Jackson library campaign marks success, new goals

On May 25 the Friends of the Jackson County Main Library marked the completion of their astonishing two-year fundraising drive, reaching their goal of $1.6 million to outfit the interior of the new library on Courthouse Hill in Sylva.

Jane Smith, president of the Friends group, put into perspective the effort to raise the money in the worst economy in recent memory.

“It is so amazing, because there were people at the beginning who said, ‘You can’t do this. Not around here,’” Smith said.

Kathy Proctor, chair of the Fontana Regional Library Board, accepted a $200,000 grant from the USDA’s Rural Library Fund on behalf of the Friends. The grant, which required a $1.2 million local match, pushed the fundraising drive past its $1.6 million target to a grand total of $1.726 million so far.

The Friends have raised $1.2 million for furniture, fixtures and equipment at the library and the $200,000 will be added to that total. In addition, the Friends raised $225,985 for the library’s collection and another $100,000 to offset costs association with the campaign.

The USDA grant came as the result of cooperation between the Fontana Regional Library and the federal representatives of Western North Carolina, including Rep. Heath Shuler, D-Waynesville, and Sen. Kay Hagan, D-N.C.

Freddie Harrill, Hagan’s representative at the event, praised the local fundraising committee for meeting its goals.

“Projects like these are economic drivers for small towns,” Harrill said.

Bill Hobbs, community programs director for USDA Rural Development, said he was happy to deliver the $200,000 check.

“We are tickled to death to bring this check to y’all,” Hobbs said. “We can’t wait to come back when the project is complete.”

Mary Otto Selzer, chair of the Friends’ fundraising committee, said the group would continue to raise money for collection materials at the new library.

“Not too long ago, we realized $100,000 doesn’t go very far for a collection so there are still steps to climb,” Selzer said.

Selzer took time to thank the volunteers at the Friends of Jackson Library Bookstore in Sylva, who contributed $155,000 and countless hours to the campaign.

“That’s the little engine that keeps the library offering great services,” Selzer said.

The Jackson County Public Library Complex is a $7 million building project that includes the construction of a 20,000-square-foot library and the renovation of the historic Jackson County Courthouse, which will be used as a community resource facility and cultural center for the county.

County power struggle surfaces in Finn v. Ashe trial

“Putting Mr. Finn out of business is not a duty of the Jackson County sheriff. Is that a fair statement?” asked Frank Contrivo Jr., the lawyer representing David Finn.

“That statement or thought has never crossed my mind,” said Jackson County Sheriff Jimmy Ashe.

On the witness stand on one side of the courtroom sat Sheriff Ashe, arguably the most powerful politician in Jackson County. On the other side, next to Contrivo, sat David Finn, whose company police officers at Blue Ridge Public Safety have kept order in the upscale district of the Sapphire Valley for the past 10 years.

The two men, once allies, are now locked in an unusual power struggle that has led to a civil trial now playing out in front of a jury in a federal courtroom in Bryson City.

Ashe is the homegrown, hard-working sheriff from Sylva in the midst of his second re-election campaign. Finn is a Florida transplant with a long career in private law enforcement who has built a successful business enterprise patrolling private developments in the unincorporated communities around Cashiers.

Finn sued Ashe in 2007, accusing the sheriff of using his office to scuttle the sale of Blue Ridge Public Safety to an Asheville buyer named John Hale. After Ashe’s lawyer, Patrick Flanagan, failed to convince the court to dismiss the case for lack of evidence, the civil suit landed in the courtroom of U.S. District Judge Martin Reidinger last week.

At stake in the trial are damages that stem from a series of tort claims. The sheriff could end up paying Finn a lot of money if the eight-person jury decides he misused his office to injure Finn’s business dealings. But for the people of Jackson County, the trial has broader implications.

Testimony in the case has revealed that a power struggle between Finn and a small group of influential Cashiers property owners developed into a full-scale donnybrook that to one extent or another pulled in Sheriff Ashe.

Former Jackson County Sheriff Jim Cruzan, District Attorney Mike Bonfoey, N.C. Sen. John Snow, N.C. Rep. Phil Haire, and Jackson County sheriff candidate Tim O’Brien have all been named during the testimony of witnesses called by Contrivo.

One of the key issues raised by the case is the extent to which southern Jackson County functions independently, and how Sheriff Ashe has incrementally sought to increase his influence there since succeeding Cruzan.

The question in the trial is relatively straight-forward: Did Ashe use his position as sheriff to hurt Finn’s business and eventually to scuttle the sale of Blue Ridge Public Safety? The question for the county is more complicated: How can law enforcement in Jackson County, which at this point depends on the cooperation between sheriff’s deputies and private police, function while their leaders are at war?

Where it began...

By all accounts, the relationship between Ashe and Finn was a good one back in 2002. Finn, who had purchased Blue Ridge Public Safety in 1998 and acted as its police chief since 1996, backed Ashe in his bid to take the sheriff’s office from his former boss, Jim Cruzan.

