After EB-5 Scandal Convictions, What's Next for the Northeast Kingdom?

After EB-5 Scandal Convictions, What's Next for the Northeast Kingdom?

Jay Peak

After EB-5 Scandal Convictions, What's Next for the Northeast Kingdom?

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Two months ago, the mastermind behind the Northeast Kingdom EB-5 scandal, Ariel Quiros, got sentenced to five years in prison. With the sentencing completed for the participants in the scandal, the people of the Northeast Kingdom, along with the outside world, are shifting their focus as to what comes next.

The EB-5 situation helped grow Jay Peak into a powerhouse with multiple hotels and other amenities and helped grow Burke Mountain as well. Unfortunately, Ariel Quiros and others were involved in a situation identical to a Ponzi scheme, leading to excessive money wasting and starting some projects that would never see the light of day. The feds came in to take away their properties in 2016, and Jay Peak and Burke Mountain have been in a federal receivership since. Over the past couple of months, convictions have been given to the numerous people behind the scandal. Quiros got five years, his business partner, William Kelly, got eighteen months behind bars, and former Jay Peak President Bill Stenger got eighteen months for falsifying documents and statements to government agencies. Surprisingly, federal prosecutors dropped ten federal charges aimed at the fourth defendant: Alex Choi. According to Vermont Biz, he was convicted of fraud in South Korea in 2016. Investigators were unable to locate Choi, who remained at large after being charged in 2019, and couldn’t obtain critical evidence.

In early June, VPR spoke with Bill Stenger, who received an eighteen-month prison sentence for his involvement in the EB-5 scheme. Bill did not take the EB-5 funds for personal use like Quiros did but eventually became aware of the fraud that was taking place, and made falsified statements to a government agency. Bill Stenger said the following about the EB-5 era in the Vermont Public Radio interview:

“I saw myself as someone who had an opportunity to change the economy of a region using a federal program that I fully believed in. I know what went wrong, and I should have done more at the time, and I regret [that] I didn’t.”

One of the most prominent scars from the EB-5 era was the abandoned developments in the town of  Newport. They were aiming to add an AnC Bio building and a mixed-use project in downtown Newport, but this turned out to be a total sham. Luckily, the Northeast Kingdom Development Corporation recently bought the AncBio plot of land and will be leasing the building to Track Inc, which builds snow groomers and other equipment. While the failed AncBio project aimed to add 400 jobs, Track Inc. could add 100 new jobs within the next five years. In the meantime, Jay Peak remains busy after wrapping up its ski season in May. The big off-season project for Jay Peak is the expansion of their mountain biking offerings. They recently opened up a pump track next to the Hotel Jay & Waterpark. They will also be adding a new rental fleet of bikes via Trek. With only a few trails being part of Jay’s mountain biking network, it’s something they can grow on in the coming years with a new ownership crew coming in.

The story to watch this summer for the New England ski industry will be who buys Jay Peak, as all signs point to a buyer emerging in the coming months. According to VPR, there are reportedly two to three buyers still interested in purchasing the mountain, and they will likely keep it on the Indy Pass. Recent podcast episodes from the Storm Skiing Journal have confirmed that the Alterra Mountain Company is out of the running, and SNOW Partners, who was also once interested in buying Jay, is now focused instead on building more indoor ski areas.

While Jay Peak is likely to be sold, Burke Mountains’ future is less certain. While it’s still likely to continue to operate under federal receivership, there hasn’t been much news on a future buyer. In a 2021 interim report published by the federal receivers, they discussed the progress on the sale of Jay Peak, but nothing was mentioned in regards to Burke. In the meantime, Burke has joined the Indy Pass as a reciprocal partner for next season, with 25% off weekends and holidays, and 50% off weekday tickets.

I actually got to travel to Burke Mountain this past weekend and was really impressed with what I saw. I took the toll road up the mountain and was impressed with how varied the terrain was. Burke has a stunning mid-mountain hotel with various amenities, it’s home to Burke Mountain Academy, and it has an extensive mountain biking network that is connected to Kingdom Trails. There is still work to do at Burke to reach its full potential though, as the old Willoughby Quad has not been fully removed since its closing in 2018, their lodges will likely need to be renovated at some point, the amount of affordable housing in the Northeast Kingdom is limited, and various expansions that have been proposed in the past could extend their skiing network. Hopefully, Burke can find a buyer, and the Northeast Kingdom can have a fully happy ending to what was a bizarre era of drastic EB-5 fraud. Image Credits: Jay Peak Resort, Burke Mountain, Vermont Biz, Ian Wood

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