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Is developer Michael Foxman's vision realistic?  (File photo:  Brian Mann)
Is developer Michael Foxman's vision realistic? (File photo: Brian Mann)

Tupper Lake resort faces deep skepticism in business community

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For seven years, developer Michael Foxman has been promising to build a massive new resort in Tupper Lake, worth roughly $500 million.

He's hoping to win final approval for the project from the Adirondack Park Agency this fall.

Many community leaders have embraced his vision as a way to revive a former logging and manufacturing town that lost seven percent of its population over the last decade.

But an investigation by North Country Public Radio, in partnership with the Adirondack Explorer magazine, found that significant doubts remain about the economic viability of Foxman's resort.

Over a period of weeks and dozens of interviews, we found that important questions remain unanswered about how the resort will be financed and marketed.

As Brian Mann reports, it's unclear when the project's elaborate infrastructure and amenities, including those at the Big Tupper ski area, will be built.

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Hopes for the project are running high in Tupper Lake (File photo:  Brian Mann)

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Brian Mann
Adirondack Bureau Chief

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This special report was produced in partnership with the Adirondack Explorer magazine.  To read more about Brian Mann's in depth investigation into the Adirondack Club and Resort's business plan, click on the link above.

At a public meeting last month, Jim Martin, a consultant for the Adirondack Club and Resort, spoke confidently about how this vast project will change Tupper Lake in the first few years.

"We are projecting some 313 jobs created per year on average," he said.  "It’s a very big project.  Many aspects of the trades will come into play here.  We’re looking at approximately $9.68 million in payroll from those construction jobs on an annual basis."

Last June, the resort’s lead developer, Michael Foxman, submitted a detailed financial analysis of his project to the Adirondack Park Agency.

As described in that document, the project will launch big, with tens of millions of dollars in new construction – including refurbishment of the lodge at the Big Tupper ski area.

Martin said the project would rapidly boost revenue to the town and school district to the tune of hundreds of thousands of dollars a year "just after phase one." 

For years, supporters of the project, including Franklin County tourism director Neil Seymour have argued that the resort needs to be big and ambitious if it hopes to attract high-end customers from all over the world.

"Big Tupper needs to be resurrected on the scale that is being proposed by the Adirondack Club and Resort.  In my opinion, anything less than that would jeapordize the future success of the project," Seymour said. 

The developer, Michael Foxman, plans to sell more than six hundred luxury-priced parcels of land and new homes over the next fifteen years. 

The project includes an equestrian center, a marina, a gym, a hotel and restaurants. 

Local residents like Mary Sparks have argued that his resort will inspire other businesses and other entrepreneurs to invest in Tupper Lake.

"Approving the ACR project would go a long way toward improving our economy and improving the economy of the surroundging area," she said.

But building such an elaborate resort will be hugely expensive. 

Annual carrying costs – including debt service, salaries, construction, and marketing – will reach into the millions of dollars. 

Foxman is a seventy-three year old attorney from Philadelphia. 

In public statements he has suggested that his company will pay its bills by selling between forty and fifty homes and build-ready parcels of land every year.

"Yes, forty or fifty is a lot of units," he acknowledged.

"But if you put forty or fifty into the context of seven million people within 130 miles and then go look around and tell me what other resorts have usable water and the beauty that we will have and the ski area."

Foxman says his properties will sell for luxury prices, ranging as high as $5 million dollars for his biggest and most exclusive great camp.

But in interviews with a dozen realtors – including many industry leaders in Adirondacks — North Country Public Radio couldn’t find a single independent expert who thought Foxman’s sales goal were realistic. 

To sell that many units, this one new resort would have to match the total number of luxury homes sold last year in all of Clinton, Essex and Franklin Counties combined.  

"The buyer pool and the location are unlikely to sustain those kinds of goals," said Mark Bergman, a veteran luxury home seller based in North Creek. 

He points out that the Adirondack housing market is still mired in a painful slump.  But Bergman says even after the economy recovers, selling so many parcels so quickly would be nearly impossible.

"You’re talking about numbers that make more sense in an area that has an established international draw, like Aspen or Vail.  Those numbers in Tupper Lake are, to be polite, very aggressive." 

