Do you think Killington makes money every year?
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Stenger and Quiros Ousted from Management of Jay Peak and Burke
- Thread starter thetrailboss
- Start date
They used to, but that was now decades ago under SKI
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steamboat1
New member
What does that have to do with Jay? Question was do you think 3%-4% per anum is a good return on investment.
Lets not forget those are pre-tax dollars too.
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To that I'd answer, it depends on a number of factors. 3-4% could be a decent year for a ski area depending on the hand they're dealt with weather and the economy.
I guess my point is that some years are better than others and to look at just one season is pretty foolish.
Gunstock normally prints money for Belknap County, this year they needed to borrow money to fund summer operations.
The year I worked at Snowshoe, we did 500k skier visits and had an annual operating revenue of $35M and an EBITDA of $8M. The year prior they lost money. Even the mighty Vail has massive swings in revue to the tune of 30%.
http://www.denverpost.com/2015/09/2...illion-2015-earnings-strong-despite-bad-snow/
I just find BGs comments rather flippant and unrealistic; like it's very easy to make money in the ski business. It's not.
I guess my point is that some years are better than others and to look at just one season is pretty foolish.
Gunstock normally prints money for Belknap County, this year they needed to borrow money to fund summer operations.
The year I worked at Snowshoe, we did 500k skier visits and had an annual operating revenue of $35M and an EBITDA of $8M. The year prior they lost money. Even the mighty Vail has massive swings in revue to the tune of 30%.
http://www.denverpost.com/2015/09/2...illion-2015-earnings-strong-despite-bad-snow/
I just find BGs comments rather flippant and unrealistic; like it's very easy to make money in the ski business. It's not.
steamboat1
New member
2015 had record skier visits in VT. Jay turned $3m in pre-tax profit even with the hotel & waterpark. That's a 1.5% return on investment.
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Did Jay have a record year as well? The southern part of the state did much better snow and weather wise, so it's certainly plausible that people didn't travel as far north into the state to ski. Do we know what kind of money the Qs might have been skimming?
You tell me. How much money should they have made? Obviously you think more than they did. How much more?
You tell me. How much money should they have made? Obviously you think more than they did. How much more?
steamboat1
New member
Make all the excuses you want. It is, was & likely always will be a shitty investment.
Okay.
fbrissette
Well-known member
That's the thing you and BG are not getting. It was not a traditional investment. They were selling 500k green cards with possibility of making money. If you were guaranteed 10% ROI there would no need to go through EB5.
steamboat1
New member
We weren't looking at just one year.
steamboat1
New member
Never realized there were guaranteed 10% returns on traditional investments. Sign me up.
Jully
Active member
That's the key. Doesn't matter that $200 million was put into the place from the perspective of the buyer, all that matters is that the resort can make a profit. Any assessments of viability should be looked at through the lens of what Jay is worth today because EB5 / the ponzi threw everything else out the window.
mbedle
Well-known member
What is interesting is they are thinking of either selling off the general partner's interest in the Jay Peak Hotel Suites project or obtaining a mortgage to finish the project. They are also looking to sell off the GP's interest in the Burke hotel to satisfy the liens on the property. Hopefully the same party that purchases the GP interest in the hotel, will also be purchasing the ski resort??? Just not sure why that wasn't made a little clearer in their letter to investors. See below:
"Although the following is subject to change, we are currently considering a potential plan whereby we would seek to sell the General Partner's interest in this partnership to a third party who would be required to continue to operate the hotel in compliance with the federal EB-5 program to insure that all investors in this project are able to meet the necessary requirements of the EB-5 program. The purchase price of the General Partner's interest would be based upon the current market value of the property, as determined by a reputable appraiser and a competitive sales process designed to achieve true market value. The proceeds of the sale of the General Partner's interest in this partnership would be used to satisfy the claims of the contractors who built the hotel. This amount is currently estimated to be approximately $3.5 million. Moreover, the purchaser would also be granted the option to purchase each investors' limited partnership interest once all investors in the project have had their I-829 petitions approved. The purchase price of each limited partners' interest would also be based on the current market value of the property. Again, this plan is in the preliminary stages and is subject to change and will require discussion with the USCIS and the Court's approval prior to implementation."
