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|Powder worth immigrating for. Welcome to Jay Peak, Vt.|
Over the past four years, Jay Peak Resort in northern Vermont has invested more than $125 million in capital projects -- a startling number for a small ski area. The resort has built two large hotels, an indoor ice arena, a golf course clubhouse and a 60,000-square-foot waterpark. Over the next two years, the resort will replace three chairlifts and then build three new ones to accommodate a 200-acre expansion. That project, including infrastructure at the base, is expected to cost $100 million.
So how, then, can Jay Peak possibly advertise itself as being "debt free"? Because the capital hasn't come from banks; it's come from 500 immigrants, complete strangers, really, who are buying their way into the United States by creating jobs in a down economy. It's all part of a federal economic-stimulus program that has been around since 1990. And few people in America understand it better than Jay Peak CEO and co-owner Bill Stenger.
Judging simply by the numbers, the resort's improvements have been a runaway success. Jay Peak just celebrated the most successful Thanksgiving weekend in its 55-year history, and five years after it employed 150 people full time, year round, Stenger expects the number to break 1,000 by spring.
Jay Peak's investors have come from 56 countries (everywhere from Bolivia to Dubai to Zimbabwe), thanks largely to a decade of Stenger's legwork to position the resort as an attractive investment within the EB-5 visa program. Through the program, prospective immigrants must invest at least $500,000 in an American company such as Jay Peak, enough to create 10 direct or indirect jobs. The U.S. government then essentially shoos them through the process to issue the investor and his or her family a visa. After five years, they can apply for citizenship.
Critics rail against the program for its immigration implications, but not many of the critics live in Vermont's Northeast Kingdom, where reliable jobs are scarce. "This has allowed us to develop facilities and services that make the resort a 12-month resort," said Stenger, who was named the Vermont Chamber of Commerce's 2011 Citizen of the Year. "It lets us employ our workers year round. It's a win-win for all."
Maybe not all. Peggy Loux, chair of the Jay Select Board (equivalent to a town council), acknowledged a few naysayers in town. And Jay Peak did pay an $80,000 fine to the Environmental Protection Agency for filling in 2 acres of wetlands without permits during its golf-course construction.
But in general, Loux said, local support for Jay Peak's expansion projects has been strong. "The people that I know feel this is very positive," said Loux, who worked at the resort for nearly 30 years. "If Bill Stenger had not been aggressive, the mountain may not exist anymore. We really feel it's wonderful for the area. Not just Jay, but the whole Northeast Kingdom."
Stenger said the resort's EB-5 investors get monthly updates and earn a 4 to 6 percent annual return on investment. They also get two weeks' accommodation with skiing and golfing privileges, according to eb5jaypeakresort.com. Not every investor who approaches Jay Peak is approved, however. Stenger said he's turned down "a couple of people based on them not being able to provide a clear track record of where their money came from. Our investors have to be squeaky clean, and they are."
Due to Jay Peak's success with the EB-5 program, the National Ski Areas Association is featuring the resort at its Winter Conference and Tradeshow at Killington, Vt., in February. "It's quite a story," said NSAA communications manager Troy Hawks. "And [Stenger] did it in the face of a bad economy, when most ski areas were really struggling to obtain capital."
Which begs the question: Why wouldn't every ski area take advantage of EB-5? According to Stenger, there are "administrative downsides," and getting involved with the program is costly at the outset. "I've gotten calls from dozens and dozens of ski areas interested in this," Stenger said. Among them: Ragged Mountain, N.H., and Saddleback, Maine, both of which have recently received approval to participate in EB-5.
"I try to be helpful to a point, but there's a tremendous amount of institutional knowledge that goes into it. I don't discourage people from looking at it, but I don't want them to think it's the answer to every problem they have," Stenger said.