Displaying items by tag: economy

U.S. Senator Richard Burr, R-N.C., didn’t don kid gloves when addressing a cross section of Haywood County business leaders representing agriculture, tourism, banking, construction and professional sectors last week.

“Here’s the hard, cold reality. We’ve got to cut an additional 6 trillion in spending. That’s to get on a glide path so that 30 years out we can balance our budget,” Burr told about two-dozen businessmen at a private lunch at the Waynesville Inn.

The magnitude of what must be cut is staggering, and the results won’t be pretty, Burr said.

But, Burr said this juncture provides a rare critical mass to reform the corporate and business tax structure, something he hopes to see passed by Congress in coming months.

“All the tax loopholes, all the credits, all the deductions — gone,” Burr said.

Bad news for big corporations, but great for small business owners like those in the room, Burr said.

Burr sympathized with those who have fruitlessly tried to borrow capital to expand their businesses in recent years.

“You almost walk away and say ‘Gee, they’d lend it to me if I had enough money to where I didn’t need it,” Burr said.

But don’t blame the local bankers, Burr said. They are merely acting on orders from the banking regulators harping on debt-to-capitalization ratios.

Meeting with Burr was a little like sitting down with an economic analyst. He talked about currency and trade, foreign investment, the still frozen credit market, lack of capital, sovereign debt, how a new tax code could effect business’ bottom line. Europe’s financial crisis perhaps topped the list.

“Dominoes will fall from what happens in Europe. Nobody is smart enough to know what they are going to hit,” Burr said.

Burr was quick to joke and banter with those at his table as they introduced themselves.

“I should have given the caveat that for any brokers in the house, don’t trade based on my predictions. I don’t even take my own trading advice,” Burr told Larry East, financial advisor with Wells Fargo.

Aside from the occasional “welcome WCU students” signs, there isn’t much visible evidence in Sylva that signals more than 7,000 students have flooded this community for the start of school.

The town isn’t awash in purple, the school’s official color. You won’t see many images of catamounts, the university’s mascot, splashed about.

But despite the lack of an obvious welcome mat, the influx of students is a critical cog in Jackson County’s economic engine — and merchants and elected leaders here know that.

But it’s not always about the direct exchange of dollars. The economic ties between the university and community are often subtler than that.

At Rick’s Full Service Car Wash, Manager Mark Harwood relies on students for a workforce. And, as a general rule, he said, the students are simply stellar in that role.

“They do a great job for us,” he said, gesturing toward the car washers busy cleaning out a line of cars. “I love having them.”

Without WCU’s students, Harwood said he’d be hard pressed to find the dozen or so workers he needs to keep the 15-year business running. Students don’t usually have enough extra cash to get their cars cleaned here, he said, but they are vital to the car wash’s economic wellbeing nonetheless.

“With the economy the way it is, we are a bit of a luxury item,” he said.

At Super Wal-Mart in Sylva, displays cater to students and parents to shop for go-back-to-college items. That money returns to the community in the form of retail taxes.

“It’s a really big deal,” said Jackson County Commissioner Charles Elders of the economic ties between this county and the university.

Elders owns a gasoline station on U.S. 441 between Sylva and Whittier. Students headed west, or commuting in from outlying communities, help make up his business clientele, too — though gamblers headed to the Cherokee casino are even more important on a day-to-day basis, Elders said.

But at the Exxon service station on N.C. 107 in Sylva, students make up most of the business, and on this day WCU student and worker Samantha Talbert is rushing to keep up. It’s 9:30 a.m., and she oversees both the main cash register and drive-thru area.

Even at this early hour, people are driving though picking up six-packs of beer. It’s a Saturday, and people are eager to start their day of fun.

“It’s mostly locals during the day, and college kids at night,” Talbert said between customers.

Talbert eats at local restaurants and shops at local stores. Though she’s more frugal than many — she prefers to make her own meals most days, for health and economic reasons — Talbert still, like other WCU students, helps bolster Jackson County’s economy.

When construction on the lofty Clarion Inn started in 2008, the town of Sylva thought it was finally going to get a recognizable name-brand hotel to help attract visitors and commerce.

Three years later, and the Clarion Inn is instead the town’s biggest eyesore, defacing the viewscape high atop a mountain along the main commercial corridor. If the unfinished hotel today serves any useful purpose, perhaps it’s as a visual reminder that when granting regulatory breaks, beware of big-talking dreamers bearing big plans.

The developers, TJ Investments — father and son team Thomas and John Dowden — went into bankruptcy. Alpharetta Community Bank of Georgia, which seized the property after the men failed to payoff a $5 million loan, now owns the unfinished Clarion Inn.

