Six years ago, amid great fanfare, Joe Kimmel pledged $6.9-million dollars to Western Carolina University.

Based on that pledge, with payments expected to come in over an eight-year period, WCU went forward with a new school: the Joe W. Kimmel School of Construction Management, Engineering, and Technology.

Kimmel’s ability to pay WCU, however, abruptly ended in December 2009, when his company, Asheville-based Kimmel & Associates, went into bankruptcy. He stopped at $1.43 million — more than $5 million short of the original pledge to WCU.

The date of the last payment isn’t known. WCU would not release the payment schedule.

Chapter 11 bankruptcy afforded Kimmel and his wife, Cynthia, legal protection to try to reorganize their finances, both personally and for Kimmel & Associates. The company recently came out of bankruptcy proceedings. But it remains unclear whether Kimmel will, or even would be allowed under terms of his bankruptcy emergence, to fulfill the remainder of his promise to WCU.

The Kimmels said they had $7.2 million in personal assets and $15.8 million in liabilities. Kimmel & Associates listed $2.1 million in assets and $7.2 million in debts, according to federal bankruptcy filings.

Kimmel did not return a phone message seeking comment, with an employee at his company declining on his behalf.

Construction industry crashes

Kimmel & Associates is an executive head hunting search firm founded in 1981 that is focused on the construction industry. Kimmel & Associates could at one time — and did — boast of a national client base of more than 100 companies.

Pairing a construction-management school at a university seeking national prominence in the field with a construction head-hunting firm must have seemed a match made in heaven — particularly given Kimmel’s nearly $7 million dowry.

With an additional $3.5 million in matching state money secured as a result of Kimmel’s generous gesture, WCU promised to create a first-class educational program.

“We expect this pledge, combined with additional public and private support, will result in a school that will place Western on par with the nation’s finest institutions of higher education in preparing students for careers in construction management and related fields that are critical to the emerging economy of the state and the nation,” Chancellor John Bardo said in a press conference at the time.

Kimmel generosity didn’t stop with WCU. He and his company made contributions to numerous organizations in WNC, including the University of North Carolina at Asheville, Asheville Art Museum, Buncombe County Medical Society’s Project Access, Humane Society, Center for Diversity Education, Asheville Buncombe Community Christian Ministries, Meals on Wheels and the Fine Arts League of Asheville. Kimmel also established in 2004 a fund that provided $1,000 scholarships for students in construction fields.

“Giving and serving is the nucleus of the world, when the world is right,” Kimmel noted in a company newsletter as he reflected on his donation to WCU.

That was then; this is now. The world, at least the world according to Kimmel & Associates, soon wasn’t right.

Not even close: The housing boom, which seemed to promise ever-increasing profit margins to a construction industry left almost giddy by that prospect, instead crashed. Kimmel and his firm saw business dry up, virtually overnight, as builders were forced to put their measuring tapes up and hammers down.

In 2007, Kimmel & Associates was pulling in gross revenue of more than $19 million, bankruptcy documents show. That number dropped to $16.4 million in 2008, and by the following year, the company had dropped to $8.6 million.

Kimmel & Associate’s gross monthly income in 2009 still amounted to $625,000. But, with total monthly expenses coming to $626,047, Kimmel’s company was $1,047 a month in the red.

“Collapse of the construction industry” is the single reason given as a contributing factor in Kimmel & Associates fall into bankruptcy, according to documents.

School nuts & bolts

Today, the Kimmel School offers six degree programs in two departments: construction management and engineering and technology. There are state-of-the-art laboratory facilities; and about 300 students enrolled to take advantage of them.

The Kimmel contributions have gone toward endowments for distinguished professorships, student scholarships and program support for the construction management program, including allowing students and faculty to expand their participation in academic competitions, national conferences and industry meetings, said Bill Studenc, a WCU spokesman.

WCU landed a big-name, politically connected dean in March of 2008 when Robert K. “Bob” McMahan Jr. came on board. An astrophysicist, McMahan came to the university from his previous position as then North Carolina Gov. Mike Easley’s senior adviser for science and technology.

It wasn’t just WCU that Kimmel & Associates left in the lurch. UNC Asheville, where six of Joe and Cynthia Kimmel’s seven children attended school, built the Kimmel Arena — the health and wellness center was the result of a $2-million pledge from the couple. Last year, a UNCA official told the Asheville Citizen-Times that half that amount had been received.

WCU optimistic

A full assessment of the Kimmel School financial outlook is difficult to ascertain. When asked directly whether the school would be given a different name to more accurately reflect the true giving-picture, Clifton Metcalf, WCU vice president for advancement and external affairs, responded in a written statement:

“The university has taken a long-range view in our relationship with Kimmel & Associates,” he said. “We have been confident that Kimmel, one of the nation’s premier firms in recruiting executives for the construction industry, would rebound as economic conditions improved generally and as construction activity, specifically, accelerated. That appears to be happening now, and there is no intention to rename the school.”

Metcalf’s assessment of Kimmel & Associates’ ability to fulfill its pledge might be more hopeful than realistic.

