# Jay Peak EB-5 news



## VTKilarney (Apr 4, 2014)

Jay peak has put their latest EB-5 project "on hold" for six months, which happens to be during the construction season.

http://www.wcax.com/story/25167761/jay-peak-eb-5-update

What do people think?  Is it merely a "marketing" and permitting delay, or is there more trouble brewing?

While I have not been able to confirm this statement, in another forum (at britishexpats.com), a person who claims that they were a Phase 1 investor in 2007 has said that it will take 15 years to recoup their money.  Several years of no payments, 9 years of payments in the amount of $21,500 and then a final balloon payment in the amount of $306,500. They claim that they will not receive anything other than their investment back.  If this is true, what are the odds that Jay will be able to afford these balloon payments?  The investor was initially led to believe that they would receive their money back in 5-7 years.  

In the same forum, a Phase 2 investor says that an "exit strategy" has been "defined", but they have yet to be given a specific timeframe.  

I understand the risk of EB-5 investing, but I'm more interested in what's going on at Jay Peak - and also at Burke.  I'm curious to hear thoughts about this delay and the state of EB-5 at Jay/Burke in general.


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## BenedictGomez (Apr 4, 2014)

<---------  Predicted this (and worse).

It's not an "investment", regardless of the BS they tell you. 

 You're simply buying a Green Card and able to skip ahead of the _"tired, poor, huddled, masses"_ because you have money.

But the *real* problems with EB-5 are currently unforeseen.   These will occur in the unintended negative consequences that artificial manipulation with small, local, relatively closed economies will wreak....... you'll need to wait about 7 or 8 years, but you'll see.


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## VTKilarney (Apr 4, 2014)

Care to explain?


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## BenedictGomez (Apr 4, 2014)

VTKilarney said:


> Care to explain?



There was a long discussion about this in another thread if you do an EB-5 search.  Needless to say, my prediction ends poorly.

Short version: Most people simplistically think, _"Gee, what could possibly be bad?  It's "free money" and it's all from foreigners.  This is great!"_  The reality is economics is far more complicated than that, the EB-5 numbers bandied about and promoted are largely fictional, and once the money dries up and the merry-go-round stops, the unintended negative consequences will be poor.


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## xlr8r (Apr 4, 2014)

The mention that only 25% of the Burke development is currently funded is more telling of issues IMO.


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## thetrailboss (Apr 5, 2014)

The video is telling.  Things are "moving head nicely" with regards to design, concept, blah, blah, we're still fundraising....

The last part is what you need to know.


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## Smellytele (Apr 5, 2014)

As I posted in another thread:
http://finance.yahoo.com/news/rich-chinese-overwhelm-u-s--visa-program-181413597.html


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## VTKilarney (Apr 5, 2014)

At the same time, the Wall Street Journal came out with an article saying that the Chinese are now becoming extremely picky about where to invest their money.  They want to see real returns.


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## thetrailboss (Apr 5, 2014)

VTKilarney said:


> At the same time, the Wall Street Journal came out with an article saying that the Chinese are now becoming extremely picky about where to invest their money.  They want to see real returns.



Hence why Bill said they are going to South America, etc.


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## VTKilarney (Apr 5, 2014)

They are also courting South Africa.


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## thetrailboss (Apr 5, 2014)

As BG said folks are in it for buying a green card.  That is what the expectation should be.  The rest of it is a business investment that may or may not come to fruition.


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## VTKilarney (Apr 5, 2014)

thetrailboss said:


> As BG said folks are in it for buying a green card.  That is what the expectation should be.  The rest of it is a business investment that may or may not come to fruition.



Agreed that this is what the expectation should be.  These are high risk investments, after all.  But there has been a fundamental change.  There is now much more competition for those EB-5 funds.  And that alone has allowed investors to be more particular about where they wish to park their money.

Take a look at the Trapp Family Lodge.  Their trip to China was a total bust.  They could only scrape up $2 million out of a $20 million project.  And the Trapp Lodge has a long history of operation under common ownership.


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## BenedictGomez (Apr 5, 2014)

What it really says is that the low-hanging fruit has already been devoured.  They have to "work" now.


