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A Challenge to "The Jay Way"

Written by JJ Toland
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A first-person account of the day the Securities and Exchange Commission seized Jay Peak, and of Jay's eventual triumph over adversity.

IT STARTED WITH A RUCKUS.

And not the good kind. There was no laughter tumbling along with it, as when, say, a pack of fun-crazed children topples into a room. No, this ruckus was stilted, arrhythmic. Heavy footsteps muffling snippets of clipped speech. Thudding fists on doors.

As the thuds and footsteps grumbled their way down the corridor of offices toward me, the muffled speech became clear: commands. Issued tersely and with unknown authority. And then silence; only a pause, really. Just the amount of time it took to raise an arm, cock a wrist, and let a fist fall.

“How’s it going?” I offered, answering the knock on my door.

“Securities and Exchange Commission. Step out into the hallway.”

I did. And into a world of shit.

ENOUGH HAS BEEN SAID ABOUT THE TRAUMATIC LACK OF SNOW THAT MUMMIFIED THE 2015-16 NEW ENGLAND WINTER.

It was a giant head-butt for anyone in the snow farming business. But on April 13, 2016, the SEC placed the cherry on the top of that shit sundae on Jay Peak Resort.

April 13 was a Wednesday, and not just any Wednesday. We would be closing for the season soon, and this was the last day I’d be snow reporting. As the resort’s director of communications, I set the weekly schedule for this task. One perk of this role is getting to choose what day(s) I’ll wake up at 4:45 a.m. and drag my ass up to the hill. Wednesdays seemed like a safe pick. Midweeks typically see fewer people. Fewer people usually equals fewer unexpected lift stoppages and patrol incidents. Simple math, really.

But the 19 prior Wednesdays had been anything but simple. While snow had been scarce, wind, fog, and near-freezing rain had not. In northern Vermont, those elements had morphed into the meteorological equivalent of a crack-smoking Tasmanian Devil, one who chose Wednesdays to go banana-balls crazy all over our resort. Bedlam had been a staple of my snow reporting shifts.

APRIL 13 STARTed ON A BRIGHTER NOTE.

The alarm pushed me out of bed at 4:45 a.m. I went downstairs, hound in tow to be let out for his morning ritual. Outside I saw stars. No wind. My 5:00 a.m. phone check-in with the overnight team lasted all of 20 seconds because there was nothing to report. Promising.

6:15 a.m. In the office. No chatter on the operations radio. No reports of snapped winch cables. No ice-imprisoned chairlifts. No profanity. Weird.

8:20 a.m. Radio the head of lifts, “All clear for an on-time spin.” Radio Patrol dispatch, “All clear for an on-time opening.” What was this black magic?

9:00 a.m. Update the websites and snow phone. “Good morning Jay Peak skiers and riders, and thanks for calling the snow phone. It is Wednesday, April the 13th, and as of 9:00 a.m. four of nine lifts are spinning, 27 of 78 trails are open, and the sun has decided to make a guest appearance. The mercury will be moving toward the 50-degree mark today, and while most of us up here are looking to put a bullet in this season, come on up and enjoy the quasi-springish conditions.”

I could see where this day was headed: I would do my rounds posting the daily trail report, check in with Patrol, pretend to read some emails, and then done. If I didn’t hit any snags, I would be bellied up at the new Mexican restaurant in town by early afternoon. Margaritas into Pacificos into a wobbly bike ride home. A just dessert for the previous 138 days.

I WAS PRETENDING TO READ EMAILS WHEN THE KNOCK CAME.

jul17 the jay way 01The invitation to step out into the hallway came from a woman with red hair, wearing a black pant suit and black boots with heels. Her outfit didn’t scream skiing, but it conveyed authority.

Standing next to her was a guy with a camera slung over his shoulder. He slid into my office as I stepped out. He did a quick scan, then asked me to come back in. “Just stand next to your computer,” he said, raising the camera. He snapped a few shots, and then I followed my stern-faced red-haired escort down the hall.