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fbrissette
Well-known member
Are you trolling or are you reading impaired ?
benski
Active member
You guys put a lot of faith in cost put out by a guy who stole funds from projects. They claimed the investment was 200 million dollars but how much of that was just for Q and Stenger. Also it sounds like they were not good at running the mountain profits will likely increase now that it's under new management.
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fbrissette
Well-known member
The receiver (at the homeowner meeting) stated very clearly that everything (hotel + resort) would be sold as a whole. Money from the sale would be used to pay off creditors and investors. They will be trying to make sure that investors get their green cards which is why they are looking at ways to finish the last State Side project (condos + rec. center).
BenedictGomez
Well-known member
Ummm..... no, actually it was not "obvious" - at least not to many people on this board. Most people here thought this was going to be the greatest thing since sliced bread, that money would be teaming from the rafters. That was by far the majority opinion here in 2012, 2013, 20XX, etc....., and those few that thought otherwise were a (very) small minority.
It will go NELSAP. I've stated my belief here many times that Burke will go NELSAP without either:
A) State of Vermont directly intervening and essentially making it a taxpayer funded charity
B) RPT
We don't have enough public data of their finances and spending to give an accurate (or even ballpark really) answer. What I can say, however, is that from the results we do know - it's horrendous. There's not even an avenue to allow for turd-polishing or spin here.
Not to be pedantic, but it's actually even worse than that. I don't know what sort of deductions are "games" are allowed for with the tax code regarding ski resorts, but Vermont has one of the highest corporate tax rates in all of America, so I imagine Jay's effective tax rate is worse than your average bear's.
I'm not sure what you're even trying to prove BG? Yes, profitability at ski areas can be bad. In the example cited it was particularly bad, but probably not all that shocking given the shenanigans going on.
Poor profitability isn't a just a Jay issue, it's a ski industry issue. Look at all the massive ski area companies and family run resorts that have imploded. Look at what banks are willing to finance today compared to the 80s and 90s. You're arguing water is wet essentially.
The areas and companies that weather the storm best tend to be the ones that diversify both in season and four season products. So, I don't think it should be a surprise that Jay is doing just that. It will likely never be a major profit company, but the hotel and water park likely give them a better shot. Why do you think Killington is spending all their money lately on their summer product? Why have they been trying to find the money to build their own village for decades? Why did Stowe put together the massive Spruce Peak development? Stowe was losing money annually and it was either go all in or scale back their operations.
Smuggs actually set the model for all this. They were the only major ski resort in Vermont that made money every single year during the 90s. Everyone else had one or several money losing years. So, it's not at all surprising other areas are trying to follow that four season formula. Some are better at it than others and there's numerous factors involved.
So, what exactly are you trying to tell everyone you are right about again?
Poor profitability isn't a just a Jay issue, it's a ski industry issue. Look at all the massive ski area companies and family run resorts that have imploded. Look at what banks are willing to finance today compared to the 80s and 90s. You're arguing water is wet essentially.
The areas and companies that weather the storm best tend to be the ones that diversify both in season and four season products. So, I don't think it should be a surprise that Jay is doing just that. It will likely never be a major profit company, but the hotel and water park likely give them a better shot. Why do you think Killington is spending all their money lately on their summer product? Why have they been trying to find the money to build their own village for decades? Why did Stowe put together the massive Spruce Peak development? Stowe was losing money annually and it was either go all in or scale back their operations.
Smuggs actually set the model for all this. They were the only major ski resort in Vermont that made money every single year during the 90s. Everyone else had one or several money losing years. So, it's not at all surprising other areas are trying to follow that four season formula. Some are better at it than others and there's numerous factors involved.
So, what exactly are you trying to tell everyone you are right about again?
from_the_NEK
Active member
Maybe we should just close Burke and Jay and let it all rot? Since they are too far to drive to from Jersey, they can't be viable, so that is the only answer!
