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Megow-Dowling announces resignation

Jackson County’s economic development director Dorothea Megow-Dowling had been on the job for less than a year when she announced her resignation last week.

She came from a long career in economic development and specialized in strategy and planning processes.

“It is going to be unfortunate to see her leave,” Joe Cline, the chairman of the economic development commission told fellow members of the EDC at their last meeting. “The county and this board owes her a debt of gratitude for the work she has put in it has been tireless to say the least.”

More board members expressed regret after the meeting.

“She was fantastic,” said Dick Sterka, an EDC member appointed by Sylva.

Sterka’s company, Diversified Expo, helps works the trade show circuit, whether it’s hosting the shows or helping companies attend them. Given the circles Sterka runs in, he interacts with businesses regularly that may be interested in moving to a new area or expanding their operation, and as a result, he constantly fed Dowling tips on companies that would be worth courting.

“She was very active. Give her a lead and she was like a bulldog. I hate to lose her,” Sterka said.

Larry Morris, an EDC member appointed by the county, said Dowling excelled in strategy, which had ideally been the next leap the EDC would have been making.

“I was real pleased,” Morris said. “I thought we were making headway in the direction we needed to go. It is really unfortunate.”

Dowling says she has plans to move back to her home region of Michigan.

Departing director recommends dissolving Jackson EDC board

Jackson County’s Economic Development Commission has again been thrust into turmoil, a near constant state of affairs for the entity in recent years.

The county’s economic development director announced her resignation last week, and along with it, offered her views on what the county should do to kickstart a new day for its economic development efforts. Most notable on the list is to dissolve the economic development commission.

The resignation comes on heels of a somewhat contentious EDC meeting last month, where the mayors of Sylva and Dillsboro charged the county with stripping the EDC board of its power and relegating it to a mere advisory role.

Meanwhile, the EDC members say they can’t figure out exactly what they are supposed to be doing. The board has been preoccupied with their structure — namely whether they have any real authority or are simply an advisory board to county leaders.

The quandary over their role has dominated discussion at their meetings in recent months, distracting them from their ultimate mission of advancing economic development, EDC members say.

The EDC board is a joint venture between Jackson County and the four towns in the county: Sylva, Dillsboro, Webster and Forest Hills. It was created in the late 1990s.

Alleged financial mismanagement by those at the helm and concerns over a lack of oversight for public funds at the disposal of an all-volunteer body led the county to withdraw from the EDC in 2005. The EDC continued to limp along without county participation for 18 months until the county eventually threw its hat back in the ring.

The board was reconstituted with a new set of bylaws, but not without a power struggle between the county and the towns over who would hold the most authority.

It appears the issue was never properly settled and continues to pose problems — thus the still-festering issue over the board’s role and authority today.

Dorothea Megow-Dowling, the EDC director, said the county missed an opportunity by agreeing to reconstitute the board under the same structure rather than dissolving the EDC and creating a new one from scratch.

“Things move on best when there is a very clear cut from a past situation that has been difficult,” Dowling said. “I don’t think that cut was perceived as adequate.”

Of the nine members on the EDC board, the majority have come on within the past year. Only three on the board were there during the past turmoils.

Yet the entity has been unable to shake itself of old baggage in the public light. In addition, it inherited a structure that isn’t working, Dowling said.

Dowling sees another fatal flaw: the lack of a comprehensive economic development strategy. Setting up an EDC structure, appointing members and hiring a director before a clear mission is defined is a backwards approach, Dowling said.

“I believe it would be very effective to let this current structure go and establish a steering committee to oversee an economic development planning process,” Dowling said. “My recommendation is to start with the task, scope the task, then put in place the best teams and resources you can to accomplish the objectives you’ve set. My recommendation is and has been dissolution of the EDC.”

Disbanding the EDC is not an easy proposition, however. It is not solely up to the county, or even to the EDC board members themselves. As so-called forming entities, all four towns in the county have a say on whether the existing structure remains in tact.

“We are stuck with it unless there is some willingness on the part of municipalities to do something different,” County Manager Ken Westmoreland said.

There was a failed attempt to dissolve the EDC board two-and-a-half years ago rather than reconstitute it. It was voted on by elected officials from the county and all four towns and failed by a vote of 15 to 13.

Dowling’s resignation has caused all the old tensions still lurking below the surface to emerge, Westmoreland said.

Joe Cline, chairman of the EDC, is reluctant for EDC members to wade into the fray over whether the board should be dissolved.

“I feel like that rests with the local elected officials,” Cline said. “It is up to the stakeholders and the people who put it together to decide.”

Cline acknowledged that some EDC members would like to weigh in. At the meeting last week, however, he suggested holding off unless the board is asked for its opinion.

“To me it is a moot point. One way or the other we could all be removed tomorrow,” Cline said at the meeting.

The board may be not be able to speak with a unified voice, however. Some members want to assert more authority and hold the decision-making power, while others are fine in an advisory role.

“The advisory board I think is the way we need to go,” said Larry Morris, an EDC member who owns a kitchen and bath cabinetry dealership in Cashiers.


What next?

At this point, the county will not rush to replace Dowling, Westmoreland said.

“I think we are going to take some time before we try to re-employ someone in this position to analyze some of these questions,” Westmoreland said. “I think we do need as a community and as a county to come to some general consensus as to what we are going to focus on.”

If an economic development director is preoccupied chasing every elusive job on the block, the county can’t focus its resources on the prospect that are the most probable fit.