The bankruptcy plan called for Kimmel and his wife to sell their $1.2 million in gold jewelry and 100 acres in Madison County, plus turn over to debtors the leases on two properties — the business itself on Page Avenue in Asheville, and a beach house in Folly Beach, S.C., used by customers and employees. Even leases on the company’s fleet of cars were up for grabs.

Haywood County, like everyone else, is bracing for the impact of state budget cuts. But the good news is that they may leave the budget fray with fewer scrapes than they thought.

In Raleigh, budget committees have been busily trying to bang out cuts in the billions, and while nothing is yet final, a proposed House budget released last week gave a view of the carnage that may be to come.

So Haywood commissioners met with county staff to hash out what this might mean for the county’s budget and the services that rely on it.

Though there will certainly be state cuts that will fall to counties to pay for, but County Manger Marty Stamey told commissioners at a budget workshop last week he’s not as concerned as he could be.

“Best case scenario, we’ll be $250,000 out, which is good,” said Stamey, meaning that a mere $250,000 shortfall would be their best landing in the budget fallout. “A lot of counties would be proud to be where we are. People say what they want to say, but budget-wise, we’ve done the right things over the last few years.”

The county’s budget is still in flux, waiting on both state cuts and the reaction of other groups, such as community colleges and the school system, which may come to the county for helping plug holes from state cuts of their own.

Currently, community colleges are looking at a 10 percent reduction in state funding, while K-12 education was slightly shielded, only facing an 8.8 percent cut.

One area where the county might feel some crunch is in its health and human services budget. The state is seeking to reduce spending there by $527 million, including $527 million in Medicaid, $67 million for mental health services and half of the funding for senior centers. Also on the chopping block are Community Care block grants and Smart Start spending.

“Human services are really busting at the seams for demand in this county,” said Stamey, noting that a decline in services would affect many citizens harshly.

Another proposal that staff said seemed likely to come through is the closure of four state prisons. Though there’s no word yet on which prisons would close, it would shift the burden of housing prisoners serving time for misdemeanors to county jails.

Stamey reported that, while Sheriff Bobby Suttles said he was confident he could house the criminals currently in the system, predicting whether they’ll have room in the future is impossible.

“That’s one reason that we think we might need to have higher contingency this year, for things like this, because that’s an unknown,” said Stamey.

On the revenue side, Finance Director Julie Davis told commissioners that the picture is no clearer there.

Surprisingly, said Davis, the property revaluation that happened this year isn’t what’s throwing projections into turmoil.

Usually, property values would go up with a revaluation, requiring counties to tinker with the tax rate to offset would would otherwise be an unpallatable rise in property taxes.

But due to the stagnant real estate market, the total value of property remained nearly flat in the recent revaluation — requiring little adjustment to the property tax rate to bring in the same amount of revenue as last year.

Sales tax is a different story, however.

“Sales taxes have been up and down. Looking at the comparison to last year, four months they’re up compared to the current year and three months they’re down,” Davis said. “Were chasing a moving target on revenues.”

The fluctuation makes it hard to predict how much money the county can bank on from sales tax next year, but year-to-date on average, sales tax collections are down 10 percent over last year.

In light of that, and state-level slashing, a property tax rate increase might not be out of the question.

Overall, though state cuts do look grim, Stamey said he’s confident in the county’s ability to stay afloat without undue carnage. But, he said, there just aren’t any solid numbers yet to be had, so it’s impossible to know for certain.

“We’re at the mercy of a lot of people’s budget’s right now to sort of figure out our budgets,” said Stamey. “I feel like I’d be doing us an injustice right now [to give numbers].”

The picture painted by county staff was in broad strokes, an overview of what could be coming in stead of the nuts and bolts of what to do about it. But that was purposeful, according to Davis.

“We specifically did not mention numbers or the revenue neutral rate because there is so much up in the air right now,” said Davis.

Commissioners will be meeting throughout the spring for more budget talks, though they noted that much of it is out of their hands.

As Commissioner Kevin Ensley said, “so if the state leave’s us alone, we’ll be alright.”

A state budget is expected by early June.

Haywood schools talk budget

Haywood County Schools could be facing a budget shortfall of $4 million if the state House of Representatives proposed budget gets adopted. The school board held a public hearing on Tuesday to hear community feedback and discuss what cuts might mean for local schools.

The reductions would mean 46 positions would be slashed within the system. Teacher assistants would be scaled back by 49 percent, textbooks by 68 percent and dropout prevention programs, school technology and staff development initiatives, among other things, would be eliminated.

See www.smokymountainnews.com Thursday for an update on the public hearing and the impact of threats to school funding.

For the last month, Greg Petty has been on a leaflet campaign around Canton. He’s been to parking lots. He’s been to offices. He’s been to bulletin boards. He’s been inside Evergreen Packaging, the paper mill that looms large in the town’s small center, and trolled its perimeter, plastering spots that might catch the eye of workers with his restaurant’s offerings.

“We’ve got menus up at every tunnel and every gate and every parking lot,” said Petty, the owner of the Canton Lunch Box.

The Main Street lunch and dinner spot is hardly in need of new business. On any given weekday around noon, there is nary a seat to be found. The wooden tables and chairs are filled with mill workers and other locals, and the staff seem acquainted with virtually all of them.

