Saddleback buyers meet with MRDA on loan next week

Courtesy / Flickr, Jack Flanagan The sale of Saddleback Mountain in Rangeley, which last operated in the 2014-15 ski season, is expected to close by the end of this month.

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By Staff

The investment group buying Saddleback Mountain ski resort in Rangeley will go before the Maine Rural Development Association board Wednesday to discuss a loan application, part of the long-shuttered resort's $6.5 million purchase, expected to close this month.

Arctaris Impact Fund, as ARC Saddleback LLC, is looking to borrow $1 million from the MRDA, which provides financial assistance to developers who are bringing underutilized property back to life. The depends on FAME's agreement to insure it. The board meeting is at 1 p.m. Weds., Jan. 8, in the Burton Cross building at the Statehouse complex in Augusta, and the FAME board meets Jan. 16 at its offices in Augusta.

Acrtaris was scheduled to appear before FAME last month on a loan insurance agreement, but that was postponed because of the complexity of the purchase transaction, those involved said.

Arctaris Impact Fund and the Berry family, which is selling the resort, agreed in late December to extend the closing date on the sale from Dec. 23 to the end of January to accommodate the postponed FAME meeting, according to Tom Federle, general counsel representing Arctaris. In a statement, Federle said the extension "gives us the necessary time to get through the FAME process successfully and to a closing by months end in January." The statement was was posted on the Friends of Saddleback Mountain Facebook group by Andy Shepard, general manager of the new Saddleback.

Arctaris plans to open Saddleback for the 2020-21 ski season. The mountain, at 4,120 feet, is one of the largest in Maine and has 2,000 vertical feet of skiing. It last operated in the 2014-15 ski season. The resort employed 300 during ski season and, without the ski area, the town of 1,150 and surrounding Rangeley Lakes region in western Franklin County has taken an economic hit over the years.

Jonathan Tower, managing partner of Arctaris, said in December that the transaction is a complex one, involving support from both state and federal government partners, making the delay necessary, but the original terms haven't changed and the resort is still on track for a 2020-21 ski season opening.

The group, through the Saddleback Mountain Foundation, was close to reaching a $2 million fundraising goal for the sale the group said in December. Another $2 million in equity is necessary to secure New Markets Tax Credits, which provide a tax break for investment into low-income or economically distressed areas.

"Nothing about this transaction is easy, so we thank you all for your unwavering support and perseverance," Tower said in a Dec. 19 statement.

Long road to sale

Arctaris and the Berry family, which has owned Saddleback since 2003, announced the purchase agreement in November.

Arctaris, based in Boston, provides debt and equity financing to growth-oriented businesses in underserved communities in inner cities and targeted rural areas. In July, Arctaris announced it had agreed in principle to provide $10 million in financing to Opportunity Zone funds in Maine, partnering with FAME. There are 32 Opportunity Zones in Maine, and developers establish designated funds for the zones using just-realized capital. Tax breaks come after five years if the developer has stayed with the project and reached certain development and job-creation milestones.

Saddleback is not in an an Opportunity Zone, and in 2018 Tower said that the designation was key to the group buying Saddleback. At the time, he said the door was still open, but would require a public-private partnership.

The Berrys, who are from Farmington, invested more than $40 million to expand and upgrade the property. They've been trying to find a buyer since 2014-15, when they determined that major capital expenditures were needed for the ski area's continued operation.

In the 12 years the Berrys operated the mountain, annual skier visits increased from 15,000 to more than 110,000.