Amy Clifton Keely wasn’t asking for much. Being a wedding photographer, she knew how wedding days worked, and what pitfalls to look out for.

She didn’t expect the perfect wedding, or dream of making the cover of Southern Living’s bridal edition. She was prepared to overlook a few hiccups — it was, after all, an outdoor wedding in a mountain pasture.

Real estate prices have taken such a drastic plunge in Macon and Jackson counties — which once boasted the highest concentration of mega-developments catering to the high-end second home market — that county commissioners there keep postponing the countywide property revaluation.

As Macon Bank scurried to get in on the ground floor of the real estate heyday in the mountains, it unwittingly stumbled into a house of cards, and found itself caught up in a scheme akin to insider trading that artificially inflated high-end lot prices and duped the bank into making risky loans.

New owners of the high-end Balsam Mountain Preserve development aren’t daunted by the choppy waters of Western North Carolina’s real estate landscape.

Despite the still tepid demand for pricey second homes in the mountains, they say they have charted a course that will bring the beleaguered development out on the other side of the storm still raging across the rest of the region.

The 4,400-acre mega-development — one of the region’s few mountainside golf developments that can rightfully carry that tag line — has its share of battle scars. It’s been through foreclosure, repossessed by investors, hawked to the lowest bidder, babysat by an out-of-state caretaker, then put up for sale.

Now, a rescue of Balsam Mountain Preserve has come full circle. Two wealthy homeowners in the development teamed up to buy the development for $6 million — a fraction of what it was once worth.

If there’s ever a development where millionaire homeowners could emerge from the ranks to become the owners, it’s Balsam Mountain Preserve. Harry Avant of Louisiana and David Carlile of Texas knew each other previously from the oil and gas industry, even before buying their respective property in Balsam Mountain Preserve several years ago.

They have hired two former members of the Balsam sales team to come back and run the place. Jimmy McDonnell and Bruce Fine both worked together at Balsam Mountain Preserve under the original owners and developers.

“We know the owners, we know the property, we know the employees, we know the project, we know the market,” Fine said of their return, this time as president and vice president.

The hunt for solid ground in today’s new real estate landscape is more than just a financial deal for the new team.

“If there wasn’t a significant upside from a financial and business perspective we probably wouldn’t have done it. These guys are not a nonprofit entity,” Fine said. “But to save a place that you really have an emotional connection to, and it could be a good business decision at the same time, is a win-win overall.”

For the past 18 months, Balsam Mountain Preserve has been in limbo. The former owners defaulted on $19 million in debt and went into in foreclosure. The development landed in the hands of a private equity firm that immediately began looking to unload it.

So what, exactly, did Avant and Carlile get for their $6 million purchase of Balsam Mountain Preserve?

For starters, they own a really, really nice Arnold Palmer golf course. All the amenities, from the swimming pool to tennis courts to clubhouse to riding stables, are also included.

But as for what’s marketable — the pieces of the development that are worth something — there are about 130 to 150 home sites left to sell off.

Only one lot has sold in Balsam Mountain Preserve this year, however.

“2011 was kind of a lost year for Balsam. It was for sale and people knew it was for sale,” Fine said.

Despite the unimpressive showing, the new team isn’t fretting over whether Balsam Mountain Preserve will make it. Optimism over the new owners is already fueling sales, Fine said. There are two contracts pending — one on a new lot and one on an existing lot being resold by a property owner.

“We have more activity in the week we have owned this place than we’d had all year,” Fine said early last month. “People are moving forward now because it is stable. They like the story about the homeowners who have joined together and bought the place.”

Few golf course developments can claim to have that bumpy road behind them.

“Every other one has the loom of foreclosure and takeover,” McDonnell said.

Fine said few are going to emerge as intact as Balsam.

“There are so many communities in the mountains that have nothing there other than a front entrance and some renderings on paper.  Those are the places that have fallen off the end of the earth,” Fine said.

At Balsam Mountain Preserve, there is enough “critical mass” already in play, Fine said. The golf course is finished, the swimming pool has water, a restaurant and clubhouse are functioning. Roads actually lead to the lots — a novelty compared to some subdivisions that lack even that bare essential.

Most importantly, though, are the 70 homes on the ground and another 110 property owners of lots. Too many subdivisions in the mountains are empty ghost towns, and just like no one wants to eat in an empty restaurant, no one wants to be the first to build — not when it’s such a buyer’s market. And that’s why homes on the ground are an important part of Balsam’s critical mass.

Nowhere to go but up

As the rest of the nation plunged into a recession in 2008, WNC seemed insulated from the real estate crash — its quality of life, desirable views and retirement reputation helped it hang on.

