Q Burke disaster

obienickobienick expert
edited March 2016 in NELSAP Forum Posts: 853

180 people laid off including 45 full-year/full-time employees

"Reports sugest 2016-17 operations are at risk"

Lean pending by hotel contractor if $5.5M not paid by next week.

http://www.newenglandskiindustry.com/viewstory.php?storyid=404

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As a side note, I hope this doesn't bode poorly for Mt. Snow's delayed EB-5 escrow release.  Their earnings call said they've spent half their available cash on West Lake and without the release of funds they'd get close to, if not pass, their 1.5 debt ratio covenant meaning they'd have to put even more money in escrow for their long term debt payments.
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Comments

  • bmwskierbmwskier advanced
    Posts: 322
    The whole idea of the EB-5 just kind of bothers me. While I understand that it's to bring jobs and investment into a region that needs it, the concept that just because someone has extra cash should jump ahead of everyone else seems just un-American. 
    "Making ski films is being irresponsible with other people's money, in a responsible sort of way..." 
    Greg Stump
  • rickbolgerrickbolger expert
    edited March 2016 Posts: 1,061
    like express lines at resorts on USFS property, or with Homeland Security express lines at airports, or when bankers don't go to jail, or police don't get prosecuted for crime, the new toll lane to Summit County, or when the Vail valet parking attendants bring the exotic cars in five minutes while the rest of us wait 30? 

    Let's face it, EB-5 is about as American as it gets.  It's about who you know, and how much money you got.

    Sorry, rant over
  • bmwskierbmwskier advanced
    Posts: 322
    When you put it that way, I see your point. I was thinking more the idealistic version of the US-- ah well. 

    The whole Q Burke thing made the evening news a few days back-- hotel sits empty while they work out the escrow stuff that shuttered the whole project. Not sure why the state had to step in and do what they did. Seems like just another level of red tape. That area is going to need some tourist dollars to stay afloat during the summer and that means mountain bikers for Kingdom Trails. 
    "Making ski films is being irresponsible with other people's money, in a responsible sort of way..." 
    Greg Stump
  • tededetedede advanced
    Posts: 121
    "Reports sugest 2016-17 operations are at risk"
    I suspect that means the operations of just the hotel.
  • sugarloafsugarloaf expert
    Posts: 751

    like express lines at resorts on USFS property, or with Homeland Security express lines at airports, or when bankers don't go to jail, or police don't get prosecuted for crime, the new toll lane to Summit County, or when the Vail valet parking attendants bring the exotic cars in five minutes while the rest of us wait 30? 


    Let's face it, EB-5 is about as American as it gets.  It's about who you know, and how much money you got.

    Sorry, rant over
    It's called money talks, bull@@it walks. Fact of life.

    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.

  • ADKskierADKskier advanced
    Posts: 226
    ^ This
    ~Rich~
  • riverc0ilriverc0il advanced
    edited March 2016 Posts: 252
    bmwskier said:

    The whole idea of the EB-5 just kind of bothers me. While I understand that it's to bring jobs and investment into a region that needs it, the concept that just because someone has extra cash should jump ahead of everyone else seems just un-American. 

    Wait a sec, money buying privilege is un-American?  :-/

    I couldn't disagree more. Not being facetious here at all... look critically at this country's history. Money buying privilege is the rule, not the exception. Heck, look at the amusement park industry. Almost every single major amusement park has a line cutting for money package. It couldn't be more institutionalized than that. Let alone the unspoken backdoor hand shaking part of the country. 

    I fully support foreigns pretending to "invest" when they are more often than not just dumping money into our country that they'll never get back just to cut in line. What better way to welcome them to the country? Okay, now I am being a little facetious.

    I appreciate the idealism and I am all for fairness and equality and everyone being treated equally. I just don't think that is the American way, as much as it would be nice if it was.
  • bobbuttsbobbutts intermediate
    Posts: 95
    I don't like being unclear or misleading about the 'investment' part of it which I guess has been an issue.   If it's buying, call it buying, if it's investing, the level of risk should be clear.  
  • z1000307470z1000307470 intermediate
    Posts: 85

    The Q in Burke has proved to be clueless. As for the EB 5 investors, they got their green cards. If they don't see any of the "investment " they are still ahead.

  • joshua_segaljoshua_segal expert
    Posts: 1,717

    The Q in Burke has proved to be clueless. As for the EB 5 investors, they got their green cards. If they don't see any of the "investment " they are still ahead.

