Labor Day Craft Show returns to Maggie Valley

More than 100 artists and crafters from all over the Southeast, including Tennessee, Georgia, South Carolina, Virginia and Alabama will gather for the Labor Day Craft Show in Maggie Valley.

Artists will demonstrate and sell their original handicrafts works from 8 a.m. to 5 p.m. on Saturday, Sept. 4, and Sunday, Sept. 5, at the Maggie Valley Fairgrounds. Admission to the event is free.

This annual event will feature piped music throughout the day. Tasty festival foods will be prepared by local groups, while The Java Hut will make its appearance selling specialty coffee-drinks hot & iced, smoothies and other crowd-pleasers.

Fireworks will be displayed at the fairgrounds on Sunday, Sept. 6, starting at dark thirty. This part of the weekend event is sponsored by the Town of Maggie Valley.

The committee is still accepting applications from crafters and vendors from all states in the Southeast.

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.

No longer resigned to handouts from Ghost Town, Maggie searches for its own identity

No one is more intimate with the highs and lows of amusement park Ghost Town in the Sky than the people of Maggie Valley.

In its heyday, the mountaintop theme park routinely drew 400,000 visitors a year to the small town. Families on vacation could be counted on to pack into Maggie’s motels and restaurants each summer.

Throughout the years, the park’s Western theme and rides grew outdated. The amusement park fell into disrepair and ultimately succumbed to bankruptcy.

The recession struck the town hard, as did natural disaster. A massive rockslide on Interstate 40 routed traffic away from Maggie all winter long. On top of that, a major mudslide that originated from Ghost Town took out a road to the park earlier this year.

The slide, which remains destabilized, has dampened any hopes of the amusement park reopening this summer.

Business owners in the valley have felt the painful economic impact of Ghost Town’s closure. Vacancy signs linger over the town’s commercial corridor, while vacant buildings for sale have become an all too common sight.

“That park needs to be open,” said Phillip Wight, owner of the Clarketon Motel. “Weekly business has dropped off tremendously.”

“There’s still people coming into the valley just to go to Ghost Town,” said Teresa Smith, manager at Maggie Valley Inn. “Once they know it’s closed, they leave.”

Mayor Roger McElroy estimates that most motels are experiencing a steep 30 to 40 percent drop in business since Ghost Town shut down operations.


Spirited efforts


Maggie’s town government hasn’t taken the major economic blow sitting down.

It purchased land to create its own festival grounds, a rare move for municipalities anywhere. A full-time festival director now works round the clock talking to promoters who might hold events there.

Maggie’s leaders have also charged a newly-formed economic development commission to study ways to bring prosperity to the valley.

Meanwhile, the planning board is crafting a set of controversial design standards to spruce up the town’s outmoded appearance that harkens back to the ‘60s. Another option being explored is a 1 percent restaurant tax to be used on tourism promotion and projects within town limits.

Town leaders as well are setting their hopes on a $6 million sports complex planned for Jonathan Creek one day. Tournaments there hold the promise of bringing thousands of new visitors each year.

Not forgetting Ghost Town, however, the town has taken the lead in obtaining funding to clean up the mudslide below the amusement park.

Not every resident supports every direction the town has taken. Many have their own ideas on how best to proceed — with or without Ghost Town.

“The biggest summer tourism market that is underfunded is motorcycles,” said Wight. “It’s not about the [motorcycle] rallies, it’s about keeping traffic flow.”

The already popular Wheels Thru Time museum, which houses rare vintage motorcycles, recently earned its own brown highway sign, which will likely draw more curious visitors to town.

Lynda Bennett, member of the Maggie Valley’s economic development commission, would like to see tax incentives for remodeling old businesses rather than have the town set design guidelines.

“People don’t want to go in and plow under businesses, even though they’re dated,” said Bennett, who is also a Realtor. “Their building has value.”

Bennett very much likes the idea of small businesses opening up “micro-offices” in some of Maggie’s many vacant motel rooms. A computer repair business could start up next to an insurance salesman, for example.

Bennett sees a dire need for fresh ideas.

“We’re trying to change the shape of our box a little bit,” said Bennett. “If we don’t get outside of where we’ve been thinking, then Maggie could continue on the same path it’s been going on.”

Wight, too, understands the gravity of the situation.

“Without a Ghost Town, we’re somewhat doomed,” said Wight. “Ghost Town made this town.”


Counting on nature


In Mayor McElroy’s view, Maggie Valley needs to focus on the basics.

“I think we need to get back to some of the things that put Maggie Valley on the map to start with, which is the beauty of the mountains,” said McElroy.

Bennett can rattle off the benefits of visiting and living in Maggie Valley: close proximity to the Great Smoky Mountains National Park and the Blue Ridge Parkway, the cool mountain temperature and incredible views. Maggie Valley also caters to those with a more adventurous state of mind, Bennett said.

“We have a little more challenging winters; we don’t have a grocery store,” said Bennett. “It’s not like we’re convenience oriented. We have other things to offer.”

Whether it’s mountain biking, ziplining, kayaking or skiing, emphasizing nature is key to revitalizing Maggie’s tourist economy in Bennett’s opinion.

