More Expansion at Jay Peak

From snowcountry.com:

The ink had hardly dried on a deal for Jay Peak, Vermont owners to acquire Burke Mountain than Jay’s President Bill Stenger announced a $30 million improvement project at Jay for next winter.

Stenger said upgrades include a new Mountain Learning Center at the State Side of the resort; two new lifts; transformation of the Sky Haus summit tram station, and a Vermont-styled country store.

“The enhancements we will be undergoing this summer and fall are all part of the revitalization effort over the last three years,” Stenger said. “The feedback we received from our guests this past season regarding the new Hotel Jay and Pump House indoor waterpark has been overwhelmingly positive and we look to spread that excitement to other parts of the resort.”

Attention now swings from the tram side to the State Side of the resort and the summit. Construction begins in July on a new 8,500-square-foot Mountain Learning Center at the State Side base area. It will include a rental and repair shop, ski and ride school, café, and daycare center.

The two new lifts for State Side include a fixed grip quad that will carry skiers and riders over the 720 terrain park, uploading just above the Taxi trail. That provides visitors easy access to the tram side of the mountain. The other lift is a moving carpet upslope from the Learning Center.

http://www.snocountry.com/index.php/snonews/ski-resort-news/snonews-featured-stories/entry/jay-peak-momentum-continues-30-million-in-upgrades-announced.html

(Hey River they kinda blew the photo credit)

JAY, Vt. - Jay Peak is no stranger to expansion; just look at its $25 million Pump House indoor water park that opened last year. And that was on the heels of new hotels and restaurants.

It's all a part of Jay Peak President Bill Stenger's vision to revitalize the Northeast Kingdom.

Now Stenger and his partners even have bigger plans for Jay, Newport, Coventry and Burke.

Here is what WCAX News has learned:

In Jay, at least three projects totaling $175 million. Some of that will further develop the ski area. There will also be another project in the village of Jay.

Nearby Newport will also profit. We're told there will be at least four separate plans for the town. One includes a German window manufacturer setting up shop.

We have learned the state airport in Coventry will see changes, including manufacturing and expanding the runway, which would allow larger planes to land and possibly international flights. We are told the flight company Cessna is involved in this multimillion-dollar effort.

This project also extends to Caledonia County and the Burke Mountain Ski Resort. Stenger and his investors recently purchased the resort, and we have learned there are plans to build a hotel. Right now there is limited lodging at Burke and in surrounding communities.

Sources familiar with Thursday's announcement say the price tag for everything $500 million. The governor's office believes it's the biggest construction project in Vermont history.

More:

http://www.wcax.com/story/19646867/500m-project-will-bring-thousands-of-jobs-to-northeast-kingdom

It's BIG:

They are doing some great stuff financed with the loans for visa programs but just because you can doesn't mean you should.  How can they fill all those beds in slow times of the year which is almost half the time and be profitable.  I worked for the Big K when Otten ran it into the ground over reaching and it was not pretty.

Stateside Hotel:



(via mobile)

Well, it is not an ugly building. But it is kind of, how do you say, kind of institutional-looking?

Heading down there next weekend for family shenanigans. A visit to Stateside will definitely be on the agenda. Will report back.

Well maybe they could re-purpose it as a retirement residence....

Call it "Dr Surge's".  For boomers who like to ski groomers.  
And with all the Metamucil that they'll be adding to to the meals it won't take long until it starts to smell a bit like the old Stateside lodge.  Or is that my feeble memory confusing it with some other funkified ski area ?  
If so maybe I better get my self a room there.... I can think of a lot worse ski hills to retire at...

TD

Coach Z wrote

They are doing some great stuff financed with the loans for visa programs but just because you can doesn't mean you should.  How can they fill all those beds in slow times of the year which is almost half the time and be profitable.  I worked for the Big K when Otten ran it into the ground over reaching and it was not pretty.

From what I understand, they need more beds because they are filled quite a few times per year. Don't forget that winter at Jay isn't just skiing any more... that Ice Rink is filling a lot of beds too.

That price on the flyer isn't too bad for a family of four. Especially for a brand new building.

Regarding the look... I don't think we could ask for much better these days. They don't build em' like they used to. Big companies are hired to do this type of stuff and even if you try to make it look "classic" in design, it is still going to look like a multi-million dollar firm built it. Better than the new Hotel Jay from what I can see so far... but that didn't take much. Strange that each new lodge has had a different look instead of going all in the same design. But I dig that. If anything, I prefer that.

