Bill Stenger: A response to VTDigger’s stories on EB-5 investors

Editor’s note: This commentary is by Bill Stenger, who is president and CEO of Jay Peak Resort.

One of the basic tenets of professional journalism is the “free exchange of information that is accurate, fair and thorough.” With that in mind, we feel compelled to respond to recent posts on VTDigger, specifically the stories posted on July 27, Oct. 5 and Oct. 22, as they are rife with misstatements and unsubstantiated allegations. Here are the irrefutable facts of the Tram Haus Lodge, Jay Peak’s first EB-5 project.

• The Tram Haus Lodge construction was begun in 2008 and opened for operation in December 2009. Its construction and quality exceeded the required financial commitments of the EB-5 offering and Jay Peak paid for all aspects of these enhancements. The $17.5 million of investor’s funds was augmented by over $5 million of Jay Peak investment. The total project was a $23 million effort. It is an outstanding product that is very appreciated by many EB-5 Phase I investors and all guests of the hotel.

• Every investor in the Tram Haus Lodge project has received their green card, a return on their investment and, over the next 38 months, will have their entire $500,000 investment returned to them with interest.

• Every investor in the Tram Haus Lodge project signed what is called a “subscription agreement.” The agreement is very specific in what is at risk stating on the very first page that “I [the investor] realize that an investment in [the Tram Haus] is of speculative nature and may result in a loss of my entire investment.” The investor further attests that they “have accumulated a net worth of not less than $US 1,000,000, or have an individual income of not less than US$ 200,000 per annum or a joint income with my spouse of not less than US$ 300,000 per annum.”

• The investor also attests in the subscription agreement that “I can bear the risk of the proposed investment, including the loss of my entire investment, a lack of liquidity in the investment or an inability to sell the investment for an indefinite period of time.” These clauses were put in place to ensure that investors fully vetted their own financial worth before making their investment; that a loss of their money would not put them in dire financial straits.

Fortunately, no Jay Peak investor has ever had to confront any of the above possibilities as Jay Peak is actively paying back every investor in the Tram Haus Lodge project 100 percent of their money. In fact, out of the more than 750 EB-5 projects in the country, Jay Peak is one of only a handful actively engaged in paying back its investors.

As to Mr. Sutton’s request to review the project’s accounting books, we have agreed and have invited him to the resort to do so. Unfortunately, Mr. Sutton has chosen instead to communicate through VTDigger.


VTDigger has become a mouthpiece for a small group of disgruntled investors who feel they should have received a greater return on their investment. Who doesn’t want a greater return on any investment they make whether it’s real estate or the stock market? But EB-5 investors know their money is at risk.

Investments in any EB-5 project are speculative; U.S. law requires that EB-5 investment be “at risk.” The “at risk” provision is to protect the job-creating business and give it the opportunity to grow and develop and have the ability to maintain employment levels, the core principle of a successful EB-5 project.

We had hoped that the Tram Haus Lodge would generate greater returns, but the economic downturn that began in 2008 looped an anchor around the nation’s economy and the value of the Tram Haus Lodge units were part of that real estate downturn. That being said, once built, the property did generate a return for every investor every year and those dividends have been paid. And just this past August, we were able to guarantee the full return of every investor’s $500,000 investment. Checks have been sent to all 35 investors and all 35 investors have cashed those checks. Payments will continue each of the next three years and in January of 2018, all investors will have been paid back in full with interest.

Tony Sutton, one of Digger’s resources for their latest piece, says in the story that he wants the “developers to account for how [investor] money was spent.” He need only read the United States Customs and Immigration Service (USCIS) I-829 document that granted him his green card to see how the money was spent. EB-5 projects in Vermont are meticulously accounted for and the I-829 petition that is submitted to the USCIS includes every receipt for every one of the $23 million paid to complete the Tram Haus project. A developer has to build what they say they were going to build and create the jobs they said they were going to create. Those are the pillars of the subscription agreement and the federal government’s I-829 petition. If these conditions aren’t met, investors don’t receive their green cards and EB-5 projects are not approved.

As to Mr. Sutton’s request to review the project’s accounting books, we have agreed and have invited him to the resort to do so. Unfortunately, Mr. Sutton has chosen instead to communicate through VTDigger. If he did communicate directly with us he would understand that we asked him to sign a standard non-disclosure agreement as we are responsible for protecting the confidential information of the other 34 investors that is contained in the books. Signing an NDA is one of the basic principles surrounding any investment document. In fact, Mr. Sutton signed an NDA as part of his subscription agreement. Accounting documents contain sensitive investor financials. It would be inherently irresponsible of Jay Peak to not request such a protection on behalf of the broader investor group. Unfortunately VTDigger described the NDA as a gag order. Another inflammatory characterization.

The state of Vermont’s EB-5 Regional Center is one of the most successful in the country. The state’s oversight of the Jay Peak EB-5 projects over the last six years has led to the creation of thousands of jobs throughout Vermont’s Northeast Kingdom. According to a report released this summer by the Vermont Department of Labor, Orleans County is leading the state in job creation. Never in Vermont’s 223-year history has this been the case. State economist Tom Kavet, in his July 24 report to the state’s Joint Fiscal Committee, cited Jay Peak’s EB-5 projects as the driver of growth in Orleans County. These facts, along with the fact that every Tram Haus investor who applied for their green card received their green card, are a great example of what happens when private business works with state policy makers to create jobs.

Vermont’s EB-5 program is a great job-creating economic development story, but one that has many complexities. All we ask is the story be told fairly and accurately.

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