“Sheriff Ashe had called me and asked if I would support him, and I told him I would and I did,” Finn said.

Ashe won the primary against Cruzan and went on to become the Jackson County Sheriff.

For Ashe, the tension between the two men began just after the election, when Finn tried to get him to issue traffic enforcement cards to his private police officers. Ashe said he refused on advice from county attorneys, and Finn got angry.

When Contrivo asked Ashe to characterize the relationship between the two men in 2003, Ashe was reserved.

“I would say good, but there was conflict,” he said.

The relationship was good enough that when Ashe’s former boss and erstwhile opponent offered to buy out Finn in 2003, Finn called Ashe.

Finn and Ashe remember that telephone call differently.

“It was clear to me he did not want me to go through with that sale,” Finn said.

Finn said Ashe told him Cruzan was under investigation by federal authorities for the misappropriation of funds. Finn said he decided later — largely on the basis of the phone conversation — to call the deal off.

Ashe, meanwhile, said Finn called him to belittle Cruzan and scoff at the $600,000 offer.

Either way you look at it, the moment was significant in that it showed how the origin of the dispute between the two men could be traced back to their cooperation as political allies.

Cruzan had lost to Ashe in a bitter sheriff’s race and was working to get a foothold at the south end of the county by buying Finn’s business. Finn testified that he met Cruzan clandestinely on a dead-end street to sign the papers, which included a confidentiality clause and a trial period during which Finn could back out.

The fact that Finn would consult Ashe on his decision is a sign that the two men wanted to preserve the professional equilibrium they had created during the election.

Also in 2003, Ashe supplied Blue Ridge Public Safety with a glowing recommendation to the North Carolina Company Police Association, which was later cited when the security company was named best in the state during the association’s award ceremonies.

Between 2002 and 2006, Blue Ridge Public Safety grew dramatically. The business Finn bought for $150,000 in 1998 took in more than $1.2 million in gross receipts in 2006, largely due to his ability to corral the numerous property associations in that part of the county into lucrative security and law enforcement contracts.

According to Finn, his relationship with Ashe broke down over a political disagreement.

In 2006, as president of the N.C. Company Police Association, Finn was advocating for a bill in the General Assembly, The Company Police Modernization Act, that would have given private security forces like his jurisdiction on state and county roads adjacent to the properties they patrolled.

Ashe, co-chair for the legislative committee of the North Carolina Sheriffs’ Association “vigorously opposed” the measure.

In early 2007, Contrivo alleges that Ashe met with a group of Cashiers property owners who had had disagreements with Finn. According to Finn, that meeting led to a change in Ashe’s disposition.

“The first change I noticed was March 5, 2007,” Finn said.

On that day Ashe instructed his officers not to call Blue Ridge Public Safety for backup anymore, a practice that had resulted in over 1,000 collaborations over a 10-year period.

From that point, Finn’s complaint alleges, Ashe used his office and his deputies to hamstring Finn and the personnel of Blue Ridge Public Safety then later worked in conjunction with the group in Cashiers to sabotage the sale of Blue Ridge Public Safety.

Finn lined up a buyer for the company –– an Asheville man named John Hale –– in May 2007. In July, Hale rescinded the offer to pay $1.5 million for Blue Ridge Public Safety.

The lawsuit alleges specifically that Ashe’s office generated and shared arrest reports that implicated wrongdoing at Blue Ridge Public Safety and that those reports became the basis for investigations of the company that led to the scuttled sale.

“The investigations instigated by defendant James M. Ashe were based upon groundless and false accusation and were the specific reason the prospective purchasers did not perform under the contract,” the complaint alleges.

The case

There were three major flashpoints in the relationship between Ashe and Finn, according to the testimony of the two men.

The first, according to Ashe, was Finn’s demand that the sheriff issue traffic enforcement cards to his staff in return for support rendered during his election race against Cruzan. Ashe refused to sign the cards, which Cruzan had signed regularly according to Finn, and Finn was furious.

For Ashe, that moment opened the gap between the two men, and it got a whole lot wider in 2006 when the second flashpoint took place. Finn, as president of the N.C. Company Police Association, pushed the passage of legislation that would give his people limited jurisdiction on U.S. highways, like N.C. 64. As co-chair of the legislative committee for the N.C. Sheriff’s Association, Ashe and 88 other sheriffs around the state vehemently opposed the measure and it was killed.

Ashe readily admits his opposition to the bill but denies retaliating against Finn because he was president of the N.C. Company Police Association.

The third flashpoint is murkier. According to Contrivo, Ashe began looking for ways to shut Finn down. Having been approached by a group of Cashiers property owners who had complaints about Finn, Ashe, allegedly, supplied arrest reports to their lawyer, Mark Seifert, that helped to generate a number of cases against Finn. The cases were investigated by the oversight bodies that regulate private law enforcement services over a two-year period, and Finn was issued two minor cease and desist orders. None of the investigations showed that Finn had abused his power or made illegal arrests, as some of the allegations contained in the incident reports contended.