In turn, however, the bank is being sued by Cooper Construction Company, which the Dowdens left $1.9 million in the red after failing to pay the firm for all its work. DeLaine DeBruhl, vice president and field operations manager for the Hendersonville-based contractors, declined to comment about the situation here in Sylva, citing the pending litigation.

Court records indicate the case has been stalled since February, when one of the parties involved had a lawyer withdraw as counsel. The two case files at the Jackson County Clerk of Court on the hotel litigation are some six inches thick, including depositions and court motions. But there is not the smallest sign to be found of possible resolution, and in the meantime, finding a new buyer to take over the project seems remote given the lien against the property.

 

Hindsight 20/20?

A tangled, drawn-out court battle over an abandoned building sure wasn’t the economic development the town’s leaders dreamed of when they granted that building height variance to the father-and-son duo.  

“We were so thrilled to be getting a big chain hotel there,” Sylva Commissioner Harold Hensley said of the town’s decision four years ago to allow the Clarion Inn a fourth floor instead of holding it to three.

The developers claimed the hotel required a 75-foot maximum height instead of just 45 feet as mandated by town regulations.

Hensley, Stacy Knotts, Ray Lewis and then-commissioner-now-Mayor Maurice Moody voted in favor of the variance; Commissioner Danny Allen missed that meeting and an opportunity to vote yes or no.

On paper, at least, things looked good: plans called for a restaurant, convention room and 78 guest rooms.

Instead the economy crashed, and the hotel never opened. In fact, the hotel was never even finished. Today it’s a hulking, depressing presence on top of a steep cutout bank, with boarded-up windows, a surrounding chain-link fence to deter derelicts, and landscaping consisting of waist-high weeds.

“Obviously it didn’t turn out how it was expected,” Knotts said. “I didn’t envision it would be sitting there vacant. We’ve been waiting a long time for something to happen.”

You do the best you can do at the time, make the best decision that you can, and move forward, Hensley said.

“I don’t know that (it’s particularly useful) to go back and regret anything you’ve done,” he said. “Hindsight is 20/20.”

Chris Matheson, a council member who was not on the board at the time of the variance, said she could sympathize with how the situation must have appeared then.

“Had the economy not taken a turn for the worse, if it had been completed as planned and bought a tremendous amount of revenue and activity to that end of town, we’d look at it through different eyes,” Matheson said. “I don’t think we’d even be having this conversation.”

Hensley said he hopes something changes — positively — in connection with the vacant hotel, located across from Wal-Mart.

Town Manager Adrienne Isenhower said it has proven difficult to get straight answers about the hotel’s future — or determine if it even has one. She spent some time early on trying to track down decision makers.

“When I first got here, there was an investment company that said someone was interested. But I haven’t heard anything since. Something needs to happen, it’s a major eyesore,” Isenhower said.

She said if there isn’t an actual use for the building, perhaps the time has come to consider tearing it down.

The problem is, the town isn’t legally in a position to make that decision. And it would seem that until the court case is resolved, no one — anywhere — can make any meaningful decisions regarding Sylva’s empty Clarion Inn.

Six years ago, amid great fanfare, Joe Kimmel pledged $6.9-million dollars to Western Carolina University.

Based on that pledge, with payments expected to come in over an eight-year period, WCU went forward with a new school: the Joe W. Kimmel School of Construction Management, Engineering, and Technology.

Kimmel’s ability to pay WCU, however, abruptly ended in December 2009, when his company, Asheville-based Kimmel & Associates, went into bankruptcy. He stopped at $1.43 million — more than $5 million short of the original pledge to WCU.

The date of the last payment isn’t known. WCU would not release the payment schedule.

Chapter 11 bankruptcy afforded Kimmel and his wife, Cynthia, legal protection to try to reorganize their finances, both personally and for Kimmel & Associates. The company recently came out of bankruptcy proceedings. But it remains unclear whether Kimmel will, or even would be allowed under terms of his bankruptcy emergence, to fulfill the remainder of his promise to WCU.

The Kimmels said they had $7.2 million in personal assets and $15.8 million in liabilities. Kimmel & Associates listed $2.1 million in assets and $7.2 million in debts, according to federal bankruptcy filings.

Kimmel did not return a phone message seeking comment, with an employee at his company declining on his behalf.

 

Construction industry crashes

Kimmel & Associates is an executive head hunting search firm founded in 1981 that is focused on the construction industry. Kimmel & Associates could at one time — and did — boast of a national client base of more than 100 companies.

Pairing a construction-management school at a university seeking national prominence in the field with a construction head-hunting firm must have seemed a match made in heaven — particularly given Kimmel’s nearly $7 million dowry.

