DOVER — A warm, unseasonable winter has forced an undisclosed number of layoffs at Mount Snow ski resort.
But resort administrators expect to hire back those employees soon. And they say the furloughs aren't related to a $52 million cash crunch in the resort's EB-5 foreign investor program - a problem that has slowed new development at Mount Snow.
“One has absolutely nothing to do with the other,” Mount Snow President Dick Deutsch said. “One is on the development side ... and one is strictly operational.”
Deutsch added that “just about every ski resort in New England had a sub-par season this year. So this [layoff] is not atypical of what people do in the ski resort business.”
Mount Snow bills itself as “Vermont's closest big mountain to the Northeast's metropolitan areas.” But that wasn't much help during a winter that featured historically warm temperatures and little natural snow.
Resort spokesman Thad Quimby said Mount Snow was open for roughly a full season, though he acknowledged that a lack of snow in December 2015 made things difficult. He credited the resort's staff for keeping the slopes open to the fullest extent possible.
“From our perspective, it was a huge success in that we were able to rebound with our snowmaking,” Quimby said. He added that, throughout the winter of 2015-16, “we had all the events that we normally would have.”
Quimby said he couldn't release statistics detailing the warm winter's impact at Mount Snow. But the resort's parent, Missouri-based Peak Resorts, noted a 23-percent decline in skier and tuber visits companywide when releasing financial results for the quarter that ended Jan. 31.
Timothy Boyd, Peak's president and chief executive officer, said the 2015-16 ski season “got off to a late and very choppy start due to unseasonably warm weather in both our Northeast and Midwest regions.”
As a result, Boyd said in March that he expected Peak's fiscal year revenue to be down from last year because “the effect of the poor weather conditions was simply too much to overcome.”
At Mount Snow, that has translated into furloughs that go above and beyond the normal springtime workforce reduction. Neither Quimby nor Deutsch would say how many employees were affected, but Deutsch characterized the positions as “seasonal, hourly” staffers.
“Operationally, the impact is very minimal for us,” Quimby added. “We look forward to having all these employees back as we ramp up for the summer.”
Deutsch said there is recent precedent for such reductions at Mount Snow. “In 2011-12, we had a subpar year. We did it then,” he said. “There are some ski resorts that do it every year.”
He was adamant, though, that resort employment isn't connected to EB-5 funding delays at Mount Snow.
The federal EB-5 program, created by Congress in 1990, aims to stimulate the economy by allowing foreign investors to obtain visas if they contribute certain amounts to job-creating projects in the U.S. Generally, the minimum investment required is $1 million, but that is reduced to $500,000 in a “targeted employment area” like Mount Snow.
The EB-5 program is under scrutiny after state and federal authorities earlier this month alleged a $200 million “Ponzi-like scheme” by developers in Vermont's Northeast Kingdom. The allegations include EB-5-funded activities at Jay Peak and Q Burke resort properties.
Deutsch took pains to separate Mount Snow's EB-5 projects from the recent headlines, stressing that his company has “no connection to Jay Peak.” He acknowledged, though, that he is concerned that the public's perception of EB-5 will be negatively impacted by the legal drama unfolding a few hours to the north.
“I'm very concerned. I'd be foolish not to be concerned,” he said. “But it's important to know that we are in good standing with the state of Vermont.”
That's not to say EB-5 isn't causing some headaches at Mount Snow. The resort's first such project - consisting of the West Lake snow-making upgrade and the new Carinthia Ski Lodge - has slowed dramatically because $52 million in foreign investment funds are in escrow while Mount Snow awaits approvals from the U.S. Citizenship and Immigration Services (USCIS).
In reporting Peak Resorts' quarterly earnings last month, Boyd noted that the company already had invested more than $12 million in the West Lake project, which is expected to give Mount Snow six times the water-storage capacity it currently has.
“We will be reimbursed for that spending when the committed funds are released from escrow,” Boyd said. “Our advisers continue to indicate that there are no areas of concern in the USCIS approval process and attribute the delay to a growing review backlog at the USCIS.”
He added, though, that the “slower-than-expected timeline for approval of our EB-5 project has resulted in cash balances that are lower than we had anticipated.”
Deutsch said Mount Snow and Peak Resorts have enlisted congressional help to free up the EB-5 money. But he said “we've not been able to get a date certain.”
“We are now in our 23rd month of waiting for the immigration service to approve our first investor and our project,” Deutsch said. “We think it's because they've just been deluged with thousands of applications.”
Federal documents confirm that is the case. The USCIS website shows that the current, estimated waiting time for approval of an I-526 petition - the kind submitted by foreign investors under the EB-5 program - is 16.6 months.
A year-by-year list of I-526 petitions details the program's rapid growth. The government received 3,805 petitions in fiscal year 2011; 6,346 petitions in fiscal 2013; and 14,373 petitions in fiscal 2015.
Officials are approving or denying thousands of petitions each year, but it isn't happening quickly enough to avoid long waits. In the first quarter of fiscal year 2016 alone, so-called “alien entrepreneurs” filed 6,277 new I-526 petitions, and nearly 22,000 applications were listed as pending overall.
While not commenting specifically on Mount Snow's case, a USCIS spokesperson said the agency “has taken many actions to improve overall efficiency.” Those include a greater focus on clearing “aging cases” and reducing processing times.
The Immigrant Investor Program Office also is hiring more adjudicators and economists to try and address the backlog: The office has 125 full-time employees and is looking to reach 171 staffers by the end of 2016, the spokesperson said.
Deutsch, who also serves as a Peak Resorts vice president, said he is hoping Mount Snow's wait is over soon.
“I think the future of Mount Snow is great. We have really been very satisfied with our investment at Mount Snow,” Deutsch said. “We have invested in our [West Lake] project to date. And we hope the EB-5 project continues for many years to come.”