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« Previous Story | The Industry Report Home Page | Next Story » Everything's Tres Bon Under Jay's 'New' ManagementBy Craig Altschul 
Jay has been a favorite of the sport's cognoscente since the legendary Austrian ski racer Walter Foeger brought it to life in the fifties and sixties. The notoriety continued as Bill Stenger, in his first season at the helm in 1984, brought in the renowned mountain designer Sel Hannah, and the strategy of creating off-piste glade skiing, with trims and thins only where needed, was devised. There are 24 glades today, not all on the trail map. Jay's joie de vivre often is attributed to the multi-cultural mix of skiers and snowboarders, more than half speaking French on weekends. Some 55 percent of its guests drive south. But, there's more: Natural snowfall here often exceeds its New England competitors by as much as 100 feet. This northern Vermont bird's nest is primed to deliver on its long-held promise. But, no one is hanging out an "Under New Management" sign. The reason? The money is new, but not the boss. Further, the reasons for expansion and redevelopment are far from the norm in the resort industry. There is indeed a higher calling in these two Vermont counties where unemployment hovers between 6 and 7.5 percent: Job creation. Stenger came to Jay as its president and chief operating officer after 10 years in a similar role at Jack Frost Mountain in Pennsylvania's Poconos. This will be his 24th season running Jay Peak, but his first in the role of owner. Stenger long has been a leader in the Vermont Ski Areas Association and within the National Ski Areas Association. Long-time industry observers credit Stenger as the force behind how the industry re-focused on marketing when he chaired a full-scale industry-wide effort a number of years ago. The Industry Report caught up with Stenger last week as construction got underway on the first major improvement, a new $17.5 million, 57-room hotel to be ready for the 2009-2010 season. Mont Saint Sauveur International (MSSI), owner of six Canadian ski resorts, two water parks, a campground, and forest adventure course, acquired Jay Peak 30 years ago from Weyerhauser. Jay Peak was actually founded by the local Kiwanis Club. "The Mont St. Sauveur resorts can be compared to U.S. ski areas like Camelback or Wachusett," Stenger explained. "They like working in urban markets and have been very successful at it. Jay Peak was their only U.S. resort property and their only destination." Stenger, who had a good relationship with MSSI, was able to get the company to invest upwards of $15 million into improvements over the years in lifts, rebuilding Vermont's only tram, and expanded snowmaking. The Jay Peak championship golf course, designed by top Canadian golf course architect Graham Cooke, opened in 2006. The 30-year-old Hotel Jay is best described, as Stenger did, "as a tired old building." There is no village at Jay, by intent. Stenger steered the development of 275 condos with 1,600 beds at the base through the quagmire of Vermont's difficult Act 250 process. The condos are totally sold out, with more than 80 percent in the rental pool. "These aren't empty beds in a village, and that's how we developed them," he says. Stenger said he became convinced over the past few years that, if Jay was to fulfill its promise, make a real impact on northern Vermont's economy, and to be financially successful for the long term, it needed to stand on its own. He went to MSSI's owners (several founding families) and asked if they would sell if the appropriate terms could be developed. They said yes. Enter Ariel Quiros, a very successful Florida businessman (imports and exports) now in his mid-fifties, who had been vacationing in the Jay Peak region with his parents since the 1950s. He has been a property owner at the ski area for the past decade. Stenger calls him a "close friend." "That's it, there's just the two of us," Stenger says. "Ariel is a silent financial partner. We are moving forward very quickly." The new ownership company is called QResorts. No price has been released for the transaction, though news reports say the property had been valued at $12 million. Individual investors will fund the hotels, recreational amenities, and future improvements. They can be foreign or domestic. A very attractive incentive for foreign investors is that for every $500,000 invested in the U.S. that results in 10 new jobs, the investor gains permanent residence through a promised federal EB-5 visa (green card). One of the most unique features of the investment packages comes back to Jay Peak's "calling," where everyone come out winners – the new owners, employees, and the people living in Orleans and Franklin Countries. "We get equity to create jobs; investors can place their money in a good business; and there's the added attraction of a green card," Stenger points out. Jay's plan is to be able to sustain as many as 750 to 800 employees at the resort on a year-round, not just seasonal, basis. "We expect to be able to fill our beds, not only in winter and summer, but in the fall and spring as well. Not many resorts are in a position to do that." The hotel now under construction is fully funded. Much of the new "recreation core" (not a village in the sense of the relatively recent village boom in the U.S. and Canada) is also funded and will break ground in the spring. That core includes a spa, conference center, bowling center, skating facility, and indoor water park – all "weather proof" activities, making it attractive even during Vermont's well-known spring Mud Season. The state's fall foliage season is a "gimme." The Hotel Jay will be razed following the 2009-2010 season and replaced with a 120-room suite hotel. The second, larger hotel and those recreational core amenities carry a price tag of $78.5 million. Stenger says they are about halfway there. He expects full funding by the first quarter of 2009 at the latest. Ski history buffs will remember the name Walter Foeger. The autocratic Austrian who started Jay Peak in its unique direction was inducted into the Ski Hall of Fame Class of 2006. Stenger was in Ishpeming for the ceremonies. "I have great respect for Walter," he told the IR. "It was a remarkable voyage to be with him for three days. I was a good listener and Walter's passion for the sport was still very evident." Foeger, who served as General Manager and Skimeister for the resort's first decade, "invented" the "Natur Teknik" of instruction, moving students directly to parallel without the stem turn. Stenger said his influence on instruction remained a Jay fixture for many years. Foeger died in Nickeldorf, Austria in February 2007 at age 90. The future for Jay Peak? It's bright in any direction. "Draw a circle around the resort and you can count upwards of 100 million people from two countries in it. Montreal is 1.5 hours away and Ottawa and Boston are only 3.5 hours. If the circle goes west of Toronto and includes New York to Baltimore, the market is immense." Stenger notes that virtually all of Vermont's ski resorts currently have stable ownership. "With the way the economy is going, I think many people will opt out of the dual problem of airline cost and hassle and will drive to New England this winter for their vacations," he said. What It Means: Sometimes a formula based on altruism and good business sense coincide. Not often, but sometimes. The Jay Peak redevelopment is a lifesaver in these two hard-hit rural New England border counties. It's nice to see a venerable ski resort with a veteran, respected industry leader at the helm, get a shot to rock out. Other resorts looking to fund a similar model perhaps should check their homeowners list a bit more carefully. Jay le temps est venu (Jay's time has come). « Previous Story | The Industry Report Home Page | Next Story » Comments
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Posted by: James Chung | August 26, 2008 08:35 AM
