VTKilarney
Well-known member
I had a chance to hear Bill Stenger give a presentation yesterday on Jay Peak and EB-5 development. Here are some highlights:
1) There have been 550 EB-5 investors from 74 countries.
2) Administrative fees are on top of the $500,000 investment and are negotiated. The fee varies by the investor's country and the project.
3) Only Phase 1 investors have an identified exit strategy at this point.
4) There is only one project left at Jay to be permitted - the West Bowl expansion. That will take a year or two to go through the permitting process.
5) In the middle of winter there are 1,500 employees at Jay. Prior to EB-5, there were about 275. More than 250 of these employees receive benefits.
6) In the summer, there are 400+ employees working at Jay.
7) AnC Bio will break ground late this summer.
8) The condos at Jay will break ground this fall.
9) Burke will break ground on June 3rd.
10) There are four things that potential EB-5 investors want to know. In order: (a) How long until a visa will be obtained; (b) will the conditional visa be made permanent; (c) what will the return on investment be during the project (dividends); (d) what is the exit strategy.
11) There are now 450 EB-5 projects in 34 states competing for funding.
12) There is now stiff competition from urban projects. Investors are MUCH more comfortable investing in a project in New York City or Las Vegas than in rural Vermont.
13) The urban projects often have gerrymandered TEAs (target employment areas) to allow for the lower $500,000 investment.
14) Some urban projects are funded only partially with EB-5 money and don't really need EB-5 money in the first place to be funded. (Some of these projects are up to 70% bank financed.) EB-5 investors like these projects because they believe that they are much less risky since traditional funding sources are investing in the project as well.
15) All of Jay's projects except for the West Bowl project are fully subscribed.
16) Each investment group at Jay receives an almost identical dividend thanks to common management. That dividend can be from 1-4 percent, but in reality has been about 2% starting around year 3.
17) Route 242 toward Newport will be re-paved when they get the green light to put the new sewer line in. This will occur this summer or next.
An economist also spoke at this meeting. He stated the following:
1) The US economy is expected to grow at 3%+ for several quarters, which is an improvement.
2) Vermont is not expected to grow as much as the rest of the country. The forecast for Vermont is not encouraging.
3) The crackdown on Chinese corruption has led to a capital flight from China. This is a good thing for EB-5 projects. People who got their money by corrupt means want to get that money out of China so they don't get in trouble now that there has been a crackdown. (Note: Stenger is correct when he says that the investor has to have obtained their money legally. I am not sure if the economist believes that this is overlooked, or if he did not know this.)
4) Vermont had its best ski season in years. Skier visits in the northeast were up 20% this year.
The major thing I took from this is that urban EB-5 projects seem to be a HUGE problem for Vermont. Stenger wants to see a legislative fix to this. It is clear that the money is not as easily obtained as it used to be.
1) There have been 550 EB-5 investors from 74 countries.
2) Administrative fees are on top of the $500,000 investment and are negotiated. The fee varies by the investor's country and the project.
3) Only Phase 1 investors have an identified exit strategy at this point.
4) There is only one project left at Jay to be permitted - the West Bowl expansion. That will take a year or two to go through the permitting process.
5) In the middle of winter there are 1,500 employees at Jay. Prior to EB-5, there were about 275. More than 250 of these employees receive benefits.
6) In the summer, there are 400+ employees working at Jay.
7) AnC Bio will break ground late this summer.
8) The condos at Jay will break ground this fall.
9) Burke will break ground on June 3rd.
10) There are four things that potential EB-5 investors want to know. In order: (a) How long until a visa will be obtained; (b) will the conditional visa be made permanent; (c) what will the return on investment be during the project (dividends); (d) what is the exit strategy.
11) There are now 450 EB-5 projects in 34 states competing for funding.
12) There is now stiff competition from urban projects. Investors are MUCH more comfortable investing in a project in New York City or Las Vegas than in rural Vermont.
13) The urban projects often have gerrymandered TEAs (target employment areas) to allow for the lower $500,000 investment.
14) Some urban projects are funded only partially with EB-5 money and don't really need EB-5 money in the first place to be funded. (Some of these projects are up to 70% bank financed.) EB-5 investors like these projects because they believe that they are much less risky since traditional funding sources are investing in the project as well.
15) All of Jay's projects except for the West Bowl project are fully subscribed.
16) Each investment group at Jay receives an almost identical dividend thanks to common management. That dividend can be from 1-4 percent, but in reality has been about 2% starting around year 3.
17) Route 242 toward Newport will be re-paved when they get the green light to put the new sewer line in. This will occur this summer or next.
An economist also spoke at this meeting. He stated the following:
1) The US economy is expected to grow at 3%+ for several quarters, which is an improvement.
2) Vermont is not expected to grow as much as the rest of the country. The forecast for Vermont is not encouraging.
3) The crackdown on Chinese corruption has led to a capital flight from China. This is a good thing for EB-5 projects. People who got their money by corrupt means want to get that money out of China so they don't get in trouble now that there has been a crackdown. (Note: Stenger is correct when he says that the investor has to have obtained their money legally. I am not sure if the economist believes that this is overlooked, or if he did not know this.)
4) Vermont had its best ski season in years. Skier visits in the northeast were up 20% this year.
The major thing I took from this is that urban EB-5 projects seem to be a HUGE problem for Vermont. Stenger wants to see a legislative fix to this. It is clear that the money is not as easily obtained as it used to be.
