An EB-5, foreign investor-funded project at the base of Okemo Mountain Resort has come under new regulatory scrutiny over statements in its financial prospectus to investors. And the Vermont Department of Financial Regulation has stripped the project of its authority to solicit new investors, pending the creation of new disclosures that regulators say will more accurately reflect the risks, documents show.
Commerce Secretary Patricia Moulton, who heads the state agency that oversees the state’s four active EB-5 foreign investor funded projects, says she can’t comment on the specific concerns while the review is underway. But she says the suspension of investor solicitation “can be and has been a relatively normal course” of action for EB-5 projects.
“I’m not aware that there are situations at this point that could be deal-breakers, but … I don’t have all the details,” Moulton says.
Project developers bill the “SouthFace Village at Okemo” project as “the first four-season luxury home community at Okemo Mountain in over a decade.” At a projected cost of more than $200 million, the real estate venture, according to its developers, will also feature a lodge with “a gourmet eatery, indoor/outdoor pool, hot tubs, health club, and outdoor fireplaces for the ultimate in recreation or relaxation.”
Documents obtained in a public records request indicate that state regulators are demanding changes to the Memorandum of Understanding that the developers need to participate in state’s EB-5 program. They also want revisions to the “Private Placement Memorandum,” a prospectus that projects are required to provide to investors so they can assess risk.
Read more by clicking below image