New England Jay Peak, Burke Mtn Ownership Surrendered?

[JPM]

It appears former Jay Peak and Burke Mountain owners Ariel Quiros and Bill Stenger have reached a civil settlement with the United States Securities and Exchange Commission and surrendered ownership of Jay and Burke. The resorts remain under control of a government appointed receiver. Conjecture, thoughts, speculation welcome.

 

[CalG]

The love of money is the root of all evil.

 

[Erik Timmerman]

Still waiting for criminal charges.

 

[Josh Matta]

The love of money is the root of all evil.

Right......With out people making money there is no way society would be advanced as it is today.

The root of all evil is life itself.

 

[Muleski]

And Quiros has agreed to repay $81 Million of investor money as part of the deal. The amount of EB-5 money in this thing was just astounding. Really sleazy in so many ways. I used to think Bill Stenger was just dumb. Dumb like a sleazy fox, I guess.

Well, now the federal receiver can proceed to sell both areas. My only speculation is that once again, I bet that the board and those with deep pockets who are part of Burke Mountain Academy buy Burke, at least "for now."

 

[Brian Finch]

Right......With out people making money there is no way society would be advanced as it is today.

The root of all evil is life itself.

Right on Josh. Evil is what this deal has done to the residents of the state of Vermont. For years everyone questioned how to replicate what NEK was doing. Why was the balance of Vermont not advancing at such a pace?

Now we know & it has demolished the morale of the people.

 

[CalG]

Keep an EYE on Peaks, Their S. Vt operation is the present EB-5 representation.

 

[CalG]

Right......With out people making money there is no way society would be advanced as it is today.

The root of all evil is life itself.

Making money is different than "loving money"

But you know that...

 

[Erik Timmerman]

And Quiros has agreed to repay $81 Million of investor money as part of the deal. The amount of EB-5 money in this thing was just astounding. Really sleazy in so many ways. I used to think Bill Stenger was just dumb. Dumb like a sleazy fox, I guess.

Well, now the federal receiver can proceed to sell both areas. My only speculation is that once again, I bet that the board and those with deep pockets who are part of Burke Mountain Academy buy Burke, at least "for now."

Do you think BMA wants to own and operate a big hotel? Seems unlikely to me.

 

[Muleski]

No, I don't, and certainly not long term. But I do think that they absolutely want to be 100% comfortable with the ultimate long term owner. And one way to ensure that is to buy it, then resell it in time. They clearly have the capacity to do that within their community.

The hotel is "interesting". Pretty nice digs for teenage visiting racers. A bit different that the former choices in the immediate area!

I'm just guessing. Burke is real "important" to the USST/ USSSA. Lot of good things going on, and they have bought it twice before, I think.

I have no clue what it will bring, nor what the process will be to sell it. Should be interesting.

 

[RJS]

The receiver turned down a 93M offer to buy Jay Peak in the summer of 2016. Apparently the offer was more than the receiver estimated that Jay Peak was worth. Kind of crazy that Stowe sold for less than that, though I believe the Stowe sale didn't include real estate, and perhaps Jay Peak will sell with real estate?

Jay Peak would be a great catch for Vail or Alterra. It is truly one of the iconic East Coast mountains, along with Stowe, Smuggler's Notch, Killington, and perhaps a few others. Like the other East Coast icons, Jay Peak is definitely an East Coast destination - somewhere that a family, couple, or group of friends could visit for a weekend or a week. Jay could unlock a ton of potential, in my opinion, by investing in:

• Things to do off-mountain, the Jay area is not as enticing as Stowe or Killington/Rutland in terms of things to do. They know this, the waterpark was a great idea. Building up a village and creating good restaurants/bars will be another important step.
• Creating a better lift infrastructure. Upgrading Bonnie and the Jet to high speed would boost uphill capacity, and extending Bonnie a little so it is easier to access the tram side trails would make life better for many when the Flyer/Tram are on wind hold (I know a lot of people won't like these changes b/c it means more skiers on the trails or in the glades). Adding bubbles to the Flyer would make it more bearable. The tram is iconic, I wouldn't change that, but it might be worth creating a second way to access the trails up there, maybe a t-bar?

I am excited to see what happens with Jay.

I have never skied at Burke, so I know very little about it.

 

[LegacyGT]

The thing about EB-5 is that even when it works exactly as intended, it's still incredibly sleazy. The operators in this case took it to another level.

 

[James]

What about turning part of the hotel into an east coast Usst training center? Plus keep the other part to generate income if that's even possible. Does anyone want to go to that area? Weddings, corporate retreats?

