Gov. Peter Shumlin and his top commerce official visited Jay Peak Wednesday to ease concerns about the future of that resort as well as Q Burke and other developments in the area funded by the federal EB-5 program.
After reports of court filings that suggest Jay Peak’s finances are in trouble, Shumlin told reporters and resort staff that Jay Peak is open for business.
“It will continue to be a thriving business,” Shumlin said at a press conference in the Hotel Jay and Conference Center. “Q Burke also is almost completed. Literally, we’ve got the oil in the frialators.”
After federal authorities filed a lawsuit alleging millions of dollars of fraud at the EB-5 developments, attorney Michael Goldberg was put in charge of the businesses as a receiver. He says this case is unusual.
“In a typical receivership like this, a lot of times I’ll come in and there’ll be nothing, and we have to start scrambling to find out where the money went," he said. "Well, it’s pretty obvious where much of the money went here because you have the buildings, you have an operating hotel.”
Goldberg went on to say that these two resorts, which make up a huge part of the economy in the Northeast Kingdom, are staying open.
“It’s business as usual at the Jay, and the Q Burke – the Burke – will open and be a thriving hotel,” he said.
Goldberg said will be he dropping the "Q" in Q Burke, which stands for Ariel Quiros – one of the two developers accused of fraud.
Meanwhile, Jay Peak employee Alex Sullivan says operations are relatively normal for the workers there.
“I haven’t noticed any kind of difference in the way we do our jobs and the way the mountain looks, the way it operates,” Sullivan said.
What Shumlin was not as ready to address were questions from immigrant investors.
When Felipe Vieira, an investor from Brazil, started to ask the governor a question at the Jay Peak press conference, Shumlin cut him off.
“Sorry, but we're taking questions from the press,” Shumlin said. “We're taking questions from the press. It's a press conference.”
Vieira and others invested in a project that has not been completed yet, which means he is not sure if his investment is meeting the job creation requirements in the EB-5 program.
This is important because if investors do not meet all of the program’s requirements, they can lose their legal residency. That's controlled by Citizenship and Immigration Services (USCIS).
Commerce Secretary Pat Moulton said she has been in touch with USCIS and said investors should keep pursuing their applications.
“They are clearly ready and will continue to process petitions for immigration status, so we’ve … encouraged investors to continue to pursue their petitions through USCIS.”
Goldberg, the receiver, said it might work out for at least some of the immigrants who invested in the project that have not been finished.
“It's too early, because we may wind up finishing them. I don't know right now. I'm going to be meeting with the investors. My representation of the investors is my primary concern," he said.
Despite the recent fraud allegations, Moulton said EB-5 projects still have a place in Vermont's economy.
“We have the systems in place now to do the necessary compliance and review so investors will have comfort that this type of fraud, it would not happen again,” she said.
And even though a bunch of investor money seems to have disappeared, a lot of investments – like the Burke resort and Jay Peak's new additions – are here to stay.