Landslide repair below Ghost Town set to begin

Stabilization of the landslide below Ghost Town in Maggie Valley will begin in two weeks, finally bringing comfort to downslope residents who have lived below the looming threat of another slide for half a year.

The slide last February scoured nearly a mile-long path down the mountainside with a wall of debris 30-feet high and 90-feet wide in places. Only three homes were damaged, but several others suffered destruction to their yards.

The slide initially forced an evacuation of a couple of dozen homes for fear more of the mountainside might collapse. To date, all but one homeowner, whose home suffered the most damage, has returned.

The $1.37 million job will take five months and was awarded this week to Phillips and Jordan, a construction company that specializes in major earth moving. The same company did the rockslide cleanup and stabilization on Interstate 40 last winter.

In addition to recontouring and shoring up the mountainside, the job includes road repairs and returning a dislocated creek to its original course down the mountain.

Al Hill, a seasonal resident with a second home below the slide, said he is pleased stabilization work will be done before the worst of winter. The freeze-thaw cycle can exacerbate erosion and act as a trigger for more landslides.

Engineers and slide specialists who have inspected the site cautioned that the slope remains unstable and another slide is still not out of the question. In fact, a slide could be triggered in the process of stabilizing the slope if the contractor isn’t careful.

As a result, a geotechnical engineer will work on-site each day with the Phillips and Jordan crew.

“It is extraordinarily sensitive,” said Randy Hintz, project manager with McGill Associates, an engineering and planning firm in Asheville overseeing the contract.

The geotech engineer will dictate the final outcome, but not necessarily the approach.

“There is a fine line in telling the contractor how to do his job,” Hintz said. “We tell them how the slope needs to be, and they figure out how to make that happen.”

If things start to look dicey, it might be necessary to send an alert to homeowners to leave the area, Hintz said. The engineer will not always be able to predict how the unstable slope will respond to a particular strategy when the contractors begin moving dirt.

Landslide experts and engineers believe the slide was triggered by a collapsed retaining wall on Ghost Town’s property. Ghost Town had struggled to shore up the unstable and nearly vertical slope on and off over the years.

When the mountaintop was leveled off to make way for the amusement park in the 1960s, loose dirt was pushed over the side of the mountain without being properly compacted. It must now be peeled back to reveal the original contour and compacted as it is put back. Portions of the slope, especially at the top, will be permanently recontoured at a gentler grade that mirrors the original mountainside, Hintz said.

Ghost Town CEO Steve Shiver originally objected to the stabilization plan and demanded an alternative design, but he did not get the engineering specifications done in time to go out to bid. Shiver said he is simply pleased work is getting underway.

“I am extremely happy,” Shiver said after the contract was awarded.

The total project, including engineering, will cost $1.47 million. Federal and state taxpayers will foot most of the bill. Maggie Valley taxpayers will contribute $25,000, and Ghost Town has pledged to contribute $25,000 as well.

Ghost Town has been in bankruptcy the past 18 months. Time is running out for the amusement park, which is being threatened with both foreclosure and liquidation. But Shiver remains hopeful a loan will come through allowing the park’s principal owner to regain title.

Meanwhile, Ray and Cookie Dye are tired of looking at a mud-filled pond that was buried when the slide moved across their yard. They want the pond dug out and their landscaping repaired, but it’s not clear who is accountable.

“We can’t prove it is [Ghost Town’s] fault,” Cookie Dye said.

Town Manager Tim Barth said town crews would try to dig out their pond for them.

Landslide repair down to the wire as competing plans play out

The clock is ticking for stabilization work on a landslide in Maggie Valley to get underway or a federal grant to pay for the work will be lost.

A $1.3 million grant to recontour the precarious mountainside near Ghost Town in the Sky amusement park was secured months ago from the Emergency Watershed Protection Program. But developing engineering plans, securing environmental permits and navigating the various state and federal agencies overseeing pieces of the work has taken months. The Emergency Watershed program has now granted a third — and final — extension for the stabilization work and set a deadline of Oct. 16.

“We need to be under construction by then,” said Town Manager Tim Barth. “They indicated this would be the last extension.”

The town is ready to go out to bid on the stabilization work, but Ghost Town does not like the design and instead has suggested an alternate plan. Engineering for the alternate plan is not yet finished, however.

Barth said the town cannot wait beyond Aug. 22 to go out to bid, or it will jeopardize getting construction underway by mid-October and in turn jeopardize the grant.

Without the grant, there is no source of money Barth knows of to stabilize the mountain. The town can’t afford the work, and the county has said it won’t put up money to fix a landslide on private property for fear of setting a bad precedent. Ghost Town, meanwhile, has been in bankruptcy for a year and a half and its ability to pay for the work is unclear.

The engineering firm, Bunnell-Lammons, has been waiting on some basic schematics from Ghost Town for several weeks in order to draw up a detailed engineering design for the alternate design. It will take two months for the project to be bid out, have a contractor selected, and for work to get underway.

“That’s why we are saying Ghost Town needs to really get it to them quickly,” Barth said.

Ghost Town CEO Steve Shiver said that there is “no problem” meeting the deadline to go out to bid. Ghost Town is delivering schematics on the alternate plan to the engineering firm this week. Shiver blames the town for plowing ahead with a plan that was “unacceptable” to Ghost Town.

