Ghost Town makes opening deadline; roller coaster still not working

Ghost Town in the Sky drew around 2,500 people over Memorial Day weekend, despite the daunting challenges of getting the theme park up and running while grappling with Chapter 11 bankruptcy.

All eyes had been on the park to see if it would open for the season on May 22 as owners predicted, and if so, how many visitors it would rake in.

The Old West theme park opened to mixed reviews from visitors. Those interviewed with young children were delighted by the gunfights playing out in the mock western town and pleased by the line-up of rides, many of which are well suited to young children.

“It was great. We love it,” said Melinda Turner who brought her 9-year-old son and his friend to the park from Cumberland Gap, Tenn. “We love the gun shows especially.”

Families with older children and single couples said they were disappointed by the limited ride offerings, however. The park’s two main thrill rides — a roller coaster and a drop tower — weren’t working for opening weekend. Both hit glitches when being inspected the N.C. Elevator and Amusement Device Bureau in the run-up to opening day.

“We thought it was cool, but if there are going to be rides down, they should give us a discount,” said Jennifer Conley from Ohio, who was visiting without children. “We thought there would be a little more to do up there.”

Conley and her partner heard about the park on a whim, while eating lunch at Sagebrush in Waynesville, and decided to check it out. She said she probably wouldn’t come back.

“Of course, everyone wants the roller coaster to be open,” said Dorene Pauley, owner of Travelowe’s motel. “A lot stems on that roller coaster. They need to get it open.”

The park is now entering its third year without the roller coaster, which has undergone an extensive rehabilitation including brand-new train cars. Park owners say the key ride will be open soon.

Pauley said calls have been rolling in to their motel all week from visitors with questions about the park, most wanting to know if the roller coaster is open yet. Once it does, visitation will take off, attracting roller coaster enthusiasts from all over the country, said Pauley’s husband, Scott.

The Pauleys said tourism in Maggie depends on Ghost Town. When Ghost Town reopened under new ownership in 2007 after a five-year hiatus, it brought a 30 percent increase in business to their hotel, especially among families. Visitors love Ghost Town, they said, witnessed by the children donning cowboy hats, vests and gun belts while re-enacting gunfights in the motel parking lot after visiting the park during the day.

Whether the Old West theme of Ghost Town resonates with today’s youth has been questioned by critics of the park, but that wasn’t the case for Seth Rogers, 9, visiting from Tennessee. Rogers said he has watched Westerns and loved the gunfights, but admitted the chairlift clinging to the side of the mountain was his favorite part of the trip.

Rhonda Chism, who was on an annual vacation in Maggie with her kids and grandkids from south Georgia over Memorial Day, came back to Ghost Town for the second year in a row only to find the coaster still wasn’t working.

“We were disappointed they didn’t have everything going,” Chism said.

Chism said the gun fights and musical performances were very good, however, a theme echoed by several visitors. Several visitors also commented on how well they were treated by the friendly staff.

“Everyone was really, really, really nice, very accommodating,” said Tina Justus, who was visiting with her toddler and pre-schooler from Washington, D.C. The family was staying in Asheville, but ventured to Maggie for the day after Justus found Ghost Town on-line when hunting for kid-friendly attractions in the area.

“It was good for our age kids, but if they were much older they would have been disappointed,” Justus said.

Some visitors opted not to buy a ticket after learning the coaster wasn’t open, including Judy and Keith Parker of Greenville, S.C. The Parkers have a second-home in Maggie and opted to come back another day “once everything is working.”

“We are kind of holding off until then,” Judy said.

The cost of the ticket, with or without a functioning roller coaster, gave pause to one family visiting from Atlanta.

“It’s kind of high,” 13-year-old Nick Farmer said as his family stood in the parking lot discussing whether to go up. The family, who was staying in Cherokee for the week, picked up a brochure and said they might return later in the week.

“We are kind of limited on funds,” said Nick’s mom, Christi Farmer. “It will depend on what else we find that is comparable.”

The park operated at a loss last year, falling behind on its $9.5 million mortgage and racking up a backlog of $2.5 million in unpaid bills. The new owners inherited a host of problems lurking below the surface at the aging park, tapping their financial resources. The recession made loans impossible to get and put a dent in visitation, forcing the park to seeking bankruptcy protection while reorganizing.

The park will be submitting a business plan to the bankruptcy court this summer showing how it plans to get back in the black.

The park hopes to have the roller coaster and drop tower open by this coming weekend, pending the outcome of a second round of inspections this week.

