[M]ount Snow executives say hard work and expertise are helping the Dover resort thrive this winter in spite of “volatile” weather.
But there is another factor – EB-5.
The pay-to-stay foreign investment program paid for Mount Snow’s new West Lake snowmaking system. And administrators say the $30 million project, completed just before the start of the ski season, paid off by allowing the resort to open early and to recover quickly from stretches of unseasonably warm weather.
As a result, “visitation at our flagship Mount Snow resort has been very strong this season despite the often less-than-ideal weather, particularly in January,” said Tim Boyd, president and chief executive officer of Peak Resorts, Mount Snow’s Missouri-based parent company.
It’s no secret that Mount Snow and Peak Resorts are fans of the federal EB-5 program, which allows foreigners who invest in job-creating projects in the United States to get visas. In Vermont, the minimum investment is $500,000 to qualify for the program.
EB-5 is controversial and has been under particular scrutiny in Vermont following allegations of massive fraud at Jay Peak Resort. Mount Snow has no connection to Jay Peak, and the resort has raised $52 million from foreign investors for improvement projects.
After lengthy regulatory delays that caused Peak Resorts considerable financial strain, the company was granted access to its $52 million in December 2016, and immediately moved forward with two projects – Carinthia Lodge and West Lake.
The 42,000-square-foot Carinthia Lodge is expected to be ready in time for the 2018-19 ski season. It will include a restaurant, two bars, a coffee counter and a variety of ski-related businesses.
The $22 million project is on schedule, said Jesse Boyd, Peak’s vice president of operations.
“The lodge will serve as a gateway for guests to get on and off the mountain and as the anchor for residential development at Carinthia,” he said during a Thursday report of Peak’s quarterly earnings. “We are also confident that the lodge will become an important revenue stream for us.”
The other project funded through Mount Snow’s first EB-5 offering was the $30 million West Lake snowmaking upgrade, which includes a 120-million-gallon reservoir and a series of pump houses pulling water uphill to the resort.
Tim Boyd said the project “dramatically expanded” the resort’s snowmaking capacity, allowing for one of Mount Snow’s “earliest openings on record.”
“We were able to open with 180 skiable acres on Nov. 11 and operate the most terrain across the Northeast through the Thanksgiving holiday weekend,” he said.
After that promising start, however, Peak executives say this winter has been a roller-coaster ride. Tim Boyd said that across Peak’s 14 resorts, the company has seen a 100-degree swing between the highest and lowest temperatures of the season.
Fluctuations have continued into the late winter season, as a relatively warm and dry February has been followed by early March storms that dumped 3 feet of snow at Mount Snow over the past several days.
Overall, Peak Resorts have “experienced incredibly volatile weather patterns which negatively impacted conditions across much of our resort portfolio, particularly in the Northeast,” Tim Boyd said.
But West Lake has helped smooth out some of the fluctuations, and it provided a needed boost during the crucial Martin Luther King Jr. Day weekend.
“While we were in great shape heading into that weekend, a warm front moved in, bringing significant rain midweek, which really impacted conditions,” Boyd said. “However, in just a couple of days, with our new snowmaking system, we were able to resurface a large portion of the mountain and execute on a very good holiday weekend.”
He said resort operators have been hearing positive comments from skiers, which “provides us with added confidence that our resorts are favorably positioned to capture market share in one of the largest ski markets in the country.”
With that goal in mind, Mount Snow is looking toward further expansion with EB-5 money.
Peak has received federal permission to start its own EB-5 regional center, which will allow the company to manage foreign investment independently of Vermont’s troubled, state-run center.
Peak has filed documents showing plans to raise at least $55.5 million from EB-5 investors toward a $94 million housing project around Carinthia Lodge. Administrators are planning 102 ski-in, ski-out units that will cater to visitors who are “seeking luxury accommodations at the base of the ski slopes.”
Administrators have said construction is expected to begin in 2019.
Tim Boyd wouldn’t comment about the next EB-5 offering during Thursday’s earnings call, except to say “we’re still anticipating the same kind of time frame we’ve talked about in the past.”
