A real estate deal at the heart of the planned marina and conference center on Lake Memphremagog in downtown Newport, on the Canadian border, has collapsed.
The high end development at the site was part of a sweeping Northeast Kingdom Economic Development Initiative set of projects unveiled by Jay Peak investors Bill Stenger and Ariel Quiros in September 2012. The initiative is largely funded through the federal EB-5 Immigrant Investor Program.
Property owner Tony Pomerleau announced early this week he was giving up on the deal because he had not yet received a sufficient deposit.
The parties did not have a signed agreement. No money had changed hands, though Pomerleau earlier refused to accept a $100,000 check Stenger said he offered as a good faith gesture.
“I had intended by now to give him a meaningful deposit — at least $1 million,” Stenger said.
Pomerleau said Tuesday that he’ll accept a downpayment of that size if Stenger can come up with it. In the meantime, he’s ready to renew leases for the commercial tenants who now occupy a shopping plaza on the site.
Their leases are set to expire in January 2016. Pomerleau’s timeline for renewing them is much shorter.
“Immediately — this week, next week, sometime real soon,” Pomerleau said about when he’d look to get them signed. They’ll be for 10 years, with an option to renew another five years.
Stenger is determined to get Pomerleau his deposit first.
“I’m going to do my utmost in the next 30 days to close that,” Stenger said. “We have the resources. It’s just a matter of aligning them.”
Stenger said his vision for a waterfront marina and conference center is Newport’s best shot at economic growth.
“A big flagship resort like Hilton, or Ritz Carlton or Marriott — these companies would never look at … Newport,” Stenger said. “It takes somebody who knows community, who loves the community.”
Pomerleau agrees that the waterfront plaza could be “a lifesaver” for the town, and he’s disappointed not to see it come to fruition.
“My dream kind of fell through,” he said.
Dave Snedeker, executive director of the Northeastern Vermont Development Association, said Stenger’s other plans for Newport and the surrounding area can stand on their own.
Stenger and Quiros purchased a smaller property in downtown Newport from Pomerleau that is expected to close by June 1. They also bought a city block in 2013 for mixed-use development.
“I think there are probably some mutually supportive aspects,” Snedeker said about the nearly contiguous marina and Renaissance block plans. “But I do think the Renaissance Block on its own would fill a community need.”
Neither project is enrolled in the EB-5 program, which is the source of funding for the other Stenger and Quiros projects. Brent Raymond, director of the state-run EB-5 Regional Center, said no application materials have yet been received for the Renaissance and conference center projects.
The EB-5 program gives immigrants an opportunity to invest $500,000 in a U.S. business in exchange for a conditional visa. If each half million dollar investment can be credited for creating 10 jobs’ worth of economic activity within two years, green cards are issued for investors and immediate family members.
Federal visa approvals for investments in other Jay Peak projects — the AnC Bio biotechnology research park in Newport and buildouts at Q Burke Mountain ski resort in Burke — have been pending for some time, subject to many of the same delays projects all over the country are seeing with EB-5 adjudications.
Investors pay $50,000 administrative fees on top of their $500,000 investments, much of which goes to pay lawyers and economists, as well as marking and travel costs associated with the project development.
Stenger said he’s considered using some of the administrative fees from those investments as partial capital in the waterfront project. The core capital from other projects’ investments, on the other hand, is off-limits.