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## thetrailboss (Apr 5, 2014)

BenedictGomez said:


> What it really says is that the low-hanging fruit has already been devoured.  They have to "work" now.



Exactly.  I think that it was a real novel idea about 8 years ago.  Now everyone is in on it and the competition is much higher.


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## VTKilarney (Apr 5, 2014)

Here is the article I was referring to:
http://eb5info.com/system/attachments/149/original/WSJ_article.pdf?1364315621

And take a look at the staggering amount of EB-5 Regional Centers:
http://www.eb5duediligence.com/eb-5-regional-centers/


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## ss20 (Apr 5, 2014)

I'm hoping Mt Snow's EB-5 projects won't have to go through all this crap.  That's more of a dream than a reality though.


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## jaysunn (Apr 6, 2014)

DUDE, you live live in the NEK. Please stick to reporting on VT sugar production:



> At the same time, the Wall Street Journal came out with an article saying that the Chinese are now becoming extremely picky about where to invest their money. They want to see real returns.



These aliens or whatever you want to call them are robbing locals of jobs. I'm drinking so my opinion does not matter, our algos, will kill the American Main Street folks.   Just saying. PLease open a scottrade account.  We love it, we love your cash / off topic but legit.    O yeah, FUCK EB-5 projects !!!!

EDIT: Wall Street Trader here, yes I love Killington


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## BenedictGomez (Apr 6, 2014)

jaysunn said:


> DUDE, you live live in the NEK. Please stick to reporting on VT sugar production:
> 
> 
> 
> ...



1) Your first fallacy is assuming that jobs, real jobs, long-term jobs, are being created by EB-5 in the first place.
2) Do you really have to use the F-word in a high-percentage of your posts (or ever)?


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## jaysunn (Apr 7, 2014)

> 2) Do you really have to use the F-word in a high-percentage of your posts (or ever)?


Sorry for the F bombs, this is an open forum.


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## deadheadskier (Apr 7, 2014)

jaysunn said:


> Sorry for the F bombs, this is an open forum.



We don't enforce it frequently, but there is a policy on language in the forum rules.  FYI

Occasionally f bombs happen.....the moderators do it too


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## jaysunn (Apr 7, 2014)

Understood.....I will attempt to keep the foul language at bay.


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## VTKilarney (Apr 10, 2014)

Word on the street is that the contractors thought that the work was proceeding.  They have now been left high and dry and are scrambling to find a way to replace the work.

This seems odd given that Stenger says he postponed the project to give his marketing team a break.  Is there more to the story here?


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## BenedictGomez (Apr 10, 2014)

VTKilarney said:


> Word on the street is that the contractors thought that the work was proceeding.  They have now been left high and dry and are scrambling to find a way to replace the work.
> 
> This seems odd given that *Stenger says he postponed the project to give his marketing team a break. * Is there more to the story here?




I have absolutely no idea what's going on, but the bolded above is positively ridiculous nonsense.


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## thetrailboss (Apr 10, 2014)

BenedictGomez said:


> I have absolutely no idea what's going on, but the bolded above is positively ridiculous nonsense.



I think it has to do with them having a hard time getting investors.  Maybe it is because folks aren't happy, maybe it is because there now is a lot of competition for the same funds, who knows.  This is not new with Jay....they have had good ideas and no money and it just takes time to raise it.


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## skifree (Apr 10, 2014)

if these investments where any good  wouldn't investors from the good ole USA jump in?


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## thetrailboss (Apr 10, 2014)

skifree said:


> if these investments where any good  wouldn't investors from the good ole USA jump in?



You'd think so.  But check your investments and see where the money is going.  

Ski areas have a hard time getting capital because of the risk involved.  Jay was on the cutting edge in using this as a method to finance their projects that they could not get conventional financing to complete.


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## WWF-VT (Apr 10, 2014)

Here's a link to an interesting March 14th article on the EB-5 program used across a variety of VT business projects including Sugarbush:


http://www.burlingtonfreepress.com/article/20130314/BUSINESS08/303140011/EB-5-vermont-jay-peak-visas


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## BenedictGomez (Apr 10, 2014)

skifree said:


> *if these investments where any good  wouldn't investors from the good ole USA jump in?*



Yes, which is why the word, "investments" is generally a complete farce with regard to EB-5. 