Another key might be the festival grounds, which cost the town almost $500,000. A 1 percent lodging tax devoted to Maggie Valley helped bring electric lighting and other improvements to the festival grounds.

“We’re looking at everything and any way to use that facility to the fullest,” said McElroy. “Because we have a large investment in it.”

The town hired a festival director to help promote the venue after much prodding from some business owners.

Audrey Hagar, who recently went full-time as festival director, has created a promotional DVD to sell the venue to potential clients. She’s exhausted many of her connections from previous jobs to find appropriate events for the venue, which can fit up to 40,000 people.

“I’ve planted a lot of seeds, and now I’m watering,” said Hagar.

One new event Hagar recently helped bring is a vintage Volkswagen show. The town will soon vote on whethe attendees can camp overnight at the festival grounds.

Hagar is also looking at bringing back the popular Maggie Valley Moonlight Race, which once garnered ESPN coverage.

“We’re in uncharted waters,” said Hagar, pointing out few other festival grounds are run by a single municipality.

Town Manager Tim Barth said while it’s a difficult time for everybody in Maggie Valley, he urged them not to give up.

“It’s important to continue to try and find what’ll work,” said Barth.

Two towns at a crossroads

For decades Maggie Valley and Dillsboro were two of the mountain’s most iconic tourist towns. Sadly, both relied heavily — too heavily — on a single cash-cow. When Ghost Town shut down in Maggie and the Great Smoky Mountains Railroad pulled out of Dillsboro, both lost tens of thousands of visitors once delivered to their doorsteps. Both towns are now struggling to find new identities.

Senate clamps down on sweepstakes

If Rep. Ray Rapp has his way, the state House will crush video sweepstakes as fervently as the state Senate did late last month.

N.C. senators voted 47-1 to ban the video gambling machines that have evolved to circumvent a statewide ban. Court battles waged by the gaming industry had previously stalled new legislation to outlaw video sweepstakes.

The ban proposed in the House would go into effect Dec. 1. Towns like Maggie Valley, Franklin, Canton and Hendersonville would no longer be able to charge the $2,500 or more annual licensing fees on the newly illegal businesses.

Rapp, D-Mars Hill — who has been a major opponent of video gambling all along — looks forward to finally voting against sweepstakes in the House.

“It’s spreading like a contagion, and it’s got to be stopped,” said Rapp. “This puts an exclamation point on the fact that it’s an illegal activity.”

Sen. Joe Sam Queen, D-Waynesville, wholeheartedly supported a total ban on sweepstakes machines when it came to a vote in the Senate.

“These parlors are nothing more than unregulated casinos operating outside the law,” said Queen. “I listened to all sides, but stand firmly with the sheriffs and police chiefs across the state who asked us to tighten the law because of the increase in crime and high social costs that come with these illicit operations.”

Rapp cited a desperate woman in Marshall who robbed a Wachovia Bank after running up debt at two video sweepstakes places.

Rapp also pointed out that the machines are predominantly found in poor neighborhoods. According to a survey conducted in Florida, the majority of people who play earn less than $30,000 a year or are retirees.

But the gaming industry — which previously denied that internet sweepstakes were at all related to video gambling — argues now that regulation is the key. It would protect customers and create accountability for businesses.

“[Taxation] would provide more than $500 million a year in revenue according to recent figures released by the N.C. Lottery,” said William Thevaos, president of the Entertainment Group of North Carolina. “Lawmakers know there’s a pot of money there if they would just regulate it and tax it.”

Rapp has hardly been won over by the argument.

“If an activity’s wrong, you don’t do it,” said Rapp, adding that most people would not advocate making other illegal activities permissible simply to generate revenue.

Rapp said out of frustration, he has sometimes considered resorting to what his attorneys term the “nuclear option” — banning sweepstakes of all kinds.

“Every time we try to do this surgically, and sit there with our lawyers, it’s a challenge,” said Rapp. “[But] cooler heads prevailed.”

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.

$7 million investment rescues Ghost Town from bankruptcy

Ghost Town in the Sky amusement park in Maggie Valley will emerge from bankruptcy under a new corporate structure.

One of the current owners has agreed to put up $7 million to buy the park. It’s not nearly enough to cover the $13.5 million in debt the park has. The rest of the park’s debt will be wiped clean, allowing the new corporate entity to start over with a fresh slate free and clear of old debt.

The deal was approved by the federal bankruptcy court on Tuesday (May 5), saving the park from certain foreclosure.

The deal turns over ownership of the park to a new corporate entity called American Heritage Family Parks, which was formed less than a month ago by Al Harper, who incidentally is one of Ghost Town’s current owners and primary investors. Harper is also the principal owner of the Great Smoky Mountain Railroad in Bryson City, and another excursion railroad in Durango, Colo.

Harper is one of three partners that chipped in to buy Ghost Town in 2006, but is the only one emerging with an ownership stake under the new entity. CEO Steve Shiver, who will remain at the helm as day-to-day operations manager, hopes the park will open for the season by July 1.

Shiver called a meeting of Maggie Valley business owners on Monday to share details of the plan and answer questions. He acknowledged that the outcome isn’t ideal but is the best option on the table.

