Jay Peak Resort is footing the bill for a nine-day state trade mission to China in late September.
The resort is covering travel and accommodations for Gov. Peter Shumlin, Agency of Commerce & Community Development Secretary Lawrence Miller and Becky Fu, the state’s international trade and foreign investment specialist with the Vermont EB-5 Regional Center. The small state delegation will be joined by Jay Peak co-owner Bill Stenger and project manager Alex MacLean. The Vermont Department of Public Safety will pick up the tab for Shumlin’s two security guards.
The federal EB-5 immigrant investor program offers a green card to eligible foreigners who invest $500,000 to $1 million in a qualified American business. Vermont is the only state not only to own, but also to operate and administer its EB-5 regional center — the central hub for promoting the investment program in Vermont.
The Trapp Family Lodge in Stowe and a development in Quechee Village also are seeking investors, but the $465 million Northeast Kingdom Economic Development Initiative is by far the highest profile EB-5 project in Vermont to date. Jay Peak co-owners Bill Stenger and Ariel Quiros have proposed an ambitious, interconnected set of EB-5 projects that if successful could transform the poorest, most rural region of the state. The initiative is designed to create 9,300 jobs directly and indirectly associated with the project.
The resort has been involved in most state travels related to EB-5 this year. The promotional tour is a continuation of Stenger’s work that began with the Douglas administration and brought some of the resort’s completed projects at Jay Peak to fruition.
Shumlin’s appearance
On the campaign trail in 2010, Shumlin criticized then-Gov. Jim Douglas, a Republican, for traveling on similar “junkets.” Shumlin has since promoted the state’s regional EB-5 center at conferences in the United States and Canada. This is his first overseas trip.
Some past EB-5 travels were more broadly inclusive of both the EB-5 immigrant investor program and other export opportunities. One trip in which the Vermont Chamber of Commerce was involved, in 2009, included delegates from Jay Peak Resort, Burke Mountain, Vermont Organic Fiber, Country Home Products, Mobile Medical International Corp., Oleet & Co., Seldon Technologies, Global Classroom, the Doubletree Hotel, St. Johnsbury Academy, the University of Vermont, United Construction Corp. and Milne Travel, according to a chamber press release.
“It’s very difficult to plan and to have those be effective, frankly,” Miller said. “We haven’t seen the value of using the governor’s time on those broader trips at this point.”
Narrowing the trip’s focus, he said, streamlines logistics. It also saves direct expenses for the state, because project developers generally pay for the trips. MacLean, the governor’s former deputy chief of staff, secretary of civil and military affairs and campaign manager, said the state’s presence on these missions increases investors’ confidence in their projects. Having Shumlin along only heightens that effect, she said.
“It says a lot about our projects that the governor of the state of Vermont is endorsing them. It means a lot to potential investors.”
Miller said there’s “no way of duplicating” the level of recognition the regional center enjoys when the governor appears. “It’s not just the people we meet, but how it’s recorded throughout the entire EB-5 community,” he said.
Distinct roles
Miller says the state’s purpose on these trade missions is distinct from that of the developers.
“The governor’s and my role, when we go, is to represent the regional center, not the individual projects,” Miller said. “And so while (representatives) from Jay Peak will talk about their particular investment opportunity, we focus on the regional center and include comments on the other projects that are available.”
Miller said the Securities and Exchange Commission expressly prohibits state officials from promoting individual investments.
“We’re not licensed investment advisers, so we don’t provide investment advice,” he said. “It’s a clear, bright line. We’re talking about why Vermont is a great place to invest in and to visit. It’s the developer’s responsibility to represent the individual investments.” Anything that raises the profile of the Vermont Regional Center helps all its associated projects, Miller said.
Maintaining the regional center’s international profile requires constant cultivation of two markets, Miller explained.
“There’s the ‘retail’ end of the business, if you will — the individual investors,” Miller said. “And there’s the ‘wholesale’ end — the adviser community.” The surge in demand for EB-5 investments in recent years has been met by a cadre of professional investment advisers around the world, he said. “So keeping relationships with them is very important, because they’re the ones talking constantly to investors who are seeking choices.”
The itinerary for the upcoming trip has been coordinated by Jay Peak, independent of any official EB-5 or real estate trade shows. MacLean said her group has worked with foreign migration firms to host seminars where the delegation will speak to those firms and potential investors.
Timing
The trip runs Sept. 21 through Sept. 29, with a day of travel on both ends included. The group will travel first to Beijing and Shenzhen in China, fly to Ho Chi Minh City in Vietnam, then return to China to finish the mission in Shanghai.
The timing was a function of all parties’ schedules, including business and holiday seasons overseas. Miller said he’s not concerned that the trip falls so close to the state’s rollout of the health care exchange on Oct. 1. He said he doesn’t anticipate either he or the governor will be needed to tend to exchange-related business at that time.
“If we do, there are problems that I don’t know about. Everything seems to be going really well,” he said. He added that they’ll stay in touch with office staff throughout the trip, by email, phone and Skype.
The state mission is MacLean’s second planned visit to China in September. She and Jay Peak legal counsel Chuck Leamy will attend an international trade show in Xiamen from Sept. 6 through Sept. 10, organized through the Association to Invest in the USA, an EB-5 trade group for which Stenger holds a seat on the board of directors.
