Or if they know that an official commercial valuation of a non-operating building and real estate will be well south of $55M.
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Big Burke announcement
- Thread starter the original trailboss
- Start date
Or if they know that an official commercial valuation of a non-operating building and real estate will be well south of $55M.
mbedle
Well-known member
As far as the fully funded, The EB-5 offering included a lot more than the hotel/conference center. I think the offering was around 100 million. I know back in June the state allowed Burke to start getting additional subscribers. Just not sure if they were below the 55 million estimate for the hotel or looking to still fully fund the entire build out. You would have thought that Peak CM would have put in the contract, language to cover them in the event that funding isn't secured.
As far as the lack of funds, it makes not sense to me why Peak CM would continue to work at this point in time. Didn't someone post that they were still working inside the hotel? Is it possible that the hotel was funded at 55 million and they went over budget? That might explain the position that they are in right now.
As far as the lack of funds, it makes not sense to me why Peak CM would continue to work at this point in time. Didn't someone post that they were still working inside the hotel? Is it possible that the hotel was funded at 55 million and they went over budget? That might explain the position that they are in right now.
freeski
New member
For the hotel I'd add an extra "Q": Q-Qhotel. This is a very interesting thread. 
Looks like a continuation of the "traditional" ski area growth model to me....
Step1: Dream big, really big, no.... really, really big
Step 2: over-invest
Step 3: promise the world, and then some....
Step 4: limp along pretending things are going great (while the world collapses around you)
Step 5: declare bankruptcy and sell for pennies on the dollar
Step 6: buyout occurs- repeat 1-5 (unless common sense prevails, then run it like a business and never look back)
Thank god the ski industry is fueled by passion, it is a lousy investment in most cases. But people love to ski and there is often someone ready to throw their hat in the ring to keep things going. Let's hope someone is there for Burke, it is a nice mountain.
Step1: Dream big, really big, no.... really, really big
Step 2: over-invest
Step 3: promise the world, and then some....
Step 4: limp along pretending things are going great (while the world collapses around you)
Step 5: declare bankruptcy and sell for pennies on the dollar
Step 6: buyout occurs- repeat 1-5 (unless common sense prevails, then run it like a business and never look back)
Thank god the ski industry is fueled by passion, it is a lousy investment in most cases. But people love to ski and there is often someone ready to throw their hat in the ring to keep things going. Let's hope someone is there for Burke, it is a nice mountain.
Zermatt
Active member
Anybody ever figure out how over 200 ski areas in Switzerland survive in an area the size of Vermont and New Hampshire? I know it's not real estate either.
benski
Active member
There are more people living near the resorts.
VTKilarney
Well-known member
I can assure you that at the time ground was broken for the hotel they had not raised nearly enough funds raised for the completion of just the hotel.
DoublePlanker
Member
Skiing is embedded in the culture in Europe. It is not in the US.
VTKilarney
Well-known member
There are lots of factors. A couple of the big ones are: a) Dense population; b) higher percentage of skiers; c) municipal partnerships; d) decreased size of many of the areas; c) more favorable liability laws.
There are LOTS of ski hills in Europe that would have been NELSAP a long time ago based on size alone. I especially noticed this in Austria. If a town could find a place for a t-bar, and only a t-bar, they'd throw put one up.
mbedle
Well-known member
I wasn't saying that at the time they broke ground they didn't have the place fully funded. I was more thinking that maybe they did have it fully funded by June 2015, when the state stepped in and made them revised their offering memorandum. Everything I read indicates that in June 2015, they had already raised 70 million and were looking to get the additional 30 million. I am guessing that the state is holding money that was planed for the other projects and not releasing it to Peak CM for the hotel buildout. Basically holding them to the original budget and not robbing from the aquatic/tennis facility budgets.
VTKilarney
Well-known member
I'm not sure where you read that. It may certainly be true. I just don't know. If it is true, it makes it even more mysterious as to why the hotel has not opened. Don't forget that the state has alleged that it is only holding about $1.5 million of the $5.5 million that remains owing on the hotel. It bears constant repeating that the state is NOT the sole reason for the hotel remaining closed.
Remember the good old days back in 2010:
mbedle
Well-known member
As VT said, municipal partnerships plays a big part in lift installs and operations. The density of people is 4 times as much as Vermont and New Hampshire. Also, snowmaking, which is minimal to non-excitant in Switzerland.
mbedle
Well-known member
Maybe I am miss-reading this. But Stenger states that they have raised 70 million and need 30 million more.
http://www.burlingtonfreepress.com/.../16/burke-hotel-gets-go-ahead-state/30266227/
With state oversight, they may not allow money that is allocated for the other projects to fund the over budget hotel project. In other words, they may be holding Qburke to their offering estimate and making them pay the deficit, in an effort to protect all of the investors.
on a happier note- they seem to be driven to stay open until pond skimming on the 27th. Their email says they will light up the guns on Warren's tonight. AND they are heralding the barbecue to open the Mtn bike season on May 27th. So for now they are saying "operations as normal"- I am happy about that.
So 5.5M is their 10% retainage. If they went over budget due to change orders the overage has been known for a while. I doubt Peak did any additional work without being cost being approved first. 55M is a rather large project to be neglecting as an owner. Still can't believe they would start without 100% funding, for that amount I would want to know. Q probably cannot get a loan because they are over leveraged, 75% loan to value is the cut off for banks.
Could see Peak taking shares in ownership in trade and be first in line to be paid at nice return upon sale. Still got to pay the subs though
Could see Peak taking shares in ownership in trade and be first in line to be paid at nice return upon sale. Still got to pay the subs though
VTKilarney
Well-known member
The contractor reported that the project came in under budget. Of course at a 12% interest rate accruing to the contractor, it may not stay under budget for long.
What makes you think that the hotel has debt other than what is owed to the contractor? The investors ponied up the money. They don't have a secured interest, IIRC. They are associated with the LLC (owners??), but it's not as if they made a straight loan. The Jay Peak Tram Haus investors were converted to an unsecured loan, but so far I have not heard of that happening at Q Burke.
You may very well know more about this than I do. I am far from an expert on these matters.
VTKilarney
Well-known member
Welcome to EB-5!
LSC News/Channel 7 are reporting this:
To put that in perspective, a normal 70k season is coming in at about 42k skier days.
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