Apparently mine was the last office cleared; I found myself on the edge of a scrum of employees who had been corralled into the reception area. Their expressions reflected pure befuddlement. They looked like they had all just been asked to describe a color they had never seen before.

I saw Brooke from real estate, who is also the wife of our GM, Steve Wright, recently promoted from chief marketing officer. I shuffled up next to her.

“SEC? What’s the SEC doing here?” I whispered.

“They’re saying we’ve been seized.”

“What does that mean?”

“I’m guessing it means we’re somehow f___ed,” she replied while pecking at her phone.

“Where’s Steve?” Her husband/my boss had been trying to get out early so he could watch his daughter’s track meet.

“That’s who I just texted. I think he’s still on campus somewhere.”

“Do you know who’s in charge of these guys?”

Brooke looked up from her phone and scanned the crowd. “That guy,” she said, cocking her phone toward a man who resembled a fire hydrant in a leather jacket.

“Text me if you hear from Steve,” I said, snaking away to speak with the fire hydrant.

His name was Frank. His leather jacket was the kind you’d find in a second-hand store while shopping for a ’70s retro party. He had a toothpick in his mouth and enough product in his cropped hair to deflect a lightning bolt. He was the head of the security team that had been charged with “securing the asset.”

“What does that mean?” I asked.

“It means this resort has been placed in the custody of the federal government by a ruling from a federal judge.”

“Oh. What for?”

“For something that someone did that a judge thought might be illegal,” he said, his tone sounding a bit annoyed as he pulled the toothpick from his mouth. “Were you not in the room when I just explained this to everyone?”

“I was getting a commemorative photo taken with my computer,” I replied. Impertinent, yes, but it got me to my boss. I was escorted out of the admin building and up to a conference room in the Hotel Jay, where I got answers to questions I never dreamed of having.

Steve was seated at a table alongside a small contingent of lawyers and a group from a resort-management company. I was directed to sit, and, over the next hour, I learned what it meant to be “seized.”

TECHNICALLY (AND MUCH SOFTER SOUNDING), JAY AND PARTNER RESORT BURKE MOUNTAIN HAD BEEN PLACED INTO “RECEIVERSHIP.”

The SEC had gone before a federal judge, alleging that the owner of Jay Peak and Burke had misused the EB-5 monies that were funding the resorts’ revitalization projects. (More on that later.) The judge found merit in the SEC’s case, and placed some of the owner’s assets—Jay Peak and Burke Mountain—in the custody of a receiver until the matter could be resolved.

As simple as that sounds, it’s fair to ask, “what led to two resorts totaling 7,000 acres, four hotels, 200+ mountain cottages, a golf course, an NHL-sized ice arena, and a 55,000-square foot indoor waterpark being placed into receivership?”

A lot of Jay’s “assets” had been developed in recent years, funded by the EB-5 Immigrant Investor Visa Program. This category of visas was created by Congress in 1990 as a means to allow foreign investment into U.S. construction projects to create jobs. In a rural area of high unemployment like, say, Vermont’s Northeast Kingdom, a foreign national can invest $500,000 in a project and, if the project is built and 10 jobs are created per investment, the investor is granted permanent residency in the U.S. So, if you wanted to build a $1 million hotel using EB-5 funds, that project would have to create at least 20 jobs. At Jay Peak and Burke, the program raised close to $350 million.

But what I heard was that the SEC was alleging $200 million of those funds had been “misappropriated.” The owner and president of the resorts would no longer be in charge of day-to-day operations. The judge had appointed a lawyer to act as the receiver. He had contracted a resort-management company out of the Midwest to oversee operations. Both our resorts were approaching $0 in their bank accounts. Both resorts would be sold.

Margaritas, Pacificos and wobbly bike rides were replaced with misappropriations, possible insolvency, and potential unemployment. Screw Wednesdays.

There was a “but.”

Yes, the receiver said, we were in for a less-than-normal spring. And yes, the resort was going to be sold. “But I need you to keep being Jay Peak,” he added.

