Federal judge approves Jay Peak sale to Utah-based Pacific Group Resorts
After more than six years in receivership, Jay Peak ski resort will have a new owner. A federal judge in Florida on Friday approved the $76 million sale of Jay Peak ski resort to Pacific Group Resorts, Inc. (PGRI).
“This is a fair resolution, it’s actually a pretty good resolution,” said Judge Darrin Gayles during the hearing.
PGRI initially offered $58 million for Jay Peak, but the sale price went up after two other groups offered competing bids. PGRI’s final $76 million bid won during a closed-door auction last week that lasted for about six hours.
“This is the highest and best price on the market,” said Michael Goldberg, the court-appointed receiver, during Friday’s hearing.
PGRI, which is based in Salt Lake City, Utah, operates five ski resorts, including Powderhorn Mountain Resort in Colorado and Ragged Mountain in New Hampshire.
“Obviously, this is another major milestone,” said Christian Knapp, vice-president and chief marketing officer at PGRI. “There's still a lot of process left to go. We're obviously hoping that completes before the ski season, sometime this fall.”
Some of the remaining work to close the sale includes transferring the grounds lease, which needs approval from the state of Vermont.
“There's a lot of administration, so it's sort of what we're focused on now,” said Jay Peak president Steve Wright.
PGRI plans to retain Jay Peak’s staff and leadership for the upcoming season, Knapp said.
“We are a very small holding company and we really leaned heavily on the staff and the general manager at each of the resorts to run the operation,” Knapp said.
For Jay Peak employees the sale marks the end of a turbulent chapter in the resort’s history.
“There's a sense of relief that we're going to be owned by a company that kind of shares our beliefs in the way that resorts should be run,” Wright said.
Jay Peak has been overseen by a court-appointed receiver since April 2016, when the Securities and Exchange Commission accused its former owner Ariel Quiros and former president Bill Stenger of misappropriating more than $200 million from foreign investors. The men used the federal EB-5 program to pour $500 million into Jay Peak, including building an indoor water park, new hotels and condos. The EB-5 program gives foreign investors green cards if they put money into development projects in economically depressed regions.
While the Jay Peak EB-5 projects were finished, several other proposed developments — including a redevelopment in downtown Newport and a biomedical facility — were never completed.
Quiros and Stenger settled the SEC complaint, and are currently serving time in prison after pleading guilty to separate federal crimes related to the scandal.
The proceeds of the Jay Peak sale will go to defrauded investors, Goldberg said.
Burke Mountain Resort, another Northeast Kingdom ski mountain once owned by Qurios and associated with the EB-5 scandal, is still under receivership. Goldberg told the judge on Friday that he’s in “discussion” on a potential sale of Burke.