Plans to redevelop the closed Balsams Resort in Dixville Notch, N.H., suffered a major setback Monday as ski resort mogul Les Otten announced he has given up trying to persuade state officials to guarantee a $28 million loan.
Otten, the former head of American Skiing Co., has consistently described the loan as a crucial part of the $170 million needed for the first phase of the project. But Otten did not say that his nearly five-year campaign to turn the Balsams into a world-class resort was over.
“I remain supportive of economic development in the North Country but will need to take some time to reassess our approach to financing the re-development of this wonderful property,” Otten said in a statement.
Otten wants to expand the ski area and build a year-round resort with a hotel, condominiums, and a conference center. Service Credit Union of Portsmouth, N.H., was willing to lend Otten the $28 million, but only if the state would guarantee it, Otten said.
Otten had applied to the state’s Business Finance Authority for a guarantee, but said Monday that he was withdrawing his request.
“The conditions ultimately required by the authority do not allow Service Credit Union and the Balsams to proceed,” he said.
Otten’s spokesman, Scott Tranchemontagne, declined to elaborate on what Otten meant. In a statement, BFA chairman Dick Anagnost said that after reviewing Otten’s business plan the agency grew concerned it might be putting public money at risk.
Otten “wasn’t willing to meet the normal and customary conditions that are required as part of the regular application process,” he said. “We could not in good conscience risk taxpayer funds for a private venture with no assurance of repayment in the event the project was not successful.”
Tranchemontagne said Otten has lined up $142 million in funding, but that it hinged on the state guarantee for the additional $28 million.
“All developments generally go through challenges and things that they counted on may not come to fruition,” Tranchemontagne said. “We have to go another path.”
As a sign of strong interest in the project, Otten has said that he has received about $25 million in refundable, 5 percent deposits on condominiums.
This is not Otten’s first financial setback with the project. In 2016, he 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 but that he expected the loan to be approved.
But last December, it appeared Northern Bank & Trust was no longer considering the project. That’s when Otten announced Service Credit Union was willing to lend him $28 million — if the state would guarantee it.
At the time, Tranchemontagne described Service Credit Union as being a “better fit” for the project.
State economic development officials have been enthusiastic about the project, seeing it as a potential economic boost for the area. Otten has predicted the first phase will require 600 construction workers, and that the resort would employ about 400 people.
The resort, which closed in 2011, is owned by Otten and Dan Hebert, who runs a construction company in Colebrook, N.H. Hebert could not be reached for comment.
Christopher Jensen can be reached at christopherjensennh