With an additional $3.5 million in matching state money secured as a result of Kimmel’s generous gesture, WCU promised to create a first-class educational program.

“We expect this pledge, combined with additional public and private support, will result in a school that will place Western on par with the nation’s finest institutions of higher education in preparing students for careers in construction management and related fields that are critical to the emerging economy of the state and the nation,” Chancellor John Bardo said in a press conference at the time.

Kimmel generosity didn’t stop with WCU. He and his company made contributions to numerous organizations in WNC, including the University of North Carolina at Asheville, Asheville Art Museum, Buncombe County Medical Society’s Project Access, Humane Society, Center for Diversity Education, Asheville Buncombe Community Christian Ministries, Meals on Wheels and the Fine Arts League of Asheville. Kimmel also established in 2004 a fund that provided $1,000 scholarships for students in construction fields.

“Giving and serving is the nucleus of the world, when the world is right,” Kimmel noted in a company newsletter as he reflected on his donation to WCU.

That was then; this is now. The world, at least the world according to Kimmel & Associates, soon wasn’t right.

Not even close: The housing boom, which seemed to promise ever-increasing profit margins to a construction industry left almost giddy by that prospect, instead crashed. Kimmel and his firm saw business dry up, virtually overnight, as builders were forced to put their measuring tapes up and hammers down.

In 2007, Kimmel & Associates was pulling in gross revenue of more than $19 million, bankruptcy documents show. That number dropped to $16.4 million in 2008, and by the following year, the company had dropped to $8.6 million.

Kimmel & Associate’s gross monthly income in 2009 still amounted to $625,000. But, with total monthly expenses coming to $626,047, Kimmel’s company was $1,047 a month in the red.

“Collapse of the construction industry” is the single reason given as a contributing factor in Kimmel & Associates fall into bankruptcy, according to documents.

 

School nuts & bolts

Today, the Kimmel School offers six degree programs in two departments: construction management and engineering and technology. There are state-of-the-art laboratory facilities; and about 300 students enrolled to take advantage of them.

The Kimmel contributions have gone toward endowments for distinguished professorships, student scholarships and program support for the construction management program, including allowing students and faculty to expand their participation in academic competitions, national conferences and industry meetings, said Bill Studenc, a WCU spokesman.

WCU landed a big-name, politically connected dean in March of 2008 when Robert K. “Bob” McMahan Jr. came on board. An astrophysicist, McMahan came to the university from his previous position as then North Carolina Gov. Mike Easley’s senior adviser for science and technology.

It wasn’t just WCU that Kimmel & Associates left in the lurch. UNC Asheville, where six of Joe and Cynthia Kimmel’s seven children attended school, built the Kimmel Arena — the health and wellness center was the result of a $2-million pledge from the couple. Last year, a UNCA official told the Asheville Citizen-Times that half that amount had been received.

 

WCU optimistic

A full assessment of the Kimmel School financial outlook is difficult to ascertain. When asked directly whether the school would be given a different name to more accurately reflect the true giving-picture, Clifton Metcalf, WCU vice president for advancement and external affairs, responded in a written statement:

“The university has taken a long-range view in our relationship with Kimmel & Associates,” he said. “We have been confident that Kimmel, one of the nation’s premier firms in recruiting executives for the construction industry, would rebound as economic conditions improved generally and as construction activity, specifically, accelerated. That appears to be happening now, and there is no intention to rename the school.”

Metcalf’s assessment of Kimmel & Associates’ ability to fulfill its pledge might be more hopeful than realistic.

The bankruptcy plan called for Kimmel and his wife to sell their $1.2 million in gold jewelry and 100 acres in Madison County, plus turn over to debtors the leases on two properties — the business itself on Page Avenue in Asheville, and a beach house in Folly Beach, S.C., used by customers and employees. Even leases on the company’s fleet of cars were up for grabs.

Haywood County, like everyone else, is bracing for the impact of state budget cuts. But the good news is that they may leave the budget fray with fewer scrapes than they thought.

In Raleigh, budget committees have been busily trying to bang out cuts in the billions, and while nothing is yet final, a proposed House budget released last week gave a view of the carnage that may be to come.

So Haywood commissioners met with county staff to hash out what this might mean for the county’s budget and the services that rely on it.

Though there will certainly be state cuts that will fall to counties to pay for, but County Manger Marty Stamey told commissioners at a budget workshop last week he’s not as concerned as he could be.

“Best case scenario, we’ll be $250,000 out, which is good,” said Stamey, meaning that a mere $250,000 shortfall would be their best landing in the budget fallout. “A lot of counties would be proud to be where we are. People say what they want to say, but budget-wise, we’ve done the right things over the last few years.”