The park had waited until the last minute to call for an inspection by the state. Inspectors were at the park all last week certifying rides up until opening day, including the chairlift that carries visitors to the mountain-top amusement park. The park ramped up its staff just days before the park was slated to open, with some workers reporting for work for the first time just two days before opening day.

The park was seeking a $200,000 loan from the town of Maggie Valley to help cover opening costs, but did not garner enough support among town leaders to pass.

The business community has rallied to help Ghost Town, with several business owners putting up money as investors. Others have offered in-kind services.

Maggie Valley Restaurant, Legends Sports Grill, Smackers Sports Grill and Joey’s Pancake House provided food for the employees over the week leading up to the park opening.

Free landscaping work was provided by Sheppard Landscaping Services and Caldwell Trucking and Excavating. Maggie Valley Excavating made parking lot repairs, filled potholes and cleaned streets for free. Brad Kuykendall provided gravel for roads in the theme town in exchange for a stack of tickets that Kuykendall will donate to the Broyhill Children’s Home.

“We are amazed how the town is really coming together and embracing Ghost Town’s continuing efforts and commitment to tourism and working with us to grow Maggie Valley into a southeast family vacation destination,” said Steve Shiver, President and CEO of Ghost Town. “With their support, we will be able to make it happen.”

Ghost Town withdraws loan request

By Becky Johnson & Julia Merchant

A surprising turn of events caused the Maggie Valley town board to call off its vote on whether to loan the struggling Ghost Town in the Sky amusement park $200,000.

Moments before aldermen were to cast their votes at a special called meeting Monday (May 18) — and after it became apparent the request was going to be turned down — Ghost Town President Steve Shiver stood up and told the board he didn’t need the town’s money. Shiver said a private business owner in the room, who did not want to be named, had stepped up with an offer of financial aid to help get the park open.

The board then rescinded its motion to vote on the matter.

Prior to Shiver’s announcement, the board had held an hour-long public comment session and was prepared to vote. After the public comment session, each board member stated their position.

Mayor Roger McElroy said he supported loaning the park the money. Alderman Colin Edwards in a last-minute decision asked to be recused from the vote. Alderwoman Saralyn Price said she was not willing to risk taxpayer money to provide the loan, a stance that aldermen Mark DeMeola and Phil Aldridge agreed with.

It became obvious that the loan would not be approved as the majority of the board members stated their positions against it.

Shiver would not speak to The Smoky Mountain News after the meeting. According to previous statements to this newspaper and other media, Ghost Town is still scheduled to open Friday, May 22, just in time for the Memorial Day weekend.

 

Public weighs in

The question of whether to loan Ghost Town $200,000 in taxpayer money proved to be a heated issue for residents and business owners in the town.

Two packed public hearings and dozens of written comments submitted to the town preceded the would-be vote.

Those who were against the loan fear Ghost Town will go under and the taxpayers will lose what they put in.

“It is throwing good money after bad,” said Roger Ferguson, who owns a mobile home park in Maggie Valley. “They owe everybody in the county. How do they expect to pay back Maggie Valley?”

Those in favor of the loan claim that Maggie Valley’s tourism economy hinges on Ghost Town’s success.

“Ghost Town has marketed Maggie Valley for years upon years,” said Joanne Martin, a local restaurant owner. “If we lose Ghost Town, what is Maggie Valley’s brand?”

The controversy has pitted the town’s business operators in the tourism trade against average residents, according to those on both sides.

“Please remember your obligation is not just to the businesses in Maggie, but also to its residents,” town resident Candace Way implored to aldermen Monday night.

Business owner Brenda O’Keefe said the “we” and “them” way of thinking isn’t new to Maggie Valley.

“I hope this will not happen over (the loan),” O’Keefe said. “I don’t want it to be the business people versus the local people.”

Shiver had said the amusement park would open its gates for the season regardless of how the town voted.

“We aren’t here to fold up our tent and walk out if we don’t get a loan from Maggie Valley,” Shiver told the town aldermen, acknowledging their difficult position. “We are committed, and we are not going anywhere.”

While Ghost Town billed its request as a loan, several speakers at the public hearing expressed reservations about the park’s ability to repay it.

“This it is a risky move and we shouldn’t be involved in this,” said Jim Casey, a town resident and voter.

Ron DeSimone, who lives in Brannon Forest, questioned the town’s ability to thoroughly evaluate Ghost Town’s business plan and finances to know whether the loan would have been on solid footing.

The town asked Shiver more than once to provide a business plan showing how the loan could be repaid. But the town was told such a business plan isn’t ready yet, Maggie Valley Town Manager Tim Barth said. Ghost Town has to file a reorganization plan with the bankruptcy court later this summer, but until then, Shiver said the park won’t share it, Barth said.