But what Petty, with his paper push, is gearing up for is an onslaught of new customers, thanks to more than 1,400 contract workers who will descend on the town next week for a massive mill maintenance, the largest since 2003.

A collective undertaking

The workers are coming for what, in the paper business, is called a cold mill outage. The paper mill will halt operations for three days and undergo major maintenance for several weeks to overhaul the place. They’re cleaning, they’re replacing pipes, they’re rebuilding boilers, they’re aligning massive pieces of equipment like steam turbines.

It’s going to take regular mill employees working at full pelt — some clocking overtime — and a hoard of outside contractors to get it all done.

But for an often-sleepy hamlet like Canton, such an influx of people isn’t just a massive undertaking for the mill: it’s a massive undertaking for the entire town. With the incoming contractors, the town’s population will swell by a third. And out in the streets, if they’re not busily gearing up, they’re anticipating the busyness to come.

“I’m not going out to eat for the next week,” said Nancy Rathbone at Sign World WNC on Main Street.

Sign World itself, meanwhile, has been cranking out custom signage for the mill as fast as it can: signs to mark parking lots, signs to mark exits, stickers for parking, ID badges, new plaques for machinery and a plethora of other printed pieces to orient and direct the out-of-town workers. Charles Rathbone, the company’s owner, said Evergreen officials have been in nearly every day in the weeks running up to the outage.

“We’re getting a lot done for the mill to gear up and probably expect a whole lot more during the period of time that they’re here,” said Rathbone, who said he’s excited about the outage and believes it will be good for Canton.

The mill estimates that it’ll be pretty good for it’s hometown, as well. The outage should boost the local economy by $500,000, according to Mike Cohen, a company spokesman.

According to Cohen, they arrived at that $500,000 figure by using an economic impact formula that factors in things such as hotel nights, meals and gas.

Mark Clasby, Haywood County’s economic development director, said that’s only one facet of the positive impact the outage will bring.

“It’s good news because of the capital investment that they’re making in the plant to continue operations, but there are multiplier effects — it means buying supplies, there’s hotel nights, meals, things like that, expenses. All those factors go into that,” said Clasby.

A boon for business

Businesses around Canton are already feeling the rising tide they hope will continue to lift all boats.

At Days Inn on Champion Drive, they’re completely booked. They’re pretty close at the Comfort Inn just down the road, the town’s other hotel.

“We just have a few rooms, but they are very few,” said Gagan Nanda, who works the desk there. He said they’ve been taking advance bookings for three months now in preparation for the work.

The contractors themselves have been preparing, too. Anchor Steam Power, based in Asheville, said that, although they keep a crew at the plant nearly year-round to repair and maintain boilers, they’ll be sending in nearly 200 extra workers to revamp most of the plant’s many boilers.

Evergreen will be paying dearly for the maintenance — they expect it to cost in the range of $20 million.

They’ve budgeted for the outage and upped production in the weeks leading up to it so they can keep their customers’ orders filled, said Cohen, though, he notes, it isn’t a move they’re keen to make regularly.

“It’s one of those things that you do them when you need to, but not anymore often than you have to,” he said.

Of the $20 million that the company thinks they’ll spend on the outage, 60 percent of it — around $12 million — will be spent on paying workers to do the maintenance. The other $8 million will go to pay for the maintenance itself, purchasing supplies and equipment, along with preparations for the incursion of extra help.

Some of those workers, like those from Anchor Steam, are from the region. Most, though, are industry specialists who travel around the country, bouncing from site to site doing similar work.

“Most of the contractors have specialized skills for what we need,” said Cohen. “A paper mill is not like anything except other paper mills, and even those can be very different.”

With so many out-of-region workers, that means they’ll be relying on the town for pretty much everything, and in addition to shops and motels, some of Canton’s restaurants are ready to entice the temporary customers in for a meal or two.

Back at the Lunch Box, they’ve bolstered their operations in addition to their marketing.

“During the outage and the upgrade, we’re going to be opening at 10 in the morning and we’re going to double our staff,” said restaurant-owner Petty. They’ll also be delivering to the mill, and just in case anyone didn’t hear about their offerings, they’ve saturated the campus with paper.

Petty is also the man behind the renovation of the town’s Imperial Hotel, which will include a restaurant slated to open later this year. Though he was shooting for both restaurants to be open, Petty’s excited about the infusion of people and believes it will be a boon to the town’s businesses and morale.

“I think a lot of the people in town are excited about having 1,500 people in town that aren’t from Canton,” said Petty.

Rene Cutshaw, the service manager at Sagebrush steakhouse, one of the town’s other lunch spots, said they’re bulking up their normal staff schedules, too.

“We are putting some extra staff on next week and getting ready for the people staying in the hotels that are right behind us,” said Cutshaw.

And as one of only two restaurants that serve alcohol, and the only bar, they’re expecting an upshot in their sales there, too.

“We’re the only option, but we’re a good one,” said Cutshaw. “The next closest [bar] is O’Malley’s in Waynesville, so we’re making sure we’ve got a bunch of bottled beer ready and making sure we’re ready to meet their needs.”