But by the end of that year, the economy finally caught up with the region — and with Balsam Mountain Preserve. Lot sales simply evaporated.

With no cash coming in, the former developers Chaffin and Light, a highly reputable company known for massive eco-developments from South Carolina’s coast to Colorado, defaulted on its $19 million loan.

Chaffin had bargained hard for a work out, hoping to get an extension or refinance on the outstanding debt. Meanwhile, property owners at Balsam made a bid to save their own development from foreclosure. They raised $8 million and explored forming their own LLC to bail out Balsam Mountain Preserve and own the development themselves.

But the private equity firm, TriLyn, was unwilling to negotiate for anything less than a full payoff of the $19 million owed.

Marc Antoncic, the managing partner of the firm, arguably was in a tough spot. He was supposed to be earning investors a return on their money — not losing their money. So he had a choice. Cut his losses, take what he could get and get out — even if it meant selling Balsam at a rather substantial loss.

His other choice was to step in to the developer’s shoes himself, hoping to turn it around.

“You can’t rescue everything, but you can’t just sit back and hope it goes away,” Antoncic said in an interview 18 months ago, shortly after his take over. “If you bail today, you lose all that. We would turn over a good asset to someone else.”

In hindsight, it now seems he made the wrong choice.

He didn’t turn it around, and only got $6 million for the development in the end.

“Literally every deal they had on the table, whether it was Jim Chaffin or the homeowners, everyone of those was better than what they ultimately got,” Fine said.

“They had some great opportunities in front of them they chose not to take,” McDonnell agreed.

Homeowners, for their part, are optimistic for the first time since 2009 when Balsam Mountains Preserve headed down the path to foreclosure.

“Ever since then Balsam has been in a real state of uncertainty,” Fine said.

What would happen to the golf course had been one of their biggest fears. Well-groomed fairways with that perfect phosphorescent green hue come at a steep price. The golf course had been losing $1 million a year. The original developers, Chaffin and Light, were underwriting the cost of the golf course operations. Picking up that price tag is part of what sunk the developers.

After foreclosure, homeowners had to pony up the money to operate the course.

A new model

There are only a handful of developments in WNC in the same league as Balsam Mountain Preserve: of a similar acreage, prestige, price range and quality. And they too are seeing a comeback, suggesting the market has at long last bottomed out, Fine said.

“Prices are lower compared to where they were at in 2006, but they are coming back,” Fine said. “It sounds cliché-ish, but for someone who wants to be here this is when people want to strike. We aren’t at the bottom anymore.”

That financial strategy is part of Fine’s sales pitch. But the other part is far more emotional.

“The person who is waiting for the bottom is putting off living their life,” Fine said.

Indeed, the pent-up demand is why Fine has such a rosy outlook for 2012.

“The dynamic is people have put their plans on hold for anywhere from three to four years,” Fine said. “I’ve been sitting on the sidelines, I’m not any younger, I’m not any healthier, my grandkids are getting older.”

And that reality could drastically change the real estate paradigm in WNC. Before, baby boomers looked for lots to build their dream home on. But building a house — from deciding on a layout for the master walk-in closet to choosing the color of granite for the kitchen counter — can take two to three years. These days, prospective buyers want to get on with it — and perhaps spare their marriage the strain of a custom-built house — even if it means they won’t be picking out their own light fixtures or tile floor design.

“People want something they can move into,” Fine said. “In conjunction with that dynamic, people are also no longer buying what they can afford, they are buying less than they can afford in a lot of cases.”

People used to buy at the upper end of their limit — assuming that real estate would always be worth more next year anyway. But with appreciation less of a sure bet these days, second-home buyers are rethinking.

“Seriously, do I need 6,000 square feet in retirement? That’s how affluent people are thinking today,” Fine said.

Which means Balsam Mountain Preserve must retool its model — as with the rest of WNC’s developers.

“It is not going to be all about 2-acre single family home sites,” Fine said. “If you sit around and wait for individual home site buyers to come visit you one at a time, it will be years and years and years before you sell through all your availability.”

What’s in Balsam Mountain Preserve’s cards now would have been borderline blasphemy several years ago: smaller lots, pre-built homes, and even perhaps townhomes.

“Balsam has never had that, ever,” Fine said.

There are about 35 lots in the current phase of the development already platted and ready to sell. Another 100 or so are in the works, and will like take the form of smaller, more closely spaced lots rather than larger, spread-out ones. And, they could be sold with homes already on them rather than empty lots.

