Stenger and Quiros “200% ethical”

   Bill Stenger and Ariel Quiros, partners in the EB-5 financed developments Jay Peak, AnCBio and Q-Burke, have been on a roller coaster (or water slide?) the past few months. This spring, real estate developer Tony Pomerleau said he could wait no longer and canceled a pending four-year-old agreement to sell Stenger a prime site on LakeMemphremagog. This move meant the loss of a key piece of Newport’s EB-5 waterfront development. Prior to this setback, a European window manufacturer had pulled out of a project.  

Then Stenger and Quiros’ wide ranging development projects got a bit of good news. Their AnC Bio project received approval from both the Vermont Regional Center (Vermont’s EB-5 oversight and promotional entity) and the USCIS (the United States Citizenship and Immigration Services, which administers the Immigrant Investor Program).

Last week, VtDigger.com unearthed a controversy that began over the status of dozens of investor agreements. Investors seeking green cards through the EB-5 arrangement had major terms of their investment unilaterally changed by Jay Peak’s owners. The timeliness of notification for the changes Stenger and Quiros made to the contracts was … well, to be polite, sluggish. 

Investors had no knowledge of Stenger’s actions until five months after they were executed.

Stenger and his partner at Jay Peak, Miami-based Ariel Quiros, dissolved the company [Jay Peak Hotel Suites, LP, whose investors owned Tram Haus Lodge, built in 2008] on Aug. 31, 2013, turned the investments into unsecured loans and “waived” investors’ legal rights, according to documents obtained by VTDigger. Stenger says he sent an email to investors with the promissory note on Jan. 24 of this year, but he did not mail official, paper copies until May.

After the investors sent letters of complaint to Stenger and the state, Jay Peak agreed to change certain terms of the IOU in a take-it-or-leave-it offer earlier this month.

Bill Stenger has been doing damage control defending his actions on the Mark Johnson radio program. He said there was

“no gain to be had by Jay Peak” by converting Tram Haus equity investments into loans.

Stenger admits it was a “mistake” and he is “working his ass off” to repair the damage.

Okay … but he and Quiros are both smart enough (or seem to be) to know beforehand that changing the agreements might raise more than an investor eyebrow or two. So what motivated them?  

Well, right out of the gate, Ariel Quiros said the transaction was “200 percent” ethical. The more plain-spoken of the two partners, he also offered up one reason the investments were converted to loans:  

Quiros said the decision to execute the investors’ exit strategy in August 2013 was prompted partly by some investors who had asked for it, and also by an approaching promotional trip to recruit investors for pending EB-5 projects – namely, the AnC Bio biotech research and manufacturing facility in Newport, and buildout of Q Burke Mountain ski resort in Burke.

He wanted Stenger and Jay Peak representatives, as well as Gov. Peter Shumlin and other state officials, to be able to say on a trip to Asia that his first batch of investors were being paid back. [added emphasis]

“It shows the world of EB-5 that I’m giving money back to investors,” Quiros said. “OK, over time, but at least now you know you’re going to get your money back.”

 Competition for EB-5 investors has become very tight in the past years. And an overseas promotional trip (paid for by Jay Peak) trolling for EB-5 investors, accompanied by top Vermont state officials, was a high-stakes event. So, driven partly by the need to continually gain confidence and impress future EB-5 investors, Stenger and Quiros risked current-investor dissatisfaction.  

There are eight projects divvied-up between Jay Peak, AnC Bio and Q-Burke in the Northeast Kingdom Economic Development Initiative. Stenger and Quiros are at approximately 500 million in EB-5 money for these projects.

So, go ahead, all you well-heeled potential immigrants – invest in AnC Bio, Q-Burke and Jay Peak and get your visa.

After all, as Mr. Quiros says, they are 200 percent ethical. Is this meta ethics or what?

6 thoughts on “Stenger and Quiros “200% ethical”

  1. This whole over-promoted thing sounded more than a little iffy (fishy?) from the start.

    Why do the powers that be continually succumb, like rubes at the racetrack, to any scheme floated their way from the development community?  

  2. Bill Stenger has been a self-aggrandizing snake oil salesman for years. It should be no surprise that Governor “Chamber of Commerce” likes to play with him. This latest attempt at colonizing the NEK for the benefit of the right people stunk from day one. This was going to turn Newport and environs into a lovely place for people who don’t live there yet. The natives would be able to commute to their jobs making beds and cleaning bathrooms for the favored ones. The breathless cheer-leading for this project from the media and the political class was absolutely nauseating.  

  3. Vermont Regional Center (Vermont’s EB-5 oversight and promotional entity)

    You would think, by now, we would know that those two roles are contradictory.  cough NRC cough

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