The town itself has been helping out with operations, too. Though Town Manager Al Matthews said Evergreen has been handling most of the logistics, his staff has been helping them locate parking lots to house the workers’ vehicles while they’re here, which is no mean feat in Canton’s small downtown.

“We’ve been coordinating with their people to accommodate the extra vehicles that will be in the town, and our law enforcement is trying to accommodate that, to have enhanced patrols to protect all those vehicles,” said Matthews.

With so many unmanned cars sitting in vacant lots all day, police realize that the temptation might be too much for potential thieves.

Matthews, too, is optimistic about the benefits that the maintenance will bring.

“I think it will be very positive,” said Matthews, echoing the sentiments and hopes expressed by many in Canton ahead of the outage.

So as the little town readies for the big mill ball, they seem to have their hopes high that the temporary boom will be as loud and prosperous as estimates promise.

Maggie Valley is gearing up for its next round of beauty treatments in an ongoing effort to spruce up the town and bring some color to its streets.

The beautification program, led by master horticulturalist and Maggie Valley resident Clayton Davis, is a sweeping plan that intends to bring color to the valley year-round through mass plantings.

The first phase, which entailed planting tulip and daffodil bulbs in the town’s signature red and yellow, got under way last autumn. The bulbs need to be dropped into cold ground, so the town along with residents and businesses collectively planted several thousand bulbs last November.

The next phase of the plantings will include knockout roses, a famously hardy and simple species that blooms throughout the warmer months. Davis said that other plants intended to add color in the winter months, like nandina, will also be on offer.

The town is able to get wholesale discounts on the plants because they’re buying them in bulk, so citizens and businesses who take them up on the offer get their plants at cut-rate prices, as well as the expertise of Davis and the town’s grounds staff.

After discussion at a recent meeting of the beautification committee, participants will also get fertilizer and Nature’s Helper, a special growth aid, to help their plants along.

For its part, the town is funding the planting of its own properties — such as the landscaped area in front of town hall — with $6,000 it’s set aside for the project. Half of that sum was donated as matching funds by Home Trust Bank.

The idea behind the beautification belongs to Davis, who was inspired long ago by a trip to Summerville, S.C., where azaleas bloomed across the city. Davis and city officials hope this initiative will give Maggie Valley a face lift and bring increased tourist visitation.

Order forms for the plants are available at the Maggie Valley Town Hall and all orders are due by April 18. On sale are Gulf Stream nandinas for $11, nandinas for $18 and knock-out roses for $11. The next meeting of the beautification program will start at 10 a.m. on April 18, in the Maggie Valley Town Hall.

After eight years of entertainment, Maggie Valley’s largest venue is closing its doors, falling prey to the poor economy.

800-seat Eaglenest Entertainment was one of the largest in Haywood County and has drawn big-name acts such as Percy Sledge and Pam Tillis, but in the end, they just couldn’t keep pace with a still-sluggish economic environment and consumers’ increasingly discerning tastes in entertainment.

“There’s a lot of competition for the entertainment dollar today,” said owner Grier Lackey. “We have not been able to attract the clientele that we needed to make the place profitable.”

Lackey is putting Eaglenest up for sale with hopes that whoever buys keeps it as an entertainment venue.

“We are going to make every effort we can to try and get someone back in there that will be an asset for Maggie Valley,” said Lackey. “That’s not going to be easy, but we’ll wait for the right opportunity that will be an asset to Maggie Valley.”

For now though, Maggie Valley is missing one of the few major attractions the struggling tourist town had left. Carolina Nights dinner theater is not reopening this season either.

It will “leave a big gap in entertainment options,” said Teresa Smith, president of the Maggie Valley Chamber of Commerce.

The massive center is state-of-the-art and unique in Maggie Valley. In addition to the large two-level auditorium, there’s also an outdoor amphitheater that can hold up to 1,000.

The site opened in 2003, replacing the notorious dance club Thunder Ridge with a family-friendly, alcohol-free venue. The idea, said Lackey, was to bring in entertainment that was geared towards families and tourists, bolstering the entertainment economy in the valley.

And to a certain extent, it worked. The place did draw a number of big names and crowds of music fans clamoring to see them. However, with the tanking economy, the shows Eaglenest has been able to book have steadily dwindled, along with each production’s attendance.

Lackey chalks this up not only to the economy, but to new entertainment venues that have come online in the region, like Smoky Mountain Center for the Performing Arts in Franklin and a new concert venue at Harrah’s Cherokee Casino.

“I think that has had a drastic effect on it,” Lackey said. Plus, the region is known for its plethora of free festivals and music events put on to attract tourists.

Really though, said Lackey, it wasn’t just the new competition that was the death knell for the place. It was also a changing tide in what people actually want and are willing to pay for. Expendable income, he said, is shrinking fast, and the money that was once put to seeing acts of all kinds is now spent more carefully.

People only want to see artists they’re really committed to, which makes filling an 800-seat auditorium in a semi-rural community a very difficult proposition indeed.

And to just break even, never mind turning a profit, Lackey said they need to be pulling in at least 60 to 70 percent of their capacity for each show.  That, of course, just hasn’t been happening.

Lackey says he’s not in a huge hurry to sell. The venue was always more of a hobby than a central business investment anyway. He is the president of Taylor Togs, once the nation’s manufacturer of Levi Strauss.

