Mount Snow

Skiers and snowboarders arrive at Mount Snow on Jan. 17 in Dover. A marketing plan will continue to be deployed to bring more visitors to Dover and Wilmington. 

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MONTPELIER — The Vermont Department of Financial Regulation issued a cease and desist order against Mount Snow’s parent company Vail Resorts to protect EB-5 investors who don’t want to lose their ability to become United States citizens if they receive a refund before finalizing the immigration process.

“These investors are investing to get their permanent green card,” DFR Commissioner Michael Pieciak said. “That is a critical representation for them.”

The EB-5 program allows foreign investors to put money into projects aimed at creating jobs in the United States. Investors then work through an immigration process, starting with conditional residency and ultimately obtaining a green card once a final form is approved.

Their investment needs to “remain at risk” during the duration of the application.

“If you get a refund or your funds just sit in a bank account with no risk then you’ll have your petition denied and you won’t get a permanent green card,” Pieciak said.

From 2014 to 2016, Mount Snow’s former parent company Peak Resorts raised $52 million through the EB-5 program in which investors contributed $500,000 each plus an approximately $50,000 administrative fee. The U.S. Citizenship and Immigration Services approved a form and filing from the company in December 2016, allowing Mount Snow to release money from escrow to build West Lake to expand its snowmaking capacity and construct a new lodge at Carinthia.

Pieciak said the projects have benefited the resort since completion in 2019. That year, Vail Resorts acquired Peak Resorts and took control of the project.

At the time, about 24 investors received final approval for citizenship. They won’t be affected by a refund, Pieciak said.

“We have been in communication with Vail once we heard they were going to refund investors,” he said, having received correspondence from a dozen or so investors who disagreed with the plan.

Pieciak said the company had pushed the refund date from December to January. The department felt a cease and desist order was necessary to prevent any negative effect on investors’ immigration process. He noted other investors may want their refund because they moved back to their home country.

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Documents issued to investors clearly stated money wouldn’t be refunded if the final form was still being adjudicated, Pieciak said.

“Just because Vail purchased the company doesn’t mean they can back out of their legal obligations and the representations that were made to these investors,” he said. “That’s why we needed to step in to protect them.”

Pieciak believes Vail wants to be out of the EB-5 program, which isn’t being used at any of its other resorts.

“That’s fine and well,” he said. “It doesn’t mean they can go against the promises and representations made to those investors.”

Pieciak said the investors’ money will need to be redeployed to another project at the resort or some other one in Vermont, keeping the investment at risk for another two years until all the forms can be adjudicated. He estimates 30 or 40 investors are affected.

Some have thanked the department for the order.

If the final form is denied, states one investor’s email, “all of our past efforts would be wasted, and many investors’ and their families’ lives would be turned upside down. It would lead to a series of lawsuits and no one would be an actual winner.”

The order says Vail shouldn’t issue refunds to any investor who hasn’t reached the end of their conditional residence period or executed a waiver. By Jan. 24, Vail must show the state all correspondence between the company and investors from January 2019 to the present.

Pieciak anticipates the company will follow through on the order and not provide refunds where they are not warranted.

Vail said in a statement, “Since the Mount Snow EB-5 Project’s formation in 2014, our communications with investors have been transparent, clear, and compliant with securities laws. We are confident that our practices are fully compliant. We are evaluating our legal recourse.”