VT Digger Reports on EB-5 "Saving" Sugarbush

[thetrailboss]

Interesting read. Basically, Smith admits that without the EB-5 funding for the base area work, which has returned Sugarbush to profitability, it would have been tough for Sugarbush to continue without filing for bankruptcy.

Figured that there would be enough interest in this article for its own thread instead of just dropping it in the Sugarbush thread.

http://vtdigger.org/2015/11/01/fore...il&utm_term=0_dc3c5486db-9c67ca1773-405570561

 

[skiNEwhere]

O boy. This should be a long thread

 

[dlague]

Funny to read this. I have only ever known Sugarbush as it is today. When I was younger, it always seemed to have the stigma of being a resort for the well to do. Still does IMO. In fact, I have learned more from this forum than I had ever bothered to know before.

 

[BenedictGomez]

Clearly some politics here.

At any rate, I highly doubt Sugarbush would have literally"gone bankrupt" without $20 Million. I also wince when I read articles that boast of "profitability", yet offer absolutely no transparency of mathematics around that term. And that goes for, "losing money", as well. Worthless descriptors without figures to go with them.

Also, the screws are being tightened on EB-5 as well (link below), and some changes are coming.

http://money.cnn.com/2015/10/11/news/eb-5-immigrant-investor-changes/

 

[thetrailboss]

Clearly some politics here.

At any rate, I highly doubt Sugarbush would have literally"gone bankrupt" without $20 Million. I also wince when I read articles that boast of "profitability", yet offer absolutely no transparency of mathematics around that term. And that goes for, "losing money", as well. Worthless descriptors without figures to go with them.

Also, the screws are being tightened on EB-5 as well (link below), and some changes are coming.

http://money.cnn.com/2015/10/11/news/eb-5-immigrant-investor-changes/

I thought that the timing was very interesting.

 

[thetrailboss]

O boy. This should be a long thread

Better put the safety bar down

 

[BenedictGomez]

I thought that the timing was very interesting.

Exactly. It's the first thing that pops out.

 

[tumbler]

Clearly some politics here.

At any rate, I highly doubt Sugarbush would have literally"gone bankrupt" without $20 Million. I also wince when I read articles that boast of "profitability", yet offer absolutely no transparency of mathematics around that term. And that goes for, "losing money", as well. Worthless descriptors without figures to go with them.

Also, the screws are being tightened on EB-5 as well (link below), and some changes are coming.

http://money.cnn.com/2015/10/11/news/eb-5-immigrant-investor-changes/

I think that Win is telling the truth about going bankrupt and then having to sell. It's a private company, they don't have to disclose any numbers. You have no idea what a crappy business owning a ski area is. You have a one week window to make money over the Christmas holiday and if the weather sucks you are SOL. If you don't spend capital on new lifts, snowmaking and lodges then you are obsolete and outdated. It costs an incredible amount of money to just operate.

 

[steamboat1]

Lets not forget that when Sugarbush received EB-5 money they weren't required to create any new jobs at all because they were a distressed business. They were only required to show that they saved jobs not create them. I'd think that government regulators were shown the financials in order for Sugarbush to qualify for this provision of the EB-5 program. The financials couldn't have looked good.

 

[BenedictGomez]

The financials couldn't have looked good.

I believe him that they didn't.

I'm just not buying that $20 Million in capital project improvements was the only thing that kept Sugarbush from declaring bankruptcy.

Sorry, not buying that. Especially given I have no figures to substantiate the claim.

I think that Win is telling the truth about going bankrupt and then having to sell. It's a private company, they don't have to disclose any numbers.

Perhaps when a private company accepts millions of dollars in funding through a government created program, it should?

 

[HowieT2]

Clearly some politics here.

At any rate, I highly doubt Sugarbush would have literally"gone bankrupt" without $20 Million. I also wince when I read articles that boast of "profitability", yet offer absolutely no transparency of mathematics around that term. And that goes for, "losing money", as well. Worthless descriptors without figures to go with them.

Also, the screws are being tightened on EB-5 as well (link below), and some changes are coming.

http://money.cnn.com/2015/10/11/news/eb-5-immigrant-investor-changes/

just because the facts dont fit your narrative, doesnt make them any less true. You can keep on ignoring reality all you want.

