Displaying items by tag: foreclosure

jacksonA nonprofit nature center ensnared in a foreclosure saga at Balsam Mountain Preserve is one step closer to being evicted.

fr balsampreserveHomeowners in the high-end Balsam Mountain Preserve development are trying to strike a deal with an investment lender from New York to stop the foreclosure of their community nature center.

When Haywood County gets stiffed on property taxes, it carries a big stick of last resort: the foreclosure.

But since the real estate bust, it’s not been as handy as it once was.

With the bottomed-out real estate market still stagnant, some property owners are having trouble seeing the point of paying property taxes.

fr jaxforeclosuresDelinquent property tax payers beware — Jackson County is coming for you.

For more than a year, county tax collectors, with the help of contracted private attorneys, have been aggressively targeting property owners who owe substantial back taxes — and they are wielding foreclosure as a tool to force payment.

Fallout from the real estate bubble in Western North Carolina has landed Macon Bank on the watch list of the Federal Deposit Insurance Corporation, a federal banking oversight arm.

Macon Bank has been operating under the scrutiny of the FDIC since March. The oversight agency has laid out a series of benchmarks the bank must meet, from strict performance targets to heightened involvement by the bank’s board of directors.

Regular coffee connoisseurs in Cherokee may have noticed a slight change in their popular downtown coffeehouse.

The Sequoyah Fund, an economic development nonprofit that makes small business loans, is now running what was formerly Tribal Grounds under the name Cherokee Coffee Shop.

Tribal Grounds was foreclosed on after former owner Natalie Smith neglected to pay the rent for the business. The Sequoyah Fund, which lent Smith money for the lease and start-up costs, took over the shop and decided to keep it open during the foreclosure process rather than leave a vacant building in the middle of the downtown district.

“It’s in the best interest to keep the business open,” said Ray Rose, a Sequoyah Fund board member who is running the coffee shop for now. “We were also requested by the tribal business community to keep it open.”

Part of the collateral for the loan from the Fund was Smith’s business. So when Smith did not pay the rent and foreclosure documents were filed, the business came under the auspices of The Sequoyah Fund. The nonprofit then hopes to sell the business, which is currently housed in a tribally owned building.

“There are people lined up. There is significant interest,” Rose said.

The coffeehouse was closed for one week while the Fund transferred the business to its name and underwent the required inspections.

“We were able to do that in a week, which is incredible,” Rose said.

Leaders with the Sequoyah Fund declined to provide details of the loans granted to Smith.

“I think you are pushing the limit there on things that are confidential,” said Rose. Rose did say that it had been a “significant amount of time” since Smith had last made a payment toward the lease.

Michell Hicks, chief of the Eastern Band of Cherokee Indians, also abstained from divulging any particulars about the loans or any other debts owed but indicated that the amount is considerable and more than any potential buyer might want to take on.

“I am not sure if they (Sequoyah Fund) will find anyone to take on the amount of debt,” Hicks said. “They may have to accept cents on the dollar.”

A lawsuit against the tribe may also result from the foreclosure. The tribe owned the building that Smith rented for her coffeehouse.

“There have been allegations (but) nothing’s been filed at this point,” Hicks said.

Hicks said he is glad that the coffee shop will remain open, at least for now, calling it “a business that Cherokee desperately needs.”

Attempts to contact Smith were unsuccessful. However, she released a statement to WLOS two weeks ago.

“I acknowledge there have been financial difficulties with my business and I have diligently pursed resolutions to those difficulties. Unfortunately, I have not been able to meet the demands of the Business Committee and the Sequoyah Fund,” said Smith in the statement. “The (Bureau of Indian Affairs) and the Tribe have changed the locks on my business over my express objections. This situation continues to develop, and I am seeking legal assistance.”

With the exception of the coffeehouse in Harrah’s Cherokee Casino and Hotel, Tribal Grounds is the only coffee shop in the Cherokee area. The shop was recently honored with the distinction of having its coffee grounds served and sold at The Smithsonian Museum of the American Indian in Washington, D.C.

The Sequoyah Fund is a nonprofit that loans money for business ventures and provides training and other resources to companies on the Qualla Boundary and in the seven western counties. The regional loan program has used casino dollars to help provide training and technical assistance to more than 1,000 individuals and extended more than 135 loans totaling almost $4.6 million since 2001.

The shell of a vacant four-story hotel sitting partially finished on Sylva’s main drag for three years is finally going somewhere.

