October 03, 2018DIXVILLE – Owners of the Balsams Resort, Les Otten and Dan Herbert, are seeking alternative financing after withdrawing their application for a $28 million loan.
Otten recently withdrew his request to the state to approve a $28 million loan from Service Credit Union to help cover the cost of redevelopment of the resort. Part of the loan agreement was that the Business Finance Authority would have to back up the loan with a guarantee. Otten said, vaguely, that the conditions set by the state disallow the project to move forward, but he didn't elaborate.
Otten has been planning to upgrade the resort with a hotel, condominiums, and a conference center, and to expand skiing with additional trails. The cost of the project is $170 million, and the $28 million loan was critical in meeting the goal for expansion and redevelopment. Otten has bean working in the planning stage for five years. Otten said he is reassessing his approach to financing the project.
Dick Anagnost, Chairman of the Business Finance Authority, wrote in a statement that there are concerns that the project would risk public money. There are regular conditions in the application process that Otten didn't agree to meet according to the statement. Furthermore, it stated that there was a fear of non-repayment of taxpayer money if the project fails.
Yet, Otten said the BFA would not have to loan any money, just provide the guarantee.
A total of $142 million is available for the project, but the state guarantee for the $28 million was vital.
Although the owners of the resort are still working with the BFA to come up with a solution, they are seeking other options including a possible bond created by the Coös County Commission.
Since Dixville is an unincorporated town due to very low population, it is governed by the County Commission and County Delegation. This allows tax-increment financing which could be used as a way to pay off a loan from the district. But, again, the TIF can only be initiated if the BFI provides a loan guarantee.
Otten proposed to add a sentence to SB30 that would allow Coös County to issue a loan without a BFA loan guarantee. The language will be proposed to Legislature in December.
If all goes well, the County would float a bond, purchased by a third party, which would cause no risk to taxpayers as money would be paid back to the county via an annual fee.
Mayor of Berlin and County Commissioner Paul Grenier said he is a strong supporter of the Balsams project moving forward.