The information Ghost Town has provided are one-page profit-and-loss summaries from 2007 and 2008.

“We asked for detailed information on revenues and expenditures, and that’s what they sent us,” said Barth. “They haven’t really volunteered anything. We had to ask for what we have received.”

Several speakers at the public comment session said the town should not be in the banking business, especially since Ghost Town has been turned down for a loan from financial institutions.

“Why should a local government lend money to a company that has filed banckruptcy?” asked Phyllis McClure, a property owner in Maggie Valley. “Elected and appointed officials are entrusted to be good stewards of public funds. Those funds should be handled more carefully than our personal funds. They are not ours to give away.”

“Your plan to invest tax money in a high-risk venture that most normal banks won’t touch seems to be a little iffy to me,” said resident Jack Ryan.

 

Tourism driver

Shiver said it is not uncommon for towns and counties to support economic development, whether it is through a revolving loan fund or outright grants to lure industry. In Maggie Valley, where tourism reigns, Ghost Town is proper investment for town tax dollars, he said.

“There is no denying that tourism and vacation home sales are driving your economy,” Shiver said. “There are many hoteliers in the audience and lodging partners that are here that truly depend on that.”

Maggie has a history of investing in its tourism economy, Shiver said, pointing out the town’s purchase in 2002 of the festival grounds. The town has spent more than $500,000 on the purchase, adding amenities and maintenance over the years.

Business owners say Maggie Valley’s tourism economy will wither up without Ghost Town.

“We gotta have it,” said Becky Ramey, owner of Smackers restaurant. “We’ll have a Ghost Town either way — either Ghost Town will open up, or if it doesn’t, Maggie Valley will be a Ghost Town.”

Dave Blankenship, owner of Alamo Motel and Cottages, said his business went up 30 percent in 2007 when Ghost Town reopened after a five-year hiatus.

“If Ghost Town closes, we would risk losing a lot more than ($200,000) for a long time to come,” said Tammy White, owner of the Clarkton Motel. White pointed out that the theme park draws in 130,000 visitors a year who then stay in the hotels and motels in the area. The local lodging facilities would have a hard time pulling in those numbers on their own.

 

Not on my dime

If Ghost Town is so important to the businesses in the Valley, let them put up the money, some speakers suggested.

“Maybe these businesses could form an alliance and lend the money to Ghost Town,” McClure said. McClure said residential property owners won’t see a direct benefit, yet will shoulder an increased tax burden if the loan isn’t paid back.

Dave Blankenship at the Alamo Motel argued that the money split among the town’s taxpayers doesn’t amount to much. The town has 1,600 individual taxpayers on its rolls. The loan is equivalent to just $125 a person.

“That ain’t nothing. You spend that going out to a good dinner somewhere,” Blankenship said.

Speakers in the “no” camp said the town would be better served to spend its economic development dollars elsewhere.

“If the town wants to increase the climate for business, there are certainly other things you can do that would be much more effective and less risky. I think this is very risky,” said DeSimone.

Roger Ferguson agreed the money could be put to a better use.

“If you have $200,000, put it in a trust fund for the kids of the Valley so they can go to college and don’t have to scratch and claw like a lot of us do,” Ferguson said. “Set up a scholarship fund so those who have the desire can get beyond what we have here.”

 

Support from within

Employees of Ghost Town joined business owners in speaking up for the loan.

“This is how I feed my family. I think we deserve a chance to prove ourselves,” said Michael Howard, the maintenance manager at the theme park. “You won’t find a group of harder working people in the county. I work my heart out at it every week.”

Howard said the park is on the right road and can pull through.

“We’ve gone through lows and we’ve gone through highs,” said Howard. “We are making strides in any and every way we can to support our community.”

Randy Bryant, an employee of Ghost Town, said he believes in Ghost Town so much he put $250,000 into the park since it filed bankruptcy.

“I took my hard-earned money, my retirement money, and invested it in Ghost Town because I love Maggie Valley,” Bryant said. “I put my money into that park to get it open this year so we can try to get everybody that’s owed that money you are talking about paid back. Without it being open, there is no way those people can ever get paid back.”

A gunfighter at Ghost Town who goes by Preacher said the theme park is a labor of love for many employees.

“There is a great number of us up there who aren’t on the clock,” Preacher said of the push to get the park ready for opening day.

Many local people have invested personal money in Ghost Town. Among them are Austin Pendley of Maggie Mountaineer Crafts, Brenda O’Keefe of Joey’s Pancake House, and Alaska Pressley, according to Shiver.