The county’s budget is still in flux, waiting on both state cuts and the reaction of other groups, such as community colleges and the school system, which may come to the county for helping plug holes from state cuts of their own.

Currently, community colleges are looking at a 10 percent reduction in state funding, while K-12 education was slightly shielded, only facing an 8.8 percent cut.

One area where the county might feel some crunch is in its health and human services budget. The state is seeking to reduce spending there by $527 million, including $527 million in Medicaid, $67 million for mental health services and half of the funding for senior centers. Also on the chopping block are Community Care block grants and Smart Start spending.

“Human services are really busting at the seams for demand in this county,” said Stamey, noting that a decline in services would affect many citizens harshly.

Another proposal that staff said seemed likely to come through is the closure of four state prisons. Though there’s no word yet on which prisons would close, it would shift the burden of housing prisoners serving time for misdemeanors to county jails.

Stamey reported that, while Sheriff Bobby Suttles said he was confident he could house the criminals currently in the system, predicting whether they’ll have room in the future is impossible.

“That’s one reason that we think we might need to have higher contingency this year, for things like this, because that’s an unknown,” said Stamey.

On the revenue side, Finance Director Julie Davis told commissioners that the picture is no clearer there.

Surprisingly, said Davis, the property revaluation that happened this year isn’t what’s throwing projections into turmoil.

Usually, property values would go up with a revaluation, requiring counties to tinker with the tax rate to offset would would otherwise be an unpallatable rise in property taxes.

But due to the stagnant real estate market, the total value of property remained nearly flat in the recent revaluation — requiring little adjustment to the property tax rate to bring in the same amount of revenue as last year.

Sales tax is a different story, however.

“Sales taxes have been up and down. Looking at the comparison to last year, four months they’re up compared to the current year and three months they’re down,” Davis said. “Were chasing a moving target on revenues.”

The fluctuation makes it hard to predict how much money the county can bank on from sales tax next year, but year-to-date on average, sales tax collections are down 10 percent over last year.

In light of that, and state-level slashing, a property tax rate increase might not be out of the question.

Overall, though state cuts do look grim, Stamey said he’s confident in the county’s ability to stay afloat without undue carnage. But, he said, there just aren’t any solid numbers yet to be had, so it’s impossible to know for certain.

“We’re at the mercy of a lot of people’s budget’s right now to sort of figure out our budgets,” said Stamey. “I feel like I’d be doing us an injustice right now [to give numbers].”

The picture painted by county staff was in broad strokes, an overview of what could be coming in stead of the nuts and bolts of what to do about it. But that was purposeful, according to Davis.

“We specifically did not mention numbers or the revenue neutral rate because there is so much up in the air right now,” said Davis.

Commissioners will be meeting throughout the spring for more budget talks, though they noted that much of it is out of their hands.

As Commissioner Kevin Ensley said, “so if the state leave’s us alone, we’ll be alright.”

A state budget is expected by early June.

 

Haywood schools talk budget

Haywood County Schools could be facing a budget shortfall of $4 million if the state House of Representatives proposed budget gets adopted. The school board held a public hearing on Tuesday to hear community feedback and discuss what cuts might mean for local schools.

The reductions would mean 46 positions would be slashed within the system. Teacher assistants would be scaled back by 49 percent, textbooks by 68 percent and dropout prevention programs, school technology and staff development initiatives, among other things, would be eliminated.

See www.smokymountainnews.com Thursday for an update on the public hearing and the impact of threats to school funding.

For the last month, Greg Petty has been on a leaflet campaign around Canton. He’s been to parking lots. He’s been to offices. He’s been to bulletin boards. He’s been inside Evergreen Packaging, the paper mill that looms large in the town’s small center, and trolled its perimeter, plastering spots that might catch the eye of workers with his restaurant’s offerings.

“We’ve got menus up at every tunnel and every gate and every parking lot,” said Petty, the owner of the Canton Lunch Box.

The Main Street lunch and dinner spot is hardly in need of new business. On any given weekday around noon, there is nary a seat to be found. The wooden tables and chairs are filled with mill workers and other locals, and the staff seem acquainted with virtually all of them.

But what Petty, with his paper push, is gearing up for is an onslaught of new customers, thanks to more than 1,400 contract workers who will descend on the town next week for a massive mill maintenance, the largest since 2003.

 

A collective undertaking

The workers are coming for what, in the paper business, is called a cold mill outage. The paper mill will halt operations for three days and undergo major maintenance for several weeks to overhaul the place. They’re cleaning, they’re replacing pipes, they’re rebuilding boilers, they’re aligning massive pieces of equipment like steam turbines.