 The only "investment" you're getting for your $1M (or $500k) is skipping the line of immigrants who dont have as much money as you.


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## thetrailboss (Apr 10, 2014)

BenedictGomez said:


> The only "investment" you're getting for your $1M (or $500k) is skipping the line of immigrants who dont have as much money as you.



That would be the only guarantee per se I guess.  And I think the number of folks who want to buy this privilege is shrinking.


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## VTKilarney (Apr 10, 2014)

thetrailboss said:


> That would be the only guarantee per se I guess.  And I think the number of folks who want to buy this privilege is shrinking.



I'm not sure if demand is shrinking or if competition is increasing - or perhaps a combination of both.  What little I have read suggests that there is still demand, but I freely admit that I have just glanced at a couple of websites - which is not at all what I would consider to be reliable.


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## fbrissette (Apr 11, 2014)

BenedictGomez said:


> Yes, which is why the word, "investments" is generally a complete farce with regard to EB-5.
> 
> The only "investment" you're getting for your $1M (or $500k) is skipping the line of immigrants who dont have as much money as you.




As far as I know, the first batch of Jay Peak EB5 investors got their money back (entire amount ???)  last year (Tramhouse lodge), and Jay Peak elected to keep the tramhouse instead of selling it as condos.   Even if you get zero return, if you get your money back and a green card it's a pretty good deal.


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## VTKilarney (Apr 11, 2014)

fbrissette said:


> As far as I know, the first batch of Jay Peak EB5 investors got their money back (entire amount ???)  last year (Tramhouse lodge), and Jay Peak elected to keep the tramhouse instead of selling it as condos.   Even if you get zero return, if you get your money back and a green card it's a pretty good deal.



An alleged Phase 1 investor posted this:
http://britishexpats.com/forum/showpost.php?p=11097464&postcount=244
The full thread can be found here: http://britishexpats.com/forum/showthread.php?t=754864&page=17

Later in that thread they corrected the balloon payment amount to $306,500.  They also stated that they were not going to receive any income from the hotel.  I have no idea if they really were an investor or if what they said is true.

If investors have indeed been paid back in full, this is fantastic news.  Where did you learn of this?


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## fbrissette (Apr 11, 2014)

VTKilarney said:


> Where did you learn of this?



This was mentioned at a homeowner meeting.  To be fair, there was no mention of numbers.   The information was relayed as I mentioned above:   EB-5 participants got their money back, Jay Peak elected to keep the Tramhouse.   The way it was worded, impossible to tell if they got all of their money back or not, but it sounded as if they got a good chunk of it back.

To me the good news was that Jay Peak kept the tramhouse, which means they were able to make money out of it and keep the jobs that come with it.   I have  no idea if EB-5 investors had a choice between keeping part ownership or if there was negociation about how much money they would get to opt out.


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## VTKilarney (Apr 11, 2014)

Here's a WCAX story about an original investor:
http://www.wcax.com/story/23895536/bu


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## BenedictGomez (Apr 11, 2014)

VTKilarney said:


> Here's a WCAX story about an original investor:
> http://www.wcax.com/story/23895536/bu



LOL.  Whelp.... that settles that.

Love this bit:



> "I tell my clients three things -- one, will your green card be  approved? Two, will it be made permanent? Three, will you get your money  back? The third is less important than the first two, Korda said.



And now HE'S an "Immigration Lawyer" living in America, making serious BANK, and helping other people purchase US citizenship.  Oh the American dream! (fueled and made possible by a horrible government program)


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## fbrissette (Apr 11, 2014)

BenedictGomez said:


> LOL.  Whelp.... that settles that.



If I had serious money, the goal would be to get the green card.  Getting my money back would be the icing on the cake.  We will likely never know if and how much money the investors are getting back.


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## VTKilarney (Apr 11, 2014)

fbrissette said:


> This was mentioned at a homeowner meeting.  To be fair, there was no mention of numbers.   The information was relayed as I mentioned above:   EB-5 participants got their money back, Jay Peak elected to keep the Tramhouse.



