Balsams loan guarantee application withdrawn from BFA
Disagreement over requirements led to decision
The bid for a $28 million loan guarantee from the NH Business Finance Authority to help in the redevelopment of the Balsams Resort has been withdrawn over a disagreement on what kind of conditions would be required to receive it.
The application for the guarantee was withdrawn Monday by Service Credit Union, the lead lender in the project. The decision came after SCU and the Balsams development team came to “loggerheads” over the guarantee, said Scott Tranchemontagne, spokesman for the development team.
Tranchemontagne added that the decision to withdraw does not mean the project won't go forward.
“It’s absolutely not the end of the development, he said, adding that “we’re basically seeking alternative paths” since the BFA route is no longer feasible.
“This is absolutely a viable project. We have had deposits on almost $26 million in real estate. It has proven its worth in the market,” he said.
SCU submitted the application for the guarantee last December. The decision to withdraw it is the result conditions for the loan guarantee put forward by the BFA that “do not allow SCU and the Balsams to proceed” with the application, according to the press release.
Tranchemontagne said he couldn’t “go into specific detail” about those conditions. “I can just tell you that what was promised to us in terms of BFA support back three years ago did not materialize. The conditions were different.”
In a statement, the BFA defended those conditions, saying that agency “only asked for assurances from the developer that were necessary in order to protect New Hampshire taxpayers from losing $28 million.”
In the statement, Dick Anagnost, chair of the BFA, said the agency “worked very closely with both the applicant, Service Credit Union, and the Balsams team throughout the application process. Unfortunately, since the developer wasn’t willing to meet the normal and customary conditions that are required as part of the regular application process, we could not in good conscience risk taxpayers’ funds for a private venture with no assurances of repayment in the event the project was not successful.”
SCU had sought BFA approval of a $28 million tax assessment bond with a state loan guarantee.
SCU and the Balsams team were enabled to pursue the loan guarantee through the passage in 2015 of Senate Bill 30, which allows for the creation of a tax assessment district in Dixville. That district would allow property taxes paid on all future Balsams’ real estate assets to service the $28 million loan.
Now that the application has been withdrawn, Tranchemontagne said, the developers are looking at other funding sources, although he wouldn’t say who or what they were. One possibility is to “go back to the Legislature to do a small tweak to SB 30 that would allow us to move forward with creating a tax assessment district without the need for the BFA guarantee, but that’s an idea that hasn’t been vetted,” he said.
In the BFA statement, Anagnost seemed to leave the door open to reviving the application. Saying that BFA officials “recognize the importance and value the project has to the North Country,” he added that that “we welcome the developer to reassess his situation and come back in the future with a revised application that addresses the concerns raised during the underwriting process.”
It has been almost seven years since Dan Dagesse and Dan Hebert bought the failed North Country resort from the Tillotson Corp. for $2.3 million. They had plans to redevelop it, but by 2015 brought former American Skiing Company CEO Les Otten on board, making him lead developer. Throughout that time, the project has won a wide range of support in the North Country, where at least one economic study predicted that the Balsams redevelopment would generate hundreds of full-time jobs and hundreds of millions of dollars in economic activity.
This article has been updated to include comments from the NH Business Finance Authority.