It’s going to take regular mill employees working at full pelt — some clocking overtime — and a hoard of outside contractors to get it all done.

But for an often-sleepy hamlet like Canton, such an influx of people isn’t just a massive undertaking for the mill: it’s a massive undertaking for the entire town. With the incoming contractors, the town’s population will swell by a third. And out in the streets, if they’re not busily gearing up, they’re anticipating the busyness to come.

“I’m not going out to eat for the next week,” said Nancy Rathbone at Sign World WNC on Main Street.

Sign World itself, meanwhile, has been cranking out custom signage for the mill as fast as it can: signs to mark parking lots, signs to mark exits, stickers for parking, ID badges, new plaques for machinery and a plethora of other printed pieces to orient and direct the out-of-town workers. Charles Rathbone, the company’s owner, said Evergreen officials have been in nearly every day in the weeks running up to the outage.

“We’re getting a lot done for the mill to gear up and probably expect a whole lot more during the period of time that they’re here,” said Rathbone, who said he’s excited about the outage and believes it will be good for Canton.

The mill estimates that it’ll be pretty good for it’s hometown, as well. The outage should boost the local economy by $500,000, according to Mike Cohen, a company spokesman.

According to Cohen, they arrived at that $500,000 figure by using an economic impact formula that factors in things such as hotel nights, meals and gas.

Mark Clasby, Haywood County’s economic development director, said that’s only one facet of the positive impact the outage will bring.

“It’s good news because of the capital investment that they’re making in the plant to continue operations, but there are multiplier effects — it means buying supplies, there’s hotel nights, meals, things like that, expenses. All those factors go into that,” said Clasby.

 

A boon for business

Businesses around Canton are already feeling the rising tide they hope will continue to lift all boats.

At Days Inn on Champion Drive, they’re completely booked. They’re pretty close at the Comfort Inn just down the road, the town’s other hotel.

“We just have a few rooms, but they are very few,” said Gagan Nanda, who works the desk there. He said they’ve been taking advance bookings for three months now in preparation for the work.

The contractors themselves have been preparing, too. Anchor Steam Power, based in Asheville, said that, although they keep a crew at the plant nearly year-round to repair and maintain boilers, they’ll be sending in nearly 200 extra workers to revamp most of the plant’s many boilers.

Evergreen will be paying dearly for the maintenance — they expect it to cost in the range of $20 million.

They’ve budgeted for the outage and upped production in the weeks leading up to it so they can keep their customers’ orders filled, said Cohen, though, he notes, it isn’t a move they’re keen to make regularly.

“It’s one of those things that you do them when you need to, but not anymore often than you have to,” he said.

Of the $20 million that the company thinks they’ll spend on the outage, 60 percent of it — around $12 million — will be spent on paying workers to do the maintenance. The other $8 million will go to pay for the maintenance itself, purchasing supplies and equipment, along with preparations for the incursion of extra help.

Some of those workers, like those from Anchor Steam, are from the region. Most, though, are industry specialists who travel around the country, bouncing from site to site doing similar work.

“Most of the contractors have specialized skills for what we need,” said Cohen. “A paper mill is not like anything except other paper mills, and even those can be very different.”

With so many out-of-region workers, that means they’ll be relying on the town for pretty much everything, and in addition to shops and motels, some of Canton’s restaurants are ready to entice the temporary customers in for a meal or two.

Back at the Lunch Box, they’ve bolstered their operations in addition to their marketing.

“During the outage and the upgrade, we’re going to be opening at 10 in the morning and we’re going to double our staff,” said restaurant-owner Petty. They’ll also be delivering to the mill, and just in case anyone didn’t hear about their offerings, they’ve saturated the campus with paper.

Petty is also the man behind the renovation of the town’s Imperial Hotel, which will include a restaurant slated to open later this year. Though he was shooting for both restaurants to be open, Petty’s excited about the infusion of people and believes it will be a boon to the town’s businesses and morale.

“I think a lot of the people in town are excited about having 1,500 people in town that aren’t from Canton,” said Petty.

Rene Cutshaw, the service manager at Sagebrush steakhouse, one of the town’s other lunch spots, said they’re bulking up their normal staff schedules, too.

“We are putting some extra staff on next week and getting ready for the people staying in the hotels that are right behind us,” said Cutshaw.

And as one of only two restaurants that serve alcohol, and the only bar, they’re expecting an upshot in their sales there, too.

“We’re the only option, but we’re a good one,” said Cutshaw. “The next closest [bar] is O’Malley’s in Waynesville, so we’re making sure we’ve got a bunch of bottled beer ready and making sure we’re ready to meet their needs.”