Verlin Edwards, a speaker in the “no” camp, said the investors should pony up the money themselves.

“I know they can dig a little deeper and come up with their $200,000,” Edwards said.

Shiver has said previously, however, that the investors are tapped out. They have already poured their savings and assets into the park to get it this far.

In the first two weeks after filing bankruptcy, Shiver paid $23,000 to a company he owns, Global Management Services, according to bankruptcy filings. That’s in addition to a salary of $1,600 that went straight to Shiver.

Ghost Town has to file quarterly financial reports with the bankruptcy court. The first quarter filing only contained financial transactions for a two-week period from when the company filed for bankruptcy in mid-March to the end of that month.

 

Going through the process

The town held two public hearings on the Ghost Town loan, although not by design. The town initially announced it would hold a public hearing on Thursday, May 14. The town had to run a legal notice in the newspaper at least two weeks before a public hearing, per state law.

There was a glitch in the notice being printed in The Mountaineer, forcing the town to push back the date of the “official” public hearing until Monday, May 18. Since May 14 had already been widely circulated among town residents as the date of the hearing, however, the town kept it on the calendar as well — thus the two public hearings.

The first public hearing drew a crowd of about 75, while the second public hearing drew a slightly smaller crowd.

 

Why the need for a loan?

Ghost Town filed for Chapter 11 bankruptcy in mid-March. It has a mortgage of $9.5 million and outstanding bills of $2.5 million. Many locals are among the 200 companies owed money, including electricians, building supply stores, marketing outlets and suppliers of T-shirts and souvenirs.

The iconic park is deeply engrained in the collective memory of Haywood County, both as an economic driver since its debut in the 1960s and a family past-time holding fond memories through the generations.

But when new owners bought the aging park in 2007 from its long-time owner and founder, they inherited a crumbling and jerry-rigged infrastructure. It required far more of a capital investment than they bargained for. Coupled with the economic downturn and credit crunch, the park was forced into bankruptcy, according to Ghost Town CEO Steve Shiver.

 

Maggie flush with extra cash?

Ghost Town CEO Steve Shiver argued that town has the money readily available for a loan, pointing to its substantial fund balance. Shiver said the town has plenty to spare without affecting residents’ property tax rate.

The fund balance, equivalent to the town’s savings account, is 51 percent of its general budget. Maggie Valley’s fund balance is actually below the state average of 64 percent for towns of its size.

“I am not saying our fund balance is in bad shape, but it is not where the average town is at,” Town Manager Tim Barth said. “Over time, I think we need to work toward getting our fund balance up so we are much closer to the average.”

Shiver said Maggie has far more than the 8 percent fund balance required of local governments by the state. But Barth explained that the 8 percent minimum fund balance is geared toward larger governments.

“If you have a $100 million budget, 8 percent of that is $8 million,” Barth said. But for Maggie, with a general budget of $2.5 million, reserves of 8 percent would be a mere $200,000.

The fund balance is the town’s fall back for emergencies, should a storm wreak havoc, a road collapse or sewer line explode. Any government needs a certain amount of cash on hand to cover such contingencies. The smaller the town, the larger those savings will appear as a percentage of its overall budget.

The state average for towns with a population between 500 and 1,000 is a fund balance of 86 percent, and 112 percent for towns under 500.

“There’s a reason that it is that way,” Barth said. “The Local Government Commission would not wait until we got to 8 percent until they sent letter and made phone calls and said, ‘What are you doing?’”

Ghost Town owes Maggie Valley $30,000 in back property taxes.

Ghost Town seeks ride inspections

A team of state inspectors will arrive at Ghost Town in the Sky amusement park on Monday, May 18, in hopes of getting the rides and chairlift certified for the anticipated opening day of May 22.

Ghost Town barely made the cut-off for requesting an inspection in time to open, and will leave the state inspectors pushed to get it done time.

“To be honest it is going to be a really tough week for us,” said Jonathan Brooks, chief of the N.C. Elevator & Amusement Device Bureau.

Brooks will dedicate a team of five or six inspectors to Ghost Town for the week. The chairlift will be most time consuming, with inspectors physically assessing all 105 chairs, the structural integrity of the support towers and the mechanical functions that run the chair lift. They will also witness the evacuation procedure. The 10 rides on top of the mountain will take less time.

“Barring that we don’t have any unforeseen issues, I feel fairly comfortable with our guys on those rides for a week, the chances are pretty good,” Brooks said of getting the inspections done in time.

Ghost Town has also requested a ride inspection of the roller coaster, which has been out of operation while being rebuilt. The coaster inspection is far more involved.

