Wed04162014

     Subscribe  |  Contact  |  Advertise  |  RSS Feed Other Publications

Wednesday, 01 April 2009 15:32

Debts mount at theme park

Written by 

Ghost Town in the Sky amusement park in Maggie Valley has left a wake of unpaid bills with local companies over the past year, putting some small businesses in a bind during already difficult economic times.

Ghost Town owes around $2.5 million to a wide spectrum of companies: electricians, plumbers, contractors, ride engineers, building supply stores, TV stations and newspapers — more than 220 companies in all. The park’s recent Chapter 11 bankruptcy filing has left many business owners worried they will never see their money.

Several local businesses say they are disappointed they’ve been left holding the bag on Ghost Town’s debt with no hope of getting paid back any time soon — or ever if the park can’t pull through reorganization and faces foreclosure.

“This was the last thing we needed right now,” said John Mudge, owner of Apple Creek Electric in Waynesville. Apple Creek did extensive work at Ghost Town, revamping nearly all the dated wiring at the park. The company is still owed $4,800, Mudge said.

“I know it doesn’t sound like a lot, but for a small company in a small town, that money they haven’t paid us has ended up coming out of my own pocket,” Mudge said.

Out of his 30 years in the electrical business, this is the worst time he could have been hit with an unpaid bill of this magnitude. As a small business owner, Mudge only makes a modest salary of between $30,000 and $40,000 a year. When Ghost Town fell short on its payment, he still had to cover the salary of the employee who did the work. That led to cash flow problems of his own. Plus, the time he wasted doing work he wasn’t getting paid for could have been spent drumming up real business.

“Partially due to this, it has cost some of our men their jobs,” Mudge said.

Steve Shiver, the president of Ghost Town, said the company was banking on a loan to help pay off the debts. But the recession and credit crunch has made finding a loan short of impossible. Every loan they sought fell through, finally landing the park in bankruptcy.

“I truly feel sorry for all of those who we owe money to,” said Shiver.

Another small business owner on the line is Jackie Shuler at Balsam Equipment Rental.

“It is just killing me,” said Shuler, who’s owed $6,600. “That is a lot of money for a small business like me.”

Shuler has had a steady stream of equipment on loan to Ghost Town: scissors lifts, floor buffers, a demolition hammer, heated pressure washers. Ghost Town would typically let a bill accumulate, then pay it down just enough to keep renting.

“Then it snowballed,” Shuler said.

Burton Edwards, a Maggie Valley contractor who specializes in rock work, says he is still owed $28,000 on a quarter million dollar job. While Ghost Town paid the lion’s share — just enough to cover salaries for his workers, gas for his machinery and materials — there was nothing left over to pay his own salary with.

“I basically did the job for nothing,” Edwards said. “I have three children and that’s hurt my family.”

Suddenly faced with a cash flow problem of his own, he relied on a line of credit to keep going through the winter.

Edwards actually filed a civil suit against Ghost Town last fall demanding payment. Ghost Town managers are disputing the lien, claiming the rock wall he built failed.

 

A very long line

The small businesses owed money are at the back of a very long line to be paid. Ghost Town owes more $9.5 million to BB&T, which takes precedence before anyone else. While most of that sum stems from the purchase of the property by new owners two years ago, at least $3 million was racked up repairing equipment, upgrading infrastructure and generally renovating the dated amusement park.

Also at the front of the queue is roughly $208,000 in unpaid state sales tax and local property tax.

If the current owners can’t pull out of Chapter 11, the park will be put up for sale, likely to the highest bidder at an auction. It would have to bring nearly $10 million before the small businesses see any of the money they are owed.

“Most of the people who are owed probably won’t get the money if it goes to the courthouse steps,” Edwards said.

Shiver agrees, and says that’s why the people he owes money to need to be supporting him right now.

“The alternative is to close the doors and sell it on the courthouse steps for pennies on the dollar. If we close, we all, including the creditors, lose,” Shiver said. “There two options — get behind it or close the door.”