“It may be three, four, five, half a dozen things that we can do best, that works with the environment and our labor market and infrastructure,” Westmoreland said. “We can’t just continue to go negotiate with everyone about everything.”

County Commissioner Tom Massie agreed. Massie likes the idea of taking a time-out to create a comprehensive economic development strategy before deciding on a new director or a possible new structure for the EDC board.

“We need to go through a planning process where we bring everyone interested in economic development to the table,” Massie said. “We have to get them all on the same page of the hymn book.”

Massie had hoped that the county could initiate such a process sooner rather than later, and believed Dowling’s skill set was well-suited to move the process forward.

“It is just a shame everything is caught up in this nitpicking,” Massie said. “It has been a source of frustration.”

Westmoreland isn’t sure the existing EDC board is the right vehicle to create a strategic plan. Westmoreland instead favors a special task force or blue ribbon committee to embark on a comprehensive strategy, guided by a professional consultant or facilitator.

“I think that would serve a very useful purpose to explore our strengths and weakness and what we are trying to pursue,” Westmoreland said.

A special task force should be crafted to include those with something to contribute to the discussion of economic development. The same approach should ideally be used when making appoints to the EDC itself, Westmoreland said.

“Those appointments need to have some expertise to assist in working with business prospects,” Westmoreland said. “Just appointing general citizenry with an interest in economic development won’t satisfy that need.”


Cart before the horse

Dowling said it would be wise to have an economic development strategy in place before bringing in another director.

“This goes to the crux of the matter that really needs resolution. What person do you want in place for the county and what do you want that person to be doing?” Dowling said.

A strategy should also be in place before a board is created, Dowling said. Instead, the board’s structure was inherited and appointments made to fill the seats before a task was decided on.

Since Larry Morris came on the EDC several months ago, he has seen the issue of the EDC’s role and its structure dominate their agenda.

“A lot of time is taken up by trying to determine what is our role,” Morris said. “We are struggling to define how best we can serve.”

Others shared his characterization of the meetings.

“The discussion tends to revolve around the function of the EDC rather than around the tasks required to help economic development progress,” Dowling said. “When that occurs again and again, for me, I make an observation that there is something not working well structurally. There is frustration all around.”

Morris would rather spend his time working for economic development, but thinks they need a comprehensive strategy and approach, which doesn’t exist now.

“Should we be focusing on studies and research, infrastructure growth, or sitting back and waiting until a prospective business makes an inquiry about moving here?” Morris said.

That’s the issue Morris would like feedback on from the county and towns.

“It is pointless for use to think in one direction if the people we are accountable to are thinking in a different direction,” Morris said.


Structural makeup

The EDC board is a joint entity comprised of appointees from each of the towns and the county. But Dowling reports directly to the county manager — not the EDC board. That has bothered some on the EDC board, and the mayors of Sylva and Dillsboro.

Cline countered accusations that the issue is one of a power struggle. “It shouldn’t be an issue of a power struggle,” Cline said.

He said the EDC members merely need clarity.

“There is confusion there with it being a county employee but working for the EDC board,” Cline said. “How can you serve two masters? We all need to be on the same page, but at the end of the day, there can really only be one boss.”

Cline said it has to be one or the other.

“Does the county and municipalities want us to be an advisory board or a totally independent board?” Cline said. “Right now we are operating with one foot in each.”

As a result, the board has been preoccupied with what its role is, Cline said.

The EDC members have drafted a list of questions they want the towns and the county to answer, primarily dealing with what their role is but also what types of economic development projects they should be undertaking. The plan is to present the list of questions in the run-up to a joint meeting held each quarter between all the town boards and the county.

“Our position is we just want to be told by the people that formed this what they want,” Cline said.

It is unclear why the issue has come to a head again. The job description for the economic development director was hashed out during a lengthy round of meetings between the county and towns two-and-a-half years ago and included a clause that gives the county manager hiring and firing authority over the director rather than the board.

Jackson County antes up most of the money for economic development. While the county puts in $105,000. Each town puts in just $1 for each resident, amounting to a few hundred for Dillsboro, Webster and Forest Hills, and $2,500 for Sylva.

The county ultimately shoulders the financial burden of economic development, and therefore argued at the time the economic development director should be a county employee under county control.

“It was never our intention that the only job responsibility for the economic development director was to staff the EDC,” Massie said.

Cline, however, points out that the job description for the EDC director, says he or she will report both to the county manager and the chairman of the EDC board.

“There is no dispute it is a county employee and a county position,” Cline said. “Everybody understood it was a county employee and the hiring and firing of that position would rest with the county manager. But it was also stated they would work for the EDC.”

Whatever the case, the actual role of the EDC remains a source of confusion not only for those on it, but some town leaders, Dowling said, and therefore needs fixing.

“Obviously, it was not clear in their minds. Obviously, everybody did not have the same understanding,” Dowling said.

Westmoreland doesn’t see anything wrong with the EDC serving in a formal advisory role, just as the planning board or any number of county boards are advisory in their capacity.

Massie said the question of whether the EDC should officially be dubbed an advisory-only body is one he can’t answer right now.

“That is a role that will have to be determined at some point in the future. I can’t preconceive what the outcome of that is going to be before we have those discussion,” Massie said.

Cline said regardless of how the seats at the table are divvied up, the EDC will represent the entire county fairly.

“You are not going to say for example if you don’t have a representative from Sylva that there won’t be any economic development in the town of Sylva,” Cline said.

