Balsams Wilderness State Loan in Limbo

TomWhiteTomWhite expert
in NELSAP Forum Posts: 581

Vote on $28M loan guarantee to save Balsams grand
hotel in limbo

 

By
MICHAEL COUSINEAU

New Hampshire Union Leader


March 28. 2018 9:22AM



CONCORD
— The state Business Finance Authority said it didn’t have all the answers yet
to vote on a $28 million state loan guarantee to revitalize the Balsams resort.




“We
continue to work with the Balsams team to get more information,” BFA Executive
Director James Key-Wallace said Tuesday.




The
finance authority, which met Monday, is being asked to approve a $28 million
loan guarantee from the state of New Hampshire that would require the state to
step in and make loan payments should the $170 million project run into
financial difficulties.




The
finance authority and the project’s lender, Service Credit Union, “are looking
a little bit further into the terms and potential conditions,” said Scott
Tranchemontagne, a spokesman for developer Dixville Capital LLC.




The
state loan guarantee “is a critical component of the financing plan that must
be in place for us to proceed with the rest of financing as proposed,”
Tranchemontagne said.




If the
BFA approves the loan guarantee, then the proposal would go before the
Executive Council.




The next
authority meeting is April 16, but Key-Wallace wouldn’t guarantee a vote then.




“It
really depends on when and if we get the information we need,” he said.




Key-Wallace
said he couldn’t disclose what information the authority was looking for. The
BFA, established in 1992, is tasked with promoting economic development in the
state by assisting businesses to obtain loans that banks otherwise might not
fund, among other initiatives.




The
project’s first phase includes renovation of the Hampshire and Hale houses;
reconstruction of Dix House; and construction of a 400-room Lake Gloriette
House Hotel and Conference Center, Nordic baths and spa as well as a
marketplace and expansion of the former Wilderness ski area.




Other
financing includes $20 million in developer equity; about $35 million in other
equity, including preferred equity from investors; $18 million in equipment
lease financing for the ski area; $53 million in construction financing; and
$15.4 million in funding through the EB-5 Immigrant Investor Visa Program,
which allows foreigners making certain commercial investments in the United
States to be eligible to apply for a green card and permanent residence.




mcousineau@unionleader.com

Comments

  • powderstudpowderstud intermediate
    Posts: 49
    If I were a NH taxpayer, I'd be praying that the loan guarantee does not come through.  I'm hardly anti-development, I'm just pro-rationality.  This whole project is an economic disaster waiting to happen, being run by people who hardly have a track record that breeds confidence. 
  • lotsoskiinglotsoskiing expert
    Posts: 1,140

    If I were a NH taxpayer, I'd be praying that the loan guarantee does not come through.  I'm hardly anti-development, I'm just pro-rationality.  This whole project is an economic disaster waiting to happen, being run by people who hardly have a track record that breeds confidence. 

    I agree. State-supported ski areas in NH and NY are highly accessible, established areas in tourist locales (North Creek is a stretch, but still close to highway as well). Jay Peak, also built on the back of EB-5 money (and we know that tale) succeeds because of proximity to Montreal and huge, diverse buildout). Balsams is WAY off the beaten path and will be a big pull to attract people. NH is right to hesitate on this...
  • riverc0ilriverc0il advanced
    Posts: 314

    I agree. State-supported ski areas in NH and NY are highly accessible, established areas in tourist locales (North Creek is a stretch, but still close to highway as well). Jay Peak, also built on the back of EB-5 money (and we know that tale) succeeds because of proximity to Montreal and huge, diverse buildout). Balsams is WAY off the beaten path and will be a big pull to attract people. NH is right to hesitate on this...

    The problem isn't distance, the problem is demand and passing other areas. Balsams is a shorter drive from Boston than Sugarloaf. Balsalms is also less than three hours from Montreal and barely a longer drive from Portland, ME than the Loaf. If Sugarloaf can be a long term viable resort in its location, then distance is not the issue as Balsams is better positioned for the Boston market from a driving perspective.

    That said, I don't think it is viable. We've seen Burke struggle for years due to the "passing other areas" effect despite being closer to Boston than any ski area in Vermont north of Pico (and also more highway and less state road driving as well). At least when driving to the Loaf, most people aren't passing other areas thinking "I could be skiing already instead of driving..."

    But maybe Burke just isn't a big enough resort compared to its competition and Balsalms plans to be? Then the issue is demand. How many big resorts can New England sustain, especially those that are a long drive from population centers? One Loaf is fine, but two? 

    "If you build it, they will come" might work if there is demand. But if Balsalms is just siphoning off guests from other areas, I can't imagine they will draw enough to make it viable. The industry is struggling to attract new blood while evergreen money ages out. They'll need to cover costs with real estate sales but is there really demand for yet another massive mountainside development?
  • rickbolgerrickbolger expert
    edited March 30 Posts: 1,325
    riverc0il said:



    The problem isn't distance, the problem is demand and passing other areas.




    I know a handful of people who are among the Boston area well-to-do who made annual or semi-annual visits to Balsams because it was what it was, family tradition, etc. They didn't find the distance terrible, and they had no interest in skiing at Loon or Attitash or Wildcat or whatever. A few have moved on to that monster lodge at Sunday River.

    Therein is the problem -- times have changed, people have moved on. I think a lot of the people who were attracted to Balsams are no longer with us, and a majority of society has moved on to other types of ski trips. Just like the grand old resorts in the Catskills that are slowly crumbling, time has passed it by.

    There are still some folks who would gladly drive by the closer areas to ski Balsams but there aren't many of them left, and now they've got some 10 years worth of memories and experiences at new places.