“They composed the plan without any input from any property owners,” Shiver said. “If Mr. Barth would have engaged Ghost Town in the repair planning, we would already be under construction. I am frustrated that we are even put in this position by the city.”

The emergency federal grant requires support of the property owner. But Shiver said he would not agree to the first plan that was developed.

“Absolutely not,” Shiver said. Shiver said he told town officials so at the beginning of the process.

“He wasted two months worth of time. Why I have no idea why,” Shiver said. “The [engineering firm] was directed to come up with the plan absent any input from us.”

If the issue of dueling plans isn’t solved, it is unclear whether the town can compel Ghost Town to agree to the stabilization work. A state statute does allow towns to intervene if there is a threat to public safety.

“A city shall have authority to summarily remove, abate, or remedy everything in the city limits, or within one mile thereof, that is dangerous or prejudicial to the public health or public safety,” according to G.S. 160A-193.

The slide qualifies as a threat to public safety for the dozens of people living below the mountainside who would be in the path of another slide, according to N.C. Geologist Rick Wooten, who has assessed the destabilized mountainside.

“In my professional judgment, unstable slopes remain in the vicinity of the slope failure, and these unstable slopes present an imminent threat to public safety,” Wooten wrote in a letter to the Town of Maggie Valley following the slide.

Kim Hibbard, general counsel for the N.C. League of Municipalities, said the statute is most commonly used to force property owners to clean up junk cars, keep their lawns mowed or seal off old swimming pools.

But, “It is a fairly broadly written statute,” said Hibbard. Typically, the town would get a court order giving it permission to take charge of the public safety threat.

If the statute was used, the work could be billed to the property owner, in this case, Ghost Town. Although Ghost Town is in bankruptcy, the work carried out under the statute would have priority status, carrying the same weight as back property taxes, and would be the first thing to get paid off if the amusement park is either sold or liquidated.

Shiver said there are flaws in the original plan proffered by the town. For a start, it was unclear if there was enough grant money to cover the cost of the stabilization.

“There were too many variables in that plan. It had an open-ended checkbook,” Shiver said.

In addition, the original plan would claim a small flat area tucked into the side of the mountain that Shiver says is critical to the amusement park’s future plans. As the only level spot on an otherwise extremely steep slope, it’s one of the few places Ghost Town could add attractions in the future.

Ongoing issues foil Ghost Town reopening plans

Ghost Town in the Sky amusement park in Maggie Valley will not open this summer, contrary to previous assertions by park owners and managers.

The amusement park is still mired in bankruptcy and remains in a holding pattern until a major landslide blocking access to the park is cleaned up and stabilized.

A proposal by one of the park’s main owners to buy Ghost Town out of bankruptcy failed to go through as planned. Al Harper, owner of Great Smoky Mountains Railroad and a principal investor in Ghost Town, hoped to buy the park for $7 million. That price tag would fall $6 million short of covering the park’s debts, but it would have allowed the park to emerge from bankruptcy. Harper hoped to put the amusement park back in operation, but the deal was contingent on a loan from an offshore lender.

Maggie Valley business owners that rely on tourist traffic from the theme park had been hoping the deal would go through. But even if it had, the challenge of getting rides in working order to pass state inspections and hiring a seasonal staff to get the park open for the summer would have proved challenging, according to park officials.

Meanwhile, stabilization of a massive landslide that originated from the mountaintop amusement park is months away from completion. Until then, the risk of another even more massive slide is possible.

The work is estimated at $1.3 million, a tab being picked up by federal and state grants.

The town of Maggie is contributing $25,000 in matching funds and is coordinating the work. Ghost Town made a verbal promise to pitch in $25,000 as well. Maggie Town Manager Tim Barth said he won’t authorize work to start until the money from Ghost Town is in hand.

The town is still waiting on state environmental permits before the project can go out to bid. However, a debate has now emerged concerning competing plans.

Ghost Town CEO Steve Shiver is not satisfied with initial engineering plans to fix the slide.

“We thought there was a better way,” Shiver said.

The plan to recontour the mountainside on a gentler grade would claim a small flat area Shiver says may be critical to the amusement park’s future plans. As the only level spot on an otherwise extremely steep slope, it’s one of the few places Ghost Town could add attractions in the future.

As a result, Ghost Town asked for a second stabilization plan to be formulated. A slightly steeper grade, bolstered by a retaining wall, would preserve the level area.

Barth said Ghost Town must pick up the tab for engineering work required for the alternative plan, which is still in development. A cost estimate for the competing plan is not known yet, Barth said.

“If that option is significantly more expensive, that’s where more money might be necessary from Ghost Town,” Barth said.

Once one of the two plans is chosen, more detailed plans must be prepared before the project can go to bid.

Engineers still honing plan to stabilize remnants of Maggie landslide

Once repair work is complete, a precarious Maggie Valley mountainside destabilized by a major mudslide will be returned to its natural state.

The hard part will be getting to that point.

Last Wednesday, anxious residents downslope of the slide along with town leaders gathered to hear the plan of attack. Three engineers from McGill Associates and Bunnell-Lammons presented their preliminary reports, which recommend methods for both stabilizing the slope and restoring a displaced stream to its original path.

The top of the mountain was leveled more than 40 years ago to make way for Ghost Town in the Sky amusement park. Unwanted dirt was pushed over the side of the mountain in the process.