Cline doesn’t think the debate over the board’s structure is a major hurdle.

“Everyone is committed to the economic development of the county and understanding what is the best way to do that,” Cline said.


Other focus

Some EDC board members complained at last month’s meeting that Dowling was doing the bidding of the county at the expense of their own board.

“I can understand perhaps why the EDC board feels somewhat neglected,” Westmoreland said. “We have consumed almost all of her time on several significant projects.”

But with good reason. Dowling’s calendar has been filled in recent months with courting several major employers with the prospect of bringing new jobs to the county. One is widely known already: an expansion of the Jackson Paper plant.

To land the jobs, the county promised incentives. While it is not a new tactic, it was for Jackson. Dowling had to craft the incentive deals and legal contracts from scratch.

Westmoreland said the minutia of orchestrating the state and county incentive packages is immense.

“You don’t just touch bases or two times you touch base dozens of times,” Westmoreland said.

Dowling has several similar ventures in play from companies that expressed an interest in setting up shop on the old Tucksegee Mills property and the Whittier Industrial park. Dowling did not brief the EDC board on the prospect employers she was working with, however.

Cline said she should have, since the EDC’s role is presumably to help facilitate new companies moving into the county.

“There was no point in us even meeting once a month with no information about what was even going on,” Cline said.

But Westmoreland said Dowling can’t disclose the prospective companies to the EDC board.

“These prospective business plans are very proprietary,” Westmoreland said.

There are too many people on it from too many different entities to ensure that word wouldn’t leak out, he said.

With most economic development boards in the region, the EDC director does disclose — in private sessions — the companies that are being courted.

Westmoreland said he would rather disclose the prospects to handpicked stakeholders, mainly just those in a position to bring resources to the table.

Dowling said she has also spent time in her initial months on the job meeting with stakeholders and prospective partners.

“I’ve laid some groundwork with people and organizations that might be able to work with the county,” Dowling said. “I am very pleased I have been able to help the county with the things I have become involved with,” Dowling said.

Jackson County’s mosaic is still being painted

Although I sometimes wish that the maps of my Jackson County had a more beguiling shape — perhaps a bear or a quarter moon — its outline is pretty prosaic (it seems to resemble a pork chop). But marvelous events (mythical and real), notable lives and tragic encounters have occurred within these boundaries. Let’s begin with the fantastic.

According to the Cherokees, the witch Spearfinger once lived on Whiteside Mountain, where she often stood at night on the high cliffs during raging thunderstorms, brandishing her deadly digit and laughing. The great serpent Uktena once swam in the Tuckasegee (the marks of his scales are still etched in the river’s rocks). The giant, Judaculla, the “Slant-eyed One,” now sleeps in the Balsams, his flinty, upturned features visible at Pinnacle Rock. A hundred coves and creeks whisper of vanquished water spirits, nunnehi, “little people,” raven-mockers and giant eagles.

Then, there are the “maybe, maybe nots” — Jackson County tales of people, creatures, events and places that live in the twilight realm between reality and myth: the ghostly baying of Boney (sometimes called Bonas), the legendary hunting dog that leaped to his death from a cliff near Cashiers; the Tuckasegee “Smoke-hole” that was rumored to have great curative powers — now vanished; the chilling scream of “painters” in Little Canada (they were drawn to houses with new-born babies and lactating mothers.)

Many famous and infamous folks have lived here briefly and then traveled on to other destinies. William Bartram, whom the Cherokees called “flower plucker,” picked strawberries here; the outlaw, Major Lewis Redmond lived for several years at the King Place above Fisher Creek; Will Holland Thomas built a home near Whittier and, according to oral tradition, buried gold in his pasture; Dr. John R. Brinkley, the “goat-gland-man,” who sold patent medicine on XERA and ran for governor of Kansas, built a summer home above Cullowhee (his name is still inscribed in the rock walls near the road); Charlie Wright, the man who rescued Gus Baty (who fell/jumped) off Whiteside (a feat that earned Charlie a Carnegie medal) was equally famous as the man who courted Kidder Cole, the most beautiful woman in Cashiers Valley — which brings us to Judge Felix Alley, another Jackson County native who not only wrote Random Thoughts of a Mountaineer but also courted Kidder. When Wright “beat his time,” he wrote a famous square dance piece, “The Ballad of Kidder Cole.” (The lyrics include the line, “Charlie Wright, dang your soul/You done stole my Kidder Cole.”) Kidder later married “Little Doc” Nickols in Sylva.)

Any county history that is not seasoned with a bit of local bloodshed and courtroom drama is likely to be a bland chronicle. My county has a generous helping. In my childhood, I often saw the infamous Nance Dude trudging the roads near Wilmot with bundles of split kindling on her back; Bayless Henderson, the luckless killer of Nimrod Jarrett was hanged in Webster (2,000 witnesses, four preachers and picnic baskets.)

There were mysteries, too. What happed to Frank Allison, the deputy sheriff who joined a foxhunt into the Balsams and never came home. There was also a minister in Glenville who went out one evening to call his cow home — his remains found over 40 years later and his identity verified by his gold watch.

Now, comes a few of our notable people and places. Gertrude Dills McKee, the first female senator for the state of North Carolina, read poetry by candlelight at the Jarrett House when she was a child and grew up to pass legislation that revolutionized education in this state. Robert Lee Madison, who grew up in the home of Robert E. Lee (and once told my fifth-grade class about attending Traveler’s midnight funeral); attended (and described) the hanging of Jack Lambert (who was innocent), and founded a little college in Cullowhee that became Western Carolina University. The writer, John Parris, who launched a career when he interviewed a snake-bitten preacher named Albert Teaster and went on to write a series of books about the history and folklore of this region.

