Q Burke Hotel Contractor Threatens Shutdown

QBurke HotelBURKE – The general contractor for the Q Burke hotel construction project will shut down the operation this Friday if issues with payments are not corrected.


PeakCM president Jerry Davis says the state, which has to approve all project invoices, has delayed payments and forced him to consider the work stoppage.

Bill Stenger, CEO of Jay Peak and a Q Burke developer, is aware of the situation involving the potential shutdown.

EB-5 foreign investors are footing the bill for the major hotel project. Because it only received partial approval from the state last year, construction was permitted under the condition that a third party reviews all expenses.

That process involves looking over all invoices and doing a facility walk-through each month to ensure that everything lines up, according to Stenger.

Both Stenger and Davis agree that there are no issues with the state-appointed third party reviewer. According to Davis, the trouble starts once the invoices get passed to the Department of Financial Regulation.

"They're just sitting on it," Davis said when asked about the status of the payments.

He added that the DFR "hasn't been timely in processing the info and doesn't seem to understand the construction project."

PeakCM is currently owed more than $500,000, including bills from July and pre-construction in 2014. The company is also expecting a $3.5 million payment for the month of September, which was recently filed. The current contract states that all bills need to be paid within 30 days.

Stenger says any stoppage in construction will delay the hotel's grand opening, which is scheduled for December 11.

Meanwhile, he's actively looking for new EB-5 investors to cover the cost of the new hotel. As of now, the number of committed sponsors is approaching 100, but that is only half of the 196 needed.

In terms of the construction project itself, Q Burke and PeakCM are in "constant communication to make sure the contractor doesn't walk off the job," Stenger explained.

Davis thinks that inadequate outreach on the part of the DFR is the real problem.

"The lack of communication from the state is clearly interfering with the contract," he said.