In a notice filed with the United States Securities and Exchange Commission on Tuesday, Peaks Resorts revealed their plan to raise $94 million for phase 2 of their construction at Mount Snow’s Carinthia ski area. According to an investor brochure filed with the documents, Peaks plans to finance their next project with $38.5 million in traditional loan financing, along with a $55.5 million private securities offering through the United States Citizenship and Immigration Services EB-5 Program. A private securities offering, according to Investopedia, is an offering to experienced investors accredited by the SEC.
The investor brochure also lists an “owner contribution” of two leases for land, presumably at Carinthia, that Mount Snow says is appraised at $19.7 million.
According to the notice filed by Peaks Resorts on Tuesday, Mount Snow will seek a maximum of 111 EB-5 investors who will invest a minimum of $500,000 each. The investor brochure’s investment summary notes that Mount Snow’s EB-5 investors will earn a 3% return on their investment – a high return for an EB-5. According to USCIS statistics, most EB-5 investments return between 1% and 2%.
The project will be managed through Peaks Resorts Great Northern Regional Center, recently approved by the USCIS.
Through the USCIS EB-5 immigrant investor program, foreign investors in approved projects initially receive a temporary green card to enter the United States. For each investment, a minimum of 10 jobs must be created. If the minimum number of jobs is created within two years, the investor receives a permanent green card and a path to citizenship. In certain “targeted areas,” which include rural areas like most of Vermont, the minimum investment is $500,000 per investor – half the amount needed for EB5 investments in other areas.
According to their investor brochure, Mount Snow is projecting the creation of 1,396 jobs, or 12.7 jobs per investor - 26% more than the 1,033 jobs required to satisfy EB-5 rules. EB-5 job count projections include temporary construction jobs, as well as long-term staffing.
Phase two of the Carinthia project includes 102 luxury two- and three-bedroom condominium hotel units ranging in size from 1,130 to 2,155 square feet, in five buildings at the Carinthia base area. The development also includes an amenities center with a year-round outdoor pool, exercise equipment, sauna, and massage rooms. Each building has covered parking below it, and the buildings are configured around an open green space, which will be used as a snow play area in the winter and an area for play, weddings, and events in the summer.
Construction is already well underway on the Carinthia Base Lodge, which was included in Mount Snow’s last EB-5 offering. The 37,115-square-foot lodge is scheduled for completion this year. The lodge will house skier services including a cafeteria, restaurant/bar, guest services, bag check, ski rentals, retail store, and convenience store.
Mount Snow’s investor brochure includes projected hotel figures starting in 2021, when the hotel is scheduled to be completed, through 2033.
According to the projections, Mount Snow expects to have 37,230 unit stays available per year, with an average daily unit rate starting at $650 starting in 2022, the first full year of operation, and increasing each year to $850 per night by 2033. The hotel is projected to produce more than $11 million in revenue in 2022, rising to more than $15 million by 2033.
According to the brochure, Peaks Resorts generated record business in the year ending April 30, 2017, with about $123,249,000 in revenue from 1,713,000 skier visits at their 14 ski areas.
Mount Snow officials declined to comment for this article, citing the confidentiality of their private securities offering.