As a development, Balsam Mountain Preserve doesn’t particularly want to get into the spec home business. Developers generally sell lots, builders build homes.

But that’s where Balsam Mountain Preserve once again hopes to tap its unique base of homeowners.

Homeowners, eager to see their own community succeed, may actually finance construction of model homes by a builder. The homeowner would theoretically be helping out the builder they used and liked when building their own home, make a little money and help land new neighbors to keep Balsam Mountain Preserve stable.

“The developers who can facilitate these alliances between people who can finance — i.e., non-banks — and the builders, those are the communities that are really going to thrive in this segment,” Fine said.

Ghost Town in the Sky has no hope of pulling itself out of bankruptcy, according to a federal bankruptcy administrator.

The court will decide this week whether to let the amusement park continue to languish in bankruptcy, where it has been stuck for two years now, or simply dismiss the case.

When a company is in Chapter 11 bankruptcy, it buys time from debt collectors while it attempts to get back on its feet. A company is not allowed to remain under bankruptcy protection indefinitely, however.

It must reorganize and present a viable plan for how it plans to pay off debt and continue operating. Or, it is forced into a liquidation, known as Chapter 7, where the assets of the company are sold off by the court and the money used to pay off the debts.

In this case, however, the bankruptcy administrator has recommended simply dismissing the case.

“The debtor has been totally inactive since June 2010 and there appears to be no chance of reorganization,” Linda W. Simpson United States Bankruptcy Administrator, wrote in court filings.

Two bankruptcy court hearings — one on reorganization and one on liquidation — have been on the docket for a year now. Each month, they have been continued.

Ghost Town has failed to file monthly reports as required by the bankruptcy court for the past year, nor has it paid quarterly bankruptcy court fees for the past 12 months. Meanwhile, Ghost Town’s bankruptcy attorney withdrew from the case in February after months of not being paid.

Once a tourism magnet in Maggie Valley, Ghost Town has been in bankruptcy limbo for two years now with debt topping $13 million. The park is also on the brink of foreclosure.

BB&T is owed $10.5 million dating back to the purchase of the park by new owners in 2007 and for subsequent repairs and upgrades.

The bank has initiated foreclosure against Ghost Town, and could auction off the property on the courthouse steps at any point in order to recoup what it is owed.

BB&T has held off on doing so at the urging of Ghost Town principals who want to save the park and have claimed for the past year that a financing deal is just around the corner.

The 288-acre mountain top property won’t fetch enough at auction to pay off all that BB&T is owed, which is likely why BB&T has stopped short of going through with foreclosure.

Meanwhile, the 200 small businesses collectively owed $2.5 million by Ghost Town — including dozens of local businesses left hanging after providing services or products — are out of luck. BB&T is first in line to get paid, and only if there is money left over after its $10.5 million is paid off does anyone else get money.

And that’s precisely why the bankruptcy court is poised to simply dismiss the case rather than go through the hassle of liquidating the company in a formal Chapter 7 proceeding.

“The liquidation value of the property is arguably less than what is owed the bank,” surmised David Gray, Ghost Town’s former bankruptcy attorney.

Windfall in back taxes

In the trail of bad debt left by Ghost Town, there is someone who has been paid. Haywood County recently got a $142,000 check to cover three years of back taxes on the 288-acre property. Maggie Valley got one for $110,000.

But it was BB&T — not Ghost Town — that paid the bill.

“We just know that we got it, and we are pleased with that,” said Tim Barth, Maggie Valley town manager, when asked why BB&T would have paid off Ghost Town’s back property taxes.

Whoever buys property at foreclosure inherits the unpaid property taxes. If the bank resumes title to the property, the bank bears the burden of paying the property taxes.

But BB&T hasn’t pulled the trigger on foreclosure yet — so why jump the gun and pay off those taxes before it has to?

BB&T is most likely looking out for number one. Since counties can foreclose on a property owner who has failed to pay their taxes, Haywood County could do an end-run around BB&T and foreclose on Ghost Town itself in order to get the tax money it’s owed.

The only thing keeping the county at bay for now is Ghost Town’s bankruptcy status: bankruptcy halts debt collectors in their tracks. But once Ghost Town gets the boot from bankruptcy court it will lose that protection.

By paying off the taxes, BB&T is buying time. It can continue to sit on the brink of foreclosure — continuing to give Ghost Town’s owners more time to pull off a financing deal — for as long as it wants. It remains first in line should money ever materialize without the threat of being displaced by a foreclosure from the county’s end.

In an interview with WLOS, Ghost Town General Manager and partner Steve Shiver alluded that Ghost Town may open in some capacity this year.

