The building that once housed the downtown anchor O’Malley’s On Main Pub and Grill in Waynesville has a new owner.

More than a year after winning $5,000 in the Haywood County Chamber of Commerce’s annual Business Start-up Competition, Aermor, an engineering and technical services business in Canton, is still growing.

After sweeping the competition, owner Penny Morgan announced some lofty goals — to become a 100-person, $26 million outfit within five years. With about a year and a half under her belt since his announcement, Morgan still thinks that is feasible.

A sushi restaurant in Waynesville lost a protracted legal battle last month after accusing a neighboring nail salon of driving away its diners.

Saki Sushi claimed fumes from Tweety Nails hurt its bottom-line. Litigation dating back two years culminated in a nearly two-week jury trial in March, ultimately exonerating the nail parlor as the sushi joint could not prove that the smell negatively impacted the restaurant — or even that the nail salon was the origin of the smell.

“It’s a relief. It’s indescribable,” said Steve Nguyen, husband of Tweety, who owns Tweety’s Nails.

The two businesses leased storefronts next door to each other in the K-Mart strip mall on Russ Avenue.

Janet Green, owner of Saki Sushi, which had been there first, claimed “noxious odors and chemicals” began emanating from the nail salon shortly after it opened in fall 2009.

The court-filed complaint by Saki Sushi claimed that the smell interfered with Green’s ability to enjoy the property, among other charges, and sued the salon for as much as $60,000. The restaurant also sued its’ landlord.

But, Nguyen said he believes the lawsuit was retaliation. He and his wife at one time expressed an interest in buying Saki Sushi from Green.

Nguyen said that there is no smell in the building now that Saki Sushi has moved to a location on Howell Street.

On at least a couple of occasions, Green called the police about the smell, and on more than several occasions, she asked employees from the nearby Radio Shack to come into her restaurant and tell her if they smelled anything.

During the trial, at least one witness stated that he noticed a strong acrylic-like odor while in the restaurant. Another witness said her coworker couldn’t eat at Saki Sushi with her because he was sensitive to the smell.

However, the witnesses did not know when the smell started and could not definitely connect the stench to Tweety’s Nails.

One witness testified that the odor was considerably less noticeable and possibly different from the fetor wafting from Saki Sushi. Although Green consulted others about the smell, including the Waynesville police, “Mrs. Green admitted that she never even complained to Tweety about the smell,” said Mark Melrose, attorney for Tweety’s Nails.

All sides attempted to settle the issue through mediation but gave up on resolving their differences early last year. The case finally landed in court last week.

After hearing the evidence presented in the case, Judge Mark E. Powell dismissed all of Saki Sushi’s claims, except for its nuisance claim against the nail salon. Within 20 minutes, the jury returned with its verdict, Melrose said. The jury found no validity to the claim and did not award Saki Sushi any damages.

When considering a nuisance claim, Melrose said a jury must also decide if the business benefits the community.

“Every little thing that bothers you is not a lawsuit,” Melrose said.

For example, it would be extremely difficult to claim legally that the paper mill in Canton is a nuisance because is a crucial part of the town’s economy.

“If you ask people in Canton, they say it smells like jobs,” Melrose said.

Although the case is finally settled, Tweety’s Nails plans to sue Saki Sushi for the more than two years worth of court and attorney fees.

A group of Cherokee business leaders will be a driving force in the campaign to permit alcohol sales on the reservation.

Members of the Eastern Band of Cherokee Indians will vote in April on whether to legalize alcohol sales on the currently dry reservation.

“Most business owners are saying the same thing — it would be a nice option,” said Matthew Pegg, executive director of the Cherokee Chamber of Commerce.

The chamber and the Cherokee ABC Board hosted a public meeting last Wednesday (Nov. 2) to gauge businesses’ opinions about the possibility of alcohol sales. About 20 people attended.

Several business owners said they had lost business because they are not permitted to sell adult beverages.

