December 16, 2010

Steve Shiver's Twice-Told Tales

Skullduggery in Ghost Town

By ALAN FARAGO

Up there in wintry Maggie Valley, North Carolina, the former county manager of Miami-Dade, Steve Shiver, is scrambling to salvage an amusement park investment that has taken down hundreds of local debt holders and $5 million in equity. It's called Ghost Town and once sported live shoot-em up's, a little tourist railroad up the mountain, and the goodwill of a town that desperately depended on the attraction for its economic wellbeing.

According to local reports, a new investor has been brought in to breathe life into Ghost Town, its 288 acres and a collection of amusement park rides gathering snow and ice in the freezing winter. The investor, Clint Walker, has a record in penny stock trade manipulation and an SEC violation tied to other Florida operators. The new scheme appears to rely on using a shell corporation and floating stock to attract new investors to the new venture resonant with the name of an old venture—owned by Miami businessman Allen C. Harper—called American Heritage Family Parks.

Ghost Town at Maggie Valley and its CEO Steve Shiver, the controversial former county manager of Miami-Dade, followed the economy down. Harper and Shiver purchased Ghost Town in 2006 at the peak of the real estate bubble. The park had been dormant for five years. According to court proceedings, Ghost Town's revenue plunged from $5.5 million in 2007 to $4.4 million in 2008. Amidst a major slump in entertainment attractions across the nation, the 1960's era facility declared bankruptcy in March 2009.

The park had been scheduled to re-emerge from bankruptcy on May 31, 2010, but by late April, Shiver—a minority partner—had failed to come up with an acceptable plan to the bankruptcy court. By then, there was the landslide.

During bankruptcy proceedings, the frustration of local vendors, owed considerable amounts from Harper and Shiver, had been mounting. Allegations of lies and misrepresentation in Maggie Valley echo in Homestead and South Florida, where Shiver's performance as county manager and earlier as mayor of Homestead stirred mistrust and controversy. The attorney for Ghost Town debtors called the Shiver/Harper project "a tar baby."

In 2009, Shiver and Harper went back to the local government for a $200,000 bailout. They appeared to have persuaded local officials, but in two packed town hall meetings it was clear that the sentiment of voters was running strongly against the town's main source of revenue. One resident complained, "It is throwing good money after bad… They owe everybody in the county. How do they expect to pay back Maggie Valley?"

To the consternation of aldermen and townsfolk, Shiver had only provided one page summaries of business operations in 2007 and 2008. Ghost Town owed, at the time, $30,000 in back taxes. Last April, the Smoky Mountain Times reported that the theme park owed a total of $13.5 million. The North Carolina banking giant, BB&T, held more than $9.5 million. Ghost Town owed everyone from the local utility, to the telephone company, to the town and to the IRS and hundreds of local vendors. In 2010, as Shiver struggled to make his case to bring Ghost Town back to life, a federal bankruptcy administrator on behalf of claimants derided the plan as "vague, ambiguous and not feasible," and even called one portion, "absurd".

Ghost Town LLC was incorporated on December 20, 2005 in Florida City by Allen C. Harper and Steve Shiver. Harper is chairman emeritus of Esslinger Wooten Maxwell Realtors, one of the largest realtors in South Florida, and a director of one of Florida's premier suburban sprawl land bankers, Consolidated Tomoka, based in Delray. According to Forbes.com Harper has been CEO of the American Heritage Railways since 1998. "He served as Director on the Tri-County Rail Authority, a state-owned commuter railroad, from 1989 to 2005, and was Chairman of the Board for three terms. In 2003, Tri-County Rail was incorporated into the South Florida Regional Transportation Authority, and in 2004 Mr. Harper was elected its Chairman. He also served as director of Florida East Coast Industries, Inc., a railroad and real estate company based in St. Augustine, Florida, for 12 years. In May 2001, Mr. Harper was appointed for the second time by Governor Bush to serve on the Miami-Dade Expressway Authority Board. Mr. Harper was an investor in, as well as an officer and member of Ghost Town Partners LLC, owner of Ghost Town in the Sky, a theme park that filed for Chapter 11 bankruptcy protection on March 10, 2009."

There is no record of how Harper and Shiver met in Miami. As a transportation booster in Florida, Harper was a supporter of the biggest infrastructure project in the mid 1990's in South Florida: $10 billion in promised benefits from the plan to convert the Homestead Air Force Base into a commercial airport. Insiders comprised from the board of the Latin Builders Association had secured a 99 year, no-bid lease from the county even before the US Air Force had decided on the air base disposition. Shiver was Homestead mayor at the time, a community marked by insider dealing. He was the go-to guy for the project. While the top lobbyists plied the hallways at the Federal Aviation Administration and other Washington agencies, at public hearings in South Florida Shiver goaded on behalf of HABDI (Homestead Air Base Developers, Inc.) and took to baiting objectors to the project, "environmental terrorists". The plan included a future rail link between the air base, in the far southern part of the county on the edge of Biscayne National Park, to Miami International Airport. Although billed as a needed provider for low-cost domestic airlines, the distant hope of HABDI investors was turning the air base into a private supply base handling cargo to Cuba once Castro died and control passed to pro-Miami rulers. They counted their eggs before the chicken hatched. By 2002, the controversy flamed out spectacularly. By that time, Shiver had been rewarded for his duty, appointed by county mayor Alex Penelas to be his county manager administering a $6.5 billion budget.