It's so maddening to hear different accounts of what is happening at Jay.  I was able to find an article from September, 2013 that is largely consistent with what the alleged Phase One investor posted on the Internet.  (My understanding is that the Tram Haus was Phase One.)  The article is here: http://www.discovernewportvt.com/ab...enger-pays-deposit-pomerleau-waterfront-plaza

In the article, Stenger stated that all that had happened was that agreements had been signed to fully pay back investors. (aka: "I promise to do what I promised to do.")  Stenger said the first 35 investors, whose funds built the Tramhaus Hotel project, will receive their $500,000 investments back in installments over the next 10 years.

I suppose that something could have happened between September and now, but it seems hard to believe that we would not have heard about it.  My gut feeling is that the person speaking at the homeowner's meeting left the impression that the investors have gotten their money back by referencing the agreement for them to eventually get their money back.


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## Masskier (Apr 11, 2014)

VTKilarney said:


> It's so maddening to hear different accounts of what is happening at Jay.  I was able to find an article from September, 2013 that is largely consistent with what the alleged Phase One investor posted on the Internet.  (My understanding is that the Tram Haus was Phase One.)  The article is here: http://www.discovernewportvt.com/ab...enger-pays-deposit-pomerleau-waterfront-plaza
> 
> In the article, Stenger stated that all that had happened was that agreements had been signed to fully pay back investors. (aka: "I promise to do what I promised to do.")  Stenger said the first 35 investors, whose funds built the Tramhaus Hotel project, will receive their $500,000 investments back in installments over the next 10 years.
> 
> I suppose that something could have happened between September and now, but it seems hard to believe that we would not have heard about it.  My gut feeling is that the person speaking at the homeowner's meeting left the impression that the investors have gotten their money back by referencing the agreement for them to eventually get their money back.



Maybe,  and I am just offering this as a possibility, with no first hand knowledge, but it would not be unusual for a developer to build a hotel, get it up and operating, then re-finance and pay off the investors.


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## VTKilarney (Apr 11, 2014)

Masskier said:


> Maybe,  and I am just offering this as a possibility, with no first hand knowledge, but it would not be unusual for a developer to build a hotel, get it up and operating, then re-finance and pay off the investors.



I was thinking that may have happened.  It would be good news if it had.  The only thing that makes me somewhat skeptical is that I cannot imagine that a traditional lender would give better terms than the EB-5 option.  But the one thing I know about Jay is that I don't know!


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## from_the_NEK (Apr 11, 2014)

Masskier said:


> Maybe,  and I am just offering this as a possibility, with no first hand knowledge, but it would not be unusual for a developer to build a hotel, get it up and operating, then re-finance and pay off the investors.



That really doesn't make sense in this case since there is no interest being paid on the EB-5 loans (is there?), so "refinancing" kind of seems pointless.


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## Masskier (Apr 11, 2014)

from_the_NEK said:


> That really doesn't make sense in this case since there is no interest being paid on the EB-5 loans (is there?), so "refinancing" kind of seems pointless.



I think it depends, (and I am just thinking out loud) if there is a lot of competing projects and you want to be able to attract money then you would have to make your deal more appealing to investors by offering a roi.  Granted, the main motivation is the green card.  However the investor is going to choose the investment that he feels that has the best opportunity to get his money back plus some type of return.  Since investors usually want than money back asap, so many times there are built in incentives for developers to pay them back sooner (no interest, less interest ect).


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## skifree (Apr 11, 2014)

I know a few EB-5 investors that got a green card and basically told no dice on getting your investment back.
Wish I could run the EB-5 scam with my business.


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## BenedictGomez (Apr 11, 2014)

VTKilarney said:


> Stenger said *the first 35 investors, whose funds built the Tramhaus Hotel project, will receive their $500,000 investments back in installments over the next 10 years*.



What an "investment" indeed.   

You given someone $500,000 for a DECADE and don't see a penny in return!

An "investment" my ass. LOL.  That's just necessary terminology to enable this scam.


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## VTKilarney (Apr 11, 2014)

BenedictGomez said:


> You given someone $500,000 for a DECADE and don't see a penny in return!



Stenger didn't say this the day the he received the investments.  If what I have read online is true, the total period for Phase One payback is 15 years.  This assumes that Jay can make a balloon payment in the final year in the amount of $306,500 per investor.

