As we wrote in a February comment:
The new hotel and conference center at Burke Mountain is ready to open after recently receiving state Certificates of Occupancy.
But unpaid bills to general contractor Jerry Davis are keeping doors to the impressive new facility closed.
Grand openings have been repeatedly delayed as developer Bill Stenger has dealt with never-ending series of setbacks. Those headaches have exacerbated the financial torment of a calamitous lack of snow and visitors this winter.
Meanwhile a whole bunch of local people anxiously await the possibility of new jobs and opportunities at the mountain.
The problem started two years ago when a small handful of foreign investors complained to the state after experiencing some buyer’s remorse. They weren’t complaining about their newly minted green cards - the crown jewel of the EB-5 program - just that they suddenly believed the totally legitimate, above-board deal they willingly signed should somehow be made sweeter.
They got upset when Bill Stenger and Ari Quiros dissolved “Jay Peak Hotel Suites, LP,” the legal entity created to build the resort’s Tram Haus lodge. With the move, 35 limited partners (each who invested $500,000) lost investor status. In exchange, they got promissory notes, backed by the value of the resort.
The state of Vermont’s EB-5 Regional Center, as one might expect from a state agency dealing with complex issues, pretty much had no idea what was going on. They looked totally foolish when their advice to the disgruntled investors was essentially “call Bill Stenger… he’s such a great guy.”
The investors were confused. Vermont’s highest ranking pols (Governor Peter Shumlin, Senators Patrick Leahy and Bernie Sanders, and Rep. Peter Welch) were crawling over each other to take credit for Stenger and Quiros’ successes. So how was it, with such a suddenly high profile program, that Vermont’s only regulatory body appeared to be no more than glorified cheerleaders?
Well if there’s one thing bureaucrats and politicians hate, it’s being outed as buffoons. The political class, few of whom have ever built companies or created jobs, started whispering about fraud, corruption, conspiracy, ponzi schemes, dirty capitalists, end-of-the-world, etc. And the way they always deal with that kind of thing is to invent ways to show the world how tough, smart and useful they can be.
Typically that spells death for free enterprise.
The state made a couple of statutory changes and focused its vast, taxpayer-funded focus and energy into regulating Stenger, et al. That meant that the men who created thousands of jobs, and on whose coattails Governor Shumlin rode so boastfully for years, suddenly had to answer to a handful of pencil-pushers before they could write checks or tie their shoes.
No big surprise… with their hands tied, Stenger and Quiros have since been beset by headaches, setbacks and delays.
The biggest irony? The foreign investors who turned to the state years ago because they “lost confidence” in Stenger and Vermont’s ability to control him, were really just looking for ways to safeguard their money. By summoning the “power” of the state, those pigeonhearts put otherwise solid investments into serious jeopardy.
We didn’t think there were “guarantees” in the investment world. We thought it worked like this: do your homework, pick a strong company, caveat emptor, and place your bets.
For our money, we would have stuck with the guys who turned an obscure federal program into $650 million in local investments over Montpelier desk-jockeys who’ve never created anything in their lives.
Not everyone agrees with us. We still hear a lot of people calling Stenger and Quiros ponzi schemers who were under-capitalized and have nobody to blame but themselves. Those folks tend to hold the state faultless in handicapping area projects in the 11th hour.
We simply don’t understand that thinking. The Northeast Kingdom is home to 18 of the 25 poorest towns in Vermont, according to a recent paper by renowned economist Art Woolf. Barring anything illegal, it’s in everyone’s interest that these projects succeed. That’s less likely to happen if people continue to root against wannabe job creators and defend the bureaucrats steadfast on sabotaging progress.
- Jay Peak - Q Burke Mountain Resort, Hotel and Conference Center L.P.
- Bill Stenger
- Ariel Quiros
- Vermont Agency of Commerce and Community Development RC
- Peter Shumlin
- Patrick Leahy
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