Jay Peak Resort is now for sale after years of turmoil and uncertainty brought on by one of the biggest frauds ever to hit the federal EB-5 program.

The U.S. Securities and Exchange Commission alleged in 2016 that former owner Ariel Quiros and his partner Bill Stenger misused $200 million in foreign investor funds, with Quiros personally pocketing some $50 million.

The investors plunked down $500,000 each for the opportunity to receive green cards for themselves and their families. The Miami-based federal receiver Michael Goldberg said this week that of the 540 investors in Jay Peak, all but six have received conditional residency and moved to the United States. He said about 160 are already waiting for their permanent residencies to be approved.

More:Jay Peak will be for sale 'within a few weeks,' says federal receiver

The investors have not, however, gotten their money back, which begs the question: Will they? The answer hinges on whether Jay Peak can command a sale price of about $250 million.

Goldberg is quick to point out that the investors, from China and other Asian countries, Europe and Latin America, were never guaranteed their money back. The 35 investors in Jay Peak's Tram Haus Lodge have been repaid in full, according to Goldberg.

"This was not a loan, it was an investment, and it's quite possible that these individuals made a bad investment," Goldberg said. "Basically the resort will be worth what it's worth. The fact is, even if there was no fraud they may not have gotten their whole money back."

How Jay Peak's sale will be different than Stowe's

Jeffrey Altman of Houlihan Lokey is a New York-based investment banker hired by Goldberg to help him sell Jay Peak. Altman declined to say what price he believes the ski resort can command.

Altman specializes in lodging, leisure and ski resorts, and was involved in the recent sale of Stowe to Vail Resorts, advising the seller, the insurance giant, AIG.

More:Quiros reaches $82 million settlement in Jay Peak fraud case

More:The promise of millions EB-5 brought to Vermont is dead, 200 investors at risk

Mike Krongel of Mirus Resort Advisors in Burlington, Massachusetts, explains that a ski resort's value is typically calculated as some multiple of its EBITDA, or earnings before interest, taxes, depreciation and amortization.

Krongel has spent some 30 years helping people buy and sell ski resorts. He says the usual range for multiples is between six and 10 times a resort's profit. In 2017, Jay Peak recorded a profit of about $10 million, or more than five times the previous year's profit of $1.8 million under the management of disgraced former owner Quiros and Stenger.

Goldberg isn't yet releasing the resort's profitability for 2018, but Krongel guesses it was even better than 2017, perhaps $12 million. Goldberg declined to confirm that number, but said he is "happy with the direction the resort is taking."

Under the best case scenario, using the conventional method for valuing a resort, that would put Jay Peak's worth at somewhere between $60 million and $100 million. Krongel said Stowe sold at the top of the scale — 10 times profits — to fetch a price of $50 million from Vail.

What are Jay Peak's disadvantages?

Jay Peak, however, is not a conventional resort, meaning conventional methods of determining its value may not apply. It's a resort that was entangled in an alleged fraud of gargantuan proportions, and is now being run by a federal receiver.

As Altman puts it, most sales of ski resorts don't involve "federal court processes" the way the sale of Jay Peak does. A federal judge has to sign off on the sale of the resort.

There's another potential complication for a sale, in addition to the federal entanglement at Jay Peak — the resort's sheer remoteness.

"Jay Peak has an awesome reputation, fantastic terrain and a great lift infrastructure," Krongel said. "It's got everything in the world going for it except it's a long ways from anywhere except Montreal. That's going to be a limiting factor on who will look and what they will pay for it."

Goldberg disagrees.

"Yeah, we're remote from certain parts of the United States, but we have the benefit of picking up more Canadian skiers than anybody," Goldberg said. "We pick up a ton of skiers out of Montreal."

Lastly, Krongel says one year of good profitability does not a high multiple make.

"When I take an engagement to sell, or when I represent a buyer, I want five years' average (of profits) and go forward 12 months. I want your next budget," Krongel said. "Because they had a $10 million (profit) one year, it's meaningless."

So, how much could Jay Peak sell for?

So, how is it that Jay Peak could sell for 25 times or more its $10 million profit in 2017, for a price tag of $250 million?

Jeffrey Altman of Houlihan Loki describes the logic as his "price per pound" theory. Put simply, Jay Peak is much more than a ski resort. It's a water park. It's a golf course. It's a hockey rink and soccer fields. It has more than 700 owned hotel rooms. All of which drives up the price per pound.

"There's a lot of value outside the normal ways you quantify value for a ski resort," Michael Goldberg said. "We expect that we will do better than the EBITDA multiples."

In addition, the top resort operators who will be looking at Jay Peak, from both inside and outside the ski industry, are going to take into account that it was very badly run until Goldberg took over and increased profits by more than five times in one year.

Goldberg maintains that a seasoned ski resort operator should be able to do an even better job at running Jay Peak and increasing profitability than a lawyer sitting in Miami. Goldberg said he doesn't even ski.

"The only skiing I do is on the water," he said.

Goldberg has also "spent a fortune," he said, on capital improvements, including finishing the construction, and fixing the aerial tram for $5 million.

"We've got a hotel with amazing infrastructure and beautiful brand new buildings," Goldberg said. "(Buyers) are going to know we have more than $200 million into it."

Altman agrees, and says there's already a lot of market interest.

How does he know? Well, there are the dozens of phone calls he got after the Burlington Free Press first reported the resort was for sale last week.

Contact Dan D’Ambrosio at 660-1841 or ddambrosio@freepressmedia.com. Follow him on Twitter @DanDambrosioVT.