Jay Peak bombshell

[BenedictGomez]

The GAO is going to audit the EB-5 program:

Here is one very disturbing quote from the article:
Poor data collection makes it impossible to verify that foreign investors’ funds actually created U.S. jobs.

Which isn't an accident.

 

[thetrailboss]

I think that the EB – 5 program does create jobs but probably not as many as they think it does.


Sent from my iPhone using AlpineZone

 

[Tin Woodsman]

The GAO is going to audit the EB-5 program:
http://seattletimes.com/html/businesstechnology/2025210624_eb5auditxml.html

Here is one very disturbing quote from the article:
Poor data collection makes it impossible to verify that foreign investors’ funds actually created U.S. jobs.

There has also been evidence suggesting that New York City and other major metropolitan areas are more attractive to investors than Vermont. This article seems to back that up:
http://therealdeal.com/blog/2014/12/10/related-raises-record-setting-600m-through-eb-5-program/

STOP THE PRESSES!!! You mean to tell me that the Northeast Kingdom isn't as attractive an investment destination as the largest and wealthiest metro region in the country?! I am shocked, SHOCKED!!

Guys, irrespective of how haphazardly this program may have been executed, the entire rationale was to draw investment dollars to less attractive destinations by offering citizenship as a carrot. The explicit trade-off is jumping to the front of the line in exchange for the lower rate of return/higher risk that such investments would likely offer. Questioning whether that laudable vision has been implemented properly is an entirely appropriate, but entirely separate, issue.

 

[mister moose]

STOP THE PRESSES!!! You mean to tell me that the Northeast Kingdom isn't as attractive an investment destination as the largest and wealthiest metro region in the country?! I am shocked, SHOCKED!!

Guys, irrespective of how haphazardly this program may have been executed, the entire rationale was to draw investment dollars to less attractive destinations by offering citizenship as a carrot. The explicit trade-off is jumping to the front of the line in exchange for the lower rate of return/higher risk that such investments would likely offer. Questioning whether that laudable vision has been implemented properly is an entirely appropriate, but entirely separate, issue.

Yes. But in this case, the carrot for the government is the expectation of additional permanent jobs, proportional to the investment, as a result of the investment. Build a factory to build something, a la big dollars to overhaul IBM in Burlington*, and now you have something. Those jobs will last a long time. People will move to good, well paying employment.

There is something different about creating resort jobs. You can't just do it any old place, it needs to be close enough to the population that's going to support the resort. So in this case (NE Kingdom), there is an upper limit on how much resort investment an area can absorb. The surrounding metro population isn't going to grow or get any closer based on Jay's success. Jay will never be a fly-to resort of any significance. And resort jobs are largely lower paying jobs.

It will be a while until we see if that upper limit point has been reached with Jay/Burke.

*(If that's possible. The point isn't the semi-conductor industry, it's about the importance of manufacturing goods to the economy)

 

[Masskier]

Nice article in January's Ski Mag on Jay Peak and the EB 5 fueled expansion

 

[VTKilarney]

Nice article in January's Ski Mag on Jay Peak and the EB 5 fueled expansion

I read it. I didn't think it was worth even mentioning here since it presented nothing new and was clearly dated.

 

[Edd]

Of note in that article are the comments about not necessarily having to pay the investors back. That idea was posted in this thread recently. I'd also imagine some of these wealthy folks wouldn't throw themselves off a building if they lost their money....as long as the green card stuff worked out.

Edit: Also, there's a bit about the lodging being 90% full in November with no skiing available. I'm going to assume this is last month and not last year but it's impressive no matter what.

 

[Whiteout]

^^^^ I'd say it's partly due to Jay's marketing of the last minute email deals. They are getting beds full, just with less profit. Some money is better than no money.

 

[Edd]

^^^^ I'd say it's partly due to Jay's marketing of the last minute email deals. They are getting beds full, just with less profit. Some money is better than no money.

I don't know anything about that. In the example, they had multiple events being held there.

 

[Masskier]

^^^^ I'd say it's partly due to Jay's marketing of the last minute email deals. They are getting beds full, just with less profit. Some money is better than no money.

Especially in November. Another thing that is impressive is their skier growth. 150k to about 400k over the past few years.

 

[VTKilarney]

Especially in November. Another thing that is impressive is their skier growth. 150k to about 400k over the past few years.

I was definitely impressed by that.


.

 

[thetrailboss]

The 150k to 400k number is indeed impressive, but let's be honest here...it was not because they built a few new buildings, it is because they have done A LOT of marketing to go with it. Ask any skier about Jay and they conjure up images about amazing powder, glades, and incredible terrain with new amenities.

I say this because there is a misconception that if they drop in a new hotel at sister Burke that all is well. I think that the Jay Marketing machine needs to do A LOT of repair work with that image there before they see the same growth.

 

[BenedictGomez]

Of note in that article are the comments about not necessarily having to pay the investors back. That idea was posted in this thread recently. I'd also imagine some of these wealthy folks wouldn't throw themselves off a building if they lost their money....as long as the green card stuff worked out.

This is the biggest misconception I had about this program with how it relates to Jay. I too, assumed they must generally be very rich or extremely well-off to say the very least. But if you've been following this story (and believe it), many of their phase I investors are not rich - at all in some cases. In fact, this is one aspect of the story I wish someone like VTDIGGER or another organization would investigate, as it potentially strikes me as odd.

 

[Edd]

This is the biggest misconception I had about this program with how it relates to Jay. I too, assumed they must generally be very rich or extremely well-off to say the very least. But if you've been following this story (and believe it), many of their phase I investors are not rich - at all in some cases. In fact, this is one aspect of the story I wish someone like VTDIGGER or another organization would investigate, as it potentially strikes me as odd.

Not being argumentative, but they're not rich and they're investing half a million dollars? I mean, let's define what rich is, I guess, particularly for non-Americans.

 

[dlague]

Not being argumentative, but they're not rich and they're investing half a million dollars? I mean, let's define what rich is, I guess, particularly for non-Americans.

Being able to invest $500,000 for 99% of US votets would be considered rich!

 

[thetrailboss]

This is the biggest misconception I had about this program with how it relates to Jay. I too, assumed they must generally be very rich or extremely well-off to say the very least. But if you've been following this story (and believe it), many of their phase I investors are not rich - at all in some cases. In fact, this is one aspect of the story I wish someone like VTDIGGER or another organization would investigate, as it potentially strikes me as odd.

When you factor in the exchange rate, $500k equates to what, 300k pounds Sterling for the UK or so? Sure it seems like a lot of money, but if you have saved up a nest egg and want to move to the US you could amass that over many years. As you said some of the Phase I investors indeed fit into this category. The uber rich aren't biting on EB-5 from what I can see.

 

[VTKilarney]

An article in the Caledonian Record said that they have 170 investors for ANC Bio with just a few more needed.


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[steamboat1]

Article is not related to Jay but is about the EB-5 program.

http://www.washingtontimes.com/news/2014/dec/29/visa-program-for-rich-investors-raises-concerns-on/

 

[AdironRider]

Being able to invest $500,000 for 99% of US votets would be considered rich!

Im not really arguing with you, but considering the average 401k balance is six figures, plus housing, its probably more like for 50-60% of us 500k would seem like an unreachable number.

You also need to look at the mindset. Citizenship in the USA carries a lot of benefits we take for granted, that plenty of foreigners will give up everything they have for.

 

[deadheadskier]

That's what I'm thinking. If I were Chinese (or from countless other nations), I'd give up everything I had in a heartbeat for US citizenship.