Engineers want to remove that fill soil and re-grade the slope to its natural state, peeling back the layers until they reach the contour of the original mountainside.

For now, it is unclear how exactly contractors will go about their work without setting off another slide, however. Town Manager Tim Barth said he is not sure who would be liable if another slide were to occur.

Without repair, however, a slide of the same or even greater magnitude than the last one could occur, according to Bunnell-Lammon, which is in charge of the slope stabilization part.

The state geologist earlier said up to 16,000 tons of loose material threatens the mountainside. Homes below have been left endangered ever since February’s slide, which left a 3,000 feet wake of destruction down the mountainside.

In engineering terms, a “factor of safety” of 1.0 or less indicates an “impending or active slope failure.” The upper portion of the slope now has a factor of safety of 0.6. Bunnell-Lammons recommends a minimum a factor of safety of 1.3, but preferably 1.5.

While the “how” of the plan is still being formulated, one thing is clear, use of major equipment will be minimal.

“Some of those jobs, it’s shovels and wheelbarrows,” said J.P. Johns, an engineer with McGill.

“This is not going to be a scenario where we get large pieces of equipment up there working around,” said Randy Hintz, project manager with McGill. “This is more likely going to be a situation where we have bobcats (small graders) and mini-excavators up there working.”

Red tape

The primary source of funding for the approximately $1.4 million project will come from a federal grant, while N.C. Department of Transportation will fund much of the rest. Meanwhile, Ghost Town and the Town of Maggie Valley say they will contribute $25,000 each.

All work will be supervised by qualified field specialists, who will be on site to approve even the most minor changes to the official plan. Contractors must be certified by the DOT and demonstrate a minimum of three similar jobs completed successfully.

Barth says he is hopeful it will take no longer than two to three months for the work to be completed once it begins.

McGill is waiting to receive necessary permits before it can hire a contractor to start work. The firm anticipates that a permit from the Department of Environment and Natural Resources could take up to 30 days.

Even after that, the DOT will require engineers to put the job out to bid for a minimum of 21 days.

That announcement left the crowd stunned at Wednesday’s meeting.

“That’s ridiculous,” someone whispered.

“Is there no way to expedite the 51 days you were talking about?” asked Mayor Roger McElroy. “That seems to me like an unreasonable time.”

Hintz responded that since North Carolina has not declared a state of emergency — like the town of Maggie Valley and Haywood County did in February — his firm has little choice but to follow the normal protocol for publicly-funded jobs.

“In order to get the state funds to participate in this project, it must go through all the same channels,” said Hintz, while reassuring residents that the project has moved forward since February. “We’ve accomplished an awful lot at this point.”

Resident Kurt Biedler asked specifically if debris would be removed from his house, one of the five worst damaged by the slide.

“I mean these are things that are very important to me right now: trees, rocks, guardrails, timber,” said Biedler, who has moved to Arden for now.

Hintz said he would have to check with the funding agency before he could answer. “We have been given a very narrow focus on the types of things we can spend this money on,” said Hintz.

As part of the stabilization process, a road on Ghost Town’s property that sits on top of the fill dirt will be dismantled. The road is key to getting from one part of the amusement park to another. It will not be rebuilt by contractors working on the project.

According to Bunnell-Lammons, it appears the landslide started at Ghost Town’ retaining wall, where the fill soil placed with the MSE walls met underlying residual soil. Those MSE walls will be removed as part of the repair process.

Bunnell-Lammons stated in its report that it had been specifically directed not to determine the cause of the slide or evaluate the parties responsible for the slide.

“Our scope of work is how to immediately repair it,” said Will Gentry, a Bunnell-Lammons engineer. “We have not gone into why did it fail and how did it fail.”

Creek restoration

Meanwhile, mud, downed trees, and other debris have stopped up culverts where the creek crossed Rich Cove Road three times on its way down the mountain. The landslide also created a wide, long swath now prone to erosion.

To restore the stream, McGill’s plan recommends removing mud, downed trees, and other debris from three culvert crossings along Rich Cove Road. Currently, the blocked up culverts are forcing the stream to divert from its natural path.

Contractors will work upstream to downstream in the upper section, then downstream to upstream in the lower portion in order to work “dry.”

The removed trees would be ground up into wood mulch, which will be spread out on the mountain slope. This will minimize how much material contractors have to deliver up the steep slope.

“We’re going to try to limit the hauling out and the hauling in,” said Johns.

“Speed bumps,” made of mulch will be installed to slow down water as it flows down the slope.

Vegetation will be re-established with native species as much as possible, though a true restoration will be difficult to accomplish with the limited funding that’s available.

The first priority, however, will be to address the unstable slope at the top of the mountain.

“We don’t want to do any work down below until we get the top stabilized,” said J.P. Johns, an engineer with McGill.

Maggie slide victims still living in limbo

More than three months have come and gone since a major mudslide crashed through Maggie Valley’s Rich Cove community, and slide victims are still wondering when a cleanup will finally begin.

Their properties are not much better off since the Feb. 5 landslide occurred, with enormous boulders, splintered trees and muddy debris still cluttering yards. Some residents with ruined drinking wells continue to suffer lack of access to water.

Then, there’s the 12,000 to 16,000 tons of loose material hanging over their heads at the top of the mountain.

For now, these homeowners have little recourse. Their homeowner’s insurance does not cover landslides, and Ghost Town amusement park — where the slide originated — is still mired in bankruptcy and had no liability insurance at the time of slide.

