The partnership responsible for developing the Jay Peak Biomedical Research Park, commonly known as AnC Bio Vermont, announced Tuesday eveningthat its updated private placement memorandum has been approved by Vermont’s Department of Financial Regulation (DFR). The state’s EB-5 Regional Center had asked AnC Bio to suspend its marketing and offering efforts while the developers updated all of the project’s documents to come into compliance with new review standards being implemented for all of Vermont’s EB-5 projects. AnC Bio completed the process with the conclusion of an exhaustive market study of its products and services. DFR approved the project last week.
It was announced in February that the state’s Department of Financial Regulation would be assisting the Agency of Commerce and Community Development to oversee Vermont’s EB-5 Regional Center. The ACCD has had oversight of the program since its inception, and will continue to evaluate the benefits of proposed projects and assist in their marketing and promotion. But state officials had been discussing for months proposed changes in how it regulates its EB-5 Regional Center in response to the program’s growth in Vermont as well as nationally.
In 2008, Jay Peak was the only company using the program in the state. Today there are more than a dozen approved or pending EB-5 projects in Vermont. That growth curve has been even steeper on the national level. In 2006 there were only 35 EB-5 projects in the country. Today there are more than 700.
Because of such rapid growth, the Regional Center asked DFR to take responsibility for verifying that projects are in compliance with securities regulation and analyze business plans and economic studies. As part of the new standards, all EB-5 projects in the state will hold new investor funds in escrow, and those monies will be held until DFR has completed a comprehensive financial review, or the investor has received what is known as an I-529 approval from the United States Customs and Immigration Service.
“We think this level of review will only create stronger projects and make the State’s EB-5 Regional Center more competitive in a marketplace that has seen immense growth over the last few years both nationally and here in Vermont,” said Bill Stenger, who along with partner Ariel Quiros, are developing the biomedical research park. Stenger, who is also president of Jay Peak Resort, has worked with state officials over the last several years to utilize the EB-5 program to create thousands of jobs throughout the Jay area, and make the resort a year-round tourist destination.
EB-5 is a federal program that allows foreign investment in U.S. projects provided that those projects create U.S. jobs and stimulate economic vibrancy in a project’s surrounding communities. Vermont is unique in the EB-5 world in that it operates under a state-run regional center, meaning that an agency of the state government is responsible for approving and monitoring all proposed projects. A private placement memorandum is a legal document that is provided to potential investors to inform them of a project’s features and risks. The PPM is also provided to the state for review and approval.
AnC Bio Vermont is a project that had already received approval from ACCD in 2009 and was reauthorized by the regional center in 2012 when the project first released its offering to foreign investors. But the glut of projects coming online nationally caused delays at the federal level for investor approval. The biomedical facility’s PPM expired again last summer and the ACCD asked the project to update the offering and all of its technical and support data before re-approval. The update was finished just recently with the completion of a market analysis for the products and services AnC Bio will be manufacturing and offering.
Once opened, AnC Bio Vermont will be a state-of-the-art biotech facility manufacturing medical devices, pioneering adult stem cell therapy to cure disease, and operating clean rooms for research and development. The recently-completed market analysis was conducted by Frost and Sullivan, a nationally known market research firm specializing in multiple industries including healthcare. Their study re-verified that the market for the company’s products and services will be more than $4 billion by the year 2020. In addition to the 2,300 direct and indirect jobs the facility will create, the taxes generated by the new campus and its employees will inject much-needed funds into Newport, the town where the facility is slated to be located.
“With the rapid expansion of EB-5 centers across the country, it has become an incredibly competitive marketplace,” Stenger said. “To be able to say to a potential investor that Vermont is one of only two places where the state has close oversight, and policies and procedures for all projects to adhere to makes us stand out and gives the investor a greater sense of security."
Source: Jay Peak 3.31.2015