NEWPORT–The Northeast Kingdom has long been plagued by unemployment and a depressed local economy. The sparsely populated region has lagged behind the rest of the Green Mountain State for decades economically. Many people still scratch a living from dairy farming or the tourist industry here.
From time to time, the state of Vermont has injected funding for projects in the region. A prison was built in Newport; Pike Industries has a large operation near the border; and a military helmet factory remains in business in Newport. But many other companies, especially wood products industries, have gone by the boards over the years: Ethan Allen Furniture closed in Island Pond; a plywood factory folded in North Troy; and the largest paper mill in the area closed.
So when Bill Stenger, the CEO of Jay Peak Resort, and his partners announced the largest economic revitalization investment of its type in the history of the Northeast Kingdom on Thursday it seemed natural that a TV news reporter would push a microphone in the face of one of the developers and ask: “What’s different this time?”
That’s a question to which Stenger gave a quantitative answer: $500 million, 10,000 jobs, 60 months.
Stenger and his partner Ariel Quiros plan to build seven new businesses as part of an “enterprise” initiative in Newport, Jay and Burke. The partners have purchased five of the properties and have attracted 10 percent of the financing to begin construction.
All seven projects will be built simultaneously Stenger says. Ninety-five percent of the money will come from the EB-5 Visa program, which enables foreign nationals to invest $500,000 in “targeted employments areas” in exchange for a two-year green card. Each investment must result in 10 jobs.
The EB-5 program had been set to expire this year until Congress extended it earlier this month. Sen. Patrick Leahy, D-Vt., a strong backer of the program, was instrumental in extension’s passage and President Barack Obama is expected to sign the bill.
Stenger praised Leahy’s efforts in Congress. “It’s his work that has opened this window,” the ski area mogul said. “If it were not for him, this window would not exist.”
“It’s nice to see a government program that brings jobs here,” Leahy said. “The most important part is it didn’t cost the taxpayers a penny.”
The Stenger and Quiros mega-project is a complex array of industrial, commercial and travel projects, some of which have been in the works for several years. The initiative traverses most of the Northeast Kingdom.
The plan includes:
- A 75,000-square-foot research tower in Newport for AnC Bio, a South Korean biotechnology firm that will produce stem cells, vaccines and possibly artificial organs. The tower will be located on a 40-acre campus that includes the former Bogner clothing plant, a 90,000-square-foot facility that will begin manufacturing and distributing AnC Bio products in the spring of 2013. Stenger says $50 million has been raised for the project, which will cost a total of $104 million.
- A high-end window manufacturing plant, will also be located on the 40-acre AnC Bio campus. Menck Window Systems, based in Hamburg, Germany, which designs energy efficient windows will locate an operation in Newport that will employ 140 workers. The estimated cost of the plant is $20 million.
- A marina and grand hotel on Lake Memphremagog in Newport, located right off I-91 and a walkable distance from downtown, will feature restaurants, retail space and conference facilities. The 150-suite hotel will accommodate 1,200 people and cost $100 million to build. The land, now occupied by a retail strip mall, is owned by Burlington real estate developer and Newport native Tony Pomerleau.
- The Renaissance Block is a a four-story residential and commercial space near the Orleans County Courthouse in downtown Newport. The new building would take the place of a row of late 19th century offices and shops on Main Street now owned by the Spates family. The cost? $70 million.
- The Newport Airport expansion will include a 1,000-foot extension of the runway, new hanger space for regional passenger service, a private aviation light plane manufacturing and repair facility, an expanded terminal and a bonded warehouse for free trade zone goods. The expansion will pave the way for small jet (20-seat) service in Newport. The cost of the new construction is $20 million.
- The Burke Mountain Resort will get a makeover. Stenger and Quiros bought the resort in May. They plan to construct four “rustic” lodges that will house as many as 1,250 people on the mountain. This fall the company will invest $1 million in snowmaking upgrades at the ski area. Total investment: $108 million.
- Jay Peak Resort will get another dumping of $170 million in cash for the West Bowl ski area which will have 15 trails and three lifts and the Stateside project, which includes an 84-unit hotel, 100 dwellings and a medical center.
The Northeast Kingdom Economic Development Initiative comes on the heels of an initial $250 million Jay Peak Resort expansion that is 75 percent complete and encompasses a new hotel, an indoor water park, condos and extensive upgrades to the ski area. Stenger and Quiros have kept 500 construction workers busy for five years.
All told, the Jay property investment alone will total $420 million. The combined projects will total $750 million.
Has the capital infusion begun to pay off? Stenger says last year was Jay Peak’s “best year ever, and the snow was horrible.” He chalks up their success to the year-round attractions at the resort, which employs 1,000 people.
The projects were planned in anticipation of the extension of the EB-5 program. Stenger said he has hired four architects and six construction companies to handle the simultaneous build out of the projects.
The EB-5 Visa investments are coming from all over the world, Stenger said, but largely from the Asian and South American markets. He is raising about $3 million a month, he said. Though has has about 10 percent raised so far, Stenger says he anticipates attracting all of the money he needs within 12 to 14 months. None of the projects are dependent on taxpayer funding, he said.
“This momentum is so good it is going to catapult us forward,” Stenger said.
State Sen. Vince Illuzzi, R/D-Essex-Orleans, said he found the prospect of the developments “almost overwhelming and a bit scary to have all of this happening essentially at the same time, but it’s a window of opportunity, not only because of EB-5 but because the world economy has all but collapsed.” More investors, he said, are seeking a safe haven in North America.