Developers from Greensboro bought the vacant hotel along N.C. 107 for $850,000 and are promising to pump an additional $2 million into completing the project.

The hotel was partially constructed beginning in 2008 and has widely been considered an eyesore. It was supposed to become a Clarion Inn, but the original developers TJ Investments, the father and son team Thomas and John Dowden of Cashiers, went into bankruptcy. Alpharetta Community Bank of Georgia, which foreclosed after the men failed to payoff a $5-million loan, owned the hotel. The newly formed Sylva Hotel Group recently bought the property for $850,000.

Developer Stephen Austin said he and his two partners in the project have settled on a national hotel chain to brand the 78-room hotel, which includes a convention room and space for a restaurant, but added that they aren’t ready to disclose which one.

He said the bargain-basement purchase price made the deal a good venture.

“Sylva is not an extremely deep hotel market,” he said. “We’re going to do our very best to have a hotel that is worthy of our business.”

Austin said that the men’s pre-purchase market studies indicated that Sylva hotel occupancy rates run at about 50 percent, lower than the national average of more than 60 percent. Even after figuring that higher vacancy rate into the business plan, Austin said the getting-in price made it a sound investment.

“If you are going to build a new hotel, it helps to get in at a good price,” he said. “We’ll have a total of about $3 million in the project. We’re also excited to be able to take a piece of property and produce something of value, create an asset for the community.”

Austin said he and his partners are hoping to start construction soon and open the new hotel this year.

Town Commissioner Harold Hensley, who lives near the hotel, said he is excited that it sold and is going to be finished and used.

Five years ago, the town OK’d an exemption to its building height restrictions, allowing the proposed Clarion Inn to have four stories instead of three. The developers at the time claimed they needed a 75-foot maximum height instead of just 45 feet as mandated by town regulations.

Hensley said he believed the purchase was indicative that the local economy is starting to shake off the recessionary blues.

“I don’t know much about the details, but to me, it’s excellent news that this can move forward and progress,” Hensley said.

Paige Roberson, assistant to the town manager and director of the town’s Main Street program, echoed Hensley’s optimism. She said that at least two other vacant stores in town have seen movement recently. Cope’s Superette, a downtown newsstand that closed in December, is being reopened as an antique store; the crematorium of Moody’s Funeral Home is being repurposed as a doctor’s office.

RBC Bank is looking to offload the building that once housed O’Malley’s On Main Pub and Grill in Waynesville from its list of assets.

A ‘for-sale’ sign has been posted in the window of the vacant building following a bank foreclosure last fall. The once-popular downtown bar had changed management at least four times in six years, leading to a slow but steady decline in business and opening the door for new competition in Waynesville’s bar scene to gain a toehold. O’Malley’s was ultimately forced to close after the building owner failed to make mortgage payments and fell into foreclosure, ending a 20-year run.

At least five people have viewed the more than 5,000-square-foot property, said Jason Burke, a Realtor with Whitney Commercial Real Estate in Asheville.

“I’ve had a lot of interest,” Burke said. “I think it will sell soon.”

He added that two offers have already been made. The asking price is $428,000 for the three-story building, which includes an upstairs apartment and basement. The building and business together sold for $875,000 in 2005, but O’Malley’s was still a thriving business at that time.

Buffy Phillips, executive director of the Downtown Waynesville Association, said the business is a more difficult sale because a new owner must commit to purchasing the while building rather than leasing it.

“I think the financial end of it is holding it up,” Phillips said.

Phillips said she would like to see a restaurant occupy the space and believes it could be profitable. “If there is something unusual, if there is a different idea, if there is different food choices than we already have, then sure,” she said, adding that she has approached several people about the vacancy.

Waynesville already has “a couple of really good bars that have excellent food,” Phillips said about the idea of opening the business as a bar once again.

Tourism officials hope the anchor storefront doesn’t remain vacant but instead is put to work creating jobs and generating additional revenue in the county.

“O’Malley’s is a great space for a new business on Main Street,” said Cece Hipps, president of the Haywood County Chamber of Commerce, in an email. “The space will require that the business have both financial resources to purchase and time to up fit the space to their needs.”

 

Cumbersome baggage

Before the building landed in foreclosure, it was home to O’Malley’s On Main for 20 years.