Does "via mobile" mean that you are there right now, Harv? Or are you sharing a photo you found online while browsing on a mobile device?

I also think the look is OK.  I like things simple and wasn't super fond of the exterior of the Tram House, from what I remember. It's not done and finishes can matter. Hope it gets some shutters.

The "(via mobile)" thing is a signature from my phone. Not sure why sometimes it's there and sometimes it isn't. I was browsing on mobile, saw the pic on Instagram and screencapped it. Posted it later when I had a better signal.

riverc0il wrote

Coach Z wrote

They are doing some great stuff financed with the loans for visa programs but just because you can doesn't mean you should.  How can they fill all those beds in slow times of the year which is almost half the time and be profitable.  I worked for the Big K when Otten ran it into the ground over reaching and it was not pretty.

From what I understand, they need more beds because they are filled quite a few times per year. Don't forget that winter at Jay isn't just skiing any more... that Ice Rink is filling a lot of beds too.

The ski season is at best 5 and half months long. Let's be generous and say they are busy for maybe another two months in the summer.  That leaves 140 days where there don't need another Hotel. Just having the building open means staff, utilities, etc. They have to be hemoraging overhead in the off season.  You can not make money long term like that.

Maybe all the investors really just want visa's and don't care about a return on investment?  But eventually I would suspect that they will shutter this Stateside Hotel in the off season and have all the reservation on Tram side to save money.  The problem is that for those visa's you need to create 10 full time jobs per $500k invested. If you close this hotel in the off season are they going to get in trouble with the Feds or threaten the E5B status of Jay?

I like I said I saw American Skiing spend money just because they thought they could raise capital forever in the stock market.  Eventually all good things come to an end and over building Jay seems to be a serious threat to their long term viability.  

If Stengler crashes and burns like Ottten did then Vail will come cruising in and buy them. I'd buy a Epic pass if it had Jay in it for sure.

Coach, you are forgetting that they are selling beds for the hockey rink, water park, and golf during the off season AND the ski season (minus the golf except shoulder seasons). Also there is cross over from Burke non-winter due to Kingdom Trails. They are selling out during prime season because of non-skiers. Every resort is going to have beds go empty at some point during the non-peak. But if they are selling out during their peak seasons, they have a missed opportunity. Their investors wouldn't go in on a bad plan. People are filling the beds, this definitely isn't ASC syndrome. I don't see this as over building at all. They certainly could have done a lot more and they've done each new hotel in stages rather than all at once, with demand justifying expansion.

I have this client who is doing some crazy expansion right now. I just seems nuts. Outside of his really profitable business model with none of the built in advantages that have made him.... rich.

Yea the guy is 35 and probably worth €30M. He was just a kid with a job at 25.

So maybe I should watch and see what happens.

Not saying there is no risk in what Bill, Ariel and Steve are doing. But I wouldn't bet my own money against them.

Interest rates are crazy low so if the banks will lend you can borrow at very low rates.  That means that they are getting the EB5 money essentially for free and the return the investor gets is a green card.  Yes the water park and ice arena are off season attractions but what % vacancy rates do they have on a Tuesday in mid October?  10% at best.  Ultimately that overhead will become a burden to them down the road when everything is not shinny new.  Interest rates in the next year or so will also go up ending the free money funnel.

They will have to raise thier rates in ski season to accomodate the overhead in off season.  Eventually they start to price themselves out of the market.  I priced staying there mid week non holiday last winter for a PSIA event and the room rates were $300 a night.  I asked when I was there and the rooms were only half full that week.  They have to price it that high to cover overhead since all that investment is great but then you have to staff, light, heat and maintain all that infrastructure.

I love what Jay is doing but ultimately I hate it because they are fundementally changing what Jay is and it will eventually price out hard core skiers.  Really what have they spent on the mountain compared to the lodges?

Coach Z wrote

Interest rates are crazy low so if the banks will lend you can borrow at very low rates.  That means that they are getting the EB5 money essentially for free and the return the investor gets is a green card.  Yes the water park and ice arena are off season attractions but what % vacancy rates do they have on a Tuesday in mid October?  10% at best.  Ultimately that overhead will become a burden to them down the road when everything is not shinny new.  Interest rates in the next year or so will also go up ending the free money funnel.