“It will be a tough, tough haul to get the coaster done. I professionally don’t see it happening by opening day,” Brooks said. It could be done by the following weekend, however, if all goes well and nothing needs fixing or altering.

Some steps in the chairlift and coaster inspection have already been checked off. The chairlift cable has already been certified, as well as aspects of the roller coaster car, including the lap restraint system. The train car is still at the manufacturers in Tennessee, where testing was being conducted, but should arrive at the park by week’s end, Brooks said. Some portions of the track inspection have been completed by a private ride engineer and is supposed to be in the mail to Brooks.

Maggie Valley aldermen will hold a public hearing at 5:30 p.m. on Thursday, May 14, on whether to loan Ghost Town $200,000. The amusement park is currently in Chapter 11 bankruptcy.

Ghost Town files financial statements with bankruptcy court

Ghost Town in the Sky owners paid themselves nearly $25,000 over two weeks in March despite the company being in bankruptcy.

The Maggie Valley amusement park filed for Chapter 11 bankruptcy in mid-March with the aim of reorganizing, opening the park and gradually paying off debts. Ghost Town has a $2.5 million trail of unpaid bills owed to more than 200 companies. Dozens of local businesses are among those owed money. The company also owes around $9.5 million in mortgages.

As part of the bankruptcy process, Ghost Town is required to file a detailed picture of their finances with the bankruptcy court every quarter, showing all revenue and expenses. The filing for the first quarter of this year only contained two weeks, from when Ghost Town filed bankruptcy in mid-March to the end of that same month.

The filings show nearly $25,000 was paid to Ghost Town CEO Steve Shiver and a company that Shiver is president of, Global Management Services. Shiver personally got $1,657 as a salary, while $23,000 was paid to his company. Shiver’s company is billed as a professional services company and dates to Shiver’s former life in the Miami area.

While Ghost Town had launched a campaign to sell advance tickets to the theme park, sales netted only $1,659 for the reporting period, according to the filing.

So far a hunt for a cash infusion to help the park get on its feet has not been successful. Ghost Town has been unable to get traditional bank loans, or strike a deal with last-resort lenders. Appeals to the county economic development and tourism entities have not been fruitful either.

Ghost Town has asked the town of Maggie Valley to provide a loan of $200,000. Town leaders are holding a public hearing on the issue at 5:30 p.m. Thursday, May 14. The town began accepting written comments on the issue via email last week to This email address is being protected from spambots. You need JavaScript enabled to view it..

Shiver has rented out the Maggie Valley pavilion from 5:30 to 7:30 p.m. on Tuesday, May 12, for a public event presumably intended to rally support for the amusement park’s request. He is also going door to door soliciting public support.Shiver did not return calls seeking comment for this article.

Ghost Town and alderman at loggerheads

Ghost Town CEO Steve Shiver threatened to sue Maggie Valley Alderman Colin Edwards during a town meeting this week.

Edwards attempted to speak out against Shiver’s request for a $200,000 loan from the town. But Shiver objected and refused to let Edwards finish speaking.

“I raise my objections,” Shiver said, cutting Edwards off. “Gentlemen, lady, I mean no disrespect but there are serious issues of conflict we have raised through our attorneys. I think in the next few weeks you will see some legal action.”

Edwards is part owner of Caroline-A-Contracting company, which built a retaining wall at Ghost Town. Edwards’ company filed a lien against Ghost Town after it failed to pay its full bill. Ghost Town in turn contested the claim, saying the retaining wall cracked. Edwards said the crack is due to a leaking water line in the hillside. Shiver claims it’s due to faulty work.

Shiver asked the town to bar Edwards from voting on the loan and from participating in any discussion on Ghost Town. However, while Edwards and Shiver may not get along, Edwards does not meet the litmus test for a financial conflict of interest that would bar him from voting. The only reason Edwards could be legally barred from voting is if he stands to gain financially from his vote, which he doesn’t, according to state statutes and Town Attorney Chuck Dickson.

Shiver claims that Edwards cannot render an impartial vote on anything pertaining to Ghost Town, however, and if he does so, Ghost Town will be denied its right to equal protection under the Fourteenth Amendment of the Constitution.

Edwards said he intends to vote, however, and will vote “no” to the loan.

“They are just bullying, and I don’t bully real good at all,” Edwards said. “I am an elected official for Maggie Valley. I will vote and they can charge me if they want.”

Before Shiver cut Edwards off at the meeting, Edwards questioned the validity of Shiver’s claims that the park’s roller coaster was on track to pass inspections and open for the season. Edwards said he called the state’s chief amusement ride inspector before the meeting and learned that Ghost Town has not yet requested an official inspection.