The economy be damned — the burgeoning restaurant scene in Sylva continues to boom, with four eating establishments in this town of just more than 2,400 people expanding, changing hands or soon opening their doors.

“A hard economic time is really the best time to start a business,” said Bernadette Peters, a marketing specialist out of the Atlanta area who’s backing that statement with the re-launch and re-invention of City Lights Café.

Peters and the other restaurant owners have different ideas about how best to thrive in these challenging times: a focus on trendy foods in one restaurant, down-home comfort foods in another. But these restaurateurs have traits in common, too. Out-of-the-box thinking, for one, and a business eye for the many young professionals and older baby boomers now calling Jackson County home.

Recently released 2010 census data shows Jackson County experienced a 21-percent growth rate over the past decade, a population expansion from 33,273 in 2000 to 40,271 today, anchored by the presence of Western Carolina University. Nowhere is that growth more evident than in Sylva and its increasingly lively downtown scene.

Soul Infusion

This restaurant first opened in 2001, and is located in a farmhouse just off busy N.C. 107. Haley Milner and Tori Walters have purchased Soul Infusion Tea House and Bistro on N.C. 107 from Jason and Karin Kimenker. Milner was with Annie’s Naturally Bakery for six years, and has extensive experience working in a variety of Georgia restaurants.

“I’ve always liked Soul Infusion a lot,” Milner said, “and Karin and Jason are good friends. I always wanted to run a restaurant, and the opportunity came up.”

The good soups, wraps and other fare at Soul Infusion that helped build the restaurant’s steady clientele will continue, but a few changes are coming, too: Walters’ family has made a tomato-based barbecue for years that will be featured at the restaurant, plus the couple soon hopes to feature a chalkboard menu ranging from seafood to vegetarian specialties. Also on tap, an outdoor covered stage for local bands.

A celebration/grand opening of Soul Infusion takes place April 9, beginning at 11 a.m.

Breakfast Café

John Bubacz of Signature Brew Coffee Company, later this month will open a breakfast/lunch café in a small, one-story building across Main Street from the coffee shop.

Bubacz has a history of opening popular eating/coffee-house establishments in Jackson County. This will be at least his fifth, though in a way it’s simply the reinvention of the Underground, Bubacz’s former place on Mill Street (locally called Backstreet) that segued into Signature Brew Coffee Company on Main Street. What didn’t make the address change were the wraps, burritos, sandwiches, salads, juices and smoothies that were once the mainstay at the Underground. That’s where the Breakfast Café comes in — customers will be able to pick up their favorites there, made from local and organic ingredients, from 6 a.m. to 1 p.m. The new café will be in a former ice-cream shop.

City Lights

Peters worked at Bryson City's Cork and Bean (a wine bar and coffee house) a couple of years ago in Swain County. Now she’s in Sylva, intent on bringing City Lights Café back to life.

At one time, Joyce Moore, founder of City Lights Bookstore and City Lights Café, ran both establishments successfully on East Jackson Street. She got out of the café business, and retired a year ago from the bookstore after selling it to Chris Wilcox. Moore still owns the two-story building, and in conversations with her, Peters said she soon realized her vision of the café was the same as Moore’s for the original City Lights Cafe.

“I love to create things where community comes together,” Peters said. “This space is perfect. I’m going back to the roots of (City Lights), and marrying the great concepts that Spring Street had.”

Spring Street Café, owned and operated by Emily Elders, closed last fall after about a year in business. Spring Street featured higher-end dining than Peters envisioned — she’s focused on healthy, tasty and quick.

She’s also in the market for employees. Qualifications are simple: “People who like people and like being around food.”   

Plans are to open April 4.

Half Past

In the most innovative category we have Half Past, “home cooking to go … on the go.” Set to open, the owners hope, by the end of this month on N.C. 107 directly across the highway from Soul Infusion. Ernie Sipler has years of experience working as a chef for hotels in the Poconos. He and his wife Joan have lived in the Caney Fork community for 11 years.

Here’s how Half Past will work: You are driving home on N.C. 107 after a grueling, unappreciated day of labor at the newspaper. You’re much too tired to cook, but upon leaving that morning, had chirpily announced you’d be in charge of dinner. What to do? Stop at Half Past, where there will be a full array of food such as beef pot roast with roasted vegetables, chicken parmesan, soups, side dishes, salads, pasta dishes, and baked goods. No indoor seating, this is you-take-it-home catering.

“There seems to be a call for it in this area,” Sipler said, adding the couple has been forced to cover-up the phone number on the store sign because of a barrage of requests they can’t yet fill.

The second-home economy has fueled far more than construction and real estate jobs over the past decade.

“If it’s someone’s second or third home, they aren’t bringing anything with them,” said Doug Worrell, the president of High Country Furniture in Waynesville. “They aren’t moving their furniture.”

As a new economy emerged to support the second-home movement, furniture stores have proliferated throughout the region.

Worrell saw a customer last week who bought a home at Bear Lake Preserve in Jackson County and wanted it furnished by Friday. On the other end of the spectrum, a couple who hadn’t yet closed on their lot, let alone started building, were already browsing for their dream furniture.