Is that all? In actual fact, these people, places and events are but the thin outer shell of my county. Beneath that resides my personal memories and dreams fostered by the Ritz Theater on Saturday; the courtroom of the Jackson County Courthouse where I sat in the balcony with my classmates and watched murder trials as gripping as anything that I witnessed at the Ritz; the music of Harry Cagle and Aunt Samantha Bumgarner; a little lady named Sadie Luck, Sylva’s first librarian who used to say, when I entered, “Gary, I’ve been saving a book for you;” and, finally, the faint echoes of a tannery whistle and (faintly) a song my father played long ago in the Rhodes Cove twilight, “The Raindrop Waltz.”

I think, perhaps, that the story of my county is just beginning. This is but a small, modest swatch in the gigantic tapestry — or perhaps a few bars of a symphonic musical score that is still being woven/written by countless fingers and voices. Can you hear it? I hear it best at night when I take out my cochlear implant and listen to the rich, dark silence and the unheard sounds around me.

(Gary Carden is a writer and storyteller. His recent writings can be found at his blog, http://hollernotes.blogspot.com/)

Jackson County offers incentives to land new manufacturing jobs

Jackson County leaders are considering an economic development incentive that will provide property tax credits to Stonewall Packaging in exchange for a minimum $10 million investment in a new facility in Sylva and creation of at least 40 full-time jobs by 2010.

The new hires must make a salary of at least $39,000 per year, which is well above the county average of $27,820.

The county would provide grants of $32,500 per new job with a cap of $1.3 million. The grants would come out of property taxes Stonewall pays to the county, which would then be returned to the company. Jackson County officials who support the measure insisted on Monday that it will not be a handout.

“Jackson County decided not to do a cash outlay from our coffers,” said Commissioner Tom Massie. “This essentially doesn’t cost us anything. Without the jobs being created, we wouldn’t have gained anything at all. We’re simply providing a financial incentive.”

But Carl Iobst of Jackson County Citizens Action Group is far from convinced.

“Why is a private corporation that seems to be doing pretty good...why are they coming to the county with their hands out?” said Iobst. “They’ve been in business for a while. It seems like they could find some funding.”

Stonewall Packaging, a joint venture of Jackson Paper Manufacturing, is planning a 200,000-square-foot addition to its current corrugated cardboard plant in downtown Sylva. Jackson Paper has said that it will exceed the county’s requirements by creating 61 new jobs and investing more than $16 million. It will also receive a $200,000 grant from a state economic development incentive program.

County Manager Kenneth Westmoreland said he believed emphatically that the financial incentive would be good for the community.

“Obviously in this day and time, any new jobs are very attractive,” he said.

The county says it has worked closely with experts in formulating an exact contract for the deal.

“Everything’s in writing. There’s nothing left to chance, nothing left to speculation,” Westmoreland said.

Jackson County will accept written comments from the public about their opinions on the plan for the next two weeks before it comes to a vote.

Local authors proud of fishing trail map

Ask any fisherman what their favorite stretch of stream is and you may as well be asking for directions to the moon.

They might tell you what stream they frequent, but as for an exact spot — well, that’s between them and the trout.

For out-of-town fishermen wanting to snag a mountain trout on their vacation who don’t have hours to hang around a fly fishing shop prying locals to reveal their coveted fishing holes, the new Western North Carolina Fly Fishing Trail Map and Guide is just the answer.

The fly fishing trail spans 15 fishing spots in Jackson County, from wide valley rivers to narrow mountain creeks.

The trail guide was created by the Jackson County Travel and Tourism Authority and Jackson County Chamber of Commerce — with the help of some knowledgeable fishermen.

The trail guide doesn’t go so far as identifying the best spots on a creek, but does get the fishermen in the right vicinity.

“This way they may discover their own special spots,”

said Alex Bell, one of the authors of the trail map and a fly fishing guide. “We wouldn’t want everyone going to the right side of the creek bank 100 yards up. But as a fly fisherman you are able to read the water and look at the surroundings and you can figure out where the trout are most likely to be hanging out.”

Usually, fishermen just need to know where there is a good roadside pull-offs to access a creek without trespassing on private property. Otherwise, out-of-town fishermen are left studying dozens of blue squiggly lines on a map wondering which ones they could actually reach.

“Even if someone tells you such and such creek, you may have passed by it but they aren’t marked,” Bell said.

The other author behind the fly-fishing trail, Bobby Kilby, is famous in trout fishing circles. He’s caught trout in more than 85 of the named creeks in Jackson County. Kilby’s record makes the 15 spots selected for the fly fishing trail sound like child’s play. But Bell thinks they arrived at a good mix: relatively easy access, a variety of water and a good geographic spread across the county.

Bell, 54, retired as the principal of Smoky Mountain High School two years ago. While he now has all day to loaf around on rivers, during his career he snagged whatever fishing time he could. Thanks to the Tuckasegee running through town, he could steal a few minutes on his way home from work.

“I tell people all the time it was my chief therapy,” Bell said. “I had my stuff in the back of the truck and whenever my day finished I would head to the river. It was a way to decompress and relax.

“With fly casting it is all about rhythm and tempo. They always say there is an art and science to it and the combination of the two is very relaxing,” Bell said.