The town itself has been helping out with operations, too. Though Town Manager Al Matthews said Evergreen has been handling most of the logistics, his staff has been helping them locate parking lots to house the workers’ vehicles while they’re here, which is no mean feat in Canton’s small downtown.

“We’ve been coordinating with their people to accommodate the extra vehicles that will be in the town, and our law enforcement is trying to accommodate that, to have enhanced patrols to protect all those vehicles,” said Matthews.

With so many unmanned cars sitting in vacant lots all day, police realize that the temptation might be too much for potential thieves.

Matthews, too, is optimistic about the benefits that the maintenance will bring.

“I think it will be very positive,” said Matthews, echoing the sentiments and hopes expressed by many in Canton ahead of the outage.

So as the little town readies for the big mill ball, they seem to have their hopes high that the temporary boom will be as loud and prosperous as estimates promise.

Maggie Valley is gearing up for its next round of beauty treatments in an ongoing effort to spruce up the town and bring some color to its streets.

The beautification program, led by master horticulturalist and Maggie Valley resident Clayton Davis, is a sweeping plan that intends to bring color to the valley year-round through mass plantings.

The first phase, which entailed planting tulip and daffodil bulbs in the town’s signature red and yellow, got under way last autumn. The bulbs need to be dropped into cold ground, so the town along with residents and businesses collectively planted several thousand bulbs last November.

The next phase of the plantings will include knockout roses, a famously hardy and simple species that blooms throughout the warmer months. Davis said that other plants intended to add color in the winter months, like nandina, will also be on offer.

The town is able to get wholesale discounts on the plants because they’re buying them in bulk, so citizens and businesses who take them up on the offer get their plants at cut-rate prices, as well as the expertise of Davis and the town’s grounds staff.

After discussion at a recent meeting of the beautification committee, participants will also get fertilizer and Nature’s Helper, a special growth aid, to help their plants along.

For its part, the town is funding the planting of its own properties — such as the landscaped area in front of town hall — with $6,000 it’s set aside for the project. Half of that sum was donated as matching funds by Home Trust Bank.

The idea behind the beautification belongs to Davis, who was inspired long ago by a trip to Summerville, S.C., where azaleas bloomed across the city. Davis and city officials hope this initiative will give Maggie Valley a face lift and bring increased tourist visitation.

Order forms for the plants are available at the Maggie Valley Town Hall and all orders are due by April 18. On sale are Gulf Stream nandinas for $11, nandinas for $18 and knock-out roses for $11. The next meeting of the beautification program will start at 10 a.m. on April 18, in the Maggie Valley Town Hall.

After eight years of entertainment, Maggie Valley’s largest venue is closing its doors, falling prey to the poor economy.

800-seat Eaglenest Entertainment was one of the largest in Haywood County and has drawn big-name acts such as Percy Sledge and Pam Tillis, but in the end, they just couldn’t keep pace with a still-sluggish economic environment and consumers’ increasingly discerning tastes in entertainment.

“There’s a lot of competition for the entertainment dollar today,” said owner Grier Lackey. “We have not been able to attract the clientele that we needed to make the place profitable.”

Lackey is putting Eaglenest up for sale with hopes that whoever buys keeps it as an entertainment venue.

“We are going to make every effort we can to try and get someone back in there that will be an asset for Maggie Valley,” said Lackey. “That’s not going to be easy, but we’ll wait for the right opportunity that will be an asset to Maggie Valley.”

For now though, Maggie Valley is missing one of the few major attractions the struggling tourist town had left. Carolina Nights dinner theater is not reopening this season either.

It will “leave a big gap in entertainment options,” said Teresa Smith, president of the Maggie Valley Chamber of Commerce.

The massive center is state-of-the-art and unique in Maggie Valley. In addition to the large two-level auditorium, there’s also an outdoor amphitheater that can hold up to 1,000.

The site opened in 2003, replacing the notorious dance club Thunder Ridge with a family-friendly, alcohol-free venue. The idea, said Lackey, was to bring in entertainment that was geared towards families and tourists, bolstering the entertainment economy in the valley.

And to a certain extent, it worked. The place did draw a number of big names and crowds of music fans clamoring to see them. However, with the tanking economy, the shows Eaglenest has been able to book have steadily dwindled, along with each production’s attendance.

Lackey chalks this up not only to the economy, but to new entertainment venues that have come online in the region, like Smoky Mountain Center for the Performing Arts in Franklin and a new concert venue at Harrah’s Cherokee Casino.

“I think that has had a drastic effect on it,” Lackey said. Plus, the region is known for its plethora of free festivals and music events put on to attract tourists.