An important component of Finn’s case is the extent to which Ashe communicated with Seifert and his clients. Seifert created and represented two groups: the Committee of Sapphire Homeowners (COSH) and the Sapphire Association of Concerned Citizens Committee (SACCC). Seifert, an attorney based in Cary, N.C., has testified that he came to the cases in 2006 as a result of his friendship with Cashier’s property owners Robert Tillery of Sterling, Va., and Paul Hilliard of Lafayette, La.

As lawyer for COSH and SACCC, Seifert spent two years pursuing complaints before state oversight bodies in order “to bring proper regulatory oversight to BRPS.”

“I wanted the Attorney General to shut down Blue Ridge Public Safety,” Seifert said.

“Was that your goal?” Contrivo asked him.

“Indeed,” Seifert said.

“Did you discuss that with Sheriff Ashe?” Contrivo said.

“I did,” Seifert said.

Seifert filed seven separate complaints over a two-year period with the Police Protective Services Board, the Company Police Association, the State Bureau of Investigation and the North Carolina Alarm Systems Licensing Board.

Included in the filings were incident reports generated by the Jackson County Sheriff’s Office that included complaints against Blue Ridge Public Safety. Ashe claims he merely offered up public records and documents when they were requested, most significantly when he was served a subpoena by Robert Tillery’s attorney.

Tillery was suing Finn over a dispute about a gate security contract at Golf Course Estates, a private residential community in Sapphire Valley.

According to Contrivo, though, Ashe essentially generated the arrest reports to fuel the flames of Seifert’s complaints to the Private Protection Services Board, on which Ashe served.

Contrivo supports that claim by pointing out that Ashe’s office never released incident reports for any of the other law enforcement bodies that functioned in the county over the same period of time.

Citing Ashe’s cell phone records, Contrivo showed that Ashe and Seifert exchanged 150 phone calls that represented more than 50 hours of conversation between the two men. In addition, Contrivo has pointed out that despite two years of hard work, Seifert never managed to get Blue Ridge Public Safety in anything like serious trouble.

Just doing his job

Ashe’s attorney, Patrick Flanagan, who served as a captain in the U.S Army’s Judge Advocate General Corps, is painting a different picture of his client’s role in the struggle between Finn and the Cashiers property owners.

Having established that Ashe is a hard-working sheriff with deep roots in the community, Flanagan argued that the relationship with Seifert was basically one in which a public servant obsessed with details was hounded and cajoled by an over-aggressive lawyer with an agenda.

Flanagan has also pointed out that Ashe recused himself of any role on the PPSB that involved Finn.

During his testimony, Ashe called Seifert “annoying” and seemed exasperated by the repeated references to their cell phone conversations, many of which Ashe said were missed calls and phone messages.

Flanagan is expected to present Ashe’s defense on Tuesday afternoon (June 1), and the jury will likely reach a verdict by the end of the week.

Students take lettuce from greenhouse to cafeteria

It doesn’t get much fresher than this.

Horticulture students at Smoky Mountain High School in Sylva are helping to feed their peers by supplying the school cafeteria with lettuce.

Students are growing lettuce hydroponically in a greenhouse, where plant roots grow in a nutrient-rich water rather than soil.

“Our students are really benefitting from this program,” said Jeremy Jones, the horticulture teacher. “Not only are they learning about an important agricultural process, they’re also getting to see the results of their work as the lettuce ends up in salads in the cafeteria where they eat.”

The idea was initiated by Jackson County Schools Nutrition Director Jim Hill, who brought the idea with him from Haywood Community College. Horticulture students there do the same thing.

It took a while to perfect the growing system and experiment with varieties of leaf lettuce that would produce the most yield.

Students in the horticulture class learned how to harvest the leaves for the first time recently. By taking the outside leaves and leaving the new growth in the center, the plant will continue to produce a harvest for quite some time. Students have also had the benefit of a visit from Jackson County Farmer William Shelton, owner of Shelton Family Farms, who has been growing hydroponic bibb lettuce for commercial sale for 24 years. His firsthand experience has encouraged several students to consider this as a successful alternative to conventional farming.

From garden to table in Sylva

In Sylva, the buy local mantra is being reinterpreted as grow your own.

Volunteers at the Community Table, a nonprofit that provides free, nutritious meals to anyone who needs them, helped to create the Sylva Community Garden six years ago as a way to supplement the kitchen’s supply of food.

The demand for free meals has increased dramatically over the 10 years the Community Table has been in existence, and consequently, so has the need for fresh vegetables. Last year, the Community Table provided an average of 40 meals per night. This year, the number is closer to 120.

For Kevin Hughes, kitchen manager and volunteer coordinator, ramping up the effort to feed more hungry bellies is all in a day’s work.