So to recap: 
a) No return for a few years.
b) After fourteen years, only $193,000 has been paid back (38.7% of the original investment).
c) In year fifteen, a balloon payment of $306,500 to pay everything back.  If this balloon payment is made, the original $500,000 will be paid back with no interest or income from the hotel operation.

Again, this is just what I've read online.  It may or may not be accurate.


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## fbrissette (Apr 11, 2014)

BenedictGomez said:


> What an "investment" indeed.
> 
> You given someone $500,000 for a DECADE and don't see a penny in return!
> 
> An "investment" my ass. LOL.  That's just necessary terminology to enable this scam.




I agree that it's not an investment.  But unless the project goes bankrupt, the 'investors' will see some money back.  They still own the tramhouse lodge for example.  Whether or not it's worth their original 500k is another story.


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## thetrailboss (Apr 11, 2014)

I might be wrong, but this is equity and not loan deals.  

The hope might be some ROI, but the expectation seems to be get your money back and a green card.


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## Domeskier (Apr 11, 2014)

fbrissette said:


> I agree that it's not an investment.  But unless the project goes bankrupt, the 'investors' will see some money back.  They still own the tramhouse lodge for example.  Whether or not it's worth their original 500k is another story.



It's essentially a ten-year interest-free loan.  The real cost to the "investor" over the ten year period will be significantly more than $500,000 assuming any reasonable rate of return elsewhere.


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## VTKilarney (Apr 11, 2014)

My understanding is that they are not loans.  The investors have an equity stake in the operation.  I do know that EB-5 rules require that the money be placed "at risk."  This does not mean that you will lose your money.  It means that there is a risk of losing some or all of your money.  Public opinion seems to believe that the risk is quite high.

Since they aren't loans, the investors cannot foreclose like a regular mortgage holder would be entitled to do.


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## Domeskier (Apr 11, 2014)

VTKilarney said:


> My understanding is that they are not loans.  The investors have an equity stake in the operation.



That makes a lot more sense.


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## BenedictGomez (Apr 11, 2014)

Domeskier said:


> It's essentially a ten-year interest-free loan.  *The real cost to the "investor" over the ten year period will be significantly more than $500,000 *assuming any reasonable rate of return elsewhere.



Absolutely.   

Luckily for the EB-5 "takers", few people understand finance.




VTKilarney said:


> *My understanding is that they are not loans.  The investors have an equity stake in the operation.*



Really?  That doesn't seem very likely to me.


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## thetrailboss (Apr 11, 2014)

I think that each project is an LLC with each EB-5 investor made a member of the LLC....or something like that...so yeah, equity investors.


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## thetrailboss (Apr 11, 2014)

And I think that I read in the Jay magazine that they now have 2,600 beds, which is impressive.


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## VTKilarney (Apr 11, 2014)

BenedictGomez said:


> Really?  That doesn't seem very likely to me.



Apparently there can be a two-tiered structure.  Here is an explanation of a two-tiered arrangement from a law firm's website that I just read:

_Most commonly, the foreign investors invest in a new entity, “NEWCO,” which in turn, makes a secured, collateralized loan to the operating company consuming the capital, “OPCO.”  The loan will have collateral (security against loss of capital) in the form of a mortgage or UCC filing on personal property (e.g. equipment), a five year repayment term (fixed term for return of the investors capital), and a specified interest rate (fixed or floating return on capital).  Since these loan agreements and security run between NEWCO and OPCO, and do not run directly to the investors, EB-5 regulations are satisfied.  Of course, via NEWCO, investors run the risks of market interest rate changes and repayment that attach to any creditor – placing their capital “at risk.” _  (see: http://www.tollefsenlaw.com/answers/The-Law/Immigration/EB-5-Project-Finance.asp )

In the single tier model, the investors are equity holders in the business.  That same website stated that Jay is a single tier model.


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## BenedictGomez (Apr 11, 2014)

thetrailboss said:


> And I think that I read in the Jay magazine that* they now have 2,600 beds, which is impressive*.



That's awesome.   It means that once the gravy train ends and the "free money" stops, there will be affordable places and some deals to stay at Jay Peak once their artificial market ends.  