    Like the song says, "used to be's don't count anymore, they just lay on the floor til we sweep them away."

  • sugarloafsugarloaf expert
    edited March 30 Posts: 930
    Sugarloaf isn't really a skiing destination from Montreal. The roads from Montreal into Route 27 are terrible. Most of Sugarloafs Canadian visits come from the Maritime Provinces and they do a successful marketing campaign with that area. Balsams may do better with Canadian visits as 1-91 is easier to access and somewhat close to Balsams. Honestly though most Canadians will probably stop at Jay, Smugglers or Stowe.

    My brother lives in Montreal and does most of his skiing at Jay and Smugglers Notch.

    Ski Conditions Report: A detailed report describing the snow conditions on the mountain the day of your visit. Skiers should become familiar with the following snow surface descriptions: Ice: Packed Powder, Slush: Packed Powder, Frozen Granular: Packed Powder , Packed Powder - A thin covering of snow over bare earth.

  • powderstudpowderstud intermediate
    Posts: 49
    The distance IS a problem, and further, if you have ever driven Rt. 3 north of Franconia Notch, it is SLOW GOING.  I last drove it about a decade ago, and there's just no getting around the fact that it's not a highway and you can't make good time on it.  Between the locals driving at ridiculously slow speeds and you can't pass, to constant speed traps (and I never got a ticket, but the cops were out every time I drove the route and it was clear that speeding tickets have to be a significant source of revenue for those towns), to (at the time) sections of the road being in pretty poor condition with potholes, terrible paving, etc., I just don't see how anyone would ever commit to traveling to Dixville Notch regularly.  PLUS you pass through a number of small towns which also slow down the trip.  We drove to Colebrook several times, and while the trip is at times breathtakingly beautiful, it is not quick or anything close to it.  With so much less time and effort, you can get to just about anywhere else to ski from Boston.   Further, I think Rick Bolger hit the nail on the head. 

    It just seems so obvious to me that this whole project is a boondoggle.
  • powderstudpowderstud intermediate
    Posts: 49
    Re. Rivercoil's comments:

    I am not privy to insider's information, but someone very much in the know told me a while back that what makes the Loaf viable is the traffic not from Boston, but from Portland ME.  He said, "If they ever lost the Portland crowd, Sugarloaf would be out of business."

    If that's true, than it bodes even worse for the Balsams. 
  • newmannewman advanced
    Posts: 424
    As far as the grand hotel era gone, isn't the hotel at Brenton Woods doing well?
  • rickbolgerrickbolger expert
    Posts: 1,325
    newman said:

    As far as the grand hotel era gone, isn't the hotel at Brenton Woods doing well?

    Yes but it's not the same, I've visited it and stayed there and it has changed with the times.  seems much more of a transient, spontaneous crowd.   It's a hotel, and yes it is special and historic, but they're no longer operating like it's 1958.  

    What made Balsams special was, they did operate like 1958.  But who wants that anymore?  

    And if LBO offers up another Loon, as pointed out many times, who wants to drive to the end of the world when they can simply drive to Loon?    

    Still, I wouldn't count the guy out.

  • sugarloafsugarloaf expert
    edited April 2 Posts: 930
    Some of the coldest skiing I ever did was at Balsams. My son and I skied there in March of 2008. The weather was sunny and tranquil in Bethel, but Ice Station Zebra once we got past Dixville Notch.

    Single digit cold combined with wind gusts to 40mph made for uncomfortable skiing conditions. To this day it's the coldest and Windiest skiing I've ever done in March.

    Ski Conditions Report: A detailed report describing the snow conditions on the mountain the day of your visit. Skiers should become familiar with the following snow surface descriptions: Ice: Packed Powder, Slush: Packed Powder, Frozen Granular: Packed Powder , Packed Powder - A thin covering of snow over bare earth.

  • obienickobienick expert
    Posts: 1,104
    My parents once XC skied to Mud Pond there in -40 degree weather.
  • mreallymreally novice
    Posts: 1
    New Hampshire tax payers should be paying attention because they are going to pay either way.  Gov. Sununu has stated we are "open for business", he will not fund this (the Balsams) "in" state project, to the economic benefit to the state.   All the while, the BFA is looking and encouraged to fund out of state projects (with no nexus to the State of NH) SB537 - hiring an out of state contract agency.  Gov. Sununu needs to decide if he supports New Hampshire or if he will use its resources to support other states - huge distraction for the BFA!   Build it and they will come!  Not only the skiers, but the snowmobiles, hunters, hikers, fishers, fourwheelers ... Are we open or not?

    I personally would rather support my historical landmarks and the people of New Hampshire than use our resources for out of state financing with no ties to NH.  People should encourage the financing - it is desperately needed and would promote tourism and "business friendly".
  • rickbolgerrickbolger expert
    Posts: 1,325
    Interesting post, thanks for adding a different perspective to our discussion and welcome aboard mreally!

  • z1000307470z1000307470 advanced
    Posts: 142
    Montreal has a ton of options that Balsams has to compete against.
    There are all the small areas north of Montreal on rt 15 leading up to Mt Tremblant. They are close and affordable. There are the Eastern Townships with some awesome big time skiing, also close and affordable. Mt St Anne is about 3-1/2 hours and is mostly highway.
    While Vermont (Jay/Smuggs/Stowe/Sugarbush Valley) certainly gets a lot of visitors from Montreal, Whiteface  (2 hours) and Gore (2:45) also see lots of skiers from Montreal and both are an easy drive off the highway.

    The Balsams has a real tough market to try and crack.
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