“It is imperative that our restaurants have alcohol,” said Morgan Owle-Crisp, a business owner and member of the tribe. Owle-Crisp added that potential customers travel to Asheville and other surrounding cities to eat and drink.

Beth Wolpert, manager of Yogi in the Smokies, a campground in Cherokee, said that she has had campers leave after finding out that they would have to drive 20 minutes to Bryson City to buy alcohol.

While tourism in Cherokee has improved over the past decade thanks both to the casino and cultural emphasis by the tribe, tourism overall on the reservation has been on the decline since its heyday in the 1950s and 1960s, business owners said.

Alcohol could bring back some of that lost revenue, agreed business owners in attendance.

“We don’t have John Wayne out there promoting the Indians,” said Collette Coggins, owner of the Cherokee Bear Zoo.

Even if the referendum passes, the tribal ABC board will have the final say regarding who receives an alcohol permit.

To qualify to sell alcohol, a restaurant or grocery store would have to get 30 to 40 percent of its revenue from food sales, said Bob Blakenship, chair of the Cherokee ABC Board. Blakenship projected that a tribal ABC store would sell $500,000 in alcohol each year.

One reason for the major push to approve the referendum is a similar vote slated in Jackson County in May. If the measure passes, gas stations a stone’s throw from the reservation in Jackson County could sell beer and wine from their shelves. Jackson County could also place an ABC store selling bottles of liquor as close to Cherokee as possible, said Don Rose, vice chair of the tribal ABC board.

“It is going to be at our doorstep anyway,” he said. “All we’re doing is making it more convenient (to purchase alcohol).”

The three-part ballot will allow voters to separately weigh in on where alcohol sales should be permitted.

• To permit a tribal ABC store to sell liquor to the public.

• To permit the sale of beer, wine and liquor drinks only in restaurants licensed by the Eastern Band.

• To permit the sale of beer and wine only in grocery stores and convenience stores licensed by the Eastern Band.

Tribe members can approve all, none, or one or two of these.

Attendees at the meeting talked about the wording of the ballot.

“You want simplicity in these question,” Rose said. “Otherwise, people won’t know what they are voting for.”

The Chamber of Commerce will hold its regular monthly meeting Nov. 15 and discuss funding for the campaign.

On Nov. 17, a campaign committee will meet at 9:30 a.m. at the Chestnut Tree Inn to begin formulating a plan, aimed at raising awareness and promoting the benefits of allowing alcohol on the reservation. The committee will discuss advertising in newspapers and on billboards as well as arranging an informational meeting for tribal members.

“People need to know it’s not going to be widespread,” said Steve Arch, owner of Big Bear Exxon Mart.

The committee will work under a tentative deadline of April 15 since it is currently unknown when or if the vote will occur.

A plan and funding for a campaign should be in place 90 days before the vote, Rose said.

Tribal Council approved the referendum regarding reservation-wide alcohol sales last month, giving tribal members a say in the historically controversial issue.

Nine out of 12 council members voted for the referendum. The other three didn’t exactly vote “no.” Two voted to table the measure, the third was out of town for the vote.

Chief Michell Hicks has until Nov. 23 — 30 days following the tribal council vote — to veto the referendum. As of Monday afternoon, Hicks had yet to make a decision.

Even if the chief shoots down the measure, tribal council can override his veto with a two-thirds majority, which they appear to have.

Tribal members have voted against allowing reservation-wide alcohol sales twice before. In 2009, however, voters approved a referendum to permit the sale of alcohol in the casino.

While proponents say alcohol will help Cherokee’s economy and attract tourists to local businesses, opponents of the referendum cite religious convictions and a long history of alcoholism among the Cherokee as reasons to continue its dry spell.

Phil Drake acknowledges that he has two kinds of enterprises. There are those launched or purchased for strategic business reasons; others he owns to ensure family members in Macon County have places to work.

