Mount Snow received preliminary approval for $25 million in Recovery Zone Facility Bond Financing. The Recovery Zone Facility Bond program offers tax-exempt financing for large fixed-asset projects such as manufacturing facilities, commercial establishments, and office buildings. According to VEDA CEO Jo Bradley, the VEDA acts as a conduit issuer, which enables borrowers to access the tax-exempt market. Tax-exempt bonds carry lower interest rates than conventional bank loans because income earned by purchasers of these bonds is exempt from federal and state tax.
“This special low-interest bond financing is a real boon to Vermont’s recovering economy, and we expect hundreds of jobs will be created and retained by the projects the VEDA has approved,” said Bradley.
Bradley said the federal government allocated $135 million in federal tax-exempt bonding to Vermont. So far, the VEDA has committed its entire preliminary allocation in loans, but it remains to be seen whether or not all of the projects can get all of their other pieces in place by the end of the year. In the meantime, Bradley said that the VEDA is still taking applications on a first-come, first-served basis in the event that any of the current projects cannot proceed. The VEDA has a deadline of December 31 to expend all of its federal funding.
Final approval for Mount Snow’s bond financings will depend on each project’s success in assembling all the required resources to proceed, and issuance of the bonds by the December 31 deadline. “Once the project is more fully put together, the bond purchasers and finances are negotiated and drawn up, and then (recipients) return to obtain financial approval,” said Bradley.
Mount Snow will utilize the $25 million in loans to finance the ski area’s planned capital improvement project. Much of the money will go toward the replacement of the Summit Local and Sunbrook chairlifts, construction of a 120-million-gallon storage pond for snowmaking purposes, and the installation of additional fan guns. The upgrades will help Mount Snow increase snowmaking efficiency and lift capacity and may lead to 17 additional jobs within the next three years.
Bradley said they based their decisions on a business’s ability to pay back loans, their economic mission, and whether it will enhance area economic development. “(Mount Snow) is an important employer and vital to the southern Vermont tourism infrastructure. It seemed like a good place to be helping out,” said Bradley.
Bradley said that the VEDA believed Mount Snow’s economic plan benefits the local economy. The $25 million will assist Mount Snow in job creation, increase tax revenue, and has a large multiplier effect on the area. “They create a lot more jobs not just at the specific resort but at gas stations, bed and breakfasts, restaurants, and other surrounding businesses,” said Bradley.
Dick Deutch, principal owner of Peak Resorts Inc., could not be reached for comment.
The Brattleboro Development Credit Corporation was the other Windham County recipient of the VEDA loans. The BDCC received a $230,000 loan as part of a $1.4 million project to finance the purchase of a lot in the Exit One Industrial Park. The lot will provide the BDCC with additional inventory of developable land and provide access for an existing town water line to be extended to the Delta Business Campus of Brattleboro.