At a remote outpost by the Canadian border, Bill Stenger is overseeing what he says is the biggest economic development project that Vermont has ever seen. He is expanding the Jay Peak ski resort, which he co-owns, but he is also building a biomedical research firm and a window manufacturing plant, extending the runway at the local airport and rehabilitating much of the nearby town of Newport.
There, he is developing the waterfront, adding the town’s first hotel and a conference centre and rebuilding an entire downtown block. He is also creating what he says is the largest indoor mountain bike park in the world and a state-of-the art tennis centre. The price tag for the entire project, which Stenger says will create 10,000 direct and indirect jobs over several years, is $865 million (Dh3.17 million).
But even more unusual than the size of the undertaking is the method by which Stenger and his business partner, Ariel Quiros, are financing it. They have tapped into a federal program that gives green cards, or permanent residency, to foreigners who invest at least $500,000 in an American business — the reward for the investment is a chance at US citizenship.
Stenger has attracted 550 foreign investors from 60 countries to put up $275 million for the first phase: a hotel here at the Jay Peak ski complex, an indoor water park the size of a football field, an ice hockey arena, condominiums, restaurants and stores.The second and third phases, now under way, require 1,000 additional foreign investors to put up $500 million to overhaul Newport and to develop the nearby Burke Mountain ski area.
Stenger and Quiros are putting up $90 million themselves. But even at $785 million, this is one of the single biggest projects in the country financed under the investor program.
Congress created the visa program in 1990 to help stimulate the economy. Because of a cumbersome process and complaints of fraud and corruption, it was long underused. But a confluence of events in recent years has led to its rather sudden revival: The program was improved; the financial crisis of 2008 made it hard for developers to get loans from commercial banks; and foreign nationals, especially in China, were accumulating vast wealth and were eager for their children to study and live in the US.
In 2006, the government issued just 802 of these EB-5 visas to investors and their families; this year, it granted 7,818.The program is now growing so rapidly that in the next year or two the number issued will probably reach the annual limit of 10,000.
For the first time in the program’s history, applicants may be turned away.
Investors must put up $1 million for a visa, but if they invest in a rural area or one with high unemployment, that is reduced to $500,000.
This corner of Vermont, called the Northeast Kingdom, is certainly rural. The construction going on here would make a splash anywhere, but in this stretch of mountains and dairy farms, the scope of Stenger’s vision is so vast that many residents say they are still trying to comprehend it.
The 10,000 anticipated jobs are twice the population of Newport; the $500,000 from one investor is equal to the town’s annual budget. “It’s hard for us to wrap our head around what $200 million is going to mean,” said Patricia Sears, executive director of Newport City Renaissance Corp, a nonprofit group that promotes development. “Even $5 million is a lot of millions to us.”