He delivered the same line the next day in an all-employee meeting, where everyone learned just how far up the creek we were. That included Linda from payroll (44 years of service), her husband Virgil from facilities (50 years a Jay Peaker), and their daughter Emilie (who started at Jay at age 14 and now, a month away from her 33rd birthday, is the resort’s director of admissions). And the Ricks: Rick Sr., who turned his first wrench for vehicle maintenance back in 1981, and his son Rick Jr., also on the vehicle maintenance team. There was the head of Patrol and her ski school husband. There were hundreds of years of experiences, emotions, and memories—family—in that room. And their hearts were now in the hands of a lawyer. From Florida.

“I need you to keep being Jay Peak.”

It was a lifeline. Granted, it was one greased with the weight that we would be sold. Everyone knew that by continuing to be Jay Peak, we would be maintaining the resort’s value so that we could be sold at a “fair market price.” And when that happened, what would happen to us? Still, it was something to hold onto, even if the headlines that followed made the tether seem even slicker.

News outlets screamed about dire finances, shuttered resorts, and lifts that would never run again. All of that dented morale, even if some of it obviously contradicted reality. One paper ran a headline announcing “Jay Peak’s Tram Can’t Run Before $4.5 Million Upgrade,” while the story next to it announced, “Jay Peak’s Tram Opens for Summer.” I was riding the tram when that story posted online.

Headlines led to phone calls: from brides wanting to cancel weddings, and companies wishing to pull million-dollar conferences. There was the overheard phone call from an employee to her mom, in which she said how much she used to love coming to work, but now she felt sick every day because she wasn’t sure she was going to have a job.

jul17 the jay way 02Reality warped. Some days made you even question everything that we had built using EB-5 funds. You could see what the program had done, how well it worked. Hotels. Townhomes. An ice arena. A waterpark. Jobs. In 2007, the year before the revitalization initiative began, Jay Peak had a little more than 100,000 skier visits and about 300 people running the place. A decade later, 300,000 visits was the norm, and 1,500 people were getting a Jay Peak paycheck. How was all of this being called into question?

Fear travels on an exclusive wavelength.

It’s the first thing to knife through your chest when something in your life explodes. It’s an intensely personal emotion, one that manifests differently across individuals. A lot of fear pulsed through that employee meeting on April 14. Fingernails were chewed. Legs shook restlessly. Faces flushed.

But the thing about fear is: it’s only an emotion. A feeling, much like you feel hot and you feel cold, you feel afraid. And once someone reminds you of that, you can move past it. That reminder came from Steve Wright, delivered to about 100 employees, two weeks after D Day and the 3,721st “Jay is Dead” headline.

“We can’t control the headlines. We can’t control what’s being reported and misreported about us. All we can do is show up, focus on doing our jobs, and doing them well. Do that, and all of the bullshit noise goes away,” he said.

In the days, weeks, and months afterward, you could see this idea working, spreading. You could feel focus replacing fear. Wedding coordinators worked the phones to calm 78 brides. Sales staff personally visited companies who wanted to pull their conference business. Employees declined offers to work for competitors so they could stay in the fight. Teammates checked in with one another. Shit got done.

But none of that happened because of one rah-rah speech. It happened because the guy who gave the speech also helped dig out lifts after 52-inch storms, and make pizzas when the cafeterias swelled. It happened because the head of sales grabbed his team and jumped in to help housekeeping ready 200 condos for check-in. It happened because the director of the ice arena volunteered for overnight plow duty. It happened because of 1,500 people’s belief in a place and a way of life.

“KEEP BEING JAY PEAK.”

I don’t know if the receiver knew exactly what that phrase meant when he said it on April 13, 2016. It’s a spin on what we call the Jay Way. It’s a phrase open to personal interpretation and expression. But 16 months after that knock on my door, it’s come to be about recognizing fear and moving through it. It’s come to show that when 1,500 people tune out the noise, a company can have the best revenue year in its history. It’s come to be about lifelong friendships. And it’s come to be about getting shit done. And that’s what we will always do.

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