A brand-new house also calls for art and décor. Enter the many galleries and boutiques filling downtown store fronts through the region.

“What impact does the second home market have on Main Street? Major,” said John Keith, owner of Twigs and Leaves gallery in downtown Waynesville.

Many second-home owners make a hobby out of decorating their new mountain abodes, and Twigs and Leaves had the sales to prove it. But as second-home construction slowed over the past three years, so did the purchase of artwork, Keith said.

While Keith has no doubt the second-home market will return — few places can beat WNC as a destination for retiring boomers — some galleries have been unable to wait out the downturn. Just last month, Echo Gallery in the upscale Biltmore Village closed down.

No one knows the importance of the second-home economy more than Danny Wingate, the vice president of Haywood Builders in Waynesville.

Haywood Builders nearly tripled its sales over the first half of the decade, peaking at $30 million in sales in 2006. The robust growth was fueled almost entirely by the second-home market, Wingate said.

“Our business was made up primarily of high-end second homes,” Wingate said.

The large number of gated communities popping up in Jackson County spurred Haywood Builders to open a Design Center in downtown Sylva, where people building homes could pick interior features from kitchen cabinets to bathroom lighting.

“It was a platform for us to access the Jackson County market, particularly for cabinetry,” Wingate said. It was a savvy move: Wingate recalled one homeowner who spent $140,000 on cabinets alone.

But that has all changed now.

“We are off substantially,” Wingate said of sales today compared to that boom period.

Last year, sales had dropped to $12 million, a precipitous decline from the peak of $30 million in 2006.

Wingate has a bird’s eye view of the construction industry, with builders constantly funneling through his store, where both prices and customer service beat out his big-box competitors. Contractors who were once among his top 10 biggest clients are now struggling to find work.

“Even our big boys are out of work,” Wingate said.

Time for reflection

The slump in second home growth isn’t all bad, according to Ken Brown, Chairman of the Tuckasegee Community Alliance in Jackson County.

Brown questioned whether the growth rates of the past decade are sustainable. Jackson County saw the largest population growth of any county in WNC among year-round residents, as well the biggest increase in home construction, much of it in the second home market, according to the census.

“It is hard to gauge what kind of an impact that had when you have that many folks building second homes,” Brown said. “It is kind of unprecedented in my time.”

The economic downturn has been like a pressure relief valve on a boiler.

“I think we need to assess just what kind of development we want,” Brown said. “You wonder if that trend could happen again if the economy does pick up. It would put a tremendous amount of pressure on the county.”

Now is not the time for counties to let down their guard on mountainside development or roll back ordinances regulating slope construction, he said. Jackson County passed some of the region’s most progressive and restrictive development regulations four years ago — largely in response to the unparalleled building boom. But that could change given a slate of new commissioners elected last fall.

“We felt like they may try to weaken or water down the ordinances,” Brown said.

So Brown and like-minded citizens in Jackson County have formed a grassroots task force to keep an eye on any moves by the newly elected board of commissioners to undo construction regulations, Brown said.

Brent Martin, who lives in Macon County and works for The Wilderness Society in Sylva, said the face of the mountains could change dramatically if the second-home dynamic continues on its current trajectory.

“It will be very interesting to see what this place turns into in another 30 or 40 years,” Martin said.

“I don’t know how we would handle it. The current downturn is allowing us to catch our breath and step back and figure out how to address the next wave of it — because it is certainly coming.”

The rest of the economy might have suffered, but a couple of snowy winters are adding up to big bucks and good times for North Carolina’s ski industry.

Last year, the total economic impact of this segment of the state’s economic pie amounted to $146 million. That number is courtesy of the N.C. Ski Areas Association, which crunched and computed the figures for the 2009-2010 season and recently released its findings.

That good news doesn’t come as a surprise for ski industry workers such as Brittany Heatherly of Skis and Tees in Maggie Valley, who said the store was running out of rental equipment by 10 a.m. each day during the Christmas break.

“It’s been awesome,” Heatherly said. “Everybody is making a lot of money, and having fun. There have been a lot of people because it has been such good weather.”

(Clarification to readers: “Good weather” to the skiing industry would be the snow and cold many people have a difficult time dealing with.)

Heatherly, an avid snowboarder, said skiers and other winter-weather lovers didn’t let road conditions prevent them from getting to the slopes at resorts such as Cataloochee in Haywood County. Folks used four-wheel drive vehicles or put chains on their car tires.

N.C. Ski Areas Association defines “economic value” as the total value to the economy from the existence of ski areas. Winter value, employment value, capital improvements and economic multipliers were considered. The study looked from November to March as the “ski season” when compiling this report.

North Carolina has six ski areas: Cataloochee Ski Area, Sapphire Valley Ski Area, Ski Beech, Appalachian Ski Mountain, Wolf Ridge Ski Resort and Sugar Mountain Ski Resort.

Collectively, these ski areas provided 96 year-round jobs and 1,557 seasonal jobs during last year’s ski season. The industry generated over $32 million in gross revenue from ski area operations, including lift tickets, lessons, equipment rental, retail stores and food and beverages.