Really though, said Lackey, it wasn’t just the new competition that was the death knell for the place. It was also a changing tide in what people actually want and are willing to pay for. Expendable income, he said, is shrinking fast, and the money that was once put to seeing acts of all kinds is now spent more carefully.

People only want to see artists they’re really committed to, which makes filling an 800-seat auditorium in a semi-rural community a very difficult proposition indeed.

And to just break even, never mind turning a profit, Lackey said they need to be pulling in at least 60 to 70 percent of their capacity for each show.  That, of course, just hasn’t been happening.

Lackey says he’s not in a huge hurry to sell. The venue was always more of a hobby than a central business investment anyway. He is the president of Taylor Togs, once the nation’s manufacturer of Levi Strauss.

The economy be damned — the burgeoning restaurant scene in Sylva continues to boom, with four eating establishments in this town of just more than 2,400 people expanding, changing hands or soon opening their doors.

“A hard economic time is really the best time to start a business,” said Bernadette Peters, a marketing specialist out of the Atlanta area who’s backing that statement with the re-launch and re-invention of City Lights Café.

Peters and the other restaurant owners have different ideas about how best to thrive in these challenging times: a focus on trendy foods in one restaurant, down-home comfort foods in another. But these restaurateurs have traits in common, too. Out-of-the-box thinking, for one, and a business eye for the many young professionals and older baby boomers now calling Jackson County home.

Recently released 2010 census data shows Jackson County experienced a 21-percent growth rate over the past decade, a population expansion from 33,273 in 2000 to 40,271 today, anchored by the presence of Western Carolina University. Nowhere is that growth more evident than in Sylva and its increasingly lively downtown scene.

 

Soul Infusion

This restaurant first opened in 2001, and is located in a farmhouse just off busy N.C. 107. Haley Milner and Tori Walters have purchased Soul Infusion Tea House and Bistro on N.C. 107 from Jason and Karin Kimenker. Milner was with Annie’s Naturally Bakery for six years, and has extensive experience working in a variety of Georgia restaurants.

“I’ve always liked Soul Infusion a lot,” Milner said, “and Karin and Jason are good friends. I always wanted to run a restaurant, and the opportunity came up.”

The good soups, wraps and other fare at Soul Infusion that helped build the restaurant’s steady clientele will continue, but a few changes are coming, too: Walters’ family has made a tomato-based barbecue for years that will be featured at the restaurant, plus the couple soon hopes to feature a chalkboard menu ranging from seafood to vegetarian specialties. Also on tap, an outdoor covered stage for local bands.

A celebration/grand opening of Soul Infusion takes place April 9, beginning at 11 a.m.

 

Breakfast Café

John Bubacz of Signature Brew Coffee Company, later this month will open a breakfast/lunch café in a small, one-story building across Main Street from the coffee shop.

Bubacz has a history of opening popular eating/coffee-house establishments in Jackson County. This will be at least his fifth, though in a way it’s simply the reinvention of the Underground, Bubacz’s former place on Mill Street (locally called Backstreet) that segued into Signature Brew Coffee Company on Main Street. What didn’t make the address change were the wraps, burritos, sandwiches, salads, juices and smoothies that were once the mainstay at the Underground. That’s where the Breakfast Café comes in — customers will be able to pick up their favorites there, made from local and organic ingredients, from 6 a.m. to 1 p.m. The new café will be in a former ice-cream shop.

 

City Lights

Peters worked at Bryson City's Cork and Bean (a wine bar and coffee house) a couple of years ago in Swain County. Now she’s in Sylva, intent on bringing City Lights Café back to life.

At one time, Joyce Moore, founder of City Lights Bookstore and City Lights Café, ran both establishments successfully on East Jackson Street. She got out of the café business, and retired a year ago from the bookstore after selling it to Chris Wilcox. Moore still owns the two-story building, and in conversations with her, Peters said she soon realized her vision of the café was the same as Moore’s for the original City Lights Cafe.

“I love to create things where community comes together,” Peters said. “This space is perfect. I’m going back to the roots of (City Lights), and marrying the great concepts that Spring Street had.”

Spring Street Café, owned and operated by Emily Elders, closed last fall after about a year in business. Spring Street featured higher-end dining than Peters envisioned — she’s focused on healthy, tasty and quick.

She’s also in the market for employees. Qualifications are simple: “People who like people and like being around food.”   

Plans are to open April 4.

 

Half Past

In the most innovative category we have Half Past, “home cooking to go … on the go.” Set to open, the owners hope, by the end of this month on N.C. 107 directly across the highway from Soul Infusion. Ernie Sipler has years of experience working as a chef for hotels in the Poconos. He and his wife Joan have lived in the Caney Fork community for 11 years.