While a federal grant has been devoted to fix the dangerously unstable mountainside, no state or federal funds have been dedicated to repair homes and private property. The grant will do little to help residents whose driveways are busted, drinking wells ruined or homes rendered unlivable.

Many slide victims have flocked to town hall for the twice-monthly updates from Town Manager Tim Barth, but their questions seem to outnumber the answers currently available.

About 16 concerned citizens came to the latest meeting last Wednesday (May 5) when Barth informed them that a plan for stabilizing the mountain and cleaning up debris that threaten the nearby stream may be in place by next week.

Most of the $1.4 million project will be funded by a federal grant, while the Department of Transportation will fund much of the 25 percent local match, as the slide impacted state-maintained Rich Cove Road. The Town of Maggie Valley and Ghost Town have contributed $25,000 each toward that 25 percent match as well.

Resident Ike Isenhour said the residents in Rich Cove just don’t have the funds to chase Ghost Town with lawyers to receive compensation for the damage to their property.

“If you’re poor folk, and you’re living paycheck to paycheck, then you have no recourse,” said Isenhour.

Isenhour’s driveway on Landing Drive was taken out by the landslide, and though volunteers have installed a temporary fix, he’s now in need of a more permanent solution.

A few thousand dollars worth of gravel would be a mere drop in the bucket but would help his family immensely, Isenhour said.

Meanwhile, Isenhour’s neighbors still have no access to water, and have run a hose to a relative’s house nearby, where they often fill up bucketfuls of water to bring back home to flush their toilets. The situation has remained unchanged since the mudslide occurred, though warmer weather means the water running through the hose no longer freezes as it did this winter.

Barth responded that the federal Emergency Watershed Protection grant is not designed to do work on private property.

“Things like digging somebody a new well, I don’t believe would be a qualifying expense under this grant,” said Barth.

The solution may lie with private citizens once again. The Greater Maggie Valley Natural Disaster Team, which involves a slew of churches, businesses and private citizens devoted to helping those affected by natural disaster, helped slide victims in February and are exploring ways to continue assistance.

Erma Bond, assistant pastor at the Maggie Valley United Methodist Church and part of the disaster team, regularly attends the semi-monthly meetings at town hall.

Bond and her team have discussed the possibility of helping residents regain a water supply many times without yet coming to an agreement.

“If we helped the ones that had the water problem, then what are we going to do for the others?” said Bond.

It may be best to donate a collective disaster relief fund to the town to prioritize, Bond said.

Stabilization to begin soon

Two engineering firms have been commissioned for $125,000 using money from the federal Emergency Watershed Protection grant.

McGill Associates will coordinate stream restoration and debris removal, while Bunnell-Lammons, a geotechnical engineering firm based in Greenville, S.C., will determine how exactly to stabilize the slope.

Eager contractors have already begun contacting the companies expressing interest in taking on the work, but Barth said they must undergo a thorough vetting process to ensure they are qualified and experienced.

“Someone who has a small backhoe and a dump truck cannot go up and do this work,” said Barth.

State Geologist Rick Wooten said the earth continues to shift beneath Ghost Town in the Sky, a mountaintop amusement park where the slide originated from behind a series of terraced retaining walls.

On May 3, Wooten traveled to the top of the mountain once more to measure a scarp in the pavement. Wooten said his measurements show land there has moved down 4.8 inches vertically, and horizontal displacement has occurred as well — meaning the slope is moving both downward and outward.

Wooten is not alarmed by the slight creep, however.

“It’s nothing dramatic,” said Wooten.

With the rainy season upon us, however, Maggie Valley resident Deborah Reynolds asked Barth if any preventative actions could be taken before work officially begins to stabilize the mountain.

“Is there any type of measure they can go ahead with so that people can at least feel safe?” asked Reynolds.

“Someone needs to make sure they go up there every time it rains,” added Resident Denise Sutton.

Barth said the town might take action if rainfall exceeds five inches, but with the only road to the top of the mountain still largely impassable, it’d be difficult to do much work now.

Town steps in

The town hall meetings Barth conducts run fairly casually, with residents candidly discussing what they’ve read in the paper this week, expressing their ongoing concerns and asking questions informally. Many of the questions revolved around Ghost Town, which may emerge from bankruptcy soon with a new owner, Al Harper. (see story on page 6).

But Barth was unable to shed much light on Ghost Town’s plans.

“I wouldn’t know Mr. Harper if I ran into him,” Barth replied.

Residents were miffed at the lack of communication from Ghost Town.

“Nobody hasn’t come talk to us,” said resident Tammy Rich. “We haven’t seen a soul. We still don’t have any water.”

“He says they’re going to open in July,” said Resident Betty Miner. “What a laugh.”

Resident Jane Simpson asked if the town could prevent Ghost Town from opening until the stabilization is complete.

“I don’t know if they can open or not,” said Barth. “But if their customers come to me and say ‘Is it safe to go up there?’ I’m going to say ‘No.’”

According to Isenhour, there is too much focus is on getting Ghost Town back open for the summer season rather than helping impacted residents. Barth said the town’s main focus is to see the mountain stabilized and safe, not to help Ghost Town reopen.

Though the Rich Cove community lies in both town and county territory, town leaders have spearheaded the cleanup effort, tracking down funding for the cleanup and keeping residents in the loop with the regular meetings.

