Federal Judge Authorizes Execution of $ 3.25 Million PPP Loan for NEK Ski Areas | New
A federal judge in the United States District Court granted Burke Mountain and Jay Peak receiver Michael Goldberg’s request to execute a loan of $ 3,253,997 from the Wage Protection Program through the CARES law in the midst of the ongoing pandemic, funded by the City National Bank.
Access to the loan will help keep station workers at work and both ski resorts open during uncertain economic times amid the ongoing pandemic, according to the receiver’s petition in recent days in federal court.
Both resorts have reopened after being closed for several months and hope to prepare for the ski season and triple membership by November. , said the judge.
The Federal Securities and Exchange Commission case against former Vermont ski resort owner Ariel Quiros and his associates under the Ponzi scheme has been held in South Florida federal court since April. 2016, when the properties were seized as part of the investigation.
As part of Quiros’ settlement with the SEC, he has ceded more than $ 80 million in real estate and other assets, including the two ski properties in the kingdom’s northeast, which remain operating under receivership. , which will eventually sell the properties.
Goldberg filed with the Federal Court on Thursday for authorization to enforce a paycheck protection program loan under the Corona Virus Aid, Relief, and Economic Security Act.
“Non-essential employees at the complexes have also been placed on leave as of March 14, 2020,” the motion reads. “At that time, everyone involved was convinced that a temporary halt in operations was necessary to allow the pandemic to pass and / or subside so that operations could resume safely. This move also made perfect economic sense, as recreational travel to the United States ceased and it made little sense to incur the expenses associated with maintaining the resorts. “
The resorts have since reopened with “significantly reduced operations”.
Goldberg explains: “Current circumstances, however, suggest that it is impossible to predict with any degree of certainty whether, when and to what extent the complexes can resume their fully normal activities. “
Closing borders is a major concern
The main one of the uncertainties affecting the ability of Vermont ski resorts to remain open is that both depend heavily on Canadian tourists for their operations. Canadian visitors represent “a significant percentage of the resort guest population,” writes Goldberg.
“According to US officials, including Vermont Senator Patrick Leahy, we do not know when the border will reopen,” the motion continues. “Beyond that, the recent spike in COVID-19 cases in the United States and the potential second wave of cases expected to coincide with the next ski season make it nearly impossible to predict future operating cash flows. Recent reports indicate that the Canadian border will not reopen in the short term to allow potential customers to access the resorts from Canada. “
Preserving essential jobs for investors
The $ 3.25 million CARES Act PPP loan that receivership is now allowed to execute will provide a low-interest loan to help people at Vermont’s two ski resorts keep working, a explained the request to the court.
The PPP The loan program “allows the cancellation of the entire loan amount as long as the loan proceeds are used only to cover salary costs,” notes the motion.
Keeping employees on the job is essential for station operations, he noted.
“In addition, many of the people employed by the resorts are regular seasonal employees with experience in resort properties which is invaluable to guests. Therefore, maintaining adequate wage reserves to continue the regular operations of the complexes is essential for the receiver, ”the motion said. Beyond that, as the Court is undoubtedly aware, the EB-5 program requires investors not only to create but also to maintain jobs throughout the period during which investors are granted conditional residency in the part of approved I-526 requests.
According to Goldberg’s report to the court, between 90 and 115 employees are currently employed at the two complexes.
The motion notes that salary expenses for resort operations for June 2020 have been estimated to be approximately $ 312,238. The total remaining salary charge, slated from July 2020 to October 2020, is estimated at $ 1,928,180, for an average monthly salary charge of $ 482,045, according to the motion.
The payroll for the two ski resorts by November is expected to increase to $ 700,000 – $ 900,000 per month “provided operations can return to normal levels for the winter ski season,” the motion said.