The management of Jay Peak ski area won’t be getting the big tax break they were seeking from local officials in the town of Jay.
The Jay Board of Civil Authority rejected a bid by ski area leaders to slash the resort’s assessment on the municipality’s grand list from its current value of about $121 million to less than half that — $58.5 million.
The resort, emerging from an investor fraud scandal that has resulted in the indictment of Ariel Quiros, its former owner, and Bill Stenger, its past president, had cited, in part, the effect of the Covid-19 pandemic as a reason for the drop in property assessment.
The resort currently pays roughly $2 million in taxes based on that $121 million assessment, which is about two-thirds of all the property taxes in the town of Jay.
Cutting the assessment for Jay Peak and its related properties by more than half would have left the town scrambling to fill a tax revenue hole.
The Board of Civil Authority informed Jay Peak officials of its decision in a letter sent Tuesday.
“It is determined by the BCA that the appellant’s request to lower the combined assessed value of the described parcels to $58,500,000 is without sufficient merit,” the letter read, adding, “It is determined by the BCA that the lister’s current assessed value of $121,107,900 be sustained.”
Michael Goldberg is the court-appointed receiver managing Jay Peak and other properties at the center of civil enforcement actions and criminal charges brought against Quiros and Stenger since the spring of 2016.
Neither Goldberg nor the resort’s attorney, Roger Prescott, of the Vermont-based firm Downs Rachlin Martin, returned messages Wednesday seeking comment.
Jay Peak can appeal the decision to the state’s Division of Property Valuation and Review or to Orleans County Superior Court.
William Krajeski, the president of New England Municipal Consultants who represented the Board of Listers during tax appeal hearings earlier this month, declined Wednesday to comment.
Goldberg is also challenging the tax assessment for another Northeast Kingdom property he oversees that was formerly owned by Quiros — Burke Mountain ski area.
Prescott argued before the Burke Board of Civil Authority last week that the Burke Mountain ski area’s assessment should be dropped from $18.7 million to $11.2 million, a decrease of $7.5 million, or 40 percent.
A decision on that request is pending.
The property in Burke includes the Burke Mountain Hotel and Conference Center, a 116-room facility that opened in September 2016. Stenger and Quiros raised $67 million to fund the construction of the hotel and conference center, with money coming from EB-5 investors.
The federal EB-5 visa program allows foreign investors who put at least $500,000 into a qualified project to obtain green cards, or permanent U.S. residency, provided their investments meet job-creating requirements.
Prescott told the Burke board that despite all the money put into the resort, its value is far less than the $67 million raised for the construction of the hotel and conference center.
The resort, he said, has lost more than a $1 million a year since that facility opened.
At Jay Peak, Quiros and Stenger poured more than $200 million of EB-5 funds into massive upgrades, including new condos and hotels as well as a water park and ice rink.
Again, Prescott has contended, the value of the resort is far less than the amount of money that has been put into improvements. He said based on an income approach, or the revenue coming into Jay Peak resort a year, the tax value should be set at $58.5 million.
He also said that Jay Peak is currently on the market as Goldberg, the receiver, works to recoup money for the EB-5 investors. So far, Prescott said, purchase offers have come nowhere close the $121 million value set by the town.
The Jay Board of Civil of Authority, in its decision this week, had a much different view than Prescott of the value of the resort and its related properties.
“The listers presented that these parcels have been significantly improved over the past 10 years with permits exceeding $200 million,” the decision stated. “This total does not include the value of the original ski area, the lifts and 2,488 acres of land.”
The decision added, “The BCA determined that evidence of a 12-month effort, concluding with a pandemic, to sell a resort as unique and complete as Jay Peak is not a fair or complete valuation.”
Both Quiros and Stenger were indicted in May 2019 on criminal charges of fraud and making false statements to the federal government regarding a separate project they headed, a proposal to build a $110 million biomedical research center in Newport.
That development, AnC Bio Vermont, never got off the ground and has been termed by the U.S. Securities and Exchange Commission “nearly a complete fraud.”
Quiros has since pleaded guilty to three of the dozen federal charges against him and is awaiting sentencing. Charges remain pending against Stenger as well as two other business associates in the AnC Bio Vermont project.
The criminal charges were brought more than three years after state and federal regulators brought civil enforcement action against Quiros and Stenger.
Regulators accused the two men of misusing $200 million of the more than $400 million they raised from hundreds of EB-5 investors over the years to finance the projects they headed.
Stenger has pleaded not guilty to the criminal charges against him.