“It means getting here earlier in the morning to prepare, a lot more food, and a lot more volunteer hours,” said Hughes.

The mission of the Sylva Community Garden is community service. Using a 1/3-acre plot owned by Dr. Gwang Han, the garden provides a common space for local organic gardeners to ply their trade and at the same time provide food for local families that need it.

Over the past three months, 71 volunteers have worked the 20 plots that make up the garden. The individuals that maintain the plots put in countless hours cultivating food. Half of what they grow must be donated to the Community Table or other organizations that feed hungry people.

For Ann Tiner, who helps coordinate volunteers in the garden and serves on the Community Table steering committee, the result of the two organizations working together is amazing.

“I think it’s a magic show to watch these guys come into this tiny little kitchen and provide this delicious food,” Tiner said. “It’s fresh and it’s like you’re in a restaurant and you can just choose what sounds good to you.”

There is nothing institutional about the Community Table. People who come are given a choice of food and sit at common tables in a cozy room that feels like a tavern.

Likewise, there is nothing institutional about the Sylva Community Garden. It’s a loose collective of volunteers who grow what they want to eat. As the demand for fresh produce at the Community Table has grown, Tiner and Hughes have had to work harder to coordinate the harvesting, processing, and storage of the food the garden produces.

“A little sack of lettuce doesn’t really help,” said Tiner.

In addition, farmers and gardeners from the surrounding area make frequent contributions to the Community Table.

Hughes came in one day last August and found 500 pounds of fresh produce waiting for him on the doorstep. To him, dealing with the fresh produce may be challenging, but it’s also the point of his job.

“Seasonally, you come to expect things, but there’s always the surprise aspect of what’s coming in from local farmers and gardens,” Hughes said.

This year, St. John’s Episcopal Church and First Citizen’s Bank have collaborated to plant a vegetable garden in a plot behind the church. Tiner, a parishioner, and Patty Curtis, the pastor, are working hard in the garden to produce food that will end up at the Community Table.

Hughes loves working with local, organically grown food.

“It’s fantastic because our mission statement is to provide a nutritious meal,” Hughes said. “The fresh produce we are getting doesn’t have any pesticides, it’s not genetically modified, and it’s just that much better.”

Tiner said finding a way to bring the food from the community’s garden to its table is about more than having fresh produce. It’s about communicating the message that we are all responsible for our land and for each other.

“As much as the growth of the food is important, it is also about education and making people aware,” Tiner said. “I still fight the notion that this is a luxury. This is how it’s supposed to be. It goes back to the way things used to be.”

Friends of Jackson library finish fundraising miracle with help from federal stimulus money

The Friends of the Jackson County Main Library have completed their remarkable effort to raise $1.6 million to outfit the interior of the new library under construction on courthouse hill in Sylva.

The Friends announced this week that a $200,000 grant from federal stimulus money given out by the U.S Rural Development Program had pushed them over the finish line. The Fontana Regional Library system applied for the grant on behalf of the Jackson library project.

Mary Otto Selzer, co-chair of the capital campaign, credited the hard work of volunteers and the generosity of hundreds of donors for the campaign’s success. The grassroots fundraising campaign began in May 2008.

The Jackson County Public Library Complex is a $7 million project to renovate the 1914 Jackson County Courthouse for community uses and build a 20,000-square-foot addition on the back to serve as a new library. It is scheduled to open in the second quarter of 2011.

“This grassroots campaign has been successful because hundreds of individuals, foundations and companies have shown their support through various levels of giving,” Selzer said. “Children have brought in their piggy banks; patrons have joined the Wall of Fame at the library; many young readers, through the Books for Bricks summer reading program, raised over $6,300; merchants have donation boxes on the counters in their businesses; companies wrote generous checks; and grantors have been charitable in providing funds.”

Of the total $1.6 million, about $1.15 million came in the form of large grants from institutions, charities and organizations.

Dr. John Bunn of Sylva, co-chair of the fundraising committee, said the iconic nature of the courthouse that’s even visible when passing Sylva on the highway made it possible to raise money for the project during a recession.

“You’d be talking to a foundation somewhere away from here and they’d say ‘I’ve seen that courthouse!’” Bunn said.

Bunn said the successful fundraising drive allowed for the addition of special features, like the outdoor reading patio that will rival the famous sunset patio at the Grove Park Inn in Asheville.

“They’ll have to eat their hearts out,” Bunn said.

He said the new library and courthouse restoration will be a point of pride for the community.

“If you had guests from out of town you normally wouldn’t say ‘Let me show you our library,’” Bunn said. But Jackson County will be an exception.

— By Giles Morris and Becky Johnson

Graham to vacate spot on Sylva board, but not until casting vote for next year’s budget

Sylva Commissioner Sarah Graham will step down from the town board at the end of June because her family has decided to move outside town limits.

Graham said she and husband, Bill, had been looking at homes that offered more land for their growing family, when they found a perfect place on Fisher Creek Road.

