Plan to remake Balsams Resort faces decision on loan
For four years, developer Les Otten has been trying to resurrect the closed Balsams Resort in Dixville Notch. This month he faces what could be a make-or-break moment: getting New Hampshire to agree his plan is good enough that the state should back a $28 million loan.
Otten, former head of American Skiing Co., said he wants to expand the ski area and build a world-class, year-round resort with a hotel, condominiums, and a conference center.
As Otten sees, it the Balsams wouldn’t compete with ski areas such as Loon, Cannon Mountain or Bretton Woods. Instead, its guests would drive past those venues to Dixville Notch, about 35 miles from Canada and home to the famous midnight primary vote. Then, they’d stay for several days.
The project is seen as having the potential to provide a badly needed economic boost to the region, which suffered when the outdated and worse-for-wear resort was closed in 2011. About 300 full- and part-time workers lost their jobs.
But the question Otten has yet to answer is about funding.
That $28 million loan is just part of the $170 million Otten needs for the project’s first phase. But a state guarantee could boost the plan’s credibility as he seeks the remaining $142 million.
Otten, a former minority partner in the Red Sox, declined to be interviewed. But Balsams project spokesman Scott Tranchemontagne said a guarantee on the $28 million loan is a “critical element of the total package.”
The fund-raising now includes plans to seek funding from investors in India, China, Vietnam, and Turkey, said Kelly M. Wieser, manager of the Invest New Hampshire Regional Center in Campton, which is working with Otten.
Under the so-called EB-5 program, foreigners who invest at least $500,000 in an approved business that will boost the economy and create jobs will receive so-called green cards, allowing them and their immediate families to live in the United States.
And Wieser said there is good news.
“We have a commitment from an investor source in India,” Wieser said. She declined to disclose the amount and said she will not release any EB-5 money for the project until Otten has all of his other financing lined up.
Tranchemontagne said Otten has identified funding needs beyond the $28 million loan, and the company is “navigating through the various due-diligence processes.” He declined to be more specific.
In 2016, Otten told reporters that Northern Bank & Trust, of Woburn, was considering a $100 million loan that he hoped would include $28 million guaranteed by the state. He said the bank was reviewing his business plan, and he expected approval.
But in December of last year, Northern Bank & Trust faded from the picture. The Balsams announced a different entity, Service Credit Union, of Portsmouth, N.H., was willing to loan Otten $28 million — if the state would guarantee it.
Asked about the change, Tranchemontagne said Service Credit Union was “a better fit.”
James Mawn, president and chief executive of Northern Bank & Trust, did not respond to requests for comment. David Weed, an official at Service Credit Union, did not respond to a request for an interview.
The loan guarantee first goes before New Hampshire’s 10-member Business Finance Authority, nine of whose members are appointed by the governor. If the BFA recommends the guarantee, it would then need approval from the state’s five-member Executive Council.
The guarantee was expected to be discussed at a meeting last month but was rescheduled for May 21 because the BFA didn’t have all the information it wanted.
“It is an active dialogue with many moving parts,” said James Key-Wallace, the BFA’s executive director. “Some projects naturally come together quickly, and some take longer. The BFA stands ready to vote whenever the project is ready and the lender has submitted all the necessary information.”
Key-Wallace said that for him the major issue is whether the project will provide good jobs.
Otten has said the project will create 600 construction jobs, and when the resort reopens about 400 employees will be needed.
However, some employers in the North Country report they are having problems finding workers. In March, the state’s seasonally adjusted unemployment rate was 2.6 percent. Otten predicted a salary of “more than $17 an hour” would draw the needed workers from other jobs.
State economic development officials have strongly supported the project, describing it as a rare opportunity for economic growth. They say that if there is a problem with the loan being paid off, the state would still benefit, by getting part of the resort. Critics have wondered, however, what the state would do with a portion of a presumably failed resort.
Otten said there’s plenty of interest in the resort: He has “more than 120 families and individuals” who have provided refundable, 5 percent deposits on condominiums that represent $26 million worth of future sales.
But Otten doesn’t yet have permission from the state to sell condominiums because he doesn’t have all of his financing, said James Boffetti, a senior assistant attorney general who heads New Hampshire’s Consumer Protection and Antitrust Bureau.
The project has some state permits. In September, the Coos Planning Board approved the plan for a $50 million Lake Gloriette hotel and conference center. But Otten has yet to begin building anything, despite predictions over the years that there would soon be “shovels in the ground.”
If the BFA and Executive Council guarantee the $28 million loan, it is hoped that construction would begin this summer, Tranchemontage said.
The resort closed in 2011, and the decaying buildings and about 11,000 acres were purchased by two businessmen, Dan Hebert and Dan Dagesse. Hebert owns a construction company in Colebrook, N.H., and Dagesse has a string of automobile dealerships, including several in Massachusetts.
Last year, Dagesse sold his half to Otten, telling InDepthNH.org that “my involvement with the Balsams was purely to get it off the ground” and that it made sense for Otten to buy his share. Hebert retains the other half. Dagesse declined to provide the selling price.
Hebert and Dagesse have recouped at least some of their original investment. Shortly after the purchase, some of the property was logged under a forestry management plan one state official described as aggressive.
There was also a public auction in 2012 at which much of the equipment and many of the furnishings were sold.