[D]OVER – Federal officials have approved a new privately managed EB-5 regional center that can provide a conduit for millions of dollars in foreign investment to flow to Mount Snow and affiliated ski resorts.
Peak Resorts, Mount Snow’s Missouri-based parent company, announced Thursday that U.S. Citizenship and Immigration Services has OK’d creation of the Great North Regional Center to manage EB-5-funded development at its Northeastern resorts.
The approval means Mount Snow can continue to pursue significant amounts of foreign funding.
“The Great North Regional Center is a central piece of our growth strategy and will provide us with enhanced control and strategic oversight as we commence phase two of our development at Mount Snow as well as for future projects,” said Tim Boyd, Peak Resorts president and chief executive officer.
The announcement also confirms that Mount Snow is breaking away from Vermont’s state-run EB-5 center, which is on the verge of shutting down due to regulatory troubles stemming from the Jay Peak fraud scandal.
“This announcement is consistent with where we knew Mount Snow wanted to go over the long term,” said Michael Schirling, state commerce and community development secretary. “It is exciting for their projects and for Vermont. This illustrates that, while we plan to wind down the Vermont regional center, EB-5 remains a viable financing tool for Vermont projects.”
The federal EB-5 program offers visas and permanent residency to foreigners who invest in qualified job-creating projects in the U.S. It has come under intense scrutiny due to allegations of massive fraud by the owners of Jay Peak.
Federal officials in August announced plans to terminate the Vermont EB-5 Regional Center, citing the center’s oversight of the Jay Peak projects as evidence that it “no longer serves the purpose of promoting economic growth.” State officials have argued for a slower phase-out of the center so current EB-5 business can be wrapped up.
Brent Raymond, the former director of the state-run Vermont EB-5 Regional Center, was responsible for oversight of the Jay Peak projects from 2012 to 2015 and failed to require the developers to file quarterly reports as required under agreements with the state commerce agency. Raymond vehemently defended his oversight of the Jay Peak projects in 2014 when investors began complaining about financial improprieties. He left the state regional center in 2015 to head the EB-5 program at Mount Snow.
Mount Snow is not connected to the Jay Peak scandal but has been working through the state’s regional center for the resort’s first EB-5-funded projects: the 120 million gallon West Lake Water Project and the 42,000-square-foot Carinthia Lodge.
West Lake is now complete, and construction is underway on the lodge. But Mount Snow administrators have said they believe the Jay Peak mess is one reason they had to endure a long wait for federal approval to access $52 million in escrowed EB-5 money for those projects.
In an attempt to avoid future regulatory or bureaucratic entanglements, Mount Snow earlier this year disclosed plans to split with the state’s regional center and establish its own.
“It was always our plan, once the state started having problems with the Jay Peak issue, to move out of that regional center and move into one of our own so that we aren’t associated with that state organization,” Boyd said in September.
That vision apparently became reality Thursday. USCIS officials didn’t immediately respond to a request for comment, but Peak Resorts announced the Great North Regional Center is “effective immediately” and will allow the company “to pursue job-creating, transformative economic development projects at our key Northeast resorts.”
That means it’s a multistate regional center. Peak didn’t define what “key Northeast resorts” means, but the company operates Mount Snow in Vermont; Hunter Mountain in New York; and Attitash, Crotched Mountain and Wildcat in New Hampshire.
Peak also runs Jack Frost and Big Boulder resorts in Pennsylvania.
The company’s announcement mentioned the West Lake and Carinthia Lodge projects at Mount Snow, as well as future “significant expansion of lodging capacity” at the resort. Plans include 102 “ski-in, ski-out” residential units.
“With this approval from USCIS, Peak and its EB-5 investment partners can now move forward with greater long-term visibility and be far more effective in putting our partners’ capital to use as we grow our business and work to deliver increased shareholder value,” Boyd said.
A Mount Snow spokesman said the company had no comment beyond what was included in the company’s news release.
Mike Pieciak, commissioner of the state Department of Financial Regulation, said the Peak announcement is “great news for southern Vermont because we’re trying to wind down the (state’s) regional center with existing projects.”
Pieciak said Mount Snow has been a “very good partner, but this will allow them … for many years down the road to continue to utilize EB-5 through private investment.”
He added that the state’s EB-5 center continues to work with Mount Snow to wrap up immigration-related issues related to the resort’s first EB-5 offering.
State Rep. Laura Sibilia, I-Dover, said the EB-5 program remains “an important development tool, particularly for rural America, which is experiencing significant declines in population and business investment in many regions.”
“The program needs to be paired with stringent federal oversight in states and regions that are seeking to (pursue) economic investment and population growth,” Sibilia said Thursday evening in reaction to Peak Resorts’ announcement. “The future outlook of the Deerfield Valley is greatly improved by Peak’s willingness to ensure the future availability of this tool.”