David Huskins, who heads the regional tourism group Smoky Mountain Host that is headquartered outside Franklin, said the rockslide and subsequent closure of Interstate 40 in the Pigeon Gorge section of Haywood County “obviously … impacted our region’s ski economy.”

“But, generally, reports are that it was offset by the continued natural snowfall through December-March 2010,” he added. “Good news for our region.”

Money breakdown on individuals at ski areas

(Per person spending, and percent of total)

Lift tickets/tubing/ice skating: $44.78; 33.5%

Ski/snowboard lessons: $5.75; 4.8%

Equipment rental/demo at ski area: $13.81; 10.7%

Equipment rental/demo at other N.C. locations: $1.97; 1.4%

Food/beverage/restaurants on mountain/base: $16.88; 13.2%

Food/beverage/restaurants in other N.C. cities: $14.22; 9.8%

Lodging accommodations (nightly rate): $18.88;14.4%

Shopping/gifts/souvenirs/retail stores: $9.04; 6.6%

Entertainment/activities: $3.85; 3.0%

Local transportation/rental car: $1.54; 1.6%

Other spending: $0.98; 0.9%

Total per person spending: $131.70  

Source: N.C. Ski Areas Association

09-10 statistics at N.C. ski areas

Total Visits: 671,554

Total Revenue: $32,526,608

Year-Round Employees: 96

Seasonal Employees: 1,557

Capital Expenditures: $3,341,237

Source: N.C. Ski Areas Association

In many ways, Brian Hockman and wife Carrie of Claymates, a “paint your own pottery experience,” serve as the perfect business portrait of the new Dillsboro.

This is Dillsboro post the Great Smoky Mountains Railroad. A Dillsboro that maybe hasn’t exactly risen from the ashes like some resurrected phoenix, but a town that has, nonetheless, persevered and survived.

Claymates is located in the downtown section on Front Street: within a hop, skip and a jump of the railroad tracks that run through the town. The train once served as a major business conduit, disgorging crowds of tourists — about 60,000 a year — into the waiting arms of merchants.

Brian and Carrie Hockman came to Dillsboro a short time after the tourist train pulled out in 2008. In the midst of the recession, the train consolidated business operations to its new headquarters in nearby Bryson City and canceled passenger service to Dillsboro. The train moved just one county away, but the shift might as well have been to the moon as far as Dillsboro merchants were concerned.

People lost jobs — 22 full-time railroad employees and a handful of part-time workers were stranded. Stores lost money. Businesses went elsewhere.

So why did Brian and Carrie Hockman settle on the economically (and for merchants, emotionally) depressed Dillsboro during such a bleak period?

The rent was low in those just post-train days, and Pennsylvania native Brian Hockman was eager to start a business showcasing his photography. As a sideline, his wife started Claymates, a pick-out-a-cute-porcelain-figure-and-paint-it-yourself business — and the sideline became the mainline as the couple built a successful store. Brian and Carrie Hockman don’t depend heavily on tourists and walk-ins. Claymates instead relies more on events such as birthday parties, girls-nights out and office parties.

So recent news that the Great Smoky Mountains Railway has once again expanded seasonal excursions into Dillsboro doesn’t matter that much to Brian Hockman. Truth be told, he really just hopes his rent won’t increase as a result.

Other business owners in this small Jackson County town are more excited than that. But they, too, remain cautious — any help during these hard economic times is, of course, welcome news. Just be clear on this: Dillsboro won’t ever put all of its eggs back in that one basket again.

Here’s the deal

Great Smoky Mountains Railroad started four-hour roundtrip excursions from Bryson City to Dillsboro in January, and plans to continue them through this month. Tourists riding the train have an hour-and-a-half layover to wander the town.

On occasion, that layover means an extra customer or two for Jill Cooper at Haircuts by Jill on Front Street. Men who decide they need a trimming and a place to sit while their wives shop, she said, or men ordered in by their wives who want to visit other stores without them hovering nearby. Additionally, some of the train’s employees get their hair cut while in Dillsboro.

But even though the direct business benefit might be of marginal importance for Haircuts by Jill, Cooper is very happy the train is back — no matter for how briefly, or for such a short layover.

“It’s exciting,” she said.

The train has brought back a certain liveliness missing since it left, said Cooper, who lives — as well as works — in Dillsboro.

Limited runs by Great Smoky Mountains Railroad started back up in 2010, with the train bringing tourists in June, July, August and October. Peak season summer and fall runs were a good sign, but trips in the winter are an even better indication that Dillsboro might again secure a place in the train’s long-range regional vision.

“It is a bigger deal because we are coming in the winter,” agreed Sarah Conley, marketing manager for Great Smoky Mountains Railroad.

It turns out Dillsboro’s character was popular with train riders, and that had a lot to do with the train’s decision to restore passenger service to the town.

“Dillsboro is such a quaint little lively town, and it has a lot of strongholds. It is an added bonus for riders to have a destination. When they get off they say, ‘Oh this is neat. It is a little quaint historic town,’” Conley said.

Additionally, the 32-mile roundtrip from Bryson City to Dillsboro has sights that interest most riders, Conley said. There is the 836-foot Cowee Tunnel to pass through, The Fugitive movie site to eyeball, and the scenic Tuckasegee River to enjoy.   