 

[Muleski]

Every event held at Burke, by the USSA/USST does fill some beds in that hotel. Burke is the landing pad for a lot of that stuff. The new Ronnie Berlack Center is tremendous {for BMA}, the new lift is perfect. They have it working. Not really sure how the designated USST center at Mittersill all all unfold. Good news is its close to Burke. I think that short term, BMA {or a group of board members and other stakeholders} buys the place and then determines how to transition ownership in a way that works.

It's a crappy location for corporate stuff. It's probably got some wedding upside, along with every single ski area in New England. Or so it seems. The really bust activity there is the Mountain Biking in the NEK. Huge.

Of course how the big, fancy ex-Q monument fits with that is hard to determine?

This thing with the EB-5 money stunk for many years. Almost incredible to see how it unfolded.

Jay probably is a completely different potential investment/operation. It needs a fair amount of investment. Great snow, lost of good things. The Water Park {regardless of where that money appeared from} was brilliant.

Both Quiros and Stenger should end up in jail. I puke when I think of people saying how "smart" Stenger was, and such a great ski "executive." Sure he was.............

 

[RJS]

From the Burlington Free Press:

The SEC's final judgment against Quiros orders 17 properties, including the Jay Peak and Burke Mountain ski resorts and two New York City condominiums, and about $417,000 in frozen cash to be turned over to federal receiver Michael Goldberg to satisfy the $81.3 million Quiros owes, according to papers filed Friday in federal court in Miami.

Goldberg plans to sell the properties for the benefit of defrauded investors.

"In pursuing fraudulent actors, we seek not only to hold wrongdoers accountable, but also to return as much money as possible to victims," Eric Bustillo, director of the SEC's Miami Regional Office, said in a statement.

I know this is probably obvious considering that the resorts were always going to be sold by the receiver, but it's interesting that the goal is simply to sell them to highest bidder. It feels like there are many cases in the skiing world were considerations other than money are important, such as Dick Bass deciding to sell to Ian Cummings (I'm sure Vail would have loved to buy Snowbird), and so many others. Here, the receiver just wants to return as much money as he can to the victims.

With the right investments and management, I think Jay could easily match or even top the best resorts in the East. It's got the snow, the terrain, and the tram is damn cool. The places with bigger vertical and/or acreage (Sugarloaf, Killington, Whiteface) don't get close to as much snow.

 

[Erik Timmerman]

If I recall, that 93M offer for Jay was incredibly sketchy, like Saddleback levels of sketchiness.

 

[Muleski]

This ^^^^^^. As I recall it was never even considered. Came out of the blue to the receiver, in the form of a one page letter of intent from a barely heard of asset management company in, I think, Florida. The joke was the Quiros was probably behind that one as well. I do remember some chuckles.

Will eventually be interesting to see how much it brings, and obviously who buys it and what their plans and vision is. The tram is neat, but over 50 years old. New trams are "not cheap."

Then again, it's also wired to consider all of the improvements make with the ill-gotten money. Hope this works to well. It is a special place. Lotta snow!

I'm sticking with my thoughts on BMA {or a group associated with BMA} buying Burke, then putting together a deal with a long term owner that fits with the the school's mission.

 

[ScotsSkier]

From the Burlington Free Press:



I know this is probably obvious considering that the resorts were always going to be sold by the receiver, but it's interesting that the goal is simply to sell them to highest bidder. It feels like there are many cases in the skiing world were considerations other than money are important, such as Dick Bass deciding to sell to Ian Cummings (I'm sure Vail would have loved to buy Snowbird), and so many others. Here, the receiver just wants to return as much money as he can to the victims.

With the right investments and management, I think Jay could easily match or even top the best resorts in the East. It's got the snow, the terrain, and the tram is damn cool. The places with bigger vertical and/or acreage (Sugarloaf, Killington, Whiteface) don't get close to as much snow.

The receiver has a fiduciary duty to maximize realizable returns to victims. They have the opportunity to vote on any proposed sale

 

[Erik Timmerman]

Thinking around here is that you'd almost have to be crazy to take Jay even if it were free. Even while Quiros' scam was funneling free money into it from the fake projects in Coventry and Newport it wasn't making money. Why would it make money now. Now it is saddled with even greater operating costs than it has ever had before. Someone will buy it, but if Stowe only cost $41 million, there's no way in hell that they sell Jay for $80 million.

 

[Tricia]

My only speculation is that once again, I bet that the board and those with deep pockets who are part of Burke Mountain Academy buy Burke, at least "for now."

The separation of Burke Mountain Academy and Burke Mountain is something that has been on my mind in this mess.

On a scale of 1-10, how much of a mess is this?