“We would like to have the park open for its 50th anniversary at some level. It may not be full scale. It’s just too early to tell,” Shiver said on television last month.

Following the broadcast, Shiver sent out a mass email to “clarify” the situation.

“Although we have no definitive information about our opening date for the 2011 season if any, we continue to make significant progress and are currently awaiting a decision by a third party regarding the disposition of the property. All indications are for a favorable resolution within the next month,” Shiver wrote in the email.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“We are very good,” he said.

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

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

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

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

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

The quick timetable was critical.

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

When in doubt, foreclose

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

But Antoncic wasn’t going to settle.

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

He hopes patience will pay off.

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

The key, however, is a “good” asset.

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

Doing the math

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Not ‘just another’

gated community

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

A primary owner of Ghost Town in the Sky wants to buy the amusement park out of bankruptcy. But there’s a catch.

The owner would walk away from more than $5 million in debt, yet continue to own the park — only this time under a new corporate name.

More than 200 businesses still owed money by Ghost Town would be left holding the bag, including local contractors and laborers who did work for the park and were never paid. Myriad Ghost Town supporters in Maggie Valley coughed up cash to help the amusement park get off the ground when it reopened. They were promised a stake in the company in exchange for their investment, but they, too, would be left with nothing.

Employees who were sent home at the end of last season still owed two weeks of pay may be out of luck as well under the deal.

The deal is merely a proposal and would have to pass muster with the bankruptcy court. A hearing is scheduled for Tuesday, May 4. Ghost Town has asked the court to approve the sale to the new entity.

The timing is no mistake. Foreclosure of the park is scheduled to begin May 31. The plan put forward would avoid a forced auction of the park on the courthouse steps.

The bankruptcy court could opt to let the auction go forward in order to determine if there are any other prospective buyers willing to pay more.

The deal

The 1960s-era theme park was once a cash cow for Maggie Valley, raking in tens of thousands of visitors each year.

But attendance declined throughout the 1990s and the park was eventually shuttered in 2002.

It was purchased by a trio of new owners in 2006, including Al Harper, the owner of Great Smoky Mountains Railroad in Bryson City and other railroad tourism ventures, including the Durango Silverton Narrow Gauge Railroad in Colorado.

Harper formed a new LCC just two weeks ago called American Heritage Family Parks — the entity that is now trying to purchase Ghost Town out of bankruptcy. The name of the new entity is similar to the umbrella corporation for his railroad ventures, American Heritage Railroad.

The LLC was just created by Harper on April 8, apparently for the express purpose of buying the park. The registered agent is Jon Schlegel, the former general manager of the Great Smoky Mountains Railroad. The address listed for the new LLC is the same as the Great Smoky Mountains Railroad headquarters in Bryson City.

The public face for Ghost Town for the past two years has been CEO Steve Shiver. It is unclear from court filings or incorporation papers what, if any, role he would have in the new park.

“It is an unfortunate situation for all of us,” Shiver wrote in an email. He directed further requests for comment to Harper. Harper did not immediately return phone calls or emails requesting comment.

When Harper bought the dated theme park in 2006, he got an aging facility that needed millions of dollars in costly repairs and modernization. Coupled with the economic downturn, the park lost money and after just two years of being open landed in bankruptcy a year ago. It owes a total of $13.5 million. CEO Steve Shiver pledged the park could regain its footing and become profitable again, eventually paying off what it owes and pulling out of bankruptcy.

Bankruptcy court requires a detailed plan spelling out exactly how a turnaround will be achieved. Shiver was unable to put together an acceptable plan.

BB&T, which holds more than $9.5 million in debt on the property, was given the green light to proceed with foreclosure. The park was slated to be auctioned off to the highest bidder as early as June.

The entity is offering to buy the park for $7.5 million, although Ghost Town has more than $13.5 million in debt.

BB&T would get $7 million and back taxes would be paid — and that’s about it. The plan calls for paying back $300,000 in select debt, though it doesn’t say to whom.

Financial filings show past due bills of more than $400,000 still lingering from last year — racked up on top of the debt Ghost Town carried with it into bankruptcy. Last year’s past due bills include everything from property taxes to utilities, which were cut off due to failure to pay at the end of the season.

Current owners had been trying to find financing to bail themselves out of bankruptcy and open the park for the summer season. Ghost Town is urging the court to quickly approve the sale to the new entity so that it can still try to open the park by summer.

However, Ghost Town is still plagued by unstable remnants of a landslide that makes the mountain unsafe, according to state geologists. Stabilization will not be completed by the start of summer.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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