The $600 Million Question
Bill Stenger has a plan so big it could change the Northeast Kingdom forever. But can he pull it off?
Photographed by Caleb Kenna.
Wearing a navy blue blazer, a striped green and blue tie, and with his name tag pinned to his right lapel, Bill Stenger stands at a podium and speaks confidently into the microphones. It is a crowded Sept. 27, 2012, news conference being held at Jay Peak Resort, and Stenger, president and co-owner of Jay, is outlining an unprecedented development plan for Vermont’s Northeast Kingdom.
Stenger speaks of raising almost $600 million in cash in the next three years. He talks about bringing as many as 10,000 jobs to an area economically depressed for generations. He details the plans for revamping a dilapidated block in downtown Newport, building a large hotel on the shore of Lake Memphremagog and locating two new businesses to a manufacturing campus. He speaks of upgrading the Newport State Airport and making substantial changes at the two ski resorts he owns, Jay and Burke Mountain. He outlines how the money will come from prosperous foreign investors taking part in the U.S. government’s EB-5 program that expedites the visa process in exchange for large cash investments.
“It’s not about skiing,” Stenger says at the news conference. “It’s about our team economy and the development and creation of good full-time jobs for thousands of Vermonters.”
The plan is so massive — so rapid, extensive and expansive — that it’s beyond compare in Vermont history. Stenger’s announcement grabs state, regional and national headlines, and politicians from Derby to Montpelier to Washington, from all political parties, jockey to figure out how to throw their support behind what’s officially known as the “Northeast Kingdom Economic Development Initiative.”
In the wake of Stenger’s spectacular autumn announcement, it is optimism — mostly — that courses throughout much of northern Vermont. Part of that is because it’s Bill Stenger leading the charge, a man who’s done this before. Sort of. In the last five years, Stenger quarterbacked a $250 million expansion project at Jay Peak, and the new, wider-reaching development initiative will follow much of the same game plan that reshaped a cold and tired ski mountain in northern Vermont into a vibrant four-season destination resort.
It seems reasonable to expect the levels of success Stenger attained in the rejuvenation of Jay will be mirrored in the larger project, which should reverberate throughout at least six northern Vermont counties. And if that happens, it means Bill Stenger, a hard-working man from central New York who sort of fell into the ski industry by happenstance, will have left an indelible mark on Vermont’s history. Steven Patterson, executive director of the Northeastern Vermont Development Association, says, “Bill Stenger is going to be remembered as a hero.”
Stenger, 64, didn’t start out aiming to be a transformative figure in Vermont history. A graduate of Syracuse University, he briefly sold insurance before moving to Vermont in 1973 to work with the Eastern Ski Association in Brattleboro. He left that post to work in ski area management in Pennsylvania, then moved his young family to Newport in 1985 after being offered a management position at Jay Peak.
Stenger and his wife, MaryJane, raised their family in Newport. His three children — two sons and a daughter — went to high schools in the Newport area. He remains active in the community where he’s lived for nearly 30 years, still serving on the board of trustees at North Country Hospital.
It didn’t take long for Stenger to realize that Jay Peak Resort was in dire need of expansion: When Stenger arrived, the Hotel Jay had just 30 rooms. (By comparison, the new Hotel Jay and Conference Center that opened in 2011 has 176 suites.) But Jay’s owners, the Canadian-based Mont Saint-Sauveur International, preferred a conservative course in developing Jay.
Eventually, Stenger began exploring a new federal foreign investor program created by the Immigration Act of 1990. There were troubles with the fledgling program, but as those issues were ironed out, Stenger began to see its greater potential.
In 2008, after more than two decades at Jay, he spearheaded a group of private investors (led by current business partner Ariel Quiros — see sidebar at right) that bought Jay Peak from Mont Saint-Sauveur. Almost immediately after the purchase, Stenger announced an immense revitalization plan for Jay Peak, a $250 million project financed mostly through EB-5 — the federal Immigrant Investor Program he’d analyzed for more than a decade. EB-5 puts foreign investors and their family members on the inside track for a U.S. “green card” and permanent resident status, if they pledge a minimum of $500,000 to a commercial enterprise. There are qualifications attached to the investment, however: It must spawn jobs within two years of the investor being admitted into the United States.
Using the EB-5 money, and in a little more than three years, Stenger’s vision for Jay Peak became a reality. The new hotel was built, the remarkable Pump House Indoor Waterpark opened to rave reviews, additional housing units were built and sold, and jobs for local workers were created.
“The transformation at Jay Peak is not only a stunning renaissance for what was once a relatively sleepy ski area many years ago, but is also widely viewed as a game-changer for the ski resort industry,” said Parker Riehle, president of the Vermont Ski Areas Association.
To be sure, there have been speed bumps along the way. Jay has been hit with several fines for violating state environmental permits in the last decade. And early in 2012, Rapid USA Visas, the broker that assisted Jay Peak in lining up investors for the $250 million project, severed ties with Jay, citing concerns over the “accuracy of representations made by Jay Peak.”
