Investigation unfolds at Q Burke

Four state officials including the governor, attorney general and two top regulatory officials are planning a news conference Thursday to discuss developments at Q Burke ski resort in the Northeast Kingdom.

The Governor’s Office on Wednesday night issued a brief statement regarding Q Burke that referenced a “situation” unfolding there and referred to it as a “coordinated effort,” but offered no further information about what was occurring.

A Q Burke official described the situation as an "investigation."

Neither Ariel Quiros nor Bill Stenger, co-general partners of Q Burke Hotel at the resort, returned messages seeking comment Wednesday night.

Ary Quiros, who is president and CEO of Q Burke ski resort and is the son of Ariel Quiros, said Wednesday he had been "ordered" not to talk about what is happening at Q Burke, which he described as an "investigation." Quiros said he was unable to say who was carrying out the investigation that began at about noon Wednesday.

Attorney General Bill Sorrell, reached Wednesday evening, said he was unable to comment on the investigation but said it "did not come as a surprise to state officials."

As president of the ski resort, Ary Quiros said he has no connection to the limited partnership that owns the Q Burke Hotel. The $50 million hotel was built using money from foreign investors under the federal EB-5 program. Foreign nationals investing $500,000 in projects in economically depressed regions of the country receive conditional green cards through the program. The cards can become permanent, offering U.S. residency, if the project creates a specified number of jobs.

Q Burke Hotel has been under intense scrutiny by the state Department of Financial Regulation, which required all EB-5 money raised for the project to be placed in an escrow account until the department determines the money can be released. Bill Stenger has complained the state has been slow to release funds, creating a situation where the prime contractor, PeakCM Construction, has not been paid in a timely fashion.

The state has responded by saying Stenger and Ariel Quiros have failed to produce all the documents required for the review by the Department of Financial Regulation. As a result, the hotel has yet to open despite being completed, because Jerry Davis, owner of PeakCM, has declined to release certificates of occupancy until he is paid about $5.5 million he still is owed.

The state also has said the general partners, Ariel Quiros and Stenger, have taken millions of dollars from the project that are "unaccounted for." Stenger told the Burlington Free Press the state's assertion is wrong, and the partners have reinvested every dollar they've received back into the project.

Jerry Davis said Wednesday night he had no information about what is going on at the resort. He said he was paid $1.5 million of the balance he is owed in one week, leaving about $3.9 million unpaid. Davis thought the situation was moving in the right direction before Wednesday's developments.

"I thought everything was on track," Davis said. "I was hoping we were getting to the end, and I was optimistic I would be paid in the next 30 days."

Ary Quiros expressed confidence Wednesday that the investigation would reveal no wrongdoing.

"I'm not worried about it," Quiros said. "They're not going to find anything, because we're doing everything right."

Quiros said "the only bad thing" about the investigation is that it is going to scare customers and employees.

"Hopefully we can start moving forward and start planning for the next ski season," Quiros said.

The Governor’s Office statement read in its entirety:

“We're aware of the situation in the Northeast Kingdom. This is a coordinated effort. We are unable to comment until relevant information is made public. We expect that to happen tomorrow at which time the Governor, Commissioner Donegan, Attorney General Sorrell, and Secretary Moulton will hold a briefing.  We will give media as much lead time as possible before any announcement tomorrow. Thanks.”

Susan Donegan is commissioner of the Department of Financial Regulation. Pat Moulton is secretary of the Agency of Commerce and Community Development.

http://www.burlingtonfreepress.com/story/news/2016/04/13/state-officials-situation-unfolding-q-burke/83004948/

Mentions

• Jay Peak - Q Burke Mountain Resort, Hotel and Conference Center L.P.
• Bill Stenger
• Ariel Quiros

States

• Vermont