“Because the house isn’t in the town I have no choice but to resign my position on this board,” said Graham, who lived downtown and loved being part of its vibrant scene.

As a result of Graham’s announcement, the four remaining board members –– Chris Matheson, Danny Allen, Ray Lewis, and Stacy Knotts –– will be left with the task of naming a replacement in June. Mayor Maurice Moody only votes in the case of a tie.

The board underwent a similar process last December. Moody was a sitting town board member when he ran for mayor. He won, but still had two years left on the town board, leaving a vacant seat to be filled on the board.

During that process, Moody was instrumental in searching out his own replacement, Chris Matheson, and ensuring she had the support of the entire board before she was nominated, although he technically couldn’t vote except in a tie.

“Chris has had a unifying effect on the board and has done a good job, and I would hope to find the same type of candidate this time,” Moody said.

Graham said she wanted to serve until the town’s budget for next year was finalized, which means serving until the end of June when the fiscal year ends.

The town board has been divided on the some budget issues for the past four years, most notably over whether the town should make annual financial contributions to the Downtown Sylva Association, a cause particularly close to Graham’s heart.

Moody commended Graham for her work as a commissioner, particularly on issues directly affecting downtown.

“I hate to lose her, but I think when someone is putting their family’s best interest first, you have to support them,” Moody said.

In leaving, Graham said she felt the town is moving in the right direction, and she will continue to work in its best interests.

“I think the town is moving in a great direction and that, given the state of the economy, the town is in a great financial situation,” Graham said. “I look forward to serving Sylva in any way I can.”

Graham served as the director of the Downtown Sylva Association before being elected commissioner. She was instrumental in the revitalization of Bridge Park, a downtown green space and concert venue.

Jackson County rides out budget storm unscathed

Jackson County Manager Ken Westmoreland said he would deliver a balanced budget with no cuts to services or staff and that is exactly what he did on Monday night.

While neighboring counties are taking drastic measures to offset budget shortfalls for the second year in a row, Jackson County is once again holding steady.

Westmoreland presented a draft budget to county commissioners at a county meeting Monday (May 17).

“We have not had to cut services. We have not had to furlough individuals. We have met all of our obligations,” Westmoreland said in his characteristic business-like language.

The one exception to a budget that essentially holds last year’s line items is the additional money to outfit and operate the county’s new library branch at the old Jackson County Courthouse site.

Westmoreland’s proposed budget includes $121,000 for staffing, collection materials and additional operating expenses for the library. Since the new library is not scheduled to open until January, the extra money in the budget is designed to cover costs for six months. The funding will have to be continued into the following fiscal year.

If there was a surprise in the proposed budget, it was Westmoreland’s decision not to meet the Jackson County Schools’ request for an increase in operating funds to offset their anticipated decreases in state funding.

Jackson County Schools Superintendent Sue Nations asked county commissioners to help the schools bridge an expected budget gap that could extend to nearly $1 million if Gov. Perdue’s proposed discretionary cuts take effect.

Westmoreland’s draft budget includes a meager $18,000 increase for the schools’ operating budget, when Nations requested an increase in excess of $350,000 to help pay for faculty and support staff.

Westmoreland said as early as March that he would produce a budget that held departmental funding levels steady but would not involve service cuts or tax increases.

Commissioner Tom Massie welcomed the draft budget and commended the county’s department heads for recognizing the difficulty of the economic climate.

“We’re finding savings every day in the budget and that’s why we’re not having to make some of the cuts going on in neighboring counties,” Massie said. “That reflects good management.”

Massie pointed to the fact that the county could carry over money from this year’s budget if their spending rates hold steady through June.

In the current fiscal year, Jackson County’s expenditures are 11 percent below their budgeted allotment to date, despite the fact that the county’s revenues are 1.6 percent below their predicted levels.

The county will hold a public hearing on the draft budget at 6 p.m. on Monday, June 7, in the county boardroom.

New owners take long view on Balsam Mountain Preserve

As one development after another began to bite the dust two years ago, lenders who had bankrolled the mountain building spree in its heyday fretted nervously. The demand for high-priced lots had evaporated into thin air.

Banks reluctantly foreclosed, resigned to the downturn and hoping to wait things out — wait for the financial markets to stabilize, baby boomers’ 401Ks to rebound, and the buying and building to resume.

But not Mark Antoncic. Unwilling to write off one of his hand-picked investments, Antoncic rolled up his sleeves and did what few lenders want to do.

Antoncic’s firm seized control of Balsam Mountain Preserve, a 4,500-acre mega development between Sylva and Waynesville.

While some foreclosures take a year or more to play out, this one moved at lightning speed. Antoncic forced Balsam Mountain Preserve into foreclosure last October and by March, he held the keys to the gates — a record five months. When asked how he did it, Antoncic smiled.

“We are very good,” he said.

