It might be hard to believe such a massive project could be coming to the Northeast Kingdom in the next five years. The Northeast Kingdom Economic Development Initiative includes seven projects across four towns-- and we can't forget the $500 million price tag.
"We have the right vision, great ideas, but what you need with that is capital," said Bill Stenger, the president of Jay Peak.
The majority of that capital will be coming from foreign investors through the EB-5 program. It's a unique incentive program where overseas investors and their families are granted visas to live and work in the U.S. and eventually they can receive full citizenship.
Reporter Gina Bullard: How much of $500 million is from EB5?
Bill Stenger: Most of it.
Bullard: So do you have those investors already?
Stenger: Most of them. I start traveling in November to Asia.
To qualify, an investor must give $500,000 to a business in a rural or high-unemployment area like the Northeast Kingdom. That money must lead to the creation or preservation of 10 jobs within two years of completion of the project. It's already been used with success at Jay Peak, where EB-5 funded its $250 million facelift, including the Pump House water park.
"They say the proof is in the pudding. Well, Bill, you make one heck of a pudding," said Sen. Patrick Leahy, D-Vermont.
"It's about taking a program we have proven effective here and expanding its value to the surrounding community," Stenger said.
But how effective is it? Critics say the 10 jobs created through each investor of the EB-5 program rarely add up. With no one going around counting heads, the government uses a model to guesstimate.
In April, we looked at the previous expansion at Jay Peak using EB-5 money that was slated to create 5,000 jobs. According to our calculations-- using Jay Peak's numbers and the government's formula-- 3,600 jobs were assumed to be created. But according to Labor Department statistics, only 1,750 jobs actually popped up over five years.
This new $500 million investment is supposed to bring with it up to 10,000 jobs. But if this project creates jobs at the same rate as Jay Peak, it will only create 3,500 jobs by 2015.
Still, EB-5 is hailed as a success. Of the 241 regional EB-5 foreign investment centers in 41 states, Vermont is credited with being the most successful. A three-year extension of the program was just approved by President Barack Obama.
"I've talked with President Obama and he asked the same question you did: Why does it work so well in Vermont? I said because we strip it to the basics; scrutinize people when they come in. We want people with a real commitment," Leahy said.
It's a program developers say will enrich the future of the Northeast Kingdom.
"When we do the things we're doing in Coventry, Newport and Burke, the results will be the same," Stenger said.
Stenger expects to have the $500 million secured in the next 12 months.
Leahy says he will begin the process to make the EB-5 program permanent in January.
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