Jay Peak bombshell

[thetrailboss]

Hmmm....interesting.

http://www.wcax.com/story/26236286/jay-peak-paying-back-eb-5-investors-ahead-of-schedule


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[BenedictGomez]

Jay Peak says its expansion project is so successful, it's paying investors back extra ahead of schedule.

The news comes shortly after some investors went public, complaining they were losing confidence that they would be repaid. But now resort president Bill Stenger tells WCAX News that $10,000 checks will be paid out this year.

The checks go to 35 investors in the Tram Haus Lodge. As part of the EB-5 visa program people invest half a million dollars, get legal residency in the U.S. and the promise their money will eventually be repaid.

Some investors started to worry about repayment, as expansion projects across the Northeast Kingdom faltered. But now Stenger says the success of his project is allowing him to top the $21,000 already paid back to each investor with an extra $10,000.

Ummmmm.......yeah...... somebody please investigate the **** out of this already please.

 

[LONGBOARDR]

Hate to be negative but:
I wish Jaypeak would stop stating that poor communication was to blame for this fiasco.
It is pretty apparent they wanted out of the original agreement, but did not want this disclosed before a big trip for fundraising.

 

[thetrailboss]

Hate to be negative but:
I wish Jaypeak would stop stating that poor communication was to blame for this fiasco.
It is pretty apparent they wanted out of the original agreement, but did not want this disclosed before a big trip for fundraising.

+1. It was to prevent more damage.


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[Masskier]

[FONT=Verdana, Times New Roman, Times, Serif]Jay Peak Resort Accelerates Investor Payments from the cal record

Interesting read. This article seems to answer a lot of questions that has been discussed here.

http://caledonianrecord.com/main.asp?SectionID=1&SubSectionID=145&ArticleID=115958&TM=38213.61

a couple quotes from the article;

[/FONT][FONT=Verdana, Times New Roman, Times, Serif][FONT=Verdana, Times New Roman, Times, Serif]"At the end of the day, we missed the chance to showcase the fact that we are one of only a handful of EB-5 centers to have an active payment strategy in place to return 100 percent of investor funds," Stenger said.

[/FONT][/FONT][FONT=Verdana, Times New Roman, Times, Serif][FONT=Verdana, Times New Roman, Times, Serif][/FONT][/FONT][FONT=Verdana, Times New Roman, Times, Serif][FONT=Verdana, Times New Roman, Times, Serif][/FONT][/FONT][FONT=Verdana, Times New Roman, Times, Serif][FONT=Verdana, Times New Roman, Times, Serif] [/FONT][/FONT][FONT=Verdana, Times New Roman, Times, Serif][FONT=Verdana, Times New Roman, Times, Serif]"That's out of more than 500 in this country. It's a great story for Jay Peak; a great story for Vermont, and great story for the EB-5 initiative."

[FONT=Verdana, Times New Roman, Times, Serif]"Although the partnership agreement states it is solely up to the General Partner (Jay Peak Management Inc) to decide if and when it's appropriate to redeem the partnership and begin returning (investor) funds, we realize the manner in which the redemption was communicated did not measure up to the standards by which we conduct every other aspect of our business."[/FONT]

[FONT=Verdana, Times New Roman, Times, Serif]"While EB-5 investments are required to be at risk and cannot be guaranteed, as part of the project, the investing group is presented with potential exit strategies -- methods by which the investors could be made whole with the return of their $500,000 if the business goes as planned and market and other conditions permit, Jay Peak officials said. The general partner is solely responsible for determining when those conditions present themselves.[/FONT]"

[/FONT][/FONT][FONT=Verdana, Times New Roman, Times, Serif]


[/FONT]

 

[BenedictGomez]

This article seems to answer a lot of questions that has been discussed here.

Unless I'm missing something, I dont see any new information in the bit you posted.

 

[MadMadWorld]

This guy gets what's going on at Jay!

 

[thetrailboss]

This guy gets what's going on at Jay!

Mr Ponzi is back I see....




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[thetrailboss]

I wonder if these $10k payments include a litigation release...


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[thetrailboss]

[FONT=Verdana, Times New Roman, Times, Serif]Jay Peak Resort Accelerates Investor Payments from the cal record

Interesting read. This article seems to answer a lot of questions that has been discussed here.

http://caledonianrecord.com/main.asp?SectionID=1&SubSectionID=145&ArticleID=115958&TM=38213.61

a couple quotes from the article;

[/FONT][FONT=Verdana, Times New Roman, Times, Serif][FONT=Verdana, Times New Roman, Times, Serif]"At the end of the day, we missed the chance to showcase the fact that we are one of only a handful of EB-5 centers to have an active payment strategy in place to return 100 percent of investor funds," Stenger said.