WNC Fly Fishing Trail lures new anglers to Jackson streams

Alex Bell can’t resist striking up a conversation with fellow fishermen he encounters on the Tuckasegee.

But lately, he’s had a motive behind his friendly banter. As an author of the new WNC Fly Fishing Trail, Bell is eager to know just who is flocking to fish mountain waters.

One day in May, Bell was sitting on the tailgate of his truck having lunch when 14 anglers with a fly fishing club from Florida came clambering up the river bank.

“As we struck up a conversation one thing led to another and I mentioned the fly fishing trail map and one said ‘Yeah, we got it right here’ and pulled it out of their vest,” Bell recounted.

The trail guide was the brainchild of the Jackson County Travel and Tourism Authority, so Bell knew luring tourists was the whole point. But as he calculated the economic impact of 14 people spending three nights in Jackson County who came here just to fish the trail, it sunk in.

“It came full circle just how good this is for everybody,” he said.

The fly fishing trail leads fishermen to 15 different fishing spots in Jackson County, from narrow mountain streams to wide rivers. Julie Spiro, executive director of the Travel and Tourism Authority and Jackson County Chamber of Commerce, said the fly fishing trail has taken off better than she ever imagined.

“I think it has had a good positive affect on tourism here,” Spiro said. “It gets people into Jackson County to fish and spend the night and eat dinner out and enjoy some time here in the mountains.”

A testimony to its success, Spiro keeps running out of the trail map brochures. The first print run of 1,500 were gone in just two months. She ordered a batch of 5,000 in early May, but those were gone by the end of the month. In all, she’s gone through almost 9,000 in just six months.

“We mailed out thousands of maps to interested fisherman,” Spiro said

While it’s hard to know exactly how many of those ultimately make the trip, some stop into the visitor center and announced their arrival, like a man and his buddy on a recent visit from New Burn, N.C.

“He said ‘You mailed me this map and I’m here to fish,’” Spiro recounted.

The fly fishing trail has been featured around the country, from an outdoors radio show in California to a travel article in the New York Times. It’s also landed on the UNC-TV series North Carolina Now twice. Bell, 54, who runs AB’s Fly Fishing Guide Service, has booked several trips for clients who came to Jackson County after discovering the trail guide.

Spiro credits Craig Distl, a public relations specialist with the Jackson chamber, as the instigator behind the trail. Spiro has actively marketed Jackson County as a fishing destination for several years, but Distl suggested they “step it up a notch.”

The idea of a fly fishing trail is a first for the region and positions Jackson as the first county to actively capitalize on the image of a fly fishing destination.

“A lot of people are very interested in fishing all 15 spots on the trail,” Spiro said. “It gives them a sense of accomplishment that they have fished the entire trail.”

Indeed, Bell has encountered fishermen on the water checking off their maps as they go. Some said they plan to fish a few spots each year, making return trips each summer until they finished them all.

The concept of themed-trails are growing in popularity among visitors looking for a more interactive vacation. There are several themed-trails in the region: a Cherokee Heritage Trail, a Craft Heritage Trail, a WNC Farm and Garden Trail, a Birding Trail — and now a fly fishing trail.

Big developer in foreclosure as lenders call their loans

A mega developer in Jackson County has landed in foreclosure due to sluggish lot sales in the down real estate economy.

Legasus development company saw a portion of its massive land holdings auctioned off on the courthouse steps last week. The company’s business plan is not uncommon among developers: borrowing money to buy the land, market lots and build roads, meanwhile banking on revenue from lot sales to pay the debt. But lots sales haven’t been forthcoming, and the company couldn’t make its payments.

Over-extended developers have been on the rise, according to Rick Boyd, the trustee handling the sale.

Just five years ago, Boyd did an average of three to five foreclosures a month. Now, he may see as many as 40.

The day of the Legasus’ sales last week, Boyd had 20 foreclosures in one day, dashing from Haywood to Jackson to Macon counties all before lunchtime to read out lists of foreclosure notices on the courthouse steps.

While most are single homes and lots, developers with large tracts have been turning up in the mix as well.

“I have done quite a few of the developers that have over-built and got caught,” said Boyd, a real estate broker with Beverly Hanks in Waynesville. “They needed to sell so many lots per quarter to maintain their payments, and when those slowed down they didn’t have the reserves to keep up with the payments. People never foresaw they would build four or five spec homes and have them sit on the market for over two years.”

The foreclosure proceedings against Legasus are for two large tracts: a 368-acre tract on Cullowhee Mountain that’s part of the River Rock development and a 630-acre tract in Whittier called High Grove. They are two of the largest tracts Boyd has seen go into foreclosure.

In both cases, the opening bids were made by Macon Bank, the lender that initiated the foreclosure. Bidding on the tracts can, and likely will, continue for weeks. Buyers have 10 days to submit an upset bid through the court. An upset bid has to be at least 5 percent more than the previous bid.

Phone calls to Legasus’ president, Legasus’ project developer and Legasus’ primary owner were not returned.

Bidding war ahead

Few large tracts of this magnitude have changed hands since the housing boom tapered off two years ago.

The final selling price could be a sign of whether investor confidence has returned in the real estate market, according to Todd Baucom, a real estate broker with Western Carolina Properties in Cullowhee.

“This will be a big signal,” Baucom said. “The question will be how high it goes.”

Baucom predicts the current bid of roughly $5,300 an acre for the Cullowhee Mountain tract could approach $7,000 an acre by the time bidding tops out.

