REPORT: Jay Peak and Q Burke Projects Under SEC Investigation
EB-5 programs are under increasing scrutiny due to complaints and inquiries.
Thursday, June 25, 2015, NewEnglandSkiIndustry.com
According to a VTDigger report, the massive EB-5 projects run by the owners of Jay Peak and Q Burke in Northern Vermont are now being investigated by the Securities and Exchange Commission. In addition, the report claims the owners have not fulfilled financial disclosure requests from the State of Vermont.
According to the report, there are over 30 business entities owned by Ariel Quiros and Bill Stenger that are related to Jay Peak, Q Burke, and AnC Bio Vermont.
Ground was broken for the Q Burke Hotel in June 2014 and for AnC Bio in May 2015. While construction continues at Q Burke Hotel for a potential December 2015 opening, VTDigger reports no work has been conducted at AnC Bio. VTDigger reports $120 million in EB-5 contributions is needed for Q Burke, while $110 million is needed for AnC Bio.
Though prominent Vermont politicians such as Senator Patrick Leahy, Senator Bernie Sanders, and Governor Peter Shumlin appeared at various ceremonies for the ownership's EB-5 projects over the years, their support appears to be waning in light of recent developments. Senator Leahy's uncle-in-law Tony Pomerleau pulled out of the ownership's Newport waterfront project in 2014, stating, "I've been waiting for four years, I can't wait any longer. I haven't received one dime and we're talking about a big deal, millions of dollars." Neither Leahy nor Shumlin were present at the latest groundbreaking.
In 2007, the Vermont EB-5 Regional Center was rechartered. Under the EB-5 program, a foreigner can invest $1 million in an approved United States business (which must then create jobs), in exchange for a green card. With the Northeast Kingdom labeled a Targeted Employment Area, the minimum investment is cut in half to $500,000, making participating rural businesses such as Jay Peak more attractive.
The current ownership group has been in place at Jay Peak since 2008. Its first large EB-5 funded project, the Tram Haus Lodge, opened in December of 2009. A $27 million indoor water park opened two years later. Burke Mountain was acquired in 2012 and rebranded as Q Burke in 2013.