Miner said she’s grateful to the town for holding the semi-monthly meetings but would like to see an engineer or geologist familiar with the efforts inform residents about their findings.

Barth said he was planning to do so once more specific plans are in place.

“It doesn’t make sense for the engineers to come before they complete their report,” said Barth.

Ghost Town owner Harper daunted but not deterred

As Al Harper watched the national recession undermine ticket sales at Ghost Town amusement park over the past two years, he faced a tough choice: pump more money into the faltering theme park or throw in the towel?

Walking away would mean losing the millions he already invested. But investing more could mean throwing good money after bad, with no hope of recouping any of it at the end of the day.

Harper ultimately drew his inspiration from a favorite historical visionary.

“It is kind of fun to do the impossible,” Harper said, quoting the words of Walt Disney, which are inscribed on a plaque he keeps on his desk.

Harper, the 65-year-old owner of the Great Smoky Mountains Railroad and scenic rail lines in Colorado and Texas, wants to revive the bankrupt and beleaguered Maggie Valley theme park.

Harper has been a major backer of Ghost Town since 2006, but he shared ownership with other partners and investors. Under Harper’s rescue plan, he will pay off $7 million of the park’s $13 million in debt — and emerge as the sole owner of the park in exchange.

The host of other investors will be cut out and their equity in the park simply evaporate.

“I have lost a lot of money. You have no idea,” said Steve Nichols, an investor from Orlando. “It totally ruined my life.”

Harper will also walk away from more than $5 million in back debt — including hundreds of thousands owed to local businesses, from electricians and plumbers to gas companies and media outlets — which will be wiped away by the bankruptcy court.

Despite the financial carnage in its wake, Ghost Town would avoid the uncertain fate of foreclosure and emerge from bankruptcy with a leader at the helm determined to resurrect the Old West theme park.

“I believe if there is anybody that can pull it off and can keep it as a theme park it is me,” Harper said.

To fund the deal, Harper has lined up a loan with an offshore lender. He said he is “90 percent positive” the loan will come through, hopefully by early June. The Greek financial crisis has come at a bad time, however, and Harper hopes it doesn’t make the lenders nervous.

Harper is putting up the Great Smoky Mountains Railroad as collateral, pledging 100 percent of the railroad’s ownership in exchange for a $15 million loan.

“I am gambling my railroad,” Harper said.

Half the money would be used to buy the park out of bankruptcy, and the other half would sustain operations and bankroll improvements to the park until it begins turning a profit. Harper has built in losses for the first three years, though he hopes to turn it around quicker.

The plan has been approved by the bankruptcy court. All the deal waits on now is the loan to close.

When Ghost Town was put up for sale several years ago, Harper was courted by tourism leaders in the region. Harper originally hoped to be a silent partner with a limited investment.

But the other two partners were unable to raise the cash they promised, and Harper was being pressured to put up more money, he said.

“Right at the beginning they were $2 million short. They said ‘Would you co-sign with us?’” Harper said.

The pattern continued over the next two years as the park struggled to get off the ground and stay afloat.

“I didn’t want to lose the $2 million, so I put in more,” Harper said.

Similar cash calls went out to all the shareholders and investors, but Harper’s deeper pockets left him as the last man standing when the need arose to pitch in more, he said.

Harper ultimately found himself in for more than $4.5 million in loan guarantees — which he is now on the hook for if the park goes under. It’s partly what motivated his plan to buy the park out of bankruptcy.

“Here are my choices. I can forget Ghost Town and write a check for $4.5 million and never look back. Or I can go in and try in this crazy economy to buy Ghost Town,” Harper said. “The easy way out is to walk.

“But this is a lot deeper than that,” said Harper. “My name got attached to it.”

A lot to lose

Several Maggie business leaders are among the ranks of those who will lose shares in the park, but those interviewed for an article last week don’t see their investments as being for naught. As long as Ghost Town continues to operate and bring in tourists, they believe their contribution helped the greater community, even if they personally have nothing to show for it.

A handful of investors from out of state who put up capital for the park’s purchase in 2006 are not feeling so rosy by what they see as an end-run by Harper. But they are helpless to do anything about it.

“I don’t think there is anything I can do other than write it off as a bad investment,” said Court Huish, an investor from California. “That’s just business.”

Jeff Anderson, an investor from Florida, will lose a substantial six-figure investment.

“I am not happy with what has transpired, but it is what it is. The bankruptcy court is the bankruptcy court,” Anderson said.

Nichols not only stands to lose his six-figure investment as a shareholder, but he is also on the hook for a portion of the park’s mortgage, a portion of which he personally guaranteed.

Ghost Town took out a loan of $9.5 million with BB&T in 2006. Harper’s deal will only pay off $7 million — leaving BB&T short by $2.5 million. Naturally, BB&T is coming after Nichols to make good on the portion he signed a personal guarantee for. Nichols wouldn’t say for just how much.

“The nail is in the coffin. They may as well throw the dirt on,” Nichols said.

Nichols said the owners kept returning to investors asking them to put up more to keep the park afloat, but he didn’t have any more.

“It’s not that we don’t care,” Nichols said. “I think Ghost Town is a wonderful place, but if you haven’t got the money you haven’t got the money.”