With other mega developments spiraling into bankruptcy and foreclosure across the mountains, lenders and developers are taking notes as they watch the turnaround of Balsam Mountain Preserve. One key is a high-quality development to start with. The other is a savvy and well-leveraged lending firm behind the scenes, which, like TriLyn, was willing to take the reins when the developers floundered.

“The alternative could be horrible,” said Antoncic, a founder and managing partner of TriLyn. “You can imagine what this place would be like shut down. You would have to close the golf course, weeds would grow up on the tennis courts. You see a lot of that around the country and some of that you can’t reverse the damage for the property owners and the community. We made a conscious effort not to let that happen.”

Property owners who paid half a million for lots in the upscale development are breathing a sigh of relief after a rocky year.

“So far so good,” said Dave Sparks, a homeowner in Balsam. “It could have gone a lot of other directions.”

Instead, their Arnold Palmer golf course is open again, the security and maintenance staff is back to full force, and their private mountaintop dining room is back.

The quick timetable was critical.

“We have kept the wheels on the cart in doing that,” Antoncic said.

When in doubt, foreclose

Antoncic’s career in real estate investment and finance placed him in the realm of troubled and distressed assets before the term was a household world. He recently founded Carpathia, a third-party real estate adviser firm, named after a sea vessel that rescued 705 passengers from the Titanic, which the firm calls “one the greatest all-time distress-situation performances.”

Carpathia specializes in counseling lenders who don’t know what to do about the failing developers they loaned money to.

Lenders are typically eager to avoid foreclosure. They opt to cut their losses and accept whatever loan payoff they can get rather than assume ownership of a gated community with lot sales going nowhere.

But Antoncic’s advice? Err on the side of foreclosure.

“The sooner you do it, the better off you are going to be,” he said. “You have to be proactive, not reactive. You can’t rescue everything, but you can’t just sit back and hope it goes away.”

Antoncic does not recommend one-size-fits-all advice through the newspaper. The closest he came to such an edict, however, was to say that lenders should choose their investments more wisely upfront.

“We are real estate professionals,” he said. “We own real estate, we manage real estate, and we finance real estate all up and down the capital stack.”

The principals of TriLyn have managed $15 billion in investments over their careers.

“We don’t look at this as just a loan. When we make an investment, we make it based on the quality of the real estate with the expectation and capability to take over the asset and run it,” Antoncic said. “Where lenders sometimes fall down is they make loans on assets they don’t really understand.”

The question to ask is: “Could we own this and would we want to own this?” he said.

It’s the same reason Antoncic could pull the trigger on foreclosure without being bogged down in the courts for a year or more.

“It was structured properly on the front end to provide for that,” Antoncic said.

Foreclosures rarely end well for the banks these days. The lender is usually standing alone on the courthouse steps when the property gets auctioned to the highest bidder. The bank becomes the proud new owner, not quite sure what to do with its new real estate.

As a result, most lenders owed money by developers are willing to take what they can get. A partial payoff is better than none at all. If the developer shows promise, the lender may grant generous extensions or refinance the loan to avoid foreclosure.

Balsam developers tried to settle for less than the full amount owed. It was close enough that most lenders would have agreed.

“Our view is very different than a typical lender. A typical lender would not want this on the balance sheet,” Antoncic said.

Balsam Mountain Preserve borrowed $20 million from TriLyn in 2005 to finance infrastructure for the development, including the pricey golf course. The debt owed to TriLyn reached $22 million by the height of foreclosure. It included most of the original loan, plus months of interest at higher-than-normal default rate and attorneys fees. It also included money fronted by TriLyn to keep the lights on and the grass mowed as Balsam developers began to run out of cash to make payroll on their own.

TriLyn is not a sharky lender of last resort. It doesn’t make risky loans with astronomical interest rates. It doesn’t target naïve developers, waiting to gobble them up at the first sign of a stumble.

But Antoncic wasn’t going to settle.

“Should we have taken less and walked away with it?” Antoncic said. “We wouldn’t have gone into this project if we didn’t think it had a long-term prospect. We had planned the investment to be five years. The market is what the market is, so it is going to take longer.”

He hopes patience will pay off.

“If you bail today, you lose all that. We would turn over a good asset to someone else,” he said.

The key, however, is a “good” asset.

“We can fix this. It is fixable, unlike so many other projects around the country,” Antoncic said. “So many had no business being built to start with. There is a list around the country that will never get anywhere.”

Doing the math

Before the recession, lots in Balsam Mountain Preserve sold for an average of $500,000. Those days are over, at least for now, Antoncic said.

“The whole market is down 30 to 40 percent. If we did not react to that appropriately we would be as guilty as the next guy,” Antoncic said.

Of the 354 lots in the development, only 120 remain.

When asked how he plans to market them, Antoncic has no magic formula.

“Carefully and strategically,” he quipped, then turned serious. “I don’t know what an appropriate marketing campaign looks like today. I don’t think you can force feed the market anymore.”

