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Wednesday, 29 April 2009 16:58

Maggie to hold public hearing on Ghost Town loan

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Officials at Ghost Town in the Sky continued to pressure Maggie Valley leaders this week to pony up a $200,000 loan to help the beleaguered theme park get up and running.

In a special meeting Monday (April 27), Ghost Town CEO Steve Shiver said the loan could make or break whether Ghost Town reopens this summer.

“We are in a tedious and precarious time. We wouldn’t be here unless we were at the end of our rope,” Shiver said. “My whole livelihood is at stake and my whole future is at stake.”

Town aldermen expressed reservations about putting taxpayer money on the line. While hotel, restaurant and gift shop owners in Maggie are lobbying for the loan, aldermen said they also have to consider the average residents not engaged in the tourism business.

“We are looking out for the entire valley — all the taxpayers. Your side is one-sided, our side is broad,” Alderman Mark DeMeola told Shiver. “We have a lot of responsibility. We have more to answer to than just the business community.”

Shiver argued that if the town’s tourist economy goes under, the whole town will suffer. DeMeola said he recognized that, which is why the town was willing to entertain his pleas in the first place.

“You have an undertaking in your hands that a community is teetering on,” DeMeola said. “You deserve our utmost respect and the respect of the entire valley.”

DeMeola suggested holding a vote to gauge public sentiment since it is their money on the line.

“If the voters say ‘Yeah,’ I say ‘Man, go ahead and do it,’” DeMeola said.

Shiver questioned the wisdom of a town-wide vote, however. Voters are not an accurate reflection of the town’s taxpayers, he said. Many of the hotel and restaurant owners pay taxes but don’t technically live in the town limits and therefore couldn’t vote, Shiver said.

Alderwoman Saralyn Price suggested holding a public hearing instead so everyone could weigh in, whether they are a voter, town taxpayer or none of the above.

“I represent the people and I want to see what they think,” Price said.

Town Manager Tim Barth said a public hearing was in order anyway if town leaders intend to consider the loan request. State statutes require the town to hold a public hearing before granting an economic development loan to a private enterprise. The earliest one could be held is in two weeks.

Shiver said the park could use the money much sooner, as they need money to get open by May 22.

Alderman Phil Aldridge said the “eleventh hour” request has given town leaders little time for due diligence.

“Everything I’ve ever done in life, I have pros and cons and I write them down,” Aldridge said.

The town’s attorney, Chuck Dickson, recommended getting detailed financial statements and a business plan from Shiver before moving forward.

“If I were lending money to someone I would want to act like a bank and want as much financial information as possible, extremely detailed, every single thing I could find out about the ability of the borrower to repay,” Dickson said.

DeMeola agreed.

“It may not be a service to you speed-wise to do this, but we need ample time for the town to have everything detailed,” DeMeola told Shiver.

Shiver said a business plan for pulling through bankruptcy is in the works and could be shared with the board. Shiver said Ghost Town’s owners and investors have pumped millions in personal assets into the park already.

“I don’t have any more money to put up,” Shiver said.

Shiver couldn’t say whether the park would pull through bankruptcy even if it did land a loan from the town.

“I am not speculating,” Shiver said in an interview following the meeting.

Shiver said the park is moving toward opening day. Ghost Town in the Sky held a job fair over the weekend, attracting hundreds looking for seasonal work. Shiver said tickets are selling online and advertising is under way.

 

Where they stand

Mayor Roger McElroy was the only alderman to say he wholeheartedly supports the loan, pledging he would vote for it.

“There are too many motels and business people that really can’t make it without Ghost Town,” said McElroy. “When Ghost Town was down before we couldn’t buy new sheets or new towels. We had to scrimp by.”

The same goes for other tourism-dependent businesses, McElroy said.

Ghost Town was closed from 2002 through 2006. The park’s original owner — who ran the park for 40 years — shut it down, partly due to old age and partly due to crumbling infrastructure and failing rides that required a major capital investment to restore. The park sat dormant five seasons until the current owners came along and reopened it in 2007.

Meanwhile, Alderman Colin Edwards was the only one to say he was wholeheartedly against the loan.

“I want Ghost Town to succeed, don’t get me wrong. But I don’t want to lose $200,000 of the taxpayers’ money and have to go up on property taxes,” Edwards said in an interview after the meeting. “I want some security they will pay this back and they cannot give us that security.”

The loan is equivalent to 6 cents on the town property tax rate for one year (see info box).

Price, DeMeola and Aldridge were neutral in their comments, postponing judgment until hearing from the public.

If the town did agree to a loan, strings would be attached, they said. Town aldermen want to ensure the money would only be spent on operations, like making payroll for hourly workers, DeMeola said. Shiver countered that some workers are salaried, pointing to his human resources director who happened to be sitting in the audience.

 

Getting paid back

Ghost Town was forced into Chapter 11 bankruptcy in March after being unable to keep up with payments on its $9.5 million in mortgage on the property. Bankruptcy filings revealed another $2.5 million in unpaid bills to small companies, from souvenir purveyors to contractors to ride engineers.

Town leaders wanted to know how they would be paid back should the park go under.

Shiver said the town would be in line behind a $9.5 million mortgage on the property, but in front of everyone else owed money. Ultimately, however, the bankruptcy judge would decide where Maggie ranks in line. There are a few debts in addition to the mortgage that would most likely rank ahead of Maggie, such as back property and sales taxes and bankruptcy attorney fees. Other lenders being courted to put up money are also being promised they will be first in line behind the $9.5 million mortgage.

“I am out every day trying to get additional financing,” Shiver said.

Shiver said the assets of the land, rides and buildings are worth well over $9.5 million, but if the park was liquidated through the bankruptcy process there’s no guarantee it would fetch enough to pay everyone back. Edwards said all they have is Shiver’s word.

“They ain’t got no payment plan to pay us back. We’ve not seen nothing in writing,” Edwards said.

 

Want to weigh in?

Maggie Valley leaders will hold a public hearing at 5:30 p.m. on Thursday, May 14, on whether to give Ghost Town in the Sky a loan of $200,000.

Those who want to submit comments but don’t want to speak at the hearing can submit them in written format at any time. Email to This email address is being protected from spambots. You need JavaScript enabled to view it. with “Ghost Town” in the subject line, or mail to Vickie Best, 3987 Soco Road, Maggie Valley, NC 28751.

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