Stephen Breault, the owner of the Newport Natural Market & Café, fields a lot of questions about the large vacant lot across Main Street from his store. Home to a community of feral cats and a flourishing grove of birch saplings, the downtown parcel is bordered by a crooked line of rusty chain-link fence.

"Customers are always curious why it's not being developed," Breault said. "They see the exasperation on my face when I say, 'Your guess is as good as mine.'"

The 1.3-acre jumble of old foundations was once nine buildings that housed apartments, stores and offices. They were torn down in 2015 after a pair of investors, Ariel Quiros and Bill Stenger, wowed city and state officials with an ambitious local economic redevelopment plan.

That proposal crashed in 2016, and Quiros, Stenger and an adviser named William Kelly were later convicted of crimes related to an EB-5 investments scheme. Ever since, the gaping hole on the city's major thoroughfare has bedeviled Newport's business owners and city officials who would like to redevelop it but can't.

The parcel is one of many properties linked to the EB-5 scheme that are in the hands of a bankruptcy receiver, a Florida lawyer named Michael Goldberg. He was appointed by a federal judge to manage their sale and pay off the EB-5 project investors. The problem, officials say: Goldberg wants $2.4 million for the land, a price tag that has discouraged potential buyers.

"Even if you sold it to a developer for a dollar, they still couldn't make a profit building a market-rate building on that site," said David White, a Burlington real estate consultant who has been hired by Newport to come up with a plan for the lot. He said he has advised the city and state not to think about using it until Goldberg is willing to lower the price.

"There is no point in contacting him because he's so unreasonable," White said. He estimates that the property is worth about $500,000. "It's a waste of time."

Goldberg did not respond to calls or emails from Seven Days.

Stenger and Quiros' plan once promised to help pull the city of 4,400 out of a decades-long economic slump. Newport, a former lumber port, has traditionally had some of the highest unemployment rates and lowest urban property values in Vermont.

Breault, who bought his store and café in 2010, believed Quiros and Stenger when they pledged to funnel millions into the nearby Jay Peak Resort. He was one of many who saw potential for turning Newport, on the shores of sparkling Lake Memphremagog and just half an hour from the ski area, into a resort town.

Breault had faith the investors were going to build a downtown conference center, a hotel and covered parking, as well as a biotech facility.

"They showed us renderings, and I tend to be optimistic about things," Breault said. "Then it ended up being a betrayal and a Ponzi scheme, sort of, and we get left holding the bag."

Local officials are trying to move on. Last year, the local Northeast Kingdom Development Corporation bought the building that Quiros and Stenger claimed they'd use for the biotech company. It is helping a local snow-grooming equipment company to expand there.

The pit is more problematic. It's an eyesore that is visible from Main Street businesses, including the natural food store, the venerable Needleman's Bridal & Formal, and a tasting room for Eden Ciders. A tall brick smokestack that was part of a bakery is nearly all that's left of the demolished structures, most of which dated back to the early 1900s. From the perimeter fence, Breault pointed out a large collection of cat food cans. Locals are feeding the site's feral felines.

"They do eat the rodents," Breault conceded.

Vermont's Department of Buildings and General Services wants to build a new Orleans County courthouse in Newport and has $2 million set aside to do it.

Commissioner Jennifer Fitch has been eyeing the property, but like White, she doesn't think it's worth $2.4 million. She's shared several appraisals with Goldberg that put the value at around $1.2 million, but he's said he won't budge.

"The state is still interested," Fitch confirmed. "[Goldberg] does not appear to be interested in negotiation at this point in time."

Many of Breault's customers have suggested that the site would be good for a new park, a notion that he rejects. Vermont has plenty of outdoor spaces, he said.

"From a business owner's point of view, it has to be retail," he said. "Lots more people would shop here if we had a more Stowe-like setting, with more stores that were unique."

Newport's not the only Vermont community with a gaping hole. St. Johnsbury has had one on its Main Street since 2009, when a fire demolished three buildings. St. Albans had one across from its city hall until local officials crafted a complex deal in 2021 that created multifamily buildings and several offices.

The Queen City has been struggling for years to redevelop its own empty downtown lot, the former Burlington Town Center mall, which was demolished in 2017. After years of fits and starts, "the pit," as locals came to call it, is today a bustling construction site with two tall buildings being erected.

But the hole in Newport is even larger than Burlington's pit, and it plays an outsize role in the smaller city, which has a compact downtown.

"It's depressing for the entire community," White said last week. "That directly impacts all the other businesses."

Some cities have set up complicated public-private partnerships to redevelop empty spaces with office, retail and affordable housing. That takes years of planning, multiple investors and buy-in from deep-pocketed corporate partners interested in promoting downtown vitality. For example, the latest deal at the Burlington site, to build apartments, retail, parking and a rooftop restaurant, includes participation from Champlain Housing Trust, Vermont's largest affordable housing owner and manager, and three large for-profit development companies.

Newport needs affordable housing, but it lacks the experienced city administrators and the large housing agencies that have made public-private partnerships a viable strategy in Burlington and other cities. The Northeast Kingdom's affordable housing development agency, RuralEdge, isn't equipped to take on a project of that size, executive director Patrick Shattuck said.

Shattuck sees Goldberg's asking price as the primary obstacle, but his agency also doesn't want to get into the business of managing street-level retail space. Shattuck said a downtown site isn't ideal for the family-size housing units in which his organization specializes — something the area also desperately needs.

"The Newport hole has been a long, ongoing issue," Shattuck said. "I think this is one that requires a whole lot of folks to come up with a solution."

Newport has also been going through a period of political instability. Longtime mayor Paul Monette stepped down last year, and his successor, Beth Barnes, resigned in June, less than three months into her term, alleging she was bullied by city council members and the city manager, who has also now resigned. The new mayor, former Vermont representative Linda Joy Sullivan, said Newport's governance problems are unrelated to what's happening — or not — with the hole. Last week she said the city's highly publicized political instability was not "as sensational as people are trying to make it."

Breault, a serial entrepreneur who moved to Newport from New Jersey in 2010, is frustrated that Newport is failing to reach its potential as a vacation destination. Farther north along Lake Memphremagog, which is in both Vermont and Canada, the Québec town of Magog is jammed with beachgoers in the summer.

"The lake is beautiful, and there are businesses that are very successful in town," Breault said. "We have a ski season in the winter and a lake season in the summer. So I don't think it's totally unreasonable that we could have viable businesses here."