The EB-5 program, too, has its share of critics. Although a similar initiative has proven widely successful in Canada, where foreign money helped shape new ski resorts in British Columbia and businesses in urban areas, it has been framed by a national debate in the United States about immigration policy. Critics contend it’s unfair that wealthy foreign investors are allowed to buy their way to the front of the immigration line. “Sure, there are some criticisms of the EB-5 program,” said Patterson, who served as secretary of Vermont’s Agency of Commerce and Community Development during part of Gov. Howard Dean’s tenure. “Anything that generates this kind of activity is going to grab some attention.”
But Stenger is undeterred. The EB-5 investment program, he said, is key to growing business in an area of the state with a long history of high unemployment and low economic achievement. “The biggest thing the EB-5 program gives is the ability for an entrepreneur to take a good idea and implement it,” he said. “It’s that simple.”
With very little prompting, Stenger will eagerly discuss the development plan, his long-term vision for downtown Newport, the number of contractors currently employed by the Jay Peak expansion efforts or the EB-5 program. He’ll even talk about his love of Newport, the mountains and the surrounding countryside. Getting him to hone in and talk specifically about what compels him, however, is a far more difficult task.
Patricia Sears is the executive director of the Newport City Renaissance Corporation, a nonprofit organization tasked with promoting and improving Newport and the surrounding area. She worked closely with Stenger on the expansion of Jay Peak and is now in his inner circle as his plans come into sharper focus for a new downtown Newport. “He’s a visionary,” Sears said, “who’s not afraid to do the hard work required to make his visions a reality.”
Stenger has already struck a deal to transform the rundown Spates Block in Newport. Under the plan, it will become the Renaissance Block, a six-story block featuring a mix of commercial and residential units. There are also plans for a revamped marina on Lake Memphremagog and a new 150-unit hotel.
Working as directly as she does with him, Sears has become familiar with Stenger’s ambition. “Bill really does feel passionately about the future of the Northeast Kingdom,” Sears said. “Newport is where he lives, and it’s very near and dear to him. With that affection comes a very strong sense of responsibility. As he expands his resorts, he really does want as many of us who also work, live and play here to benefit accordingly.”
Like Sears, Riehle of the Vermont Ski Areas Association has worked hand in hand with Stenger in recent years. And like Sears, Riehle contends it’s Stenger’s unwavering commitment to his community that makes him tick.
“He has seen firsthand how economically challenged that part of Vermont has been,” Riehle said, speaking of the three counties in the Northeast Kingdom where residents report income levels among the lowest in the state and poverty rates among the highest. “He wants to expand on the success at Jay Peak and spread that same vision and energy across the region.”
The long list of tasks Stenger must tackle before his grand plan becomes reality is remarkable in its own right. Although he’s well on the way to identifying a large number of project investors, he needs to make certain he secures some 1,200 qualified backers and convince them to pony up $500,000 each. He must navigate Vermont’s permitting process. He needs to hire companies that will create jobs, and he needs to assuage a small cadre of critics who eyeball the project with skepticism.
Stenger says the least of his concerns is finding the money.
To reinforce that point, he pulls out his cell phone. Moments before, it had emitted an electronic “ding” signaling an e-mail had arrived in his inbox.
“Here’s one that just came in while we were talking,” he says, pushing his phone across the table. “I get three or four of these a day from people who have heard what we’re doing and want to know how they can be a part of it.”
His mission was made easier in the autumn when President Obama renewed the EB-5 program for three years. Stenger’s news conference was timed perfectly — the day before Washington announced the renewal — and that allowed Stenger’s plan to grab enough headlines to jump-start the search for investors.
He admits he has more money to find and limited time to do it. Construction on many of the projects in the plan is scheduled to begin this year, and the $600 million has to be secured before the current EB-5 extension expires in 2015.
“I’m not worried,” Stenger said during an interview session two weeks after his grand announcement. “We are talking about investors in some 60 countries in the world who can be part of this program, and I only need to find 1,200 people. There’s no doubt in my mind that will happen.”
While they aren’t being asked to front any money for the project, Stenger’s toughest job might be convincing some of the residents of the Northeast Kingdom to embrace the change.
“This will be a huge transformation for the psyche for Newport and surrounding area,” said Sears. “Yes, there is some anxiety, and it’s not all necessarily negative. How do you prepare a community for this? It’s a big change for us.”
While detractors aren’t particularly numerous, they do exist. A lengthy letter to the editor of the Newport Daily Express in late November warned that the area would transform into a playground for the rich. A Facebook posting on the page run by Sears’ Renaissance Corporation was met with a handful of posts that decried “low-paying jobs” created at Jay Peak. A story about the proposed project that aired on Vermont Public Radio in October drew comments from those concerned about the impact on the environment, municipal services and an “increase in social class distinction.”
Scott Wheeler is a former local newspaper writer who now publishes Vermont’s Northland Journal, a monthly print magazine that chronicles the history of the Northeast Kingdom. Wheeler has heard a handful of negative comments arise in the community — from people, he says, who are doubtful of the impending change. There are others, Wheeler says, who wonder if Stenger’s plan will forever diminish the rugged individualist culture and blue-collar history that has shaped the Northeast Kingdom for the past 200 years.
“Some people have legitimate concerns, some people just want to complain and some people are just hesitant of change,” said Wheeler. “This project is really well thought out. If it had been anybody else besides Bill, I think most people would have been really hesitant. But it’s Bill. He lives here. He works here. I have a lot of faith he’ll do the right thing.”