    There was an interview on PBS a few years ago with a British lawyer who came to the USA on an EB-5 visa.  If I remember right, his money was invested in Jay Peak.  He was quite pleased that he actually received a percent or so of interest annually.  As little as the return was, he was expecting nothing except the opportunity to jump the list to become an American.
  • obienickobienick expert
    Posts: 853
    Don't you mean Qless?
  • ski_itski_it expert
    Posts: 1,653
    50 million for a hotel? 27 million for Jay's water park? I guess my 25 million just doesn't buy what it used to!
    So how many rooms do you think it has and how much a night will they be able to charge on average?
    ISNE-I Skied New England | NESAP-the New England Ski Area Project | SOSA-Saving Our Ski Areas - Location SW of Boston MA
  • obienickobienick expert
    edited March 2016 Posts: 853
    I think those numbers are inflated to line contractors' pockets.

    Think about it; it's free money.  The money is not coming from ownership.  It's coming from outside investors who most likely value their Green Card as good return and so the investors probably don't care to get their $500k back .  Why would any contractor bid low in this situation?  

    Also there's a 15% "management fee" to ownership so that needs to be taken off to compare prices.
  • ski_itski_it expert
    Posts: 1,653
    So is / was the hotel open? I attempted to book a room online for various nights and it said not available in each case. Mid week.
    Says there are 116 suites 1-3 rooms. Also one night stays not possible. I hate when hotels do that.
    ISNE-I Skied New England | NESAP-the New England Ski Area Project | SOSA-Saving Our Ski Areas - Location SW of Boston MA
  • obienickobienick expert
    Posts: 853
    It is my understanding the hotel still hasn't opened.
  • BetsyBetsy intermediate
    Posts: 67
    The hotel is not open.
    Location: Greater Burlington, VT
  • obienickobienick expert
    edited March 2016 Posts: 853
    PeakCM to Place Lien on Q Burke Hotel
    General contractor had threatened to place lien on property if late payment deadline was missed.


    I didn't think this could get better (worse(?)).  Now they're using Good Friday as an excuse for not paying the contractor.  Only the Stock Markets were closed.  Banks were open.  This is quickly becoming a joke.  I'm glad I don't have a pass there!
  • ski_itski_it expert
    Posts: 1,653
    Didn't open? But still they were advertising it magazines and they have an online reservation site
    ISNE-I Skied New England | NESAP-the New England Ski Area Project | SOSA-Saving Our Ski Areas - Location SW of Boston MA
  • bousquet19bousquet19 advanced
    Posts: 220
    ski_it said:

    Didn't open? But still they were advertising it magazines and they have an online reservation site

    Right.  

    They were advertising.  They were accepting reservations per the advertised opening date.  But they were unable to open the hotel as scheduled (see links to articles above for explanations provided to news media).
  • ski_itski_it expert
    edited March 2016 Posts: 1,653

    "PeakCM President Jerry Davis has instructed his attorney to begin filing a lien on the Q Burke Hotel, the Burlington Free Press reports. PeakCM claims it is still owed $5.5 million for the $50 million EB-5 hotel."

    That name sounds so familiar...


    ISNE-I Skied New England | NESAP-the New England Ski Area Project | SOSA-Saving Our Ski Areas - Location SW of Boston MA
  • lotsoskiinglotsoskiing expert
    Posts: 665
    Peeked in the windows a few weeks ago. Tables set in the restaurant. Heard rooms still needed electric and plumbing work. Radio today said the 180 terminations are not seasonal cuts. Report said 'permanent', hence the rapid response team. Very sad for the folks who depend on the place.
  • djspookmandjspookman advanced
    Posts: 300
    Thursday afternoon I emailed the reservations desk about a campground reservation for summer, and still have no reply..  I typically reserve around now, and their response is no more than one day.  Weird stuff going on up there!
  • ski_itski_it expert
    edited March 2016 Posts: 1,653
    Those are a lot of details, thks lotsoskiing.
    So if they only open weekends after 1000 weekends they will break even
    ISNE-I Skied New England | NESAP-the New England Ski Area Project | SOSA-Saving Our Ski Areas - Location SW of Boston MA
  • LiftGuyLiftGuy advanced
    Posts: 126
    Sounds like a Shell Game gone bad...
  • obienickobienick expert
    Posts: 853
    Weren't they paying off early Jay Peak EB-5 investors with the proceeds from later EB-5 investors?
  • steamboat1steamboat1 advanced
    Posts: 250

    12920458_1116244561739761_5426943890620900105_n.jpg
    450 x 600 - 53K
  • BetsyBetsy intermediate
    Posts: 67
    Location: Greater Burlington, VT
  • bubblecufferbubblecuffer advanced
    Posts: 262
    My opinion is way more of a hotel than what the mountain warrants at this time.  When trouble was on the horizon, the effort should have been scaled back to 50% of what it is, even if mid-way through.
    • Do a root cause analysis at how things got this way
    • Examine options to get out and act on the best one.  
    • Negotiate with the builder
    • Fix any mountain issues
    • Take out the "Q"
    • Open a small fraction of the hotel for next year


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