“Another thing that is really neat on the way to Dillsboro is they go by the train shop where our engineers work on the trains,” Conley said.

While the recession is still taking its toll on tourism, Conley said ridership was up last year compared to 2009.

Many of the passengers on these winter excursions are day-trippers, the marketing manager said. People who have visited Harrah’s Cherokee Casino and are looking for more things to do. Tourists who come over the Smokies by way of Gatlinburg and Pigeon Forge, Tenn., for an opportunity to ride the train, and North Carolina residents who are in search of something to do on the weekend.

In early January, new customers came into Twin Oaks Gallery and told owner Susan Leveille they had learned about her shop after visiting Dillsboro via a ride on the train.

“That was more than I had heard in a long time,” Leveille said of the train-Dillsboro connection.

Twin Oaks Gallery, which features works in pottery, glass, iron and such by local artisans and craftspeople, isn’t in direct sight of the train tracks. That means Leveille can’t be sure exactly how much business Great Smoky Mountains Railroad funnels into her store — she must rely on customers to tip her off.

“In concept, though, I think it is a great thing they are making trips here and connecting with Dillsboro again,” the longtime business owner said. “It can’t be anything but good for us.”

Staff writer Becky Johnson contributed to this report.

By Colby Dunn and Quintin Ellison • Staff Writers

Although retail businesses might have found some relief toward the latter part of the year, homebuilders and real estate agents found fewer reasons for joy in 2010.

For homebuilders, the outlook was pretty bleak, according to Dawson Spano, president of the Haywood Home Builders’ Association. The bleeding in the industry, he said, has slowed but hasn’t altogether stopped, and many contractors around the region are still calling it quits — or at least still feeling the heat of the recession.

“Builders are getting out of the business, but not at the fast rate that it was last year,” Spano said.

The best way to characterize the situation, he said, is that things aren’t yet getting better, but at least they’re not getting worse.

The business they’re seeing now is different than what has long characterized the home building industry in Western North Carolina, with large developments of second and luxury homes on the decline or stopped altogether. And Spano said he’s not certain that kind of construction and housing market will ever return to the area.

“We’re going back to the way it used to be, where you have builders building one, two houses a year,” Spano said. “I think the big developments are dead for a long time. The Balsam Mountain Preserves, the Sanctuaries, those big places — I don’t see people dropping 300 to 400 thousand for a piece of property.”

Homebuilders, though, are seeing a trend towards remodeling, and Spano thinks this may be where the market is going when the country finally drags itself out of the economic slump. Wherever it’s headed, he has no doubt that it will be scaled back.

Phyllis Osborn, executive officer for Haywood’s Home Builder’s Association, said that the numbers bear this out. What they’re hearing from contractors around the region is that work is there, but it’s smaller in scope and opportunities are still sparse, as evidenced by the drop in contractors still in the game.

“We are 136 in our membership and at the end of last year it was 148, so we’re continually dropping,” said Osborn. “And I know in years prior it’s been up almost to 200.”

Spano’s predictions that small building will lead the way out of the recession and beyond are echoed by the National Association of Home Builders, who released a study at the end of December proving that very trend. The NAHB found that 65 percent of builders that are still in business pull in less than $1 million annually.

“We are seeing market conditions returning to normal in many parts of the country after a long, hard downturn, and these companies have the agility to move quickly and start leading the economy forward,” said NAHB Chairman Bob Jones in a December statement.

In the real estate market, the general sentiment seems to be much the same – that things are still languishing, but the sales dips are not quite as deep as they were last year.

Bob Holt, who teaches about real estate for Southwestern Community College, said there are fewer agents than during the pre-recession boom years. The ones that have stuck with it, however, are staying relatively busy, he said.

“It is still slow, but things are turning around,” said Holt, a Franklin resident. “The prices are low, the interest rates are low — it is a good time to buy stuff.”

Holt said the situation would not improve significantly for another year or so, “until we clear out all the foreclosures” and the job situation improves.

In Haywood County, the Board of Realtors is looking to a merger with Asheville as a possible force to help mitigate the loss if the economic hits keep coming. For homebuilders, 2007 was the banner year, and for Western North Carolina’s real estate world, the benchmark for booming business was 2005. But as one real estate agent put it at a recent board meeting, 2005 probably isn’t coming back, so the future may be found in a new business model, not a return to pre-recession growth.

“If the real-estate market doesn’t improve, then neither will my membership,” said Lisa Brown, association executive for the Haywood Board of Realtors. The math is simple, and after taking a hit of more than 25 percent last year, the area’s agents are looking for a better 2011.

But John Keith, a Waynesville real estate agent in his second year in the county, remains optimistic. People are still buying, even if the pace is much slower. People still want to move here, even if they can’t make it happen until their current house sells.

“The market is still depressed, but I’m optimistic,” said Keith. “We still know that this is one of the best retirement relocation areas in the country, and there’s still a lot of people that are trying to get here.”

For his part, Spano takes a more poetic view of what’s coming in 2011.

“We’re in the valley of the shadow of death,” Spano said. “We’re there, except now we can see the light at the end of the tunnel.”