[/FONT][/FONT][FONT=Verdana, Times New Roman, Times, Serif][FONT=Verdana, Times New Roman, Times, Serif][/FONT][/FONT][FONT=Verdana, Times New Roman, Times, Serif][FONT=Verdana, Times New Roman, Times, Serif][/FONT][/FONT][FONT=Verdana, Times New Roman, Times, Serif][FONT=Verdana, Times New Roman, Times, Serif] [/FONT][/FONT][FONT=Verdana, Times New Roman, Times, Serif][FONT=Verdana, Times New Roman, Times, Serif]"That's out of more than 500 in this country. It's a great story for Jay Peak; a great story for Vermont, and great story for the EB-5 initiative."

[FONT=Verdana, Times New Roman, Times, Serif]"Although the partnership agreement states it is solely up to the General Partner (Jay Peak Management Inc) to decide if and when it's appropriate to redeem the partnership and begin returning (investor) funds, we realize the manner in which the redemption was communicated did not measure up to the standards by which we conduct every other aspect of our business."[/FONT]

[FONT=Verdana, Times New Roman, Times, Serif]"While EB-5 investments are required to be at risk and cannot be guaranteed, as part of the project, the investing group is presented with potential exit strategies -- methods by which the investors could be made whole with the return of their $500,000 if the business goes as planned and market and other conditions permit, Jay Peak officials said. The general partner is solely responsible for determining when those conditions present themselves.[/FONT]"

[/FONT][/FONT][FONT=Verdana, Times New Roman, Times, Serif]


[/FONT]

The article is behind a paywall. Maybe it will be up on VTDigger in a day or so. From what it looks like it is a rehash of the WCAX article I posted that just announced that the Tram Haus investors are getting $10k payments now. That's only 2% of their investment and it's coming after a huge PR disaster a couple weeks ago. I think that the hype is meant to try to put others at ease. They won't be able to say that 100% are paid back until it happens. I think that this is called damage control.

 

[BenedictGomez]

I think that this is called damage control.

Absolutely, but it's slightly more than that.

It's, "lets try to make this story go away now" control.

 

[VTKilarney]

So they weren't going to pay back extra money they could have afforded to pay until the sh*t hit the fan? Nothing troublng here! And why does the press let Stenger get away with saying "guaranteed" payback? It's a loan now, thanks to Quiros. Ask any bank if payback of a loan is guaranteed.

On a positive note, Jay was quite busy today (8/9/14). Busiest I've seen so far this summer. Even busier than Jeezum Crow fest. Seemed like more Canadians than normal. Also at least one large wedding.

 

[VTKilarney]

Unless I'm missing something, I dont see any new information in the bit you posted.

You didn't miss anything at all.

 

[VTKilarney]

"That's out of more than 500 in this country. It's a great story for Jay Peak; a great story for Vermont, and great story for the EB-5 initiative."

And out of those 500 EB-5 projects how many were completed prior to the Tramhaus Lodge? How many have been completed at all? This number is disingenuous at best.

"Although the partnership agreement states it is solely up to the General Partner (Jay Peak Management Inc) to decide if and when it's appropriate to redeem the partnership and begin returning (investor) funds, ..."

"The general partner is solely responsible for determining when those conditions present themselves."

Interesting that Stenger is really hammering home this narrative. Methinks he knows this is going to be very important in the future. If things are going so well, why would Stenger make such a point of this?

 

[thetrailboss]

Absolutely, but it's slightly more than that.

It's, "lets try to make this story go away now" control.

As you know, I was on the Stenger Bandwagon in 2012 when they took over Burke. I thought that he was doing a good job and had his ducks in a row. I thought that they'd be good for Burke. Their first season they promised an early opening and then delayed it quite a bit...yes, some was weather, but with the way they hyped the snowmaking improvements you'd thought it would not matter. And then the Q show. I can say that with Q it's WAY better that he keep a low profile. They've already pissed off the locals enough at Burke to last for quite a while.

The real thing that was a red flag was when Pomerleau not only bowed out, but went to WCAX to tell them about it. For a guy who grew up in Newport and LOVES the town, the fact that he pulled out was huge; the tell-all was a warning I guess. In hindsight we should have noticed a few other signs of things not going as well as hoped--the airport went from EB-5 to private funding and the window factory evaporated with no real explanation.