Here’s how Half Past will work: You are driving home on N.C. 107 after a grueling, unappreciated day of labor at the newspaper. You’re much too tired to cook, but upon leaving that morning, had chirpily announced you’d be in charge of dinner. What to do? Stop at Half Past, where there will be a full array of food such as beef pot roast with roasted vegetables, chicken parmesan, soups, side dishes, salads, pasta dishes, and baked goods. No indoor seating, this is you-take-it-home catering.

“There seems to be a call for it in this area,” Sipler said, adding the couple has been forced to cover-up the phone number on the store sign because of a barrage of requests they can’t yet fill.

The second-home economy has fueled far more than construction and real estate jobs over the past decade.

“If it’s someone’s second or third home, they aren’t bringing anything with them,” said Doug Worrell, the president of High Country Furniture in Waynesville. “They aren’t moving their furniture.”

As a new economy emerged to support the second-home movement, furniture stores have proliferated throughout the region.

Worrell saw a customer last week who bought a home at Bear Lake Preserve in Jackson County and wanted it furnished by Friday. On the other end of the spectrum, a couple who hadn’t yet closed on their lot, let alone started building, were already browsing for their dream furniture.

A brand-new house also calls for art and décor. Enter the many galleries and boutiques filling downtown store fronts through the region.

“What impact does the second home market have on Main Street? Major,” said John Keith, owner of Twigs and Leaves gallery in downtown Waynesville.

Many second-home owners make a hobby out of decorating their new mountain abodes, and Twigs and Leaves had the sales to prove it. But as second-home construction slowed over the past three years, so did the purchase of artwork, Keith said.

While Keith has no doubt the second-home market will return — few places can beat WNC as a destination for retiring boomers — some galleries have been unable to wait out the downturn. Just last month, Echo Gallery in the upscale Biltmore Village closed down.

No one knows the importance of the second-home economy more than Danny Wingate, the vice president of Haywood Builders in Waynesville.

Haywood Builders nearly tripled its sales over the first half of the decade, peaking at $30 million in sales in 2006. The robust growth was fueled almost entirely by the second-home market, Wingate said.

“Our business was made up primarily of high-end second homes,” Wingate said.

The large number of gated communities popping up in Jackson County spurred Haywood Builders to open a Design Center in downtown Sylva, where people building homes could pick interior features from kitchen cabinets to bathroom lighting.

“It was a platform for us to access the Jackson County market, particularly for cabinetry,” Wingate said. It was a savvy move: Wingate recalled one homeowner who spent $140,000 on cabinets alone.

But that has all changed now.

“We are off substantially,” Wingate said of sales today compared to that boom period.

Last year, sales had dropped to $12 million, a precipitous decline from the peak of $30 million in 2006.

Wingate has a bird’s eye view of the construction industry, with builders constantly funneling through his store, where both prices and customer service beat out his big-box competitors. Contractors who were once among his top 10 biggest clients are now struggling to find work.

“Even our big boys are out of work,” Wingate said.

 

Time for reflection

The slump in second home growth isn’t all bad, according to Ken Brown, Chairman of the Tuckasegee Community Alliance in Jackson County.

Brown questioned whether the growth rates of the past decade are sustainable. Jackson County saw the largest population growth of any county in WNC among year-round residents, as well the biggest increase in home construction, much of it in the second home market, according to the census.

“It is hard to gauge what kind of an impact that had when you have that many folks building second homes,” Brown said. “It is kind of unprecedented in my time.”

The economic downturn has been like a pressure relief valve on a boiler.

“I think we need to assess just what kind of development we want,” Brown said. “You wonder if that trend could happen again if the economy does pick up. It would put a tremendous amount of pressure on the county.”

Now is not the time for counties to let down their guard on mountainside development or roll back ordinances regulating slope construction, he said. Jackson County passed some of the region’s most progressive and restrictive development regulations four years ago — largely in response to the unparalleled building boom. But that could change given a slate of new commissioners elected last fall.

“We felt like they may try to weaken or water down the ordinances,” Brown said.

So Brown and like-minded citizens in Jackson County have formed a grassroots task force to keep an eye on any moves by the newly elected board of commissioners to undo construction regulations, Brown said.

Brent Martin, who lives in Macon County and works for The Wilderness Society in Sylva, said the face of the mountains could change dramatically if the second-home dynamic continues on its current trajectory.

“It will be very interesting to see what this place turns into in another 30 or 40 years,” Martin said.

“I don’t know how we would handle it. The current downturn is allowing us to catch our breath and step back and figure out how to address the next wave of it — because it is certainly coming.”

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