That view is widely held in the real estate community, with brokers pointing to the fact that Foxman’s proposed homes aren’t on lakeshores – a prized feature in the Adirondack market. 

They note that another big resort project in North Creek – attached to the Gorge Mountain Ski Area and close to the Hudson River’s popular paddling and fishing areas — was given the green light by the Adirondack Park Agency three years ago and still hasn’t sold a single property.

The one realtor who expressed optimism about Foxman’s ability to sell more than forty homes a year is Jim LaValley.

LaValley is a respected Tupper Lake businessman who helped form ARISE – a community group that strongly backs the resort.

 "There are going to be some years when that number won’t be met, but there ar going to be some years when it will exceed [Foxman's projections," he said.

Foxman’s response to skepticism within the business community is complicated. 

He acknowledges that his vision for the new resort was unveiled back in 2004 before the recession, at a time when Adirondack real estate was booming. 

But he argues that his vision of a four-season luxury destination will still attract a new cadre of wealthy home buyers from as far away as Boston, Toronto and New York City. 

"We’re not just dreaming this up.  We did our homework at the time, we thought it would work, we invested our money.  We still think it will work.  We certainly recognize that it’s a different economy." 

But in lengthy interviews with NCPR, Foxman also distanced himself from claims made by his consultants and in his company’s financial analysis about how and when the resort will be built.

Foxman described those detailed documents and public statements – with their descriptions of new construction and resort jobs as "assumptions”.

He said that it is now unclear when his company will sell the bonds that will finance the project’s roads, sewer systems and power lines.

It’s unclear how big those bond issuances will be.

He also suggested that construction of infrastructure and amenities – including a new lodge and lifts for the Big Tupper ski hill — will have to wait until enough home-buyers begin to come forward. 

"Flexibility is absolutely essential in a project like this because nobody is smart enough to know exactly what will happen.  I can’t tell you precisely when we will start to do what.  I can tell you that what I am focused on is making sure that the mountain is available."

Asked why wealthy customers would pay luxury prices for homes in Tupper Lake before most of the resort’s amenities have been built, Foxman acknowledged what he described as a "chicken and egg" problem.

 "Will the first buyer be more couageous than the 200th buyer?  Probably," he conceded.

Foxman also suggested that once his resort receives a permit from the Adirondack Park agency, more investors will come forward. 

But North Country Public Radio’s probe found other lingering questions about the project. 

- Foxman has marketed the resort as an Orvis sporting lifestyle community, linking its appeal to the high-end sporting company based in Vermont. 

But a spokesman for Orvis downplayed their ties to the project, telling NCPR that they had no plans to invest in Tupper Lake and describing the relationship as –quote— “dormant.” 

- Efforts to negotiate the complicated bond issuance and PILOT property tax agreements with Franklin County’s Industrial Development Agency are still at an early stage.    

Major issues about how that partnership might be structured are still unresolved.  

- In recent weeks, Foxman’s company shut down its website.  Asked about that decision, the developer said that it wasn’t needed.

- Adding to this uncertainty was news last month that Foxman and his partners were unable to pay their property taxes totaling roughly $100,000.

Foxman said that delinquency shouldn’t raise questions about his ability to finance his massive resort, but after investing roughly $8 million dollars in the project, he acknowledged financial difficulties.

"Without question we have been uncomfortable from time-to-time.  We expect to raise a lot more money during the course of the project," he added.

Most community leaders have continued to embrace Foxman’s project and have called for the APA to issue a permit. 

But in conversations with North Country Public Radio, many local officials acknowledged the project’s many uncertainties and expressed concerns about the stability of Foxman’s company.  

In an interview, village Mayor Mickey Desmarais sounded a cautious note.

"When you get into a room, there’s the light side and you’ve got dark corners.  Unfortunately, it’s my job, it’s our job as leaders, to look in the dark corners and say, ‘What about this, what about that.’  Get answers to it, move on," Desmarais said.

When the Park Agency resumes its hearings on the project next Tuesday in Tupper lake, the focus of testimony will fall on these financial and economic questions.

 

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