By Chris Jensen,
InDepthNH.org
DIXVILLE – The Balsams’ developers are pressuring the Coos County Planning Board for a quick approval of their plan for a new hotel saying a bureaucratic delay could ruin their hope to start construction as early as October.
But while making such urgent pleas, developer Les Otten’s Dixville Capital LLC lacks key funding for the first phase of the $170 million project. And getting that could be months away.
Otten still needs a $100 million loan that has reportedly been under consideration by the Northern Bank & Trust Company of Woburn, Mass.
The bank and Otten want the state to guarantee $28 million of that $100 million. If the loan isn’t paid back, the state’s collateral would be some portion of what might be a failing resort.
But getting that state guarantee requires a review by the state’s Business Finance Authority. And the bank hasn’t yet applied for the guarantee, said James Key-Wallace, the BFA’s executive director.
It could take 45 to 60 days for the BFA to make a recommendation to the Executive Council, according to Key-Wallace.
“It is complex. There are a lot of moving pieces. It should not be rushed. It needs to be done right,” he said.
Chris Jensen photo
The Balsams closed late in 2011 and the following year most of its furnishings were sold at auction. Chris Jensen photo
Then the BFA’s recommendation would have to be considered by the Executive Council, which must also hold a public hearing.
Balsams spokesman Scott Tranchemontagne said the developers expect the bank to submit the application “very soon.” Almost six months ago he told InDepthNH.org that the developer was hoping the bank would act quickly.
Dixville Capital LLC is trying to move ahead concurrently on planning and financing, he said.
“We’ll certainly ask everyone to move as expeditiously as possible,” Tranchemontagne said.
James Mawn, the president and chief executive officer of the bank, did not immediately respond to a request for comment.
The application would include the bank’s study of Otten’s operating plan, the value of the land and the resort’s fiscal prospects.
Those documents would be analyzed by the BFA as it tries to determine whether the risk of the loan is outweighed by the economic benefit to the state.
“The way we measure economic impact, it is really all about jobs. There is no formula that says ‘This many jobs need to be made for every dollar of loan,’” Key-Wallace said.
“It is a judgment at the end of the day. Is the level of risk being taken proportionate to the possibility of job creation? That is a judgement that will ultimately have to be made by the (Executive) council.”
A report commissioned by Otten predicts about 400 employees would be needed when the first phase of resort opens. The average hourly wage would be $17. In addition, about 600 construction jobs would be created. If the resort is expanded, the number of jobs could grow to 1,500, the report said.
Under state law the “the governor and the council may award” such a loan guarantee if a project “is of vital importance to the economic well-being and general welfare of a substantial number of the state’s citizens and will minimize the risk of permanent economic damage to the state or a region of the state.”
A key part of that first phase of the Balsams redevelopment is a new $50 million hotel and conference center called Lake Gloriette House. It is the subject of a public hearing before the planning board next Wednesday in Colebrook.
After the public hearing – which begins at 6 pm in the elementary school – the board is expected to decide whether it has all the information needed to deem the plans complete and begin its review and deliberations.
Several times officials from Dixville Capital – as well as politicians – have complained that the board gets hung up on what the developer sees as minor details – such as where snow will be stored – that can be worked out later.
But the planners have noted that the law requires them to review certain elements and there is no flexibility. Failing to follow the law could later make the project vulnerable to a legal challenge.