Shiver said he would “not tolerate nor allow phone calls” by Edwards to the state amusement ride division. Shiver suggested Edwards was trying to sabotage Ghost Town by calling the state.

The Smoky Mountain News had called the same state ride inspector earlier in the day and was given the same information as Edwards — that Ghost Town has not yet made a formal request for ride inspections, for either the chairlift or the roller coaster. The information is public record and can be requested by anyone.

That said, there have been lots of verbal communication, emails and progress updates on the rides, according to Jonathan Brooks, Elevator & Amusement Device Bureau Chief with the state.

“I know they are working very diligently to put something together for us to come up and start inspecting. I know they are making headway,” Brooks said. There is still a big checklist for the roller coaster before it’s ready, however, Brooks said.

Maggie to hold public hearing on Ghost Town loan

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.

Ghost Town didn’t withhold sales tax

Among Ghost Town’s debts is $136,000 in back sales taxes owed to the state of North Carolina. It was previously reported that Ghost Town failed to remit sales tax to the state collected as part of ticket sales. Ghost Town nor the N.C. Department of Revenue would elaborate on the source of the back sales tax.

However, it was learned in bankruptcy court last week that the sales tax owed is actually from the purchase of large piece of equipment by Ghost Town. Ghost Town is at odds with the state over whether it actually owes the tax, and thus is why it hasn’t paid up. Ghost Town claims the tax should be paid by the company it bought the equipment from, not by Ghost Town.

Ghost Town appears in bankruptcy court

Ghost Town in the Sky revealed last week that it was driven into bankruptcy by the threat of foreclosure from BB&T, which holds outstanding debt on the property to the tune of $9.5 million.

In a bankruptcy hearing in federal court April 15, CEO Steve Shiver said the theme park has filed for Chapter 11 bankruptcy with the intention of returning to solvency. To do so, however, the Maggie Valley theme park must pull off a summer opening, Shiver said.

If the park is unable to open, more than 200 small businesses and companies would likely be left holding the bag on around $2.5 million in unpaid bills racked up by Ghost Town, including electricians, plumbers, building supply stores, souvenir and soda vendors, newspapers and billboard companies.

“I cannot emphasize enough the need to reopen the park to have the cash flow to pay everybody back,” Shiver told the handful of creditors who showed up for the meeting.

Shiver asserted the park was aiming for a May 22 opening, but offered few specifics on how the cash-strapped theme park would be able to ramp up in time.

If reorganization doesn’t work and BB&T forecloses on the park, it’s doubtful the sale of the Ghost Town would net enough to pay back the long list of businesses owed money, which stand in line behind BB&T’s $9.5 million.

“If BB&T forecloses, nobody gets paid except BB&T,” said David Gray, an Asheville bankruptcy attorney representing Ghost Town.

Shiver said he and the other owners of the park have invested personal money into the park to the tune of $5 million, which they stand to lose as well if Ghost Town doesn’t pull through. The same goes for numerous private investors who have equity shares in the company, Shiver said.

Shiver said financial troubles went back to the large capital investment required after buying the park in late 2006. The park, created in the 1960s, had been sitting dormant for five years. It had to overhaul the dated rides, prop up rundown buildings and bring infrastructure like electrical wiring and water lines up to code.

Beyond these short-term needs, the park needed fresh attractions that would appeal to today’s tourist audience, Shiver said.

To do all this — plus be able to pay its mounting stack of bills — Ghost Town was seeking an $18 million loan last year, Shiver said. When the credit crunch hit last fall, the lender pulled out at the last minute, he said. That left park owners scrambling for another source of money. Shiver said they chased a high-interest loan of last resort known as a “mezzanine loan,” but pulled out when it seemed too risky.

“At the eleventh hour, they wanted an additional payment to be sent overseas with no guarantee and we said ‘No guys, we don’t trust you,’” Shiver said.

When the last-ditch loan fell through, the park was forced to file for reorganization bankruptcy, Shiver said.

 

Under oath

When creditors had a chance to ask questions of Shiver under oath, Mike Plemmons of Plemmons Plumbing and Heating in Waynesville, questioned a line of credit the park owners set up to funnel up to $500,000 into the operation.

“Will any of that be used to pay the creditors?” asked Plemmons, who is owed nearly $8,000.

Gray explained the line of credit will bypass those owed money and be used to get the park up and running.

“The whole concept is to save the debtor to pay the creditor,” Gray said. “If it operates, it generates money, it pays.”

