[B]urke Mountain Hotel will open Sept. 1 — two months ahead of schedule, according to Michael Goldberg, the SEC receiver.
Goldberg says there will be a soft opening in August as Leisure Hotels & Resort, the management company in charge of operations, gets the hotel up and running.
The original opening for the hotel was set for December, but because of a dispute between the developers, a contractor and the state, the hotel remained closed after it was completed in January. On April 12, the Securities and Exchange Commission filed fraud charges against Ariel Quiros and Bill Stenger, the developers of Burke Hotel, Jay Peak Resort and a biomedical center in Newport. The next day the U.S. District Court of South Florida appointed Goldberg as the SEC receiver for commercial properties in Vermont owned by Quiros.
Initially, Goldberg said the hotel would open in November, but preparations have progressed more quickly than anticipated, and the start date is now set for Sept. 1.
The receiver is also moving ahead with the installation of new snowmaking equipment at Burke Mountain Academy. The boarding school, which trains high school ski racers, broke ground last week on a $2.8 million recreational facility.
Goldberg was in Vermont last Tuesday and Wednesday to meet with officials from the Agency of Commerce and Community Development to talk about a plan to address questions about the immigration status of 700-plus investors who were allegedly defrauded by Stenger and Quiros.
Goldberg also met with the subcontractors who helped to build the Burke Hotel and the Stateside development at Jay Peak. The subcontractors who worked for the general contractor PeakCM on the Burke project are owed $3.5 million. Subcontractors for the Stateside project, which was managed by DEW Construction, are owed $2.2 million.
In an interview, Goldberg said he will ask the court to allow the Burke and Jay Peak subcontractors to perfect liens so that their interests are protected as the Securities and Exchange Commission lawsuit against Quiros and Stenger moves forward. Judge Darrin Gayles placed a temporary restraining order on the properties and all legal actions and payments associated with the projects must be approved by Gayles.
Patricia Moulton, the secretary of ACCD, said she organized the meeting for Goldberg and said the receiver “is doing all he could to find the dollars to get them [the subcontractors] paid over the next several months.”
Permission from the court to perfect the liens will enable businesses to ask banks for letters of credit. “Everyone in the room was pleased and positive, they wanted to make sure their interests are understood by the receiver,” Moulton said.
Moulton said her agency is trying help companies that are still owed money figure out how to stay afloat while they wait for payment. “These Vermont businesses are the backbone of the [Northeast] Kingdom,” she said.
Goldberg says he is communicating directly to the subcontractors — many of which are local mom-and-pop operations that don’t have cash reserves — to make sure they are paid as soon as possible.
“They’re going to get paid,” Goldberg said. “The value is there, but it’s a timing issue for us.”
Don Wells of DEW Construction was present at the meeting last week, and Moulton says Wells is offering in-house legal help for subcontractors so they don’t have to hire lawyers to file paperwork with the court. “He is trying to protect his subcontractors,” Goldberg said.
Goldberg says Jerry Davis, the CEO of PeakCM, did not attend the meeting. Davis, who says he is owed $4.5 million for the construction of the Burke Hotel, has insisted that he would pay the subcontractors himself.
“We will treat PeakCM separately and deal with them fairly,” Goldberg said.