If the park is liquidated — whether the owners voluntarily throw in the towel or are forced to by the bankruptcy judge — it’s anyone’s guess how much it might sell for in these times. But most likely it would only be enough to cover the big loans from the financial institutions at the front of the line, whose debts are backed by the collateral of the property.

“The small business owner does get caught in the cross fire. They get the short end of the stick,” said attorney Gavin Brown, chairman of the Haywood County Economic Development Commission and Waynesville’s mayor.

 

An even longer line

While not listed by name on the bankruptcy filing — but caught in the crossfire nonetheless — are several local sales reps for national suppliers and vendors. Take Dick Cabe, a sales rep for apparel companies that provided Ghost Town with everything from T-shirts to ball caps to resell in its gift shops. Cabe’s salary is 100 percent commission based, leaving him holding a great big bag if Ghost Town doesn’t pay for the merchandise it ordered.

“If they don’t get paid I don’t put food on my table,” Cabe said. “Anytime you lose money in this economy it hurts. You never like to lose money.”

Margie Woodward, a sales rep for souvenirs stiffed out of her commission as well, said she is generally very careful about who she sells to on credit.

“Who is going to expect a company like that to file bankruptcy?” said Woodward, who lives in Jackson County.

After seeing the long list of people owed in the bankruptcy filing, Woodward doesn’t hold out much hope for getting paid.

“I have pretty much written it off,” Woodward said.

Ghost Town has similar debts across the country, from $45,000 to a company that makes cap guns in Tennessee to a company owed more than $300,000 for rebuilding the incline railway.

“It’s affected us drastically, extremely,” said Brannon Deal, the owner of Industrial Service Group of Georgia, the company that has been working on the incline railway. “When somebody hits your business for $300,000 and that’s the total amount of money you do in a year, it hit us hard. It’s got us in a financial bind like you can’t imagine.”

Ghost Town is contesting that payment, too, which is the subject of a civil lien filed last fall.

 

Good faith

Local businesses say they wanted Ghost Town to succeed. Tourist traffic pulled in by the theme park has historically been an economic driver in Maggie Valley.

“Everybody here in Haywood County wanted it to be a go. It would be a fantastic thing,” said Shuler. “The whole community welcomed them with open arms.”

When Shuler is traveling and people ask where she’s from, they typically haven’t heard of Haywood County. But if she says Maggie Valley, it triggers the line people from here know well: “Oh, yeah, Ghost Town!”

“When I was a kid, we had season passes and would go there two and three times a week,” Shuler said. She remembers her uncle being scared to death riding the incline railway up the mountain, and still has pictures of her with the gunfighters.

Cabe, the sales rep for apparel merchandise, lives in Maggie and knows how much it means to the community.

“More than anything I’d love to see them succeed,” Cabe said.

That feeling led several business owners to give Ghost Town the benefit of the doubt as long as they could.

“We continued to work up there under promise of being paid, just because we were sure those guys would come through,” Mudge said. “After a certain point when money wasn’t forthcoming we just quit going.”

Businesses owed money saw Ghost Town start to fall behind on payments last summer, some as early as June, others not until August. When business owners broached the problem with Ghost Town management, they were all told the same thing.

“We’ve been told for months that they were going to pay our bill in a couple weeks. That’s been the story all along,” Mudge said. “Whoever we talk to up there, we get the same story. The bankruptcy came as a surprise in a way, because they kept assuring that wasn’t going to happen.”

At Balsam Rental Equipment, Shuler had a large lift valued at $100,000 on loan to the park that she wasn’t getting payments for.

“They kept saying ‘Yeah, yeah, yeah, you’ll get it, you’ll get it,’” Shuler said.

But finally, Shuler went up to the park to take back the equipment.

“We had to get the men down off our big lift and tell them ‘Sorry, no pay, no rent,’” Shuler said.

That was in June. Shuler called every two weeks since then. She said she tried to be nice, hoping that would move her bill to the top of the stack. But it seems it didn’t work.

Edwards believes the Ghost Town management had to see the writing on the wall.

“At a certain point they had to know,” Edwards said. “I don’t hire people I can’t pay.”

 

Julia Merchant contributed to this article.

blog comments powered by Disqus
Read 3781 times

Media

blog comments powered by Disqus