But an attorney representing the interests of Mountain Energy of Waynesville, which is owed $14,600, questioned whether the park could operate at a profit even if it gets open. When the new owners reopened the park in 2007, it brought in $5.5 million. That year, the park had a positive cash flow, Shiver said. In 2008, however, revenue dropped to $4.4 million, and the park lost money that year, Shiver said.

Mountain Energy’s attorney asked Shiver what the break-even point was. Shiver said that information would be forthcoming when Ghost Town files its reorganization plan, a detailed business plan required by the bankruptcy court mapping out the park’s road to recovery.

“We’ll detail that fully in the plan,” Shiver said.

BB&T holds two notes on the property: a $6.5 million mortgage stemming from the original purchase of the property and a $3 million loan that funded upgrades. The initial mortgage is backed by a USDA Rural Development loan guarantee. If Ghost Town defaults, the guarantee would kick in to cover 70 percent of BB&T’s $6.5 million mortgage, courtesy of federal taxpayers.

Arnold Skelton, president of tourism brochure distributor Mountain Information Center who is owed $2,500, asked Shiver why the loan guarantee didn’t kick in already.

Gray explained that the guarantee would be triggered only as a last resort.

“BB&T has to proceed with legal collection outlets. BB&T has to attempt to collect and come up with a deficiency before the guarantee kicks in,” Gray said.

Shiver thanked the creditors for their cooperation as Ghost Town tries to get back on its feet.

“Thank you all for being there,” Shiver said.

Ghost Town partners establish own credit line

Owners of Ghost Town in the Sky hope to funnel up to $500,000 into the amusement park in order to get it open by summer.

A recently created limited liability corporation called Resurrection Partners has emerged as a vehicle to provide the beleaguered theme park much needed cash. The line of credit would be provided at least in part by Ghost Town partners themselves, according to Ghost Town CEO Steve Shiver. By funneling the cash through a separate entity, the investors have a shot at recouping their money should the park go under.

The park needs “emergency and immediate approval of financing,” without which “the park will not be able to open and operate for the 2009 year,” according to bankruptcy filings. The line of credit would provide money for payroll and “expenses commensurate with the opening preparations.”

Resurrection Partners, LLC, was created in early March. Lynn Sylvester, a Waynesville accountant who serves as Ghost Town’s CPA, is listed as the registered agent for Resurrection. Sylvester is also an equity member in Ghost Town. He is also listed among the creditors in the bankruptcy filing, with a claim of $74,000 for accounting services and fees.

The other players in Resurrection Partners are not known, but Shiver has previously said the owners of the park will be putting up money to get the park reopened.

“You should all be thanking us because we are putting our money where our mouth is to make something work that benefits all of Haywood County,” Shiver said.

However, those putting up money through Resurrection would only do so if they could be granted super-priority status, according to the filings. That means they will be among the first in line to get paid back if the park doesn’t pull through a reorganization and is liquidated.

Resurrection is second in line behind a $6.5 million bond held by BB&T for the property’s purchase. They are ahead of more than 200 other creditors owed money by Ghost Town. They are even in front of a $3 million loan by BB&T for property upgrades.

Ghost Town owners originally asked the court to approve a $100,000 line of credit through Resurrection. After it was approved, they returned to the court and asked for it to be increased to $500,000. They claimed the initial request for $100,000 was an “error in communication,” according to bankruptcy filings, and that they had always intended for it to be $500,000.

But in a phone interview two weeks ago, Ghost Town CEO Steve Shiver said the initial request for $100,000 was a “place holder.” Shiver said they needed the bankruptcy court to approve the concept of a line of credit from Resurrection first, and would then ask for it to be increased.

The larger the line of credit gets, the further back in line the other creditors are pushed.

The bankruptcy court will track how much is actually passed to the park through the line of credit, with the ability to ask for bank statements and cashed checks. This ensures Resurrection only stands to get back the amount it puts in.

The court will also track how it is used. The court will want to see the money used to help the park remain solvent rather than salaries for the park’s owners, for example. The court would not allow Resurrection to be a vehicle for funneling money to the owners while other creditors on the list remain unpaid.

Shiver said Ghost Town plans to fight a liquidation.

“That is not in the best interest of the creditors and the Maggie Valley businesses we owe money to, our bond holder and our investors,” Shiver said.

The park has a trail of unpaid bills with more than 215 companies totaling $2.5 million. That’s on top of a $6.5 million bond to purchase the park and a $3 million loan for upgrades to the property. The park owes another $200,000 in back sales tax and property tax. The bankruptcy filing doesn’t reflect the numerous private investors who put up money over the past two years in exchange for an equity stake in the company but may never see a return.

