BALSAMS RESORT APPROVALS EXTENDED AMID FINANCING EFFORTS
January 19, 2025
By Robert Blechl
Appearing in the Caledonian Record
Amid ongoing efforts to secure the project financing, the developers of The Balsams Grand Resort in Dixville Notch have gone before the Coos County Planning Board to request and receive extensions for previous approvals.
In 2021, several planning board approvals from 2016 that had been granted for five years were extended to Jan. 18, 2025.
But with that date just days away, developers sought additional extensions for another five years.
After a planning board hearing on Dec. 18, the board granted a 5-year extension to Jan. 18, 2030, for three approvals (two for a subdivision and one for a lot line adjustment) regarding the Balsams’ Planned Unit that was originally granted in 2016 and amended in 2021 to extend the expiration to January 2025.
The extensions will be co-terminus with January 2030 extensions approved by planners in May 2024 for the Lake Gloriette House and Hampshire-Dix House.
Also, on Dec. 18, a March 2023 approval of the Wilderness Ski Area along Route 26 was extended to Jan. 18, 2030, to allow developers to meet the remaining conditions required by county planners, update certain references to the New Hampshire Department of Environmental Services approvals, and update language in the Coos County Zoning Ordinance.
The extension revised a condition to the existing NHDES wetlands permit to accommodate a new one, which would supersede the current one.
According to the requests by Dixville Capital LLC, which represents the developers, “The Applicant has not yet obtained the financing necessary to complete its acquisition of all the parcels necessary for the project, and therefore, has been unable to finalize and record the maps as required by the Board’s approvals.”
Now approaching a decade and a half, The Balsams has been closed since September 2011, following several years of reduced guest counts and declining revenues.
In 2014, ski resort developer Les Otten joined the development team as a developer-owner.
In March 2023, during a special meeting of the Coos County Delegation, the three-member county commission approved the financing plan for a total first-phase project that, accounting for inflation, is now north of $300 million.
Established through the approval is a tax assessment district for the issuance of $35 million in bonds, which are part of the financing and are to be sold to private buyers.
The commission’s approval was conditioned on The Balsams redevelopment being in the public interest, as required by the New Hampshire statute authorizing redevelopment districts and district bonds in unincorporated places like Dixville.
Developers aim to transform The Balsams into a four-season resort employing hundreds of construction workers and, after full build-out, support more than 1,000 full-time employees.
First-phase redevelopment entails a new Lake Gloriette House hotel featuring some 400 rooms and a convention center that by itself is expected to be financed through a bond of at least $100 million.
It also involves a quadrupling of the Wilderness Ski Area to include 22 lifts, 2,200 acres of skiable terrain, and a gondola and ski-back bridge over Route 26 to connect the hotels with the ski area; Nordic baths and a retail marketplace; a renovated golf course; fine dining and culinary offerings; shared ownership condominiums; and a Planned Unit Development of up to 4,600 lodging or residential units.
Redevelopment Status, Future
On Thursday, Otten spoke of the project’s setbacks, what he said have been its successes to date, the permits granted, and how the development team remains committed.
Currently, 17 full-time people work on different aspects of the project, including the internal finance team and development program staff, he said.
In addition, there are attorneys, third-party structural and civil engineers, and architects.
All are being funded internally, said Otten.
“My partners and I wouldn’t be making that kind of an effort if we didn’t see light at the end of the tunnel,” he said. “My partners and I are very encouraged. There’s been a lot of setbacks along the way, to say nothing of COVID and a whole bunch of other things that have gotten in the way, but we’ve been able to overcome everything to date. The team that’s in place to be able to finish this all out and break ground has been working.”
Otten said he anticipates success because he’s optimistic, and all partners continue to invest in the project.
“That doesn’t guarantee that we’ll succeed, but there are no guarantees in life,” he said.
The financing plan approved by the county in March 2023 remains largely the same, with all of the first-phase components in place, though the 60- to 70-percent construction cost increase in the last four years has prompted a few modifications, he said.