The marketing campaigns of days past instilled prospective buyers with a “fear of loss,” said Ken Costanzo, the new president of Balsam. Buyers were convinced there was a limited pool of resort mountain real estate and they could miss out if they hesitated.

Now “there is lots of inventory out there and there aren’t buyers lining up for it, so it is a different world,” said Costanzo.

Antoncic has two options to profit from lot sales at Balsam Mountain Preserve.

He could slash lot prices and unload the inventory with minimal effort, luring buyers by the bargain alone. Lots would go more quickly, saving on overhead and operations that could otherwise drag on for years, and avoiding expensive marketing campaigns.

Or Antoncic can keep lot prices high enough that Balsam retains its image. He’ll be in the game longer, be stuck subsidizing the golf course and other operations for possibly years to come, as well as fund a marketing campaign.

But it’s the route Antoncic is choosing. Existing property owners are glad the new owners don’t subscribe to the fire sale mentality.

“I think it would tend to have a negative impact on the community,” said Dave Sparks, a homeowner in Balsam.

It would likely anger the 170 individual property owners who bought into what they presumed would remain an upscale development.

TriLyn has hiked both the fees paid by the property owners association and club dues for members who use the amenities, bringing revenue closer in line with expenses.

The former owners were taking a substantial hit on golf course operations and overhead for the amenities, including a horse stable, pool, tennis courts and clubhouse.

Antoncic also plans to cut costs, claiming the former owners weren’t very efficient. The move bring the operations “closer to break even,” Antoncic said, but they will still have to be subsidized.

Dave Sparks, a homeowner at Balsam, said property owners aren’t mad by the move.

“Quite honestly, they should be higher,” he said of the fees. “We expect that. That was in play before all this stuff crumbled.”

Of the 170 individual property owners, 120 are club members — about 30 fewer than last year. But Sparks said it is not because of the fees. Some simply don’t visit their property that often, and others bought lots only as investments and never visit.

Sparks is just glad the golf course has reopened after being closed abruptly during foreclosure last fall.

Not ‘just another’

gated community

Balsam Mountain Preserve has just 354 lots despite its massive size. Most of the 4,400 acres are protected in a conservation easement. It was the region’s first eco-development, and the lot prices and culture — top-notch amenities, an environmental ethos, strict covenants and a woodland estate setting — cater to affluent buyers.

Balsam Mountain was created and run by Chaffin Light Associates until the foreclosure. Unlike some developers who forayed into the mountain real estate world during the boom, Chaffin Light was no amateur. Massive developments touted as sustainable and set in striking landscapes — from Colorado’s snow-capped mountains to coastal South Carolina — are a Chaffin Light specialty.

But the firm failed to adjust to the new real estate reality brought on by the recession, Antoncic said.

A new president, Ken Costanzo, is now at the helm of Balsam Mountain Preserve. Costanzo was the chief operating officer of the Cliffs, the epic Tiger Woods golf resort with properties spanning from Western North Carolina to Upstate South Carolina.

Costanzo said Balsam doesn’t have the same uphill fight as other developments.

“It’s not just another beautiful mountain golf community,” Costanzo said. “Golf is important, but there is so much more to offer here.”

Unfortunately, Balsam’s presumed turnaround doesn’t offer a model for other faltering developments to follow. Many troubled developments are carrying far more debt than they’re worth and lack infrastructure to make lots sellable. Golf courses exist only in master plans not on the ground. Roads haven’t even been built yet.

But Balsam was nearly complete and had a realistic debt load.

“Unlike so many around the country, the assets were good. The infrastructure is here, it is built out,” Antoncic said of Balsam Mountain Preserve. “If there is a leader in the market, we have the ability to be that leader.”

Antoncic said there is still a lot of carnage to come in the real estate market. He estimates a turnaround is three to five years away.

“At one point, I was concerned we were just having warm-ups, but I think the game has started,” Antoncic said.

Boosters of the mountain real estate scene like to think the area was insulated from the downturn, that the spectacular scenery and lifestyle here was so desirable prices here didn’t fall. Not so, Antoncic said.

“It is better than other parts of the country, but it is not as though the region escaped the downturn,” he said.

Eventually, confidence of buyers will return. After all, there’s still 77 million baby boomers out there dreaming of their own golden retirement.

Proposed road calls for bridge over N.C. 107 in Jackson

A new road that would traverse the campus of Southwestern Community College and provide a new link between two of Jackson County’s major roads is in the final planning stages.

The proposed two-lane road is designed to alleviate congestion and improve traffic flow at the intersection of N.C. 107 and N.C. 116 and help transit to and from SCC, according to N.C. Department of Transportation project engineer Steve Williams. The congested intersection is flanked by an Ingles grocery store and a Lowe’s home improvement store.