Comments from Shiver in this article were made a week and a half ago. Shiver would not return phone calls and emails seeking comment this week. Sylvester did not return phone messages seeking comment, nor did Ghost Town’s bankruptcy attorney David Gray.

Park starts lengthy reorganization process

Despite the daunting hurdles faced by Ghost Town in the Sky to get the Maggie Valley amusement park open by summer, it could be only the beginning of a long, uphill slog to pull through bankruptcy reorganization.

Ghost Town managers say they are committed to getting the park back on its feet. If they stick to that plan, they will have to file a reorganization plan with the bankruptcy court in coming months.

Ultimately, the people Ghost Town owes money to will get to vote on the reorganization plan. With the list topping 215 companies, the vote could get interesting. The plan must be approved by the majority of creditors, and by those holding two-thirds of the total debt. The double-litmus test prevents a handful of the largest creditors from tipping the vote, and prevents the more numerous but smaller creditors from upstaging those with a bigger stake.

The bankruptcy judge has veto power over the reorganization plan, but typically defers to the vote of creditors. The judge could tweak elements of the reorganization plan if he spies something that he thinks is unfair or unrealistic. The plan, in general, will describe how the park plans to pay back creditors and over what time period.

Along with the reorganization plan, Ghost Town will submit a disclosure statement that offers an in-depth look at its finances. The disclosure statement will be the first order of business taken up the bankruptcy judge. It will provide crucial information for creditors when weighing whether the reorganization plan is realistic. For example, after making payroll and covering overhead, can Ghost Town bring in enough revenue to not only cover its costs but also slowly replay the debt it has racked up? If so, over what time period?

If Ghost Town doesn’t provide enough information in the disclosure statement for creditors to make an informed decision on the reorganization plan, the bankruptcy judge can make Ghost Town answer additional questions.

Ghost Town could choose at any time to throw in the towel on Chapter 11 and move to a Chapter 7 bankruptcy, which means the park would be sold off to the highest bidder and the money used to pay off as many of the outstanding debts as possible. But Ghost Town partners have said they are committed to turning the park around and remaining solvent.

A bankruptcy judge could analyze the situation and declare it hopeless, forcing the amusement park into Chapter 7 involuntarily, but that is highly uncommon. A bankruptcy judge typically gives a company an opportunity to turn things around.

Creditors will likely give Ghost Town’s owners the benefit of the doubt in reorganization as well. If Ghost Town goes to Chapter 7, the vast number of creditors will likely never get a dime, or at best would get pennies on the dollar of what they are owed. In a sense, the creditors have nothing to lose, so they may as well let Ghost Town owners give reorganization a shot.

“Once they are in reorganization it is really our job to work with them and give them the best opportunity to pull through reorganization,” said Roger Gardner, a ride engineer in Colorado who is owed $52,000.

There is roughly $10 million in debt that stands in line ahead of the myriad small companies owed money (see box on “Who is owed?”).

At the front of the line is about $9.5 million owed to BB&T — of that $6.5 million is for the initial mortgage and $3 million is for improvements to rides and infrastructure. Also at the top of the list is $200,000 in back taxes, and a yet-to-be-determined amount for Resurrection, LLC, a newly created entity loaning Ghost Town money (see sidebar).

If Ghost Town goes to Chapter 7 and is liquidated, it would have to net more than $10 million for any of the small businesses in line behind BB&T to see anything.

“It’s not in anybody’s interest at all. That is the last ditch,” said Gardner.

Ghost Town CEO Steve Shiver has said in the past that Ghost Town was seeking a large loan last fall in order to keep going. The loan would pay off bills, but more importantly complete a major overhaul of the park’s equipment, rides and infrastructure, as well as add new features to make the park more appealing to a 21st century audience.

The credit crunch killed the park’s shot at getting the loans, forcing it into reorganization, Shiver said. Shiver would not comment for this article, citing the sensitive nature of the proceedings.

While the case is small compared to the major Chapter 11 bankruptcies playing out on the national stage, the case is big for Western North Carolina’s bankruptcy division in terms of the 215-plus creditors with a stake in the game.

 

Who does Ghost Town owe?

The list includes more than 215 companies, many of them local businesses, like plumbers, electricians and contractors who did work on the mountain and several local building supply stores that provided a line of credit for materials. Ghost Town owes vendors that provided food for concession stands, souvenirs for the gift shops and even capguns for the gunfighters. The park also owes big bucks to ride engineers. Another category of debt is for marketing and advertising, including newspapers, TV stations, magazines and billboard companies.

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