“This is an extremely ambitious plan,” said Otten. “People always ask why didn’t you start with something smaller? The simple answer is really bright people and good people were operating The Balsams when it was much smaller. Because of its location, it was never a big enough magnet to attract enough guests and customers and it didn’t have a winter season. So it had to be bigger to support a winter season to go along with the summer season, to say nothing of the conditions of the buildings. There was no air conditioning.”
So the team, factoring in economies of scale, looked at a new business model, how much revenue a new operation would need to generate, and what minimum size of a destination resort would be needed to attract enough people and succeed while knowing that the old hotel of 150 to 200 rooms was not generating enough revenue to carry the business, he said.
It’s well-documented by the Tillotson Trust that The Balsams, which was purchased by Neil Tillotson in 1954, was losing millions of dollars annually, which was made worse after Tillotson’s latex glove factory in Dixville closed some two decades ago, said Otten.
“The glove factory was the income generator for Dixville, not the hotel,” he said. “The hotel was Mr. Tillotson’s hobby, and everyone in the North Country benefited from his largesse in keeping the place going. The reality started to sink in when the glove factory closed.”
About a decade ago, the development team studied the size of a hotel needed for a new resort and found it had to be in the neighborhood of 450 rooms that would support about 800 people and with a 60-percent occupancy rate year-round, said Otten.
“That philosophy remains intact today,” he said. “Whether we can achieve it, I would say yes, we can, which is why we’re doing this.”
Otten said the $300 million-plus investment factors in the real estate and condos, for which pre-sales are being placed into an escrow account.
While natural snow for New England ski areas is not the most dependable, The Balsams, because of its northern location and high elevation, is in the top three or four places in the Northeast that receive the most snow and is the snowiest in New Hampshire, said Otten.
But because there are no guarantees, the project involves piping water from a nearby river and running it along Route 26 for snow-making operations.
“You have to have a business operating philosophy where you can make enough snow in the wintertime, even if it doesn’t snow,” he said. “We’re getting a permit from the federal government that would draw water from the Androscoggin River and then pump it nine miles to get to our location so we can be guaranteed to have plenty of water to make snow.”
That was the first piece.
The other was developing a design through the gondola and bridge over the highway to link the hotels with the ski area.
For that, the team worked with the New Hampshire Department of Transportation for rights-of-way and traded the state land so the state can build a new DOT garage on Balsams property and abandon the old one, which was in the way of everything, he said.
Then, there were the permits needed from the New Hampshire Department of Environmental Services.
“Going through federal, local, and state approvals has in itself been a gargantuan task,” said Otten. “But if you now look at what we’ve been able to do, even if it’s not built, we have permits for a water line, we have wetlands permits, we have most of our DES permits, we know what’s going to happen with our sewer and our water, we have our bids in for the construction of all of our projects, we have a bunch of pre-sales in real estate. We have the team in place that’s going to build. We have the ability to build something really significant. No one has started anything from scratch, or something from very little, in 50 years or more. Bretton Woods was the last resort to be started in the Northeast of the United States.”
The permitting processes are not really built to accommodate the scope of the project, although permitting entities have been supportive, he said.
“It’s really remarkable that we’ve gotten to where we are, and I think part of it is because I suffer from some sort of ski dementia that keeps me working on this,” Otten, who in 2024 was inducted into the U.S. Ski and Snowboard Hall of Fame for various innovations, said with a chuckle.
The project is not receiving any state money and is a completely private enterprise, and the bond, while there is the bonding authority from the county, will be a private bond, he said.
“We’ve had incredible support from the county planning board, county commissioners, DES, DOT, the Legislature, the governor’s office,” he said. “If we do succeed, it’s going to be because of a joint state, local, and developer effort.”
Project spokesman Scott Tranchemontagne became involved before Otten, with the first owners.
“The question today is not why haven’t they started yet,” said Tranchemontagne. “The question is how they got so much accomplished given all the obstacles that they’ve faced along the way and the complexity of the project. We really have achieved quite a bit and we’re pretty close to the precipice of it.”
On Thursday, Coos County Commissioner Ray Gorman, a Colebrook resident who worked for The Balsams for 32 years before its closure, said, “The county has been right there with them. We realize the absolute value of this for our county. We wish him luck. These things take time.”
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