Besides, the shareholders weren’t given a say in park operations, like the large amount of the money spent on upgrades the first two years after reopening. The 1960s-era amusement park was plagued by crumbling infrastructure, from a jury-rigged electrical system to malfunctioning rides. Putting the park in order required a “big capital burn” and dug a hole it couldn’t emerge from, Nichols said.

“I think they tried to fix too many things too fast instead of little by little,” Nichols said.

Anderson agreed, to a point.

“To suggest the sole reason for the failure of the park to perform was because of the capital over-expenditure is ridiculous. As with everything that fails, there is not one reason, there is multiple,” Anderson said.

Nichols said the park has the potential to make money, but luring visitors was ultimately the main challenge.

“If you don’t have enough people coming, what are you going to do? It’s Business 101,” Nichols said.

Particularly in the days of Six Flags, Busch Gardens and Carowinds.

“That stuff wasn’t there back in the 1970s,” Nichols said.

Harper estimates it will take 150,000 visitors a year to make the park profitable. It brought in just 71,000 last year while suffering from the negative publicity of bankruptcy and spending no money on advertising.

As a sole owner, Harper said he will have the control he needs to make the park work — control he didn’t have under the old entity. Harper points to his success with the Great Smoky Mountains Railroad, even during the recession.

“My worst year ever I put 150,000 people on a train,” Harper said. Harper plans to cross-market with the railroad to send visitors Ghost Town’s way. He will also combine functions like payroll, accounting and ticket sales, saving hundreds of thousands, he said.

Huish, Nichols and Anderson say they were not properly kept apprised of unfolding events, like Harper’s bid to buy the park.

All three were all brought to the table as investors by Hank Woodburn, one of the lead buyers in 2006. Woodburn comes from the amusement industry, operating a network of 10 fun parks with water parks, mini golf, laser tag, go-carts and the like under the company Adventure Landing. Woodburn also recruited Harper to the deal.

Woodburn, who will lose substantially in the deal, did not return messages.

Moving on

Harper doesn’t see his deal as ruthless. The alternative was foreclosure, and under that scenario, the investors would likewise lose all their money and the small businesses still would go unpaid. Under Harper’s plan, at least Ghost Town has a shot at staying an amusement park.

Harper could theoretically use part of the $15 million loan he is taking out to pay back those left holding the bag. But divesting the park of its old debt is key to Harper’s business plan.

“I can’t pay for all the mistakes that happened in the past,” Harper said. “It is a tragedy that it ended up like it ended up.”

Harper said he is not exactly a winner in whole deal. He’s taking on a major new venture at the age of 65 — a defensive but risky strategy to protect the investment he already sunk into the park. In addition to the $7 million Harper will pay for the BB&T bank mortgage, he is on the hook for $2 million on an outside loan to fund improvements at the park that he co-signed for — which must be paid separately.

“I could take the approach I was a victim. But the world is full of victims,” Harper said. “I made mistakes, so I am going to correct them. I am going to make this thing work. We have got to move forward and get this past behind us.”

Getting the park open

A deal to bail Ghost Town out of bankruptcy court is contingent on a loan from an offshore lender.

If it goes through, the park could be open by the beginning of July, according to Ghost Town’s CEO Steve Shiver. Shiver told a group of business owners last week that there is a lot to do to get the park open for the season. Once the loan comes through, work can begin.

Workers must be hired and trained to run the park, but the biggest challenge will be getting the grounds, rides and facilities ready. Shiver laid out a long list of needed repairs, including replacing water pipes that froze and broke over the winter and two broken water pumps that move water around the mountaintop. Winter even took its toll on the rides, some of which need retrofitting now, Shiver said. The major rollercoaster, which opened only for a short time last season, has inspection hurdles to pass once more.

One issue to contend with will be nearly $400,000 in debt from 2009. The long list includes paying off at least $30,000 in utility bills from 2009 to get water and power restored.

It is also unclear whether the park could reopen until the mountainside below, which was destabilized by a mudslide, is shored up.

Ghost Town liability insurance lapsed prior to Feb. 5 mudslide

Ghost Town in the Sky failed to make timely payments on its liability insurance policy, and as a result it lapsed just days before a massive mudslide originating from the theme park wreaked havoc on the mountainside below.

Now, property owners downhill of the mudslide whose homes were damaged may have no recourse to pay for repairs to their homes.

It is unwelcome news, although not surprising, to Kurt Biedler, a homeowner in the path of the slide whose home is now unlivable.

“We are victims of shabby business,” Biedler said. “Ghost Town is the Sky has effectively turned my life upside down and it is a very difficult thing for anyone to put with. It is not an easy thing knowing that a company, whether it is bankrupt or not, has been allowed to pull the shenanigans they have.”

Biedler and his wife have a mortgage on a house that has been destroyed. They say they are innocent victims with no clear or obvious path for recourse. But that isn’t going to stop Biedler from trying.

“We are still exploring our options of what we are going to do. There are always options,” Biedler said.

Ghost Town CEO Steve Shiver and others knew almost a year before the mudslide that the mountain was unstable. Ghost Town hired an engineer to examine the slumping portion of the mountainside in early 2009. The report calls into question the structural integrity of a massive series of retaining walls holding back a section of the mountainside that had proved troublesome on and off for 30 years.

“The MSE wall is not functioning as intended at this time and structural failure of the wall is possible if not replaced,” the report by Haywood County engineer Pat Burgin states.