After Win bought SB, and while his group was formulating their plan, he met with a bunch of us to talk frankly about the state of affairs and to trade ideas about moving forward. Basically, while ASC had spent considerably on capital improvements for new lifts, when the development plans were scuttled and things went downhill for the company, it essentially orphaned SB. There was no marketing and maintenance was deferred. When Win took over, skier visits were down to like 200k/year, the base facilities were ancient/decrepit and the resort had very limited and old lodging stock. They were losing money and needed considerable capital investments to turn things around. Its not an easy business to begin with, but even more so when you have a tremendous hole to dig out of. We loved it because we basically had the mtn to ourselves but understood that it was not sustainable.
Obviously they are in a much better position today. Not only have skier visits grown dramatically but they have more lodging. And its a four season resort now. That is in large measure due to the EB5 money which financed the 3 new base lodges and real estate development. Not only did it directly benefit the resort but also the entire MRV community. and all that in exchange for some 40 visas to some wealthy foreigners. in the immortal words of Derrick Coleman "whoop dee damned do".

 

[HowieT2]

I believe him that they didn't.

I'm just not buying that $20 Million in capital project improvements was the only thing that kept Sugarbush from declaring bankruptcy.

Sorry, not buying that. Especially given I have no figures to substantiate the claim.




Perhaps when a private company accepts millions of dollars in funding through a government created program, it should?

First of all, and this is among the major concepts that seems to elude you, there is no government money involved in eb5. second of all, the goal of the program is to create jobs and so therefore, the jobs creation data is public and required by the legislation. Insuring the investments of foreigners is not part of the deal and never was.

 

[thetrailboss]

The biggest change I have seen is, as was said, Sugarbush is now a true four-season resort. There is a lot of business on the mountain that did not exist before. It is nice to see.

 

[steamboat1]

I believe him that they didn't.

I'm just not buying that $20 Million in capital project improvements was the only thing that kept Sugarbush from declaring bankruptcy.

Sorry, not buying that. Especially given I have no figures to substantiate the claim.

You are correct, $20 million wasn't enough. Clay Brook residences, Timbers restaurant & the new Gate House base lodge were built at an estimated cost of $40 million. Only $20 million of that came from EB-5 money.

 

[HowieT2]

The biggest change I have seen is, as was said, Sugarbush is now a true four-season resort. There is a lot of business on the mountain that did not exist before. It is nice to see.

not just on the mtn but in the valley in general. It has been an economic success story and exactly what they eb5 program was intended to do.

 

[steamboat1]

First of all, and this is among the major concepts that seems to elude you, there is no government money involved in eb5. second of all, the goal of the program is to create jobs and so therefore, the jobs creation data is public and required by the legislation. Insuring the investments of foreigners is not part of the deal and never was.

Like I said earlier Sugarbush wasn't required to create a single new job. They only had to show they saved jobs.

 

[HowieT2]

Like I said earlier Sugarbush wasn't required to create a single new job. They only had to show they saved jobs.

perhaps, but after the eb5 funded development they replaced all the kids from south america with seasonal local workers.

 

[Newpylong]

I think that Win is telling the truth about going bankrupt and then having to sell. It's a private company, they don't have to disclose any numbers. You have no idea what a crappy business owning a ski area is. You have a one week window to make money over the Christmas holiday and if the weather sucks you are SOL. If you don't spend capital on new lifts, snowmaking and lodges then you are obsolete and outdated. It costs an incredible amount of money to just operate.

Couldn't have said it any better.

 

[steamboat1]

perhaps, but after the eb5 funded development they replaced all the kids from south america with seasonal local workers.

I'm not saying it didn't create new jobs, I'm sure it did. I'm only saying that Sugarbush wasn't required to show they created new jobs. They took advantage of a provision in the EB-5 program which says if they could show their net worth dropped by 20% or more they'd simply have to show they saved 10 jobs per investor not create new ones.

 

[thetrailboss]

not just on the mtn but in the valley in general. It has been an economic success story and exactly what they eb5 program was intended to do.

Very true. Which goes back to the timing of this story seems interesting.....