Layoffs, furloughs, and other cost cutting measures have been enacted.
Tuesday, April 26, 2016, NewEnglandSkiIndustry.com
As first reported on NewEnglandSkiHistory.com News earlier this month, Peak Resorts is struggling to cut costs as it enters the off season, following a rough winter, EB-5 funding issues, and mounting debt.
Wildcat and Attitash
Wildcat, April 16, 2016
The plug has been pulled on Wildcat's season, just a day after stating they were hoping to operate into May. In recent weeks, multiple long tenured, year round employees were let go at Wildcat and Attitash. Employees from Mount Snow were on site at Wildcat later in the month.
Mount Snow
Mount Snow's Bluebird Express, March 27, 2016
Furloughs have been enacted at Mount Snow, according to VTDigger. Mount Snow refused to say how many employees are affected.
Meanwhile, the West Lake snowmaking project is in jeopardy due to EB-5 delays. Mount Snow broke ground on the project in May 2015, reportedly fronting $12 million with the expectation that at least $30 million of EB-5 immigrant investor funds would be released from escrow last year. With the Jay Peak-Q Burke alleged EB-5 Ponzi scheme grabbing national headlines, it is not known when Mount Snow's $52 million of EB-5 funds will be released from escrow.
Mount Snow has been reportedly using Senator Patrick Leahy's office to put pressure on the EB-5 situation. Senator Leahy has come under fire in recent weeks due to his involvement with the Jay Peak-Q Burke situation, including joining Jay Peak officials on fundraising junkets, lobbying for Jay Peak, and accepting $10,800 in contribution from Jay Peak management. After championing the EB-5 program and subsequent extensions, Senator Leahy is now calling for reform or the termination of the EB-5 program.
Meanwhile, after purchasing Hunter Mountain for $36.8 million and the poor 2015-16 season, Peak Resorts' free cash account was nearly halved year to year by the end of January. With long term debt of $118 million, much of it at 10% interest, it's not known if Peak Resorts can obtain additional debt to fund off season operations. Peak Resorts' fiscal year ends on Saturday.
When speaking about the Mount Snow EB-5 situation, Mount Snow President Dick Deutsch stated, "I'm very concerned. I'd be foolish not to be concerned."
