Jay Peak Resort's multimillion dollar side projects in Newport and Burke are delayed due to a slowdown in investor recruitment. Federal backlogs and increased scrutiny of all projects financed through the EB-5 Immigrant Investor Program have jammed up the ventures, which are part of the resort owners' ambitious Northeast Kingdom Economic Development Initiative.
Jay Peak president and partial owner Bill Stenger and majority owner Ariel Quiros say they're confident construction will begin this summer at AnC Bio, their planned biotechnology research park in Newport, and at Q Burke Mountain.
Before they access the money they've already raised, the developers are waiting for the EB-5 projects' early investors to receive visa approvals from U.S. Citizenship and Immigration Services, which administers the EB-5 program.
In the meantime, other potential investors whose capital is needed to complete the financing plans are wary of placing their money in a project until they see that job creation and business plans have gotten a green light. A few investors who placed their money behind the AnC project have asked for a refund.
"We have refunded a handful of investor funds due to the delay, but those spots have been taken up quickly by others," Stenger said by email.
EB-5 is a federal immigration program in which would-be immigrants and their immediate family members can get a conditional visa in exchange for investing $500,000 to $1 million in a U.S. business. (In Vermont, which has a rural program, the maximum amount is $500,000.) If at least 10 jobs' worth of economic activity can be attributed to that investment within two years, the visas are upgraded to green cards.
Brent Raymond, the Vermont EB-5 Regional Center director, said in an email that the visa review process has slowed dramatically in the last year.
"The initial petition is of significant importance since it is when USCIS evaluates the new enterprise's business plan," Raymond wrote.
Wait times for visa applications associated with Vermont projects have doubled. Four projects in Vermont are waiting for their investors' initial visa approval, Raymond said. One project has been waiting for about 17 months.
Raymond and other EB-5 stakeholders around the country say they've seen a pronounced increased in the number of investors who are asking for additional evidence to support the likelihood that their money will lead to U.S. job growth.
USCIS has hired economists to vet EB-5 business plans, and they apparently are going through job creation projections with a finer toothed comb than the traditional immigration officials who previously reviewed EB-5 petitions.
Some AnC Bio investors have received requests for evidence, Stenger confirmed. He said none have been issued for Q Burke.
USCIS is working to speed up visa adjudications, but the agency's slowdown is not just a bureaucratic logjam. Many of the new processes that have slowed down reviews are in response to a string of controversies within the program.
To help tighten up the program and its public image, USCIS hired economists to vet the business plans. But new staff take time to get up to speed on the intricacies of the program's complex regulatory structure.