VTKilarney said:


> In the single tier model, the investors are equity holders in the business.  That same website stated that Jay is a single tier model.



But what exactly is the equity that they have true ownership of?  They certainly don't have any rights to liquidate an asset. This seems mostly like semantics to me


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## AdironRider (Jun 11, 2014)

Did he seriously promise that for an investment of 21.5k in nine years it would be worth 306.5k? 

Either Stenger is going to end up in jail or this was lost in translation.


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## thetrailboss (Jun 11, 2014)

AdironRider said:


> Did he seriously promise that for an investment of 21.5k in nine years it would be worth 306.5k?
> 
> Either Stenger is going to end up in jail or this was lost in translation.



Huh? Where was that?


Sent from my iPhone using AlpineZone


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## fbrissette (Jun 12, 2014)

thetrailboss said:


> Huh? Where was that?
> 
> 
> Sent from my iPhone using AlpineZone




Somehow I think a post was deleted.  Here's what I got in my email alert:
--------------------
Dear fbrissette,

bbery has just replied to a thread you have subscribed to entitled - Jay Peak EB-5 news - in the Northeast Skiing and Snowboarding Forum forum of New England & Northeast Skiing, Mountain Biking, Hiking Forums - AlpineZone Forums.

This thread is located at:
http://forums.alpinezone.com/showthread.php?t=129570&goto=newpost

Here is the message that has just been posted:
***************
we are phase one and the above are true ,we have no say in what happens at tram house, we have just found this out,and  $21500 for 9 years and supposedly in 9 years $306500, unfortunately  not everyone who invested in eb5 were super rich it was just the best way forward for our family and we believed in jay peak and bill stengers promises, not any more though.
***************


There may also be other replies, but you will not receive any more notifications until you visit the forum again.

All the best,
New England & Northeast Skiing, Mountain Biking, Hiking Forums - AlpineZone Forums
--------------------------


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## VTKilarney (Jun 12, 2014)

That is consistent with what I have read - but AdironRider appears to have misinterpreted the data.  Stenger did not say he would turn an investment of $21,500 into $306,500 after nine years.  These numbers have to do with payback of a $500,000 investment.


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## mbedle (Jun 12, 2014)

I tried reading about the program today and there seems to be a lot of confusion about the actual program. I think that is partly because the government has very little control over firms/brokers that are using or promoting the EB-5 program. On a lot of websites (include the US Immigration site), it seems pretty straight forward that EB-5 investors understand that they may never get a permanent VISA (i.e., job creation never happens company and or project fails, etc.), they may only receive part or none of their investment back and in most cases they never will receive a return on their investment. With that said, I got to believe that a lot of these EB-5 investor have 500K sitting around in a forgotten bank account and are not putting their entire life savings into the program. I also got to believe that most of them, if they did their due-dillegences, understand the risks associated with the program. To me, if it generates jobs and brings new businesses, I happy with it. If 20 people chose to pay 500K each to gain citizenship, that is their choice. And yes there have been some failures and scams committed under this program. 




VTKilarney said:


> Apparently there can be a two-tiered structure.  Here is an explanation of a two-tiered arrangement from a law firm's website that I just read:
> 
> _Most commonly, the foreign investors invest in a new entity, “NEWCO,” which in turn, makes a secured, collateralized loan to the operating company consuming the capital, “OPCO.”  The loan will have collateral (security against loss of capital) in the form of a mortgage or UCC filing on personal property (e.g. equipment), a five year repayment term (fixed term for return of the investors capital), and a specified interest rate (fixed or floating return on capital).  Since these loan agreements and security run between NEWCO and OPCO, and do not run directly to the investors, EB-5 regulations are satisfied.  Of course, via NEWCO, investors run the risks of market interest rate changes and repayment that attach to any creditor – placing their capital “at risk.” _  (see: http://www.tollefsenlaw.com/answers/The-Law/Immigration/EB-5-Project-Finance.asp )
> 
> In the single tier model, the investors are equity holders in the business.  That same website stated that Jay is a single tier model.


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## AdironRider (Jun 12, 2014)

VTKilarney said:


> That is consistent with what I have read - but AdironRider appears to have misinterpreted the data.  Stenger did not say he would turn an investment of $21,500 into $306,500 after nine years.  These numbers have to do with payback of a $500,000 investment.




