A big hotel and conference center under construction on Burke Mountain has narrowly escaped a work stoppage that could have killed the project. But the contractor and developer must still hash out disagreements with state regulators.
The 116 room, four-season conference center at Q Burke resort is being financed under the federal EB-5 program. It allows qualified foreigners to invest a minimum of $500,000 in exchange for green cards. But late last week the Vermont-based contractor, PeakCM, threatened to walk off the job. The contractor claimed that Vermont’s Department of Financial Regulation, which is overseeing expenditures, is holding up payments.
The work stoppage could have scuttled the project and idled dozens of subcontractors. On Monday PeakCM President Jerry Davis agreed to keep working when DFR approved paying about $3 million in outstanding bills. But he says other thorny issues about how to document expenses still need to be resolved.
"That’s the big challenge right now, is how to I protect myself when I don’t have a contract with the state? I have a contract with the developer," Davis said.
Davis, whose concerns were first reported by VtDigger.org, says several major sticking points were resolved only about a half an hour before he was reluctantly planning to shut down the job Friday afternoon. He says PeakCM’s September bill has now been paid, a fee for a project delay has been covered, and the state has shown a willingness to negotiate the way furnishings, fixtures, and equipment are being billed as construction costs. Those expenses have not yet been reimbursed, pending final agreement about how they are documented.
For now, Davis says he is putting faith in the DFR to help keep the project on track, because any further delays could harm the very investors the state is trying to protect. And he says hundreds of local construction and hospitality jobs, many held by Vermonters, are at stake.
"I am cautiously optimistic." Davis said. "It’s obviously always a little nerve wracking or a concern when we are still owed … $3.9 million, almost $4 million and counting every day that we are still doing work. Out of the approximately $4 million, $900,000 of that is still significantly late and behind."
PeakCM has worked with the developer, Bill Stenger, on several other projects, including Jay Peak. Davis says Stenger has nearly always met payment deadlines, until the state stepped in to review and approve invoices.
Stenger left for Brazil on Monday to seek more EB-5 investors, but still vows the hotel will open in December, in time to cash in on the ski season.
Department of Financial Regulation Commissioner Susan Donegan was out of town Monday and unavailable for comment.