Drake has a lot of family, and he owns a lot of businesses: some 18 or so under the Drake Enterprises umbrella alone. These include a tax software company, an internet company, a performing arts center and a printing press.

Here’s how Drake and Drake Enterprises work, in what’s virtually a textbook model of a business practice dubbed “vertical integration,” or expanding within the core company’s supply chain of operations:

• Drake Enterprises was responsible for 75 percent of the work at Macon Printing in Franklin. Drake, once alerted to that fact by the shop’s owners, bought the business.

• Drake needed more reliable internet service than was available in WNC, so he joined with the Eastern Band of Cherokee Indians to create BalsamWest FiberNet. The company, headquartered in Sylva, has built 225 miles of underground fiber in Western North Carolina.

• Drake Enterprises had extensive marketing needs; Drake launched PRemiere Marketing in response. PRemiere serves as an in-house marketing service for Drake Enterprises, plus handle advertising and marketing for “outside” companies.

• Drake’s companies use computers extensively. Today he owns TechPlace outlets in both Franklin and Hayesville, specializing in computer and cell-phone sales and repairs.

Not bad for a boy from Franklin whose mother used to come home from work with bloody fingers from making denim jeans for Wrangler at the local factory. These days, Drake owns that place, too — he turned the 56,000-square-foot building into a “Fun Factory” for kids, complete with arcade games and a go-cart track.

Buying into the Drake dream

More than 500 people work for Drake. Key employees, those he wants to keep in the company for life, are encouraged to buy stock in Drake Enterprises using money Drake loans them. These employees now own 10 percent of the company.

“I picked employees who are loyal, have the same vision I do, and who don’t have an exit strategy,” Drake said. “I hope to work there until I die; the employees I picked, I hope they’ll work there until they die.”

With that many employees, there are that many people in WNC who owe Drake their comforts and livelihoods. His legion of supporters view Drake as a man who takes care of family and community, pays his dues and debts, and gives proper homage to God.

“He has worked very hard for what he’s got,” said Ronnie Beale, a Franklin native and Democratic county commissioner who owns and operates a construction company in Macon County. “We might differ politically on some things, but Phil has a heart for Macon County and its people.”

Drake would like to branch out of the private sector and serve in Congress. To date, however, his wife has made it clear she’d rather he not. Drake was equally clear in a recent talk in Asheville to area business owners about his intention of honoring her wishes.

Don’t count Drake out of politics too quickly, however. When you examine his history, this is a man who has managed to do pretty much whatever he’s wanted, one way or another. Through sheer perseverance, an uncompromising business intellect and an almost uncanny ability to time his business deals, Drake has prospered, and the extended Drake family has prospered right along with him.

“If I can create a job, make a little money or break even, I’ll do it,” Drake said. “God put me in the right place at the right time, and I really hit a homerun in software. On some of these other businesses, I’ve gotten some singles and some doubles. I’m still out there trying to find that next homerun.”

From bankruptcy to wealth

Drake’s rags-to-riches, Horatio Alger Jr.- type tale takes something of an odd turn in 1981, when shortly before the age of 30 he plunged into bankruptcy. Drake, a proponent of small government who has spoken at area Tea Party venues, was forced to rely on food stamps to help feed his family. Today he expresses gratefulness for that particular program of the federal government.

Drake grew up on a farm. He went to Davidson College after graduating from Franklin High School, and then headed into neighboring South Carolina. Drake taught high school math for three years in that state before deciding he couldn’t support a family on take-home pay of $425 a month.

Drake returned to Franklin in 1976 and joined his father in the family tax business. These were the days when taxes were done with pencil and calculator — pre-computer and pre-computer tax programs. Drake said he just knew there had to be a better way of preparing people’s taxes.

Drake bought an IBM computer for $22,385 in 1977 using borrowed money. At his son’s urging, his father mortgaged a piece of property to cover the cost. Drake was confident he could program the new computer — which, in fact, he did. Drake developed an accounting program that he was soon selling to other accountants.