But this situation does not make sense if you believe what they say. On the other hand, if you believe that the revenue-side is lagging and that they need more time to hopefully get things going, then it makes sense. A well-oiled machine, like Jay, doesn't just "malfunction" like Stenger said. This was another quiet change made to try to adjust course and when it came out folks were pissed. Like with Pomerleau's deal, Stenger showed that he just does not have a lot of cash lying around because it's all tied up with the development, etc. There were 35 investors, so this peace offering is $350,000. That's not even what ONE investor put up for the place and not a lot of money for a resort that is (theoretically) doing as much business as they claim.

 

[VTKilarney]

Absolutely, but it's slightly more than that.

It's, "lets try to make this story go away now" control.

So why the desperate play at damage control? The Tramhaus Lodge investors are still going to be pissed off - and are locked in anyway.

I can think of a couple of theories:
1) The Tramhaus Lodge investors are talking to potential investors. I haven't seen any sign of this, but maybe there is a network out there that they have tapped into.
2) The Tramhaus Lodge investors had to give something up to get the extra money.
3) Prospective investor interest, while obviously low, has now completely evaporated.

My suspicion is that it has more to do with #3. It could be a play to try to save the AnC Bio project, or perhaps the Burke hotel. Keep in mind that Stenger in a very recent "damage control" interview admitted that Burke was only 25% funded, and Burke's PR guy admitted that the hotel itself was not fully funded. Stenger made no mention of AnC Bio's funding level in that interview, and you know if it was going well he would have been trumpeting that fact.

 

[thetrailboss]

So why the desperate play at damage control? The Tramhaus Lodge investors are still going to be pissed off - and are locked in anyway.

I can think of a couple of theories:
1) The Tramhaus Lodge investors are talking to potential investors. I haven't seen any sign of this, but maybe there is a network out there that they have tapped into.
2) The Tramhaus Lodge investors had to give something up to get the extra money.
3) Prospective investor interest, while obviously low, has now completely evaporated.

My suspicion is that it has more to do with #3. It could be a play to try to save the AnC Bio project, or perhaps the Burke hotel. Keep in mind that Stenger in a very recent "damage control" interview admitted that Burke was only 25% funded, and Burke's PR guy admitted that the hotel itself was not fully funded. Stenger made no mention of AnC Bio's funding level in that interview, and you know if it was going well he would have been trumpeting that fact.

It's clearly to try to calm upset investors and to get some PR spin to keep the whole thing going.

Though we're talking about Jay here, I will say that the Hotel at Burke is concerning for me because the last thing Burke needs is a half-baked project that becomes a dead albatross around its neck. They need not just enough money to build it, but build it RIGHT, run it RIGHT, and keep it going. Is the facility going to have any amenities like a pool area (not Olympic sized)?

As to Burke, and as an "arm chair resort operator", I've never been able to determine if it was better for them to "build it and then they will come" or to get things going right before building it up. In some ways I'd rather see them invest in better operations--snowmaking, grooming, customer service, etc. and get their skier days up rather than just dropping in a hotel and not really improving the ski product. But I can see that they have hit a wall with the day tripper market and need some beds. I just hope that they let someone who is in the ski business run the place instead of the Little General looking to "prove himself".

 

[VTKilarney]

Is the facility going to have any amenities like a pool area (not Olympic sized)?

I don't believe that the hotel will have a pool. The pool was a separate project. If it is indeed modeled after the Tramhaus Lodge it won't. Of course the Tramhaus Lodge has the Pump House water park down a hallway.

 

[thetrailboss]

I don't believe that the hotel will have a pool. The pool was a separate project. If it is indeed modeled after the Tramhaus Lodge it won't. Of course the Tramhaus Lodge has the Pump House water park down a hallway.

Yeah I heard that they had a ridiculous idea of an indoor tennis facility and an Olympic sized pool and diving complex. My reaction as "WTF?" Like Boardguy said, we don't need that. Have a nice place for guests and that should be fine. The indoor bike park was a GOOD idea and made a lot of sense. But that was back when they were integrated with KT. We know what happened there....

 

[VTKilarney]

Remember when Stenger told Mark Johnson that the delay in informing investors of the dissolution of the partnership was because he hadn't finished preparing documents to provide to the investors? According to this article, 9 months was apparently not enough time to get the documents done.
http://bartonchronicle.com/stenger-...mpaign=stenger-admits-investors-informed-late

Here is a great quote from the article:
Asked if any of the investors had filed legal action over the decision to dissolve the partnership, Mr. Stenger said he saw no basis for a claim.

When Mr. Raymond [VT's Regional Center coordinator] was asked if he thought one or more investors might sue, he replied, “I wouldn’t be surprised.”