As for the Whittier tract, the rock bottom opening bid of $357 an acre could make for a wild ride.

“That is going to upset and upset and upset. It could go through upsets for the next year,” Baucom said. “It will be very interesting to see what plays out with that.”

It is highly unusual to see an opening bid that is so low compared to the assessed value of the property. Typically, the opening bid is put down by the bank or lender that initiated the foreclosure — in essence buying up their own debt to protect their investment.

What makes the foreclosure unusual is that Macon Bank was owed so little — only $305,000 — on a tract worth millions. Macon Bank’s initial loan to Legasus was for $400,000 in 2004 to fund development activity on the tract. Legasus had paid off some of it, leaving a debt of just $305,000.

Given the small sum that was actually owed, it seems Legasus would try hard to come up with the money and hang on to the land. Baucom surmised Legasus wanted to divest themselves of the tract anyway and therefore didn’t fight to save it.

There’s another possible explanation: more outstanding debt associated with the High Grove tract. Even if Legasus got out from under its small debt to Macon Bank, there was a much larger lender waiting in the wings: a lender of last resort known as Kennedy Funding.

Legasus had borrowed $9.5 million against the property from Kennedy Funding last April. It’s not known exactly how much of the $9.5 million Legasus ever saw, however. Kennedy only made a portion of the full loan available through draw downs. Legasus apparently never realized the full amount of the loan promised by Kennedy.

Whatever Kennedy is still owed will come out of the final sale price.

Collateral for loans

Until recently Legasus owned more than 4,000 acres in Jackson County. The majority of the holdings were in the Tuckasegee and Glenville area, where plans called for 1,800 lots in five separate gated communities spanning 3,500 acres.

In addition to the foreclosures last week, Legasus sold off 300 acres to a private investor for $10.1 million two weeks ago.

The first sign of financial trouble for Legasus appeared in late 2007 when Legasus sold off 850 acres to a private investor for $16 million.

A few months later, the company sought financing from hard-money lender Kennedy Funding for $30 million: $9.5 million using the High Grove development in Whittier as collateral and $20.5 million using a portion of River Rock as collateral.

Legasus has been adept at using its land holdings to leverage financing. Legasus has used various parcels as collateral for more than 50 loans from at least two dozen different banks and lenders to finance property, according to a search with the Jackson County Register of Deeds Office.

It is difficult to figure out just how much outstanding debt Legasus has on all its property. For starters, the loans aren’t all in Legasus’ name. Legasus sometimes created subsidiaries to run the loans through, making it impossible to search for all of them unless you know the names of the subsidiaries.

In addition, there is no way to tell from the deeds of trust how much Legasus has paid back versus how much it still owes on each loan.

Aside from the two big tracts under foreclosure, Legasus is facing foreclosure on a few small lots as well. Last week, two lots of two acres each in the Water Dance development between Tuckasegee and Glenville were sold at foreclosure. The two lots went for a total of $325,000, purchased by Macon Bank, who was doing the foreclosing. Legasus still owed on a $423,000 loan made by Macon Bank in 2006.

There are pending foreclosures against five additional lots in Water Dance.

Developer’s plight mixed blessing for community

Legasus developers have been attracting attention from Jackson County residents for almost two years.

When news of the plans got out in early 2007 — calling for 1,800 lots on 3,500 acres between Tuckasegee and Glenville — Legasus evoked the ire of locals. While Legasus developers pledged to create a high-quality, environmentally-friendly development, locals feared the loss of viewsheds, degradation to water quality and an eroding sense of place from the growth of gated communities.

Residents of Tuckasegee publicly raised concerns about what would happen if the developers got part way into the project only to realize they didn’t have the capital to see it through.

“Two years ago I said, ‘What if the housing bubble bursts?’” recalled Jeanette Cabanis Brewin, a resident in Tuckasegee. “What if they get up there and start ripping the top of the mountain off and they run out of money? What is going to happen to the rest of us?”

That fear has indeed played out in some places.

“Legasus is definitely not alone. There are so many right now that have folded,” said Bryan Tompkins with the U.S. Fish and Wildlife Service in Asheville.

Tompkins has seen developers make an initial foray into development, cutting roads and grading lots, only to find out there isn’t a market for those lots after all.

“When they go bust, they have all these roads cut and they are not there to maintain it,” Tompkins said.

Environmental agencies are left trying to figure out what to do and who is responsible. In Madison County, a development abandoned by its owner needs $750,000 in work to get it back in compliance, Tompkins said. Tompkins wonders if a new owner would be able to take on such a liability.

“Who can do that and what bank is going to give you money to do that?” Tompkins said.


Vested rights

Rumors of Legasus’ plans in early 2007 helped spur the creation of a comprehensive development ordinance in Jackson County. The county adopted some of the most stringent development guidelines in the mountains.

The very development that led to the creation of the ordinances was ultimately grandfathered in, however. Legasus received vested rights, allowing it to proceed with development plans exempt from Jackson County’s new rules.

The vested rights most likely will be passed on to any new owner, according to Michael Egan, an attorney in Hendersonville who advised Jackson County during the creation of its development ordinances.

“It would be my opinion that common law vested rights would run with the land,” Egan said.

Vested rights are intended to protect developers caught mid-stream by new ordinances. Legasus argued they’d already spent a great deal designing a master plan and marketing the development to prospective buyers. If they had to start over again, they would be unable to recoup the investment they already had in it, they argued.

