NORTHEAST KINGDOM — Property tax payments on EB-5 properties at Jay Peak, Burke Mountain and in Newport City are late.
The total tax bill is sizable. But the delay isn’t a surprise to municipal officials.
The three municipalities affected won’t see those payments until on or after Nov. 20 because the man responsible, a court-appointed receiver, is waiting for settlement payments to pay these bills.
The receiver, Michael Goldberg, was appointed after Jay Peak/Burke Mountain owner Ariel Quiros Sr. and his partner Bill Stenger became the subject in April of a federal lawsuit alleging fraud and misuse of hundreds of millions of dollars in foreign investments raised under the federal EB-5 program.
A federal court judge in Florida granted Goldberg control of the properties until he can sell them to repay contractors, investors and others owed money on the projects.
The town of Jay is owed about $2 million in property taxes for the Jay Peak Resort, which became overdue Oct. 16. That’s about two-thirds of all property taxes owed in Jay.
In Newport City, the receiver owes $32,361 in property taxes for the former Bogner site on Lake Road and a neighboring house. The receiver also owes $22,651 for the now-razed downtown block, according to city clerk James Johnson. That includes six lots on Main Street, two on Second Street and one on Central Street.
Taxes became overdue Wednesday, and will add a 1 percent penalty per month for the next six months until payments are made. If the payments are not paid by May 2017, then another penalty of 8 percent is added.
In Burke, the receiver owes $408,325 for the Burke Mountain Resort, including the new hotel and conference center, and several other properties including a residence on Darling Hill Road, and under various corporate names.
Once taxes are officially late in Burke, an 8 percent penalty is immediately tacked onto the total amount due, which would be a $32,666 fee in this case, according to Burke officials.
Goldberg was named in mid-April to take possession of the seized properties of the Northeast Kingdom Economic Development Initiative owned principally by the now embattled developer Quiros.
Goldberg said the taxes will be paid once the receivership is paid a multi-million dollar settlement with Citibank.
“We get the money around Nov. 20,” he said in a recent text to this newspaper. “It will be paid right away.”
Goldberg said the receivership will seek to have the 8 percent penalty waived.
Citibank had given Quiros a line of credit for $15 million, which they cannot collect on because of his assets being frozen in the federal securities fraud case.
To obtain the line of credit, Quiros had posted a total of $17 million in collateral, property the receiver successfully argued belongs to the investors in the EB-5 projects Quiros is now accused of having deceived, along with Stenger.
The settlement Goldberg struck with Citibank means $13.3 million total will come back to the receivership to be used for a mountain of debts owed by Burke Mountain and Jay Peak resorts.
That includes property taxes, vendors owed, money to the general contractor for the Burke Mountain Hotel & Conference Center, many sub contractors, and the same for some work done at Bogner, the site of the proposed AnC Bio development planned that authorities say was nearly a complete fraud.
Meanwhile Newport City plans to use state and federal grants to see whether the city should participate in the ownership and development of the vacant downtown block.