They will have to raise thier rates in ski season to accomodate the overhead in off season.  Eventually they start to price themselves out of the market.  I priced staying there mid week non holiday last winter for a PSIA event and the room rates were $300 a night.  I asked when I was there and the rooms were only half full that week.  They have to price it that high to cover overhead since all that investment is great but then you have to staff, light, heat and maintain all that infrastructure.

I love what Jay is doing but ultimately I hate it because they are fundementally changing what Jay is and it will eventually price out hard core skiers.  Really what have they spent on the mountain compared to the lodges?

Vacancy rates everywhere in Vermont during the shoulder seasons are going to be 10%. I don't know where the point of saturation is but I suspect Jay knows there business better than you or I. I suspect with the hockey camps they do as well as the waterpark and golf that they are at better than 10% capacity right now, especially when you add in the leaf peepers.

Jay has insane package deals. Not sure what the deal is with $300 a night when you called unless you were calling last minute. But they bomb my email with really good package deals for ski/splash/stay stuff. Nothing I would take advantage off but accounting for the hotel and the type of accommodations, they offer a LOT of really good package deals.

The "hard core" skiers are staying at Grandpa Grunts and the Snowshoe or other off mountain accommodations like they always have. Or they've "moved up" to live close enough to the mountain that lodging isn't a factor. Jay DECREASED their day ticket prices last year compared to the previous year during the expansion. What have they spent on mountain? Good grief, how about two new lodges. Praise the lord I don't believe in, the Stateside Lodge is finally gone. New park/beginner lift, new never=ever learning terrain and a magic carpet, the six pack was delayed a year but it is coming. The Sky Haus is finally getting fixed up a bit. New paint job on the Jet. Parks are getting some love.

I can't believe I am defending Jay here... I am not a lover of everything going on at Jay. And after careful consideration, I decided against a Jay Pass and went with a Badge at Smuggs despite an hour extra drive round trip and not as long of a season (they are usually one of the last to close...). I don't love what is happening at Jay but I think they are walking the high wire pretty well, trying to balance long term expansion, revenue generation, economic development and job creation while trying to retain the essential "Jay-ness" of the mountain.

^ Good job there, Snowway Steve. Couldn't have said it better myself.

Though I do have a Jay season pass and live seven hours away. And have a low-cost place to stay in the local area. Bias?

What do you call it when it is hilarious and tragic at the same time? I forget.

http://jonnyjay.blogspot.com/2013/10/a-field-trip-to-stateside_14.html

Harvey wrote

What do you call it when it is hilarious and tragic at the same time? I forget.

http://jonnyjay.blogspot.com/2013/10/a-field-trip-to-stateside_14.html

Tragicomedy

Wikipedia wrote

Tragicomedy is a literary genre that blends aspects of both tragic and comic forms. Most often seen in dramatic literature, the term can variously describe either a tragic play which contains enough comic elements to lighten the overall mood or, often, a serious play with a happy ending.

I am hoping for a happy ending. Thanks for the link!

here's a great little read courtesy of Ptor Spricenicks, a fellow Canuckistanian (although he's at odds with the whole nationality deal - prefers "civilization surfer")

It's a bit of a lateral step from discussing Jay Peak's evolutionary state, but if you concentrate on breathing deeply into his mindset, then I think it will put things into perspective.  

Or not.

BTW, Ptor first started serious off-piste skiing at Jay.  FWIW.

http://www.powdermag.com/photos/ptors-spacebook-why-i-occupylagrave/

TD

  Edited to add - it's more of a metaphor than a simile. (the article)

Harvey wrote

What do you call it when it is hilarious and tragic at the same time? I forget.
http://jonnyjay.blogspot.com/2013/10/a-field-trip-to-stateside_14.html

Nice piece, SBR. My only complaint about your writing is that you don't do it often enough!

I made mention of the Jay expansion in the opening of a recent Magazine article.

Jamesdeluxe wrote

Harvey wrote

What do you call it when it is hilarious and tragic at the same time? I forget.
http://jonnyjay.blogspot.com/2013/10/a-field-trip-to-stateside_14.html

Nice piece, SBR. My only complaint about your writing is that you don't do it often enough!

I made mention of the Jay expansion in the opening of a recent Mag article.

Thanks, James. It has been a busy year but things are settling down, so with any luck you will see more posts on the RJPSR this season. I had also made a promise to myself to take a break from writing about the development story and try to keep things positive. I may have broken that promise a little bit with the last two posts, but hey, there is no snow activity to write about.