‘Balsams Boondoggle’ continues with hearing on Senate Bill 30 - Granite Grok

‘Balsams Boondoggle’ continues with hearing on Senate Bill 30

balsamsYesterday the New Hampshire House Finance Committee held a public hearing on Senate Bill 30 (SB 30). The bill is “AN ACT relative to the establishment of redevelopment districts in unincorporated places.” It also changes the amount of the bonds the state can guarantee from $25,000,000 to $28,000,000 (the exact amount “needed” for the Balsams project to move forward) among other things.

What most people are calling this bill is “The Balsams Bill” or the “Balsams Bailout Bill.” Why? Because this bill never came up until the developer of the Balsams, Les Otten, informed the locals that he would need $28 million in order to move forward with his Balsams project.

Coos County has been in dire straits with high unemployment for years yet they never asked for this bill until now. Conveniently it comes with the knowledge that if passed, the Business Finance Authority will possibly approve the bonds and the Governor has already stated she too would approve. All without much say from the taxpayers of New Hampshire who will actually be on the hook for the $28 million if the project fails.

Over 3 hours of testimony was all by proponents of the bill. From the sponsors of the bill to the developer, Les Otten, to the Business Finance Authority and other government officials who said they’ve all been working on this bill to move it forward. Essentially government workers in New Hampshire, working on the taxpayer dime, have been working to see if the Balsams project is viable even though SB 30, the first step in the process, hasn’t yet been passed.

There were some interesting discoveries thanks to the questions from the committee members. Otten was asked if the Balsams had ever been successful on its own (it was always subsidized by the family that owned it either with the previous factory that was there or the family themselves). The answer was no.

A committee member also asked Otten if he had a “Plan B” if SB 30 were to fail and the state didn’t move forward with the $28 million bond, did Otten have another plan. His response:

Plan B is Plan A.

Basically Otten pulled a “Veruca Salt” and told the committee that it will be his way or no way at all. What kind of developer does that? He has enough money already to renovate and get the Balsams running as a resort without his “grand scheme” yet he’s choosing not to do that and essentially refuses to move forward with the project unless New Hampshire taxpayers are on the hook for $28 million.

Another question was asked of the Business Finance Authority who gave quite a surprise when they told that the $28 million bond wouldn’t actually be against the $143 million investment but only $73 million. This came as quite a surprise to many in the audience and it appeared to as well to the committee members. Apparently Otten is breaking up the resort from the expensive time shares that he is planning for the Balsams. Sounds shifty? It certainly does.

There’s also a question about the land. Otten talked about thousands of acres yet no mention of the Conservation organization that purchased over 5,000 acres several years ago for $850,000 in a partnership with the Balsams. If this land is now protected conservation land, it’s value is far less than the $3.5 – 5 million for timber value that it had before. Which means the total value of the Balsams is less and that would affect financing.

While SB 30 itself doesn’t “technically” have anything to do with the Balsams, even the commissioner of the New Hampshire Department of Resources and Economic Development admits that it is vital to the Balsams project:

The passage of SB 30 is vital to saving The Balsams and transforming it into a world-class resort. If it does not pass, there may never be another chance and this landmark, and the opportunities it brings, will be relegated to history.

Basically, by passing SB 30, the legislature will enable the taxpayers of New Hampshire to help back a wealthy developer so he can create low-paying jobs to serve his wealthy clientele. Otten could indeed begin development and then seek more private investors after the resort is up and running but he is choosing not to do that. The current owners of the property were going to invest $10 million plus to get the renovations done and the resort running, apparently that isn’t good enough for Otten.

Coos County representatives and residents shouldn’t be asking the taxpayers to back a $28 million bond, they should be asking Otten why he can’t begin the project without “demanding” the state provide assistance. The story of the “Balsams Boondoggle” is so convoluted and intransparent most people will probably never learn the truth about the backroom deals and shenanigans that have occurred. No matter what the outcome, the government should never be in the business of picking winners and losers in the private sector using taxpayers as guarantors.

You can watch the full hearing here.

Cross posted from Examiner.

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