According to NCDOT projections, daily traffic on N.C. 116 is expected to increase from 10,200 vehicles per day in 2008 to 19,100 vehicles per day by 2035, and traffic on N.C. 107 is expected to increase from 23,300 vehicles per day in 2008 to 51,100 vehicles per day by 2035.

Engineers have developed two options for the new road. Both follow the same route and include plans for a bridge over N.C. 107, but they differ in the style of intersection.

SCC President Cecil Groves said the new road was crucial for the college’s expansion.

“The road is essential to the future development of the college, particularly with regard to our ability to handle traffic patterns and expand the number of students,” Groves said.

Groves said the new road would give SCC an exit out of the back of the campus that would greatly enhance its ability to complete construction projects related to its expansion. It would also make the N.C. 116 entrance safer for faculty, students, and staff.

The 0.7-mile connector road would run along the edge of the SCC campus and connect N.C. 107 at Evans Road to N.C. 116 at Bonnie Lane.

The NCDOT will hold an information session to share designs for the new road from 4 to 7 p.m. on Thursday, May 20, at the Balsam Center on the SCC campus.

The meeting will provide an informal venue for dialogue about the proposed road’s effect on the community.

According to Williams, the two scenarios mainly affect the intersection with N.C. 107.

The major components of the plan involve the construction of a roundabout on N.C. 116 –– close to the site of the Jackson County Schools bus garage –– that would serve in lieu of a stoplight at the intersection.

The new road would then cross a U.S. Forest Service property, traverse the SCC campus, and eventually intersect with N.C. 107 just over the hill from Smoky Mountain High School — after crossing 107 with an overhead bridge.

In one set of plans, the new road would have a second roundabout that would provide access to N.C. 107, while the other option traffic would access N.C. 107 directly from Evans Rd.

The new road would be built with a sidewalk and bike lane to accommodate pedestrian traffic and cyclists.

In order to move forward with the new road, NCDOT will need to purchase additional right of ways from landowners and undergo the necessary environmental assessments for the road project.

Sylva cardboard box venture collapses

Stonewall Packaging, a cardboard plant in Sylva, laid off 43 workers last week and shut down operations after coming on line just a few months earlier.

Stonewall Packaging was a venture of Jackson Paper, also a cardboard plant in Sylva, which employs 120 people. Jobs at Jackson Paper are safe, according to the company.

The closing of Stonewall has less to do with the economy and more to do with a stroke of bad luck. When Jackson Paper launched Stonewall, it secured commitments from box companies pledging to buy its cardboard. One of those that pledged to buy a large volume fell through, however. Stonewall was unable to find a new buyer for the corrugated cardboard sheets being churned out.

The cardboard industry is consolidating, with a smaller number of larger companies dominating sales — making it harder for ventures like Stonewall to find a seat at the table.

The Stonewall plant was built last year at a cost of $17 million. The closure is “very disappointing,” according to company officials.

“This is not the outcome that we had hoped for with our investment in Stonewall, and we did everything within our power to prevent it,” Jackson Paper President Tim Campbell said.

The fate of the new facility — whether it will be sold or kept in hopes of one day ramping up again — is unknown at this time, according to company officials.

Stonewall Packaging had been offered both state and county incentives in exchange for job creation and the capital expansion. The state agreed to give the plant $200,000, but had yet to award the money. Jackson County offered Stonewall Packaging a property tax break of up to $1.3 million during the next several years, but it was contingent on the creation of jobs.

What was Stonewall?

Jackson Paper’s official role in Stonewall is that of an investor, although the two plants had a symbiotic relationship. Stonewall was an attempt at vertical integration by Jackson Paper, which makes the wavy middle layer found in corrugated cardboard.

Making a cardboard box is a four-step process. Each step is carried out by a different plant: one to make the wavy middle layer, one to make the outer layers, one to sandwich them together, and one to cut and fold the sheets into finished boxes.

With the cardboard box industry consolidating into the hands of larger plants, Campbell feared the chain his niche product relied on would prove too fragile. Jackson Paper would find an increasingly limited number of buyers for its wavy middle layer of cardboard.

Enter Stonewall.

Stonewall would buy the wavy middle layer produced by Jackson Paper, buy the outer layer from other plants, and sandwich them together to make sheets of corrugated cardboard on site. The venture would secure a stable buyer for Jackson Paper’s product.

Unfortunately, that model collapsed when a box company lined up to buy the cardboard did not uphold its commitment.

Jackson Paper has found buyers to pick up the slack now that it can’t sell its product to Stonewall.

“Operations at Jackson Paper are strong and expected to remain so,” Campbell said. “Jackson Paper has been able to replace those orders lost in the Stonewall shutdown with orders from other customers.”

But that doesn’t blunt the disappointment both managers and employees have over the fate of Stonewall, Campbell said.

“This is a terrible situation for the dedicated and hardworking employees of Stonewall Packaging. Our thoughts and prayers are with them during this difficult time, and we will do everything possible to support those affected,” Campbell said.

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