The report was made in March 2009. However, Ghost Town owners failed to alert anyone of the potential danger — not the town, county, emergency agencies or homeowners living below.

Insurance saga

Ghost Town was three months behind in liability insurance payments when a cancelation was issued on Jan. 28.

The mudslide happened on Feb. 5. Five days later, on Feb. 10, Ghost Town wired $27,400 to cover the past due bill. Insurance was reinstated, but it was too late to cover damages stemming from the mudslide, the insurance company contends.

The insurance company, First Mercury Insurance, has been contacted by three homeowners suffering damage in the mudslide, according to the company. But First Mercury says it will not cover the claims, citing a lapse of Ghost Town’s liability insurance policy at the time of the slide.

“Some homes were in the direct path of the landslide and certain homeowners appear to be pursuing claims against Ghost Town for damages,” an attorney for First Mercury wrote in a federal bankruptcy court filing. “First Mercury contends that it has no duty to defend or indemnify any claims that may arise from the landslide because the policy was cancelled prior to the landslide, and therefore does not afford any coverage.”

Homeowners could redirect their claims and lodge them against Ghost Town directly instead of the insurance company, but First Mercury admits in the court filing that route could be futile, stating there is “little to no likelihood of recovering anything from (Ghost Town) itself.”

Ghost Town has been in federal bankruptcy court for more than a year. This week, Ghost Town brokered a deal to sell the amusement park to one of its current owners, but under a new corporate entity — walking away from several million in debt in the process and starting over with a clean slate.

The former corporate entity of Ghost Town may cease to exist once the new corporate structure takes over. The new entity, while comprised of the same major player, may not be responsible for claims against the old corporate entity.

It’s the same principle that allows the amusement park to leave behind millions in unpaid debt while the primary owner remains at the helm.

First Mercury Insurance points out in its court filings that Ghost Town may not be liable for damage claims anyway. Lawsuits would have to hash out whether Ghost Town is at fault for the slide before the insurance company would have forked over damages under the policy, even if it was valid.

When The Smoky Mountain News first reported on Ghost Town’s insurance lapse two months ago, Ghost Town partners insisted their coverage had never lapsed. Failure to keep insurance current is a violation of bankruptcy rules.

Ghost Town has not filed a response to the court filing of First Mercury outlining issues with the insurance coverage.

Landslide count keeps climbing

In a record year for landslides, yet another one struck this week, this time along U.S. 441 in Great Smoky Mountains National Park.

The slide occurred Monday near Newfound Gap, about a mile from the Tennessee state line. One lane of the road is open to traffic. The park hopes to reopen two lanes by commandeering a portion of an overlook parking area for a travel lane.

U.S. 441 between Cherokee and Gatlinburg is one of the only routes between North Carolina and Tennessee that is passable. Three other highways between the two states are closed due to rockslides of their own.

• Interstate 40 has been closed for five months now near the state line.

• U.S. 64, which runs between Murphy and Chattanooga, is also closed due to a rockslide.

• U.S. 129, which leads from Robbinsville to Maryville, Tenn., is also closed due to a rockslide.

There have been four other landslides in the region: a major one in Maggie Valley that forced an evacuation of several homes, one that took out a road and a lot in the Water Dance development in Jackson County, one that took out a road and a lot in the Wildflower development in Macon County, and one in Macon County that could be partly to blame for destabilizing a home foundation.

Moreover, there have been two more rockslides on the Tennessee side of the Great Smoky Mountains National Park.

Federal, state taxpayers to fund Maggie slide cleanup

Everything has fallen into place for a government-sponsored cleanup of the Rich Cove mudslide in Maggie Valley, an undertaking pegged at roughly $1.47 million.

The federal Natural Resources Conservation Service agreed last week to foot 75 percent of the bill to stabilize the slide through the Emergency Watershed Protection program, which helps repair watersheds damaged by natural disasters.

The N.C. Department of Transportation has agreed to fund much of the remaining 25 percent local match since the slide affects a state-maintained road.

Maggie Valley’s town government has agreed to chip in $25,000 toward the local match, while Ghost Town in the Sky, a bankrupt amusement park where the slide originated, has volunteered $25,000 as well, but possibly in in-kind services rather than cash.

Town officials were driven by a sense of urgency to lock down funding for the cleanup since a large part of the mountainside remains unstable and threatens an even worse slide.

“I don’t think we have a choice but to do it,” said Maggie Valley Alderwoman Saralyn Price. “Because I feel like it’s a safety issue.”

At first, the town was at a loss for how it’d come up with the local match, which under current estimates comes to $334,000. Maggie Valley could hardly afford the whole amount by itself.

The town asked county leaders for help, but they balked at the idea of committing tax dollars to fix a slide that originated on private property — even though the property owner is in bankruptcy with a long trail of debt and was unable to pay up, either.

In the end, N.C. Rep. Phil Haire and N.C. Sen. Joe Sam Queen stepped in, teaming up to secure emergency funding from the N.C. DOT.

“We realize the dire circumstances those people who use Rich Cove Road were in,” said Haire. “I’m certainly glad Sen. Queen and I could do all we could to help out.”

Alderman Scott Pauley said Friday he was disappointed in the county board for not pitching in.

“We’ve got county residents and town residents that are losing sleep every night and haven’t slept since the slide,” said Pauley.

Pauley called the town’s contribution of $25,000 “a small, small cost to get this done.”