I should have quoted the post, but a guy with one post in broken english said he paid 20.5 and was supposed to be paid out 306500. Its exactly what he said, and hence my lost in translation comment.


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## thetrailboss (Jun 12, 2014)

AdironRider said:


> I should have quoted the post, but a guy with one post in broken english said he paid 20.5 and was supposed to be paid out 306500. Its exactly what he said, and hence my lost in translation comment.



Was he saying that he was paid $20,500 a year with a final balloon payment of $306,500?


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## mbedle (Jun 12, 2014)

I pretty sure the case was he was paid 20.5K per year with a final ballon payment. What is weird is that he seemed to be bitching about it, but agreed to it prior to signing up for the EB-5 program.


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## AdironRider (Jun 12, 2014)

thetrailboss said:


> Was he saying that he was paid $20,500 a year with a final balloon payment of $306,500?




The way he wrote it yes, but considering the other grammar and spelling issues, I dont think he meant it that way. 

Even still 20.5k a year with a balloon of 306.5k leads me to believe Jay is going to be in some deep shit when 9 years is up.


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## VTKilarney (Jun 12, 2014)

mbedle said:


> I tried reading about the program today and there seems to be a lot of confusion about the actual program.



Two things are true about EB-5:
1) The money has to be "at risk", meaning that there is no assurance of getting your money back.
2) With 400+ projects competing for money, investors are gravitating toward projects with the least perceived risk.  Even those with $500,000 to lose prefer the best chance of not losing it.

Care to guess how competitive a tennis center at Burke is to a real estate project in Manhattan?


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## VTKilarney (Jun 12, 2014)

AdironRider said:


> Even still 20.5k a year with a balloon of 306.5k leads me to believe Jay is going to be in some deep shit when 9 years is up.



If this is their model, and AFAICR there has been no evidence here to the contrary, that is definitely the $64,000 question.  I'm not sure that they will be in "deep shit", though, since my understanding is that the investors can't foreclose like you could on a traditional loan.  The biggest impact will be on future funding, which is why I am sure that they are scrambling to get their projects done before that time.


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## thetrailboss (Jun 12, 2014)

AdironRider said:


> Even still 20.5k a year with a balloon of 306.5k leads me to believe Jay is going to be in some deep shit when 9 years is up.



Yep.   By then Stenger will be retired and in the Caribbean.


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## fbrissette (Jun 12, 2014)

AdironRider said:


> Even still 20.5k a year with a balloon of 306.5k leads me to believe Jay is going to be in some deep shit when 9 years is up.



Worse case scenario, they sell the tramhouse units as condos or shared ownership and make more than enough to cover the remaining 306.5 k.


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## AdironRider (Jun 12, 2014)

fbrissette said:


> Worse case scenario, they sell the tramhouse units as condos or shared ownership and make more than enough to cover the remaining 306.5 k.




Thats a big if. Residential units at hotels are nowhere near as popular as they were ten years ago. Who buys timeshares these days? 

Thats still ponzi scheme level return promises. While these are at risk investments, theres still ramifications for making promises that large.


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## BenedictGomez (Jun 13, 2014)

fbrissette said:


> *Worse case scenario, they sell the tramhouse units as condos or shared ownership and make more than enough to cover the remaining 306.5 k*.



I'm not convinced that that math folks are assuming to be the case in the above broken English example is correct.....because it's friggin' insane.......but if it is......trust me, the above is NOT the _"worst case scenario"_ on that puppy.  That thing could potentially get all kinds of ugly if it's true (which I doubt it is).


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## fbrissette (Jun 14, 2014)

BenedictGomez said:


> I'm not convinced that that math folks are assuming to be the case in the above broken English example is correct.....because it's friggin' insane.......but if it is......trust me, the above is NOT the _"worst case scenario"_ on that puppy.  That thing could potentially get all kinds of ugly if it's true (which I doubt it is).



I have no first hand information about this buy back program but there is some good reading here that seems to confirm this.

http://britishexpats.com/forum/us-i...4/problems-amlife-eb5-investor-754864/page17/


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