The same still holds true, Egan said. If the vested rights don’t pass to the new owner, it would devalue the selling price of the land, and put Legasus back in the same spot of being unable to recoup its investment, he said.

There is one catch, however. Legasus’ argued that all 3,500 acres were entitled to vested rights, even though development forays were further along on some of its tracts than others. Legasus claimed that the disparate tracts shared a common marketing theme. Residents of each development could use the amenities of the other properties, from a clubhouse at one to the golf course at another.

“If a sale of the property would somehow interfere with that common promotional plan then it is possible it might affect the vested rights,” Egan said.

Vested rights aren’t good forever. In this case, the county granted vested rights for five years.

“The clock is ticking,” said Jeanette Cabanis Brewin, a resident in Tuckasegee who has expressed concerns about the mega development. “They have used up almost two and half years of their five years.”

The economic slump may have given the community a reprieve, said Mary Jo Cobb, a Tuckasegee resident who was opposed to the scale of the development.

Most of all, “I hope this has bought us some more time to step back,” Cobb said. “There is so much interest in our environment now than there ever was before. I think that is good. We need to be aware and preserve these mountains.”

Cobb hopes the foreclosure will sideline Legasus’ plans for a golf course.

“That would be fine with me,” Cobb said.

Indeed, the foreclosure throws the fate of a controversial Phil Mickelson-designed golf course on Legasus’ property into question. A tract currently in foreclosure encompasses some of the land slated for a golf course in Legasus’ original plans.

The buyer of the tract could decide to partner with Legasus, in which case the golf course could still be pursued. If the buyer goes off on their own, Legasus could be forced to redesign the course on a different portion of the property or scale it down.

The golf course has yet to receive its state and federal environmental permits. The Army Corps of Engineers and the N.C. Department of Environment and Natural Resources had several concerns with the original design. Legasus’ application has been on hold until it could address those issues — for nearly 18 months now.

“They have not made any effort to address those concerns,” according to Bryan Tompkins with the U.S. Fish and Wildlife Service.

Legasus has lined up a biologist to conduct a bat survey of old mine caves on the property in the fall, but that has been the only movement Tompkins knows of.

Thompkins said it was abnormal to go so long without hearing from Legasus. Tompkins monitors environmental permits from developers all over Western North Carolina and often has to send them back to the drawing board.

“When things were going like gangbusters we would have gotten a response a month later,” Tompkins said of typical developers. “They would turn around with a response on a dime to speed up the permitting process so they could get on with their project.”

The recent news that part of the property is in foreclosure could explain Legasus’ silence, Tompkins said.

Jackson eyes options for current library site

In the game of musical chairs stemming from the library moving out of its current digs on Sylva’s Main Street, “rear ends” may be landing in unexpected places.

The Sylva Police Department was at least temporarily rebuffed — not “rebutted,” though you might think so — in its inquiry into occupying the old library building.

At the town board’s direction, Police Chief Jeff Jamison recently approached the county about the prospect of buying the old library and converting it into a police station. But Jamison learned the county may have plans of its own for the building. The county currently leases space for a few of its departments, which could be relocated to the old library to save on rent money.

The problem, however, is that the building only has 16 parking spaces, said County Manager Ken Westmoreland.

Another option on the table would be to sell the building to the adjacent Jackson Savings Bank. Westmoreland said the bank has long indicated interest in acquiring the building.

He said the county’s about 18 months out from making a decision. Construction has only just now gotten underway on the new library.

Still on the hunt to relieve crowding at the current town hall and police station, Sylva leaders are now eyeing a couple of former fire truck bays in the main level of town hall that are currently used for storage. Town Manager Adrienne Isenhower said they’re just putting the finishing touches on a grant application to the U.S. Department of Agriculture’s Community Facilities Grant and Loan Program to renovate the space, and hope to know by fall if they’ll get the grant.

If so, that’s what they’ll do — and that’s their druthers anyway, Isenhower said.

“I think I would pick what we’re doing [over the county space] because it will put us all in the same place. We want the expansion,” Isenhower said.

Under that scenario, “The renovation is scheduled to begin in fall of 2010,” Chief Jamison said. “The federal Department of Agriculture has money available for municipalities with those kinds of needs to expand.”

Mayor Brenda Oliver said the town would also need to conduct a feasibility study of renovation of the bays for use by police.

Katrina refugee wades into the fray against Duke

As Jackson County leaders continue their fight against Duke Energy, an unassuming local lawyer that few have heard of has appeared as the county’s heavy-hitter against the politically powerful and uber-wealthy Fortune 500 utility.

Attorney Gary Miller, 52, a former business lawyer from New Orleans, has been hired to represent the county in its push to seize control of the Dillsboro dam owned by Duke. Jackson leaders plan to use eminent domain to take over the dam and adjacent shoreline and turn it into a river park. The move would thwart Duke’s plan to demolish the dam, achieving the county’s long-standing goal to save the dam.

Miller spent most of his career to date representing the corporate world. His expertise lies not in the courtroom, but in pulling off complex deals and financings rife with legal maneuvering, at times plowing new ground where precedent was lacking. Miller has negotiated deals between mega-corporations like Shell and Union Carbide. He also has represented casinos, developers, financial syndicates and other large organizations, both private and publicly traded.

“Historically I have been a transaction lawyer. I am typically a paper pusher,” Miller said, downplaying his lawyering past.

A paper pusher, perhaps, but mass quantities of extremely complicated, critically worded paper. Hundreds of pages with millions on the line should the other side manage to get a fast one by in the language. Paper with months of legal maneuvering and tedious research lurking behind the ink.

