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State board expected to vote on Balsams loan guarantee

New Hampshire Union Leader

March 17. 2018 11:12PM
A major project to revitalize The Balsams resort in Dixville Notch could receive the first of two state approvals next week. (UNION LEADER FILE)

A major project to revitalize The Balsams resort could receive the first of two state approvals next week.

But the $170 million project in Dixville won't make its predicted April construction start.

A positive vote from the state Business Finance Authority (BFA) would send a request for a $28 million state loan guarantee to the Executive Council for consideration, possibly in April.

"If that (approval) occurs, we believe we'd only need another few months to finalize our plan, get to financial closing and immediately start construction," Scott Tranchemontagne, a spokesman for developer Dixville Capital LLC, said Friday.

On March 26, the finance authority could vote on approving a $28 million loan guarantee from the state of New Hampshire that would require the state to step in and make loan payments should the project run into financial difficulties.

"The board will be voting on the 26th," said James Key-Wallace, the BFA executive director.

BFA board chairman Dick Anagnost said the board deliberated in a nonpublic session at its last meeting and had requested additional information. He said there could be a vote March 26.

Asked about the project's chances, Tranchemontagne said, "We wouldn't presume to handicap the BFA's decision."

Key-Wallace explained what the BFA is considering.

"The Balsams plans to raise capital from a variety of sources," Key-Wallace said. "One of those sources is a $28 million bond, which it requested the BFA issue. Service Credit Union purchases the bond, which is, in effect, making the loan to The Balsams."

If the project were to run into financial problems and can't repay the loan, "that means the state of New Hampshire has to pay the bank," Key-Wallace said.

There are 10 voting BFA board members.

The project's first phase includes renovation of the Hampshire and Hale houses; reconstruction of Dix House; and construction of a 400-room Lake Gloriette House Hotel and Conference Center, Nordic baths and spa as well as a marketplace and expansion of the former Wilderness ski area.

Other financing includes $20 million in developer equity; about $35 million in other equity, including preferred equity from investors; $18 million in equipment lease financing for the ski area; $53 million in construction financing; and $15.4 million in funding through the EB-5 Immigrant Investor Visa Program.

"Each is an individual effort requiring different sets of information and approaches, but we have taken nearly all of them as far as we can at this point," Tranchemontagne said. "Obtaining a favorable recommendation from the BFA and an approval from the Executive Council would help a great deal in finishing up some of these deals.

Under the EB-5 program, entrepreneurs - and their spouses and unmarried children under 21 - are "eligible to apply for a green card (permanent residence)" if they make the necessary investment in a commercial enterprise in the United States and plan to create or preserve 10 permanent full-time jobs for qualified U.S. workers, according to a federal government website.

Project developer Les Otten received a $5 million loan from the Forward NH Fund, established in conjunction with the proposed Northern Pass hydroelectric transmission line, to be used for The Balsams project.

Northern Pass spokesman Martin Murray said payments already have been made to Otten, even though the fate of Northern Pass remains uncertain. Murray and Otten both have said there was no connection between Otten receiving the money from the fund and him speaking in favor of Northern Pass during a public hearing in 2016.

Senior Assistant Attorney General Rebecca Ross said the loan guarantee request would only go before the Executive Council with BFA approval.

Key-Wallace said the board's review of financials as well as deliberations are done in a nonpublic session with the vote conducted in public.

The meeting will start at 2 p.m. at the BFA at 2 Pillsbury St., Concord.

Business Dixville

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