He remembers boasting to his wife, “I’m going to be a millionaire by the time I’m 30.”

There was one problem with Drake’s plan, however. Each year the computer needed updating. The updates required new, expensive computers — not the relatively cheap, internal fixes you’d get today. Drake kept borrowing and buying new, expensive computers.

“I was $100,000 in debt just from buying computers,” he said.

Then he left the state and went to Kansas City for a time to help another company automate its tax service, putting faith in an on-site manager to take care of his business at home.

That didn’t happen. The Internal Revenue Service didn’t get its due in the form of payroll taxes. One day a federal agent informed Drake the IRS planned to padlock the family’s office door and seize their business equipment if the government didn’t get its money.

Drake didn’t have that kind of cash. He instead drove to Asheville, retained an attorney, and filed for bankruptcy.

Time seems to have helped heal the sting of that decision, and there’s clearly balm on the wound from having, Drake emphasized, paid back every dime to every creditor involved. He estimated that took about six years.

Drake described learning some hard lessons during those times. About not using money you don’t have, and about not getting out on a limb and sawing it off behind yourself.

“You know the only thing my wife and I could talk about then? Money. We didn’t have any, and that’s all I could talk about,” Drake said.

He’s self-critical, too, of the 100-hour weeks he once worked, remembering tearfully how one of his three children begged him over the phone, “Daddy, please come home.” Drake described his younger, driven self as “ornery,” a perfectionist who had difficulty letting workers write some of the most basic software code the business needed.

Now, he said, he hires good people and gets out of their way.

“I’m getting easier to work for,” Drake said.

And, he turned to his faith.

“This was a life-changing experience for me,” Drake wrote of the bankruptcy in an article published by the National Christian Foundation, on whose board he serves. “I came to the place where I finally said, ‘God, I’ve messed this up. From now on, I’ll manage your business, and Lord, would you manage mine?’”

The National Christian Foundation is based in Atlanta, Ga. It is the largest Christian grant-making group in the world, self-reporting that it has received more than $4 billion in contributions since 1982 and given more than $2.5 billion in grants to thousands of churches, ministries, and nonprofits. While board members such as Drake are technically elected each year, they are expected to serve for life.

An ‘angel’ investor

In a downward spiraling economy that has seen countless businesses go under, Drake has instead thrived — these days he’s emerging as a self-described “angel investor,” a man with enough money at his command to select only those investments that interest him. He likes to buy-in low, on the promise that the sellers will get their money back, and more, if the targeted business turns around. That minimizes his risk, and promotes cooperation to get the invested-in business moving in the right direction.

“We don’t pay more than we can sell it for tomorrow,” Drake said.

Bob Dunn, director of consulting for Mountain BizWorks, said Drake motivates companies he invests money into.

“His deals are tough love, but they have an attainable upside,” Dunn said.

Cecil Groves, a former president of Southwestern Community College who is overseeing BalsamWest for Drake and the Eastern Band, described Drake as a man who reaches business decisions quickly and decisively. Groves also sees Sharon Drake as a true partner of her husband, in every sense of the word, including in the business side of his life. Sharon Drake handled accounting and human resources for Drake Enterprises for two decades.

In addition to an ability to sift through facts and data quickly, Phil Drake has that near perfect pitch when it comes to timing on business deals. He was among the first in the nation to start filing taxes electronically, for example.

Drake is also a stickler for customer service — in January, just as the tax season kicks off, his business gets 14,000 to 15,000 calls a day from customers needing support using his tax software. Drake has call centers in both Sylva and Hayesville.

He expects the support line to be answered in three rings, an eight-second wait on average. This, Drake said, compares to the 45-minute wait time of some competitors.

Ron Haven, a Republican commissioner in Macon County, is an unabashed fan of Drake’s and of the business empire he’s built.

“He could have picked up and moved everything away,” Haven said. “But he’s stayed here instead in Macon County, and helped this community.”

