One part of the Park Agency's review involves determining whether the project will have negative economic impacts on the community. As Brian Mann reports, that effort is complicated by the fact that there are still a lot of unanswered questions about how the resort will be financed and built.
During Friday’s work session, Adirondack Park Agency staff laid out a portrait of a world-class resort worth hundreds of millions of dollars that would be built in Tupper Lake over the next fifteen years.
Terry Martino, APA executive director said developers hope to start big, selling tens of millions of dollars worth of real-estate in the first three years.
Sales for phase one. They’re estimated to be $91-plus million, with unit prices ranging from $700,000 for the duplexes to $5 million for the Great Camp Lot-A,” Martino reported.
The developers have also laid out a vision for refurbishing the Big Tupper ski area and open a new marina on the shoe or Big Tupper Lake.
The concept has captivated many local residents and it redefined this month’s election.
Big Tupper supporter Paul Maroun swept to victory in the village mayor’s race after incumbent Mickey Desmarais – who had raised doubts about the project – withdrew.
But more than seven years after this project was launched – and despite months of adjudicatory hearings overseen by a state judge — key aspects of the business plan for the resort and its financing remain unclear.
During Friday’s testimony, the APA’s director, Terry Martino, highlighted one of their own staff’s internal conclusions: that many of the developer’s ambitious claims appear to be unsupported.
“The cross-examination of the project sponsors’ experts revealed that the project application does not provide a reliable basis for projecting either the number of residential sales likely to be sold, or the likely prices of those units.”
So that’s once uncertainty – given the economy, given the realities of the Adirondack real estate market – can the developers sell enough of these homes to support a state of the art year-round resort.
The developers, Tom Lawson and Michael Foxman, have said repeatedly that they’ll take it slow and cautious – building only the amenities and infrastructure they need to match home sales.
But that concept sparked this question from APA commissioner Judy Drabicki:
“This is really probably one of the most critical issues that I see, is this chicken and egg. Selling versus infrastructure, versus repayment. So I think it would be really helpful to have that in some concise format for us.”
The Big Tupper project is complicated. The developers are proposing to build the project in four phases with the timeline and financing for each phase full of contingencies.
The developers also plan to break ownership of and responsibility for the resort up into nearly a dozen limited liability corporations, homeowners associations.
Those entities will have different levels of financial responsibility over different aspects of the project – from operating the ski hill to running the wastewater treatment plant.
But perhaps the most complex and controversial piece of this is a plan to arrange the sale of $35 million worth of bonds through the Franklin County Industrial Development Authority to pay for all that infrastructure
Under the plan, a payment in lieu of taxes or PILOT deal would effectively reroute of the resort’s property taxes to pay off that debt.
PILOTs aren’t new or strange in big projects like this. What is different here is that the developers want land in the resort to stay within the PILOT deal even after it sells to private homeowners.
Here again is the APA’s Terry Martino.
“As individual lots are sold, the owners of those lots will enter into separate PILOT agreements, and separate PILOT mortgages, covering only their respective lots.”
During Friday’s session, Martino’s description of the PILOT plan prompted this question from commissioner Cecil Wray.
“I have some experience doing industrial development bond financings and I think I know how to look at the sort of the flow charts and the mechanics of it, and I don’t quite understand it from all of this.”
In fact, in interviews with North Country Public Radio, Franklin County IDA director John Tubbs had cast doubts on whether this kind of arrangement – allowing private homeowners to stay within the PILOT — is workable.
“When this idea was first introduced and up to the present day,” Tubbs wrote in his latest email on Friday, “it has not been clear how this would work.”
In the past, Tubbs has said that his agency couldn’t find any other PILOT deals in the country structured in the way the Big Tupper developers are proposing.
Writing on Friday, Tubbs pointed out that the IDA has had –quote—no recent discussions with the Adirondack Club and Resort about how this PILOT might be structured.
He added that he expected those negotiations to begin after the APA issues its permit.
Despite these lingering questions, developer Tom Lawson said last month that he hopes to break ground on the new resort as soon as possible, possibly as early as next spring.
“I have been working with architects and engineers and everything trying to get plans going. The intent is not to get caught flat-footed. We’d like to get started immediately. We want to get people back to work,” Lawson said.