Town Manager Tim Barth said the town had to take action because it was unrealistic to expect Ghost Town to foot the bill.

“The reality is Ghost Town is in bankruptcy,” said Barth. “I know that they don’t have $334,500, so there’s no point in forcing them to pay because they won’t.”

However, Barth and Pauley have not ruled out the possibility of suing Ghost Town to be reimbursed. For now, Pauley said the focus is on getting the cleanup going.

“Anything after that is going to have to be for a later date,” said Pauley.

Ghost Town CEO Steve Shiver said he hopes to pay the company’s share of the cleanup cost by contributing work from Ghost Town’s engineer.

“We want to make sure that he’s involved completely,” Shiver said.

Shiver also pointed out that Ghost Town has already cooperated with NCDOT, and state and local agencies to help study the slide and facilitate cleanup.

According to Shiver, the economic importance of Ghost Town to Maggie Valley “far outweighs” the government’s investment to repair the slide.

“There are issues that we all must be a part of the solution,” said Shiver. “This is one of them.”

Engineers stumped on best way to shore up Maggie slide

With federal and state grants in hand, work will soon get underway to stabilize the remnants of a massive landslide still looming precariously over Maggie Valley.

“You can see the cracking of the soil. It is obviously very unstable and just hanging there, if you will,” said Mike Hinton, manager of the federal Emergency Watershed Protection Program administered by the Natural Resources Conservation Service office in Raleigh.

The landslide originated from Ghost Town in the Sky, a mountaintop amusement park, and damaged five homes along its 3,000-foot path. But several other households are in the potential line of fire if the remaining portion of the mountainside gives way, essentially leaving them without a home until something is done to fix the unstable slope.

A chief concern right now is spring rain. A good, soaking rain could easily trigger a second slide, which makes time of the essence, Hinton said. But not at the expense of a carefully crafted plan.

“I know it is an emergency, and I know the people who are out of their homes are anxious for work to be started. I know if I was in their shoes I would be thinking ‘This is taking forever,’” Hinton said. “But at the same time, we need to make sure that whatever we do does not cause further damage and takes into account the workers’ safety.”

While a second slide would certainly solve the problem of trying to stabilize the precarious slope — it would simply come crashing down on its own — a second slide could be even worse than the first one.

Only a portion of the slope collapsed in the first slide. Far more is still vulnerable.

While a second slide would likely follow the same route down the mountain, it would be deeper, wider and faster — and travel further. Houses unscathed last time could be taken out by a second slide, Hinton said.

Plus, giant piles of dirt and debris left in the landslide’s track would get caught up in a second slide, creating even more momentum, Hinton said.


A daunting challenge

But figuring out how to shore up the remaining mountainside remains elusive. Clearly, it can’t all be stabilized in place. Some will have to come down, Hinton said.

“That is easier said than done: how do you remove it?” Hinton said. “That part is really the dilemma.”

A contractor who was at Ghost Town the same day Hinton was surveying the site said he was willing to get on his dozer and just start pushing dirt off the side. But if the whole slope began to give, the man on the dozer would have had a wild ride to the bottom.

Hinton said it would be impossible to be stationed on the slope itself while performing the work. Equipment would have to far from the edge and on stable ground. But from that far back, could it reach out far enough to knock loose the unstable part?

Another option is evacuating everyone who lives below and blasting the soil off — not in one big blast but a series of smaller, controlled blasts.

“But who is to say one little blast wouldn’t trigger the whole thing?” Hinton said. So that option would likely be frowned on.

Simply coming up with an estimate was challenging. They obviously couldn’t scamper along the face of the slope. Hinton wasn’t willing to stand at the bottom and look up at it either. So all they could do was stand at the edge and look down on it.

As a result, the estimate of $1.47 million is an estimate in the truest sense of the word.

“That amount could change dramatically,” Hinton said. “This is really a starting point if you will. We had to come up with an estimate in order to request the funds, so that’s what we did.”

The first order of business now is to hire a geotechnical engineer to do a more thorough assessment. Once work does get underway, Hinton has no guess how long it may take, since the approach hasn’t even been figured out.

Last on the list will be cleaning up debris left along the track of the first slide. The area is steep, wooded and inaccessible, so carting off truckloads of dirt from the slide’s wake may be difficult, Hinton said.

“You would likely create even more of a problem, so the question is ‘Can we stabilize it on site?’” Hinton said. “I think everyone would agree just throwing grass seed on it isn’t going to do it.”

But, it could be possible to recontour the mounds of debris and build some retaining walls that would hold it. Rich Cove Road, which winds up the mountain to Ghost Town, is crossed twice by the slide’s track.

“For a while every time you get a rain, it is going to wash some of that across the road,” Hinton said.

For now, that’s the least of their concerns.

“The main thing is to stop a major movement,” Hinton said.

In the meantime, Hinton does not foresee Ghost Town amusement park opening until the slide is stabilized, although it is not an area his agency has jurisdiction over.

“I don’t see how they could,” Hinton said. “I wouldn’t want a crowd up there on a Saturday and that thing decide to let loose.”

Ghost Town has been struggling with bankruptcy for the past year. Foreclosure against the park is scheduled for June by BB&T, which is owed $9.5 million on the property. However, Ghost Town owners are optimistic that investors or some sort of financing will materialize between now and then. If so, BB&T has said it would call off foreclosure.

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