“Yeah, I’m good at that,” Miller said.

Paper pushing, in the world of lawyers, is how things get done. Jackson County Manager Ken Westmoreland said Miller’s background is a good match for “peculiarities” of the eminent domain case against Duke.

“His experience is in corporate law, working both for and against big corporations. Secondly, he specializes in real estate law, and the condemnation is basically a real estate issue,” Westmoreland said.

The most typical work for Miller involved commercial financings: a gigantic loan collateralized by corporate assets scattered across the county.

“They will hire attorneys in each state to give their opinion of the enforceability of the documents or modify them to make them enforceable,” Miller said.

When some of those assets resided in Louisiana — such as a deal involving an oil might putting up its refineries as part of the collateral — Miller was their guy

“It wasn’t the kind of stuff your average lawyer had knowledge about,” Miller said.

One of Miller’s most interesting jobs involved dueling casinos vying for a single gaming license in New Orleans. The state of Louisiana awarded the gaming license to one casino, while the City of New Orleans granted a lease to a different casino operator. Both groups felt they were entitled to the license — seemingly a no-win situation.

“The governor forced the two groups into a shotgun wedding and they formed a partnership to operate and build it,” Miller said. The joint entity that emerged went bankrupt before they finished construction, complicating an already sticky situation. Miller spent the next two years helping to sort out the mess. Skill in sorting out messes will be critical to resolving the bitter fight and test of wills between Duke and Jackson County.

The path that led Miller to Western North Carolina isn’t exactly a pleasant one. Miller is one of the thousands of Hurriane Katrina refuges who left their home city of New Orleans for good in the aftermath of the devastation and struck out for a new life. Miller hung a new shingle in Bryson City, and calls Sylva home.

Ironically, a life-long love of paddling drew him to Western North Carolina during that trying time. The paddling community is an ally in Duke’s plan to demolish the Dillsboro dam, as it would open up a new stretch of free-flowing river. Miller can frequently be found paddling the Tuckasegee in his free time, and until recently, was a member of American Whitewater, a paddling advocacy group that is a stalwart defender of dam demolition. Yet when it comes to tearing down the dam, Miller sides with the county in its fight to save it. Miller could not talk about specifics in the case or the county’s strategy.


The fateful storm

As Hurricane Katrina bore down on Miller’s former city of New Orleans, he sent his wife and two children away. But saddled with an elderly mother on oxygen who refused to leave, Miller, too, was forced to stay behind. Sadly, his mother did not survive the paralyzing power failures that accompanied the storm.

The next day, as Miller tried to make plans to get her body out of the city, his family reached him on his cell phone and warned him of the broken levees and rising water that would soon envelop the already ravaged city. Miller escaped in time, although three weeks would pass before he could finally get his mother’s body out.

While holed up at the home of extended family the next day, Miller got a call from his law firm giving him two choices: transfer to their Houston office or their Baton Rouge office.

“I wasn’t prepared to make a decision to move,” said Miller. “I told them ‘I’ll go off on my own.’”

Miller scrounged to find a rental house for his family in Lake Charles, La., but just as they got settled in, albeit with just a few suitcases between them, a mandatory evacuation was announced for Hurricane Rita.

Miller had given one of the family vehicles to his mother’s caretaker, who had no car of her own and was stranded at a major refugee camp in Dallas. So when the evacuation order came for Rita, he piled his wife, children, mother-in-law, two golden retrievers and a pet guinea pig into their only remaining vehicle and joined the mire of traffic crawling north.

Shortly after Katrina hit, Miller had received an email from John Burton, the then general partner of Nantahala Village Resort, asking if the family was OK. Miller’s family was a regular at the Village, and he had befriended Burton after years of vacationing there. Burton had offered to put them up — an offer Miller initially declined with the intention of continuing his life in New Orleans. But as Miller reflected on his life — no home, no possessions, no job and one family car — Miller contacted Burden to tell him they were on their way.

Burton put them up for free at the Village for six weeks while they figured out what to do.

“Having lived through Katrina and two weeks later being evacuated for Rita, to be honest I was a little gun shy,” Miller said of moving back to New Orleans. “I have lived through many hurricanes, but that was something that was overwhelming.”

Miller had vacationed in WNC as a kid, often to paddle on the Nantahala. He continued the tradition with his own family, and in 1999 he and his wife bought a lot with the intention retiring here one day. They decided to make the move sooner rather than later.

“After Katrina, things and money basically had no meaning to me. My priorities were completely restructured in terms of what was important in life,” Miller said. “When you are working for a Fortune 500 company, you are just helping an officer climb the corporate ladder and make money. I had worked on a lot of ‘sexy ‘things as lawyers call it, but here I can help people. It is more rewarding professionally and emotionally.”

Miller brought a few of his big corporate clients with him, however.

“Clients said, ‘We don’t care where you are as long as you have a phone, a fax and a computer,’” Miller said.

Miller said he hasn’t experienced culture shock. He was tired of the big law firm and city life, despite the big paycheck that go with them. Miller said he paid his dues, from the 3 a.m. phone calls from big money clients who feel like talking and must be humored to missing his kid’s bedtime night after night.

While many may believe Jackson County has little chance of winning against the likes of Duke, there’s little doubt that any settlement that goes the county’s way will have to involve a very complicated game of give and take. Whatever the outcome, Miller will be back in his old element in his new WNC home.

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