December 19th, 2017

Project’s Lead Lender Submits Application to NH Business Finance Authority

DIXVILLE, NH – “The Balsams Resort redevelopment has taken a significant step forward on financing, just weeks after announcing it has received pre-sale deposits representing more than $26 million of real estate. The project’s lead lender, Service Credit Union (SCU), has applied to the New Hampshire Business Finance Authority (NH BFA) for consideration of a state-backed guarantee on the credit union’s $28 million loan to the development.

The NH BFA credit enhancement is an integral component of The Balsams proposed $170 million renovation and expansion of the iconic Dixville Notch resort. The consideration of this credit enhancement was enabled by the passage of Senate Bill 30 in 2015, which allows for the creation of a tax assessment district in Dixville, whereby property taxes paid on all future Balsams real estate components will service the SCU loan.

‘With the majority of our permits in hand, and more than $26 million worth of potential real estate sales under deposit, it is exciting to take The Balsams rebirth to this next, critically important level,’ said Les Otten, the project’s lead developer. ‘Enhancing our credit through the NH BFA was one of the first recommendations proposed by the NH Division of Resources and Economic Development when they pledged to support The Balsams redevelopment years ago. We look forward to working with Service Credit Union and the NH BFA during the review process.’

Otten added that it is important to note that neither the State of New Hampshire, nor the NH BFA, are being asked to provide funds. Service Credit Union is issuing the $28 million loan, based on its independently-conducted diligence and underwriting process. The NH BFA’s review and analysis will result in whether to recommend the application, and thereby the project’s overall viability, to the Executive Council. The Executive Council will then consider and vote on the NH BFA’s recommendation.

Otten said The Balsams is very pleased to be working with Service Credit Union, a New Hampshire-headquartered institution with solid experience in the resort arena, having recently provided a construction facility loan for the development of RiverWalk at Loon Mountain in Lincoln, NH.

Included in the NH BFA application are a work force study commissioned by PolEcon Research and an appraisal/feasibility study by CBRE Hotels on the value of the improvements that will be made to The Balsams property, and the overall feasibility of the redevelopment plan presented.

The work force study concludes that there is sufficient available labor in the region to meet the staffing needs of the redeveloped Balsams Resort. It determined that the project will have a positive impact on workers in the region and provide a number of public benefits, including:

• Putting people to work – The Balsams Resort will increase the size of Coös County’s labor force and raise the below-average labor force participation rate, especially among younger, working-age residents.

• Job diversity – The Balsams Resort will create 600 construction jobs during Phase 1. Once operational, The Balsams Resort will employ roughly 400 people with the potential of creating more than 1,500 jobs once the build-out is complete, as well as indirect jobs in the communities around Dixville.

• Good wages – Wages will average more than $17 per hour and the median wages are above the median for all of Coös County.

The CBRE study states, ‘Based on the detailed market analysis performed herein, there is absolutely no question that a market exists for the creation and operation of an upper upscale/luxury, four-season resort on the grounds of the subject property. Equally important to note is that there is sound reason to believe that the for-sale real estate components as contemplated herein as part of Phase 1A and 1B, will be received well in the marketplace.’

In addition to SCU’s $28MM loan, the project’s contemplated financial structure includes developer equity, construction debt, an EB-5 investment as well as equipment lease financing relating to the ski expansion.

The Balsams first phase will include renovating the historic Hampshire and Hale Houses, reconstructing the historic 1866 Dix House and building a new Lake Gloriette House hotel and conference center, Nordic Baths and Spa, Marketplace, and an expanded ski area. Construction in The Balsams village may proceed independently from work on the ski area.

The Balsams project has been rigorously reviewed by various local, state and federal agencies and has received the following legislative and permitting approvals:

  • May 2015 – The NH Legislature passes and Governor Hassan signs SB 30, allowing the NH Business Finance Authority to consider a $28 million loan guarantee for the project’s redevelopment district
  • July 2015 – NHDES – 401 Water Quality Certificate to withdraw water from the Androscoggin River for snowmaking
  • November 2015 – Coos County Planning Board and Delegation – zoning amendment approvals
  • December 2015 – Coos County Planning Board – Planned Unit Development approval
  • December 2015 – NHDES – Wetland Permit
  • December 2015 – U.S. Army Corps Permit
  • June 2016 – Coos County Planning Board – Hampshire and Dix House Site Plan and Subdivision Approval
  • June 2016 – NH DES – Shoreland Impact Permit
  • July 2017 – NH DOT – Driveway Permit
  • August 2017 – Coos County Planning Board – Amended Hampshire and Dix House Condominium Site Plan Approval
  • September 2017 – Coos County Planning Board – Lake Gloriette House Condominium Site Plan and Subdivision Approval

About The Balsams redevelopment:
The Balsams redevelopment proposal includes reconstructing the historic Dix House, and renovating the historic Hampshire and Hale Houses, as well as restoring the acclaimed Panorama golf course and clubhouse designed by pioneering golf course architect Donald J. Ross. The Balsams Lake Village, which will encompass the Dix and Hampshire Houses, will feature a new Lake Gloriette House hotel, a 600-seat conference center, Nordic baths and spa, a performing arts center and an open-air marketplace. The resort’s fine cuisine and chef training programs, known worldwide, will return through multiple culinary options around the resort. All will embrace the farm-to-table concept by sourcing locally-grown meats, produce and dairy. The plan also includes expanding The Balsams Wilderness Ski Area into one of the largest, most technically advanced ski resorts on the East Coast.”