Vermont Re-approves Okemo South Face Village EB-5 Investment
The Department of Financial Regulation had halted investment due to concerns with the financial prospectus.
Tuesday, July 19, 2016, NewEnglandSkiIndustry.com
Weeks after it halted the offering, the Vermont Department of Financial Regulation has re-approved EB-5 immigrant investment in the South Face Village project at Okemo.
Project Background
Located at the base of the South Face complex at Okemo, the project was initiated by the Rossi Group circa 2006. Vermont Act 250 approval was achieved in 2013. Construction started soon thereafter.
Over 200 real estate units are to be constructed in the 300 acre area. The first building, Sugar Maple, is reportedly sold out with construction nearing completion.
A new Leitner-Poma fixed grip quad chairlift was installed in the area for the 2015-16 season, serving a novice trail. A second lift and six additional trails are part of the full build. Okemo Mountain Resort will operate the ski related components of the project.
The price tag for the entire project is said to be in excess of $200 million.
South Face Village Trail Map in 2015-16
South Face Village Development Map
State Concerns with South Face Village Project
According to VPR, the state was questioning the separation of business entities, profitability, repayment of investors, land value, escrow access, and Private Placement Memorandum inconsistencies.
At the time, Vermont Commerce Secretary Patricia Moulton told VPR, "I'm not aware that there are situations at this point that could be deal-breakers, but...I don't have all the details"
In subsequent weeks, the state and developers agreed to update the project's private placement memorandum and enact new escrow oversight.
The halting of the South Face Village EB-5 offering came just weeks after the SEC raided and took over Jay Peak and Q Burke due to alleged EB-5 fraud. Vermont Governor Peter Shumlin has come under fire for his involvement in the Jay Peak scandal, including falsely claiming the state was auditing the project. Scrutiny of the EB-5 program, in which foreigners can invest $500,000 in a United States business in exchange for a green card, has increased significantly in the wake of the scandal.