“There are some of us in the room that if the plan is allowed to move forward would lose a substantial amount of money, but it would allow Ghost Town to open,” Shiver said. The deal was indeed approved the next day by the bankruptcy court.

The alternative was foreclosure, which was scheduled for the end of the month if Harper’s deal didn’t go through. Ghost Town would have been auctioned off to the highest bidder. Whether there were interested buyers waiting in the wings — particularly one willing to pay more than $7 million — will remain a mystery. But Ghost Town’s supporters feared no one else would be willing to keep operating it as an amusement park.

“I don’t see anybody else stepping forward,” said Randy Bryan, a Ghost Town employee and supporter.

Ghost Town faced a perfect storm that knocked it off its feet in 2008. The nation was beset by a recession, gas prices soared, and vacation travel plummeted.

Shiver estimates that the park needs 150,000 visitors a year to be profitable. But the park only had 129,000 visitors in 2008 and 71,000 in 2009, he said. The park lost money both years.

After a 40-year run, the park had been shut down for five years until new owners came along in 2006 to resurrect it.

But they discovered the infrastructure of the 1960s-era theme park was decrepit, requiring an unexpected and substantial burn of capital to make repairs and upgrades.

“We have done our damn best,” Shiver said of the park’s struggles. “It has been a challenge to say the least.”

Who loses

Those left holding the bag under the new deal are numerous, from local business owners owed money to mudslide victims — even town and federal taxpayers will cough up money due to Ghost Town’s failings.

First come the more than 200 businesses collectively owed more than $2.5 million who will never see their money. The list includes local plumbers, electricians, contractors, building suppliers, and vendors of everything from fuel oil to advertising.

“It is very difficult for me personally to look someone in the eye I owe money to,” Shiver said. “But we have to more forward and open the park. That is our vindication.”

Shiver said the businesses aren’t the only ones not getting paid.

“Nor do any of the investors, nor do any of the bondholders. That’s just the way the cookie crumbles in the bankruptcy world,” Shiver said.

Shiver said he’s one of the losers in that sense. While he will keep his job as CEO of the park, he will no longer have an ownership stake to show for the investment he’s made, Shiver said.

“I am wiped out like everybody else,” Shiver said. “I lose a substantial amount of money. I make no bones about it. Millions.”

While some of the businesses left out in the cold by the deal may harbor ill will, locals who invested their money in Ghost Town say they aren’t angry.

“You have never heard me say a word about losing the money,” Brenda O’Keefe told Shiver at the meeting. “I want the park open. I want the park open for Maggie Valley. The poor guy who gave his 401K, now that’s a different story.”

That guy, however — Ghost Town employee Randy Bryan — said he isn’t mad either. He cashed in his 401K of more than $200,000 to invest in the park — money that he will now lose. But Bryan said his satisfaction is to see the park keep going.

“If I was ever going to give up on something, this would have been it. But I refuse to quit. I refuse to lose,” Bryan said. “I believe too much in it.”

Alaska Pressley, another Maggie Valley resident who invested a substantial sum, said she has no ill will either. Her only desire is to see Maggie Valley prosper, and the way to prosperity is through Ghost Town’s survival, she said. Pressley said she was happy to contribute to that.

“Any price is worth it to help our area,” Pressley said.

Federal taxpayers could be left holding the bag on $2.5 million of Ghost Town’s bad debt still owed to BB&T but backed by a federal loan guarantee. Ghost Town owes BB&T $9.5 million on a mortgage dating back to 2006. But only $7 million will be paid off under the current deal with Harper. The U.S. Rural Development agency had backed a portion of the loan back in 2006. The loan guarantee was intended to convince BB&T to underwrite the purchase of Ghost Town, which was otherwise considered a risky loan to make.

The U.S. Rural Development staff that made the loan guarantee wouldn’t reveal the terms — namely how much federal taxpayers may have to cough up. Richard Tucker of the commercial credit department with BB&T would not say either, citing “financial privacy,” and adding that the loan guarantee was between BB&T and the Rural Devleopment office, despite the fact that the public would be the one paying up.

And then there’s the mudslide.

Taxpayers with the town of Maggie Valley will foot at least $25,000 of the bill for the clean up and stabilization, and possibly more if costs exceed initial estimates.

Homeowners downhill of the mudslide may also be without recourse for damage to their property. (see article above).

Who wins?

Business owners in Maggie Valley seem to be pleased with just about any scenario that means Ghost Town will remain an amusement park and hopefully open sometime this summer.

“It’s a great day for Maggie,” Mayor Roger McElroy said. “The only thing I feel sorry about is anybody who is going to lose any money in the deal.”

Ghost Town today is nothing like its heyday in the 1970s and 1980s when more than 250,000 people a year funneled through Maggie Valley. But it is still a tour de force when it comes to filling motel rooms in the valley, according to Larry Debuke, owner of Tanglewood Motel for 14 years.

The county and town of Maggie Valley will also finally get their taxes. Ghost Town owes $65,000 in town and county property taxes from 2008, which will be paid when the deal goes through, and another $75,000 in property taxes from 2009, which is supposed to get paid as well.

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