During its early years, the bar filled a niche. It was the one and only bar on Main Street, a community gathering spot with a genuine Cheer’s atmosphere. A spate of management changes set off a decline in customer service, however. Meanwhile, what was once the only game in town began facing competition scene from a burgeoning downtown bar scene with establishments like Tipping Point Tavern, The Wineseller, The Sweet Onion, The Gateway Club and Frog’s Leap.

By the time Lisa Bessent leased the business in 2008, it was already on the way out.

“It had a lot of bad reputation to overcome,” Bessent said. “It was just a struggle the whole time.”

During her tenure as owner of O’Malley’s, Bessent said she never once wrote herself a paycheck but would bartend or wait tables if she needed petty cash. Everything else went back into the business, she said.

“I was not making any money at O’Malley’s,” Bessent said. “I’d never ran a business in my life.”

Bessent attributed part of the bar’s poor bottom line to competition from Hurley’s Creekside Dining & Rhum Bar, which captured customers from the nearby ski resort in Maggie Valley who previously traveled to Waynesville in search of a bar.

Regardless of the actual business, the then-building owners Eric and Jon Mostrom of Minnesota defaulted on their loan to RBC Bank, which had lent them $510,000 in late 2005. The vast majority of that loan — more than $420,000 — had still not been repaid by March of last year. So, the bank started the foreclosure process and later purchased the building at a discount on the courthouse steps.

When the bank announced that it was foreclosing on the building, Bessent decided to take what money she had left and move on rather than continue to sink everything she had into the business while waiting for the final foreclosure date.

The foreclosure was Bessent’s lifeboat off of a sinking ship. It was the “perfect out,” she said.

Despite her luck the first time around, Bessent, currently a bartender at The Gateway Club, would like to run a bar again in the future.

“I would really like the opportunity to run another business like that,” she said. “Now, I have experience under my belt.”

However, she said the name O’Malley’s is stained and brings with it cumbersome baggage.

“I don’t know if putting O’Malley’s back in there would be a good idea at all,” Bessent said.

The things she enjoyed most, Bessent said, was being able to socialize with people and escaping the regular 9-to-5 day.

“It was like my living room,” she said. “I really miss that part of it.”

Longtime Maggie Valley resident Alaska Presley has seen it all when it comes to Ghost Town in the Sky’s ups and downs.

Presley, now 88, and her late husband Hugh met R.B. Coburn, founder of Ghost Town, more than 50 years ago when he walked into a hotel that the couple owned in Maggie Valley and told them about his plans. It was the beginning of Presley’s connection to and love for the amusement park, which has spanned nearly two-thirds of her life.

Now, Presley is putting her own personal wealth on the line to rescue the shuttered theme park, and hopefully bring back the missing lynchpin in the Maggie tourism trade.

SEE ALSO: Resurrecting a ghost town

Presley knows first hand how important Ghost Town was historically in driving tourist traffic in Maggie. Presley, along with her family, has owned and sold a number of Maggie businesses throughout the years, including Mountain Valley Lodge, Holiday Motel and a trout fishing operation.

Ghost Town enjoyed decades of prosperity after R.B. Colburn conceived of the idea more than half a century ago. As a result, the town of Maggie Valley grew up around it, a string of mom-and-pop motels, diners and shops catering to the 150,000 tourists that once streamed into Maggie to visit the park.

However, the park began a long and steady decline in the 1990s. It began to show its age around the edges and was not well-maintained. The attractions grew dated, yet Coburn failed to add new amenities to cater to the changing tastes of modern tourists.

Ghost Town’s eventual closure in 2002 dealt a major blow to Maggie Valley’s economy, which continued to decline.

When a group of investors appeared and reopened the park four years later, they were seen as saviors. Business owners and leaders were willingly to help in anyway that they could as long as it meant that Ghost Town, once a economic boon for the town, would return for good. Businesses provided supplies on credit, from electricians and plumbers making repairs to hard goods purchased from oil companies to building supply stores — all under the assumption Ghost Town was a good cause.  Meanwhile, Maggie residents, including Presley, loaned money to the new owners in exchange for shares in the company.

However, the park fell into debt and filed for Chapter 11 bankruptcy in 2009. The park opened and closed several times as the owners struggled to get out of debt. But in the end, the park left a trail of $2.5 million in unpaid debt to small businesses and hundreds of thousands lost by helpful investors.

BB&T — which was owed $10 million by the new owners for the park’s purchase and later renovations  — filed for foreclosure. Eighteen months later, the foreclosure was finalized, and Alaska Presley placed her bid to buy Ghost Town.

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The Naturalist's Corner

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