Local News

Mount Snow EB-5 Project On Hold Due To Lack Of Cash

Vermont Public | By Howard Weiss-Tisman

Published April 15, 2016 at 3:41 PM EDT

Mount Snow started work on a $52 million project last summer. But the project has been halted until resort's EB-5 funding is released.

While attention in the state has been directed toward the alleged EB-5 violations at Jay Peak and Burke Mountain, another EB-5 project in southern Vermont has also hit a snag.

Work has been halted on Mount Snow's $52 million EB-5 project because the company has run short on cash.

Mount Snow is using the federal EB-5 program to fund an expansion of its snow making system, as well as to upgrade a ski lodge.

Under the EB5 program, foreign investors support development in exchange for a green card and possible citizenship.

Company spokeswoman Kelly Pawlak says the money that was raised through the EB-5 investors is being held by the U.S. Citizenship and Immigration Services, or USCIS.

"Currently the $52 million that has been raised, and is in escrow it is pending the investor petition approval by USCIS," Pawlak says. "So until that is done it is going to stay in escrow. I'm confident that it will be released. And it is my understanding that there is a backlog. What that is due to, I'm not sure, it could be simply more projects than people to review."

The company began work last summer, using more than $12 million from the reserves of Peak Resorts, the company that owns Mount Snow.

"Right now the construction's on hold. We have not spent one penny of the investors' money." - Kelly Pawlak, Mount Snow spokeswoman

Pawlak says work can't start this year until the EB-5 money is released.

"To date we have constructed the 120-million [gallon] pond, and the dam. So that was done last summer," she says. "And then we upgraded our pipeline. Right now the construction's on hold. We have not spent one penny of the investors' money."

And now the company doesn't have the cash to move forward.

Mount Snow wants to upgrade its snow making system and renovate the Carinthia ski lodge with the EB-5 investment.

Last month Peak Resorts president and CEO Timothy Boyd told investors that the tough winter dragged down revenue by more than 10 percent.

Boyd said the slower-than-expected timeline for the EB-5 approval resulted in "cash balances that are lower than we had anticipated."

Since January 2015, Peak Resorts' cash dropped by almost half, falling from almost $21 million to $11.5 million.

The company's chief financial officer said the Mount Snow project, and the delay in EB-5 funding, contributed to the cash flow problem.