Drake’s political future, if there is one

On YouTube there’s a video from an April 16, 2009, Tea Party event in Franklin featuring Drake. He sounds familiar Tea Party themes, such as: “you cannot legislate the poor into prosperity; you cannot borrow your way out of debt;” “If you take the resources from successful companies and reward those that are failing, that’s a picture of our bailout, and that’s unacceptable.”

For the most part, Drake appears on the video reasonably polished and smooth during this minor political foray. But there’s an awkward intellectual straddle when he attempts to pin the U.S. deficit, in large part, directly on abortion, which as a fundamentalist Christian, he strongly opposes.

“We have killed 30 million people who could work today and pay into the social security administration,” he told the crowd.

Drake said though he certainly would love to serve in Congress, he’s not really willing to run.

“I think I’d have some trouble,” Drake said. “I’m somewhere to the right of Jesse Helms. So getting elected might prove tough.”

The Drake empire:

• Drake Income Tax and Accounting: founded by Phil Drake’s father in 1954, Drake sold it to employees in 2004 for $1 on the 50th anniversary of the business’ founding.

• Drake Software: Software for accountants and tax preparers. Headquartered in Franklin, with additional call centers in Sylva and Hayesville.

• WPFJ Radio: Commercial AM station, Christian programming, in Franklin. Donated this year to Toccoa Falls College in Georgia, a Christian college. The move will save Drake Enterprises $50,000 a year, Drake said, and the college plans to continue with the same Christian-based music and programs.

• WNCSportsZone: Sports equipment and athletic shoes and apparel. Stores in Franklin and Waynesville.

• Dalton’s Christian Bookstore: Stores in Franklin and Waynesville.

• Macon Printing: A commercial printer in Franklin. Publishes The Real Estate Buyers Guide in five communities.

• PRemiere Marketing: Advertising and marketing agency based in Franklin.

• Franklin Golf Course: Nine-hole public golf course, driving range, pool.

• DNET Internet Services: Dial-up, DSL, wireless, webhosting. Based in Franklin.

• BalsamWest FiberNet: A partner with the Eastern Band in building underground fiber.

• TechPlace: Computer and cell-phone sales and repair, stores in Franklin and Hayesville.

• The Fun Factory: Family entertainment center in Franklin. Includes the Pizza Factory and The Boiler Room Steakhouse in the same building.

• The Smoky Mountain Center for the Performing Arts: 1,500-seat theater in Franklin, with orchestra pit and full staging; 80 events per year.

• EPS Financial: Process banking transactions and debit-card transactions. Based in Easton, Pa.

• GruntWorx: Converts scanned documents into readable and searchable PDFs and can import data into tax software. Originally based in Massachusetts, Drake moved the company to Derry, N.H.

• Stellar Financial: Drake is an investor in this Stroudsburg, Pa., company providing software and integrated management services for nonprofit donors.

• Sylvan Sport: Drake is an investor in a Brevard-based company that builds the “GO,” a camper.

• Galaxy Digital: Drake is an investor in this Asheville company that creates digital campaigns and works on web communications.

• Drake Capital: Drake is a partner in this Matthews-based real-estate acquisition and development company.

By Julia Merchant • Staff Writer

Two of the three boat docks on the Swain County side of Fontana Lake shut their doors before Labor Day, traditionally one of the biggest money-making weekends of the season for lake businesses.

Some residents on the Cherokee Indian Reservation are calling for a referendum vote on whether Wal-Mart Stores should be allowed to build there.

The town of Sylva is embarking on a smart growth plan that could reshape some of the town’s more unsightly commercial corridors in coming decades.

With Wal-Mart’s future in Franklin in limbo, business owners near the existing big-box store continue to worry they’ll lose the economic engine that drives their bottom lines.

Downtown Sylva is a special place. The events of the last couple of months only reinforce that fact, and so the momentum to create a better, closer and more unified business community should continue.