In its annual "Holding the Bag" wrap up of 2009, the local Smoky Mountain News wrote: "When Ghost Town in the Sky amusement park filed for Chapter 11 bankruptcy this year, it had a trail of unpaid bills — owing $2.5 million to some 215 companies. Local electricians, contractors, building supply stores, sales reps for souvenir merchandise — even newspapers that had run ads for Ghost Town — filled the long list of those never paid for their goods or services. But they aren't the only ones still holding the bag. Ghost Town employees never got their final paycheck at the end of the season. Cash flow was so tight all year, the park often couldn't make payroll on Fridays and instead relied on revenue from weekend ticket sales to pay employees the following Monday, and occasionally still fell short and had to make up the difference the following Monday after another weekend of revenue came in. Employees are still waiting for their last two weeks of pay from October. The park was plagued this year by lagging ticket sales due to the economy, the primary rollercoaster ride being inoperable most of the season, and expensive repairs to update the aging theme park. The park was forced into bankruptcy after falling behind on its $9.5 million mortgage, but CEO Steve Shiver maintains that the park will reorganize and pull through, including repaying the small businesses and employees who are owed."

It got worse. In December 2009 a minor landslide foretold disaster. Shiver and his team—that had spent most of the year willing the park forward—were slow to respond. Then, on February 5, disaster struck. In the gloaming, on the mountain top section that had given way more than once, a massive landslide, reaching as wide as 90 feet and 30 feet high, fell 3000 feet down the mountainside. For nearly 30 minutes, the slide pushed rocks, trees, and an enormous muddy riprap mercifully dodging downstream neighbors.

At the time of the slide, Ghost Town was five months late on its liability insurance. A few days after the slide, Ghost Town finally wired in its late insurance payment. One neighbor plaintively told the local The Blue Banner at the time, "Developers need to better review these home sites where they know unsafe terrain exists.. They should focus more on the preservation of that area's beautiful mountain landscape …, instead of just continually building and building."

There was no money to open Ghost Town, by spring 2010. In bankruptcy court, Shiver presented a plan requiring $2.3 million in new equity without detailing where the equity would come from.

By October 2010, the lawsuit filings related to the landslide traded volleys back and forth. They also became more specific. "The latest filing in a lawsuit over the massive landslide in Maggie Valley last winter claims the collapse of the mountainside was triggered by a broken waterline at Ghost Town in the Sky amusement park. Until now, accusations centered on a failed retaining wall intended to shore up the slipping mountainside… The suit also names Ghost Town CEO Steve Shiver personally, alleging he was aware that failure of the retaining wall was imminent, but didn't warn anyone."

In 2010 Harper formed a new LLC called American Heritage Family Parks. Its name is based on the corporate entity for his other railroads, American Heritage Railroads, including the Durango Silverton Narrow Gauge Railroad in Colorado and other touristic railroads in Bryce City, North Carolina and the Texas State Railroad.

According to the Smoky Mountain Times on May 5th, 2010, Harper agreed to put up $7 million to take Ghost Town out of bankruptcy. "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." Many local investors will have sacrificed hundreds of thousands of dollars and federal taxpayers, according to the news report, could be liable for $2.5 of Ghost Town's bad debt.

The Harper plan appears to split off his good asset—the Durango Silverton—from his bad ones; transferring minority ownership, including Ghost Town, Bryce City and Texas to a new public entity. The transaction, valued at $21.5 million including 100 lots in Savannah GA, has a new partner: Clint F. Walker, from Charlotte, NC.

The new company that hopes to take over Ghost Town is being called, American Heritage Family Parks. Walker's previous corporate entity was Remodel Auction, Inc. Remodel Auction is a penny corporation, traded on the "pink sheets". "Remodel Auction™ is a proprietary online marketplace that empowers homeowners to put their remodeling projects up for competitive bid online. The system was designed with the needs of both homeowners and contractors in mind. Remodel Auction is a fast and reliable solution to get competitive pricing for common remodeling projects. Remodel Auction, Inc., founded in February 2005, is a Delaware corporation headquartered in Charlotte, North Carolina."

Walker echoes Shiver-esque hyperbole: "We believe everyone should have a dream to work toward. As Remodel Auction grows and has become a publicly traded company my dream is becoming reality. By many accounts we are a small company in history and size, but not in Vision. We believe Remodel Auction will be a leader in the $230 Billion Remodeling Industry and having sold millions in remodeling contracts door to door we understand first hand the needs of both parties using our system. We will continue to be diligent in our focus to target niches inside the business that can grow the fastest." In July 2010, Remodel Auction had an estimated market cap of $771,152 with more than 7.7 million shares outstanding.

The web-based remodeler now intended minority-owner of Ghost Town went public (in a manner of speaking) through by acquiring a corporate shell, called AMSTAR Financial Services. In a 2008 SEC registration, AMSTAR disclosed share par value of $0.001. Its accountant, Joel Galpern based in North Miami, noted, "Management has elected to omit substantially all of the disclosures as required by generally accepted accounting principles. If the omitted disclosures were included in the financial statements, they might influence the user's conclusions about the company's financial position, results of operations and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters."

The corporation reported $4.8 million in "goodwill" with no other assets. It showed paid in capital of $16.5 million with negative retained earnings (ie. loss) of $11.6 million. There were no material business operations in 2004, 2005, 2006, and 2007. The SEC registration states, "Presently there are minimal controls or procedures in place regarding business, because there is no business to control." Only two names associated with the corporation: Nelson Locke, director, and Charles Kluck, director.

SEC filings also indicate that AMSTAR had a wholly owned subsidiary, Jupiter Mortgage Corporation d/b/a Synergy Mortgage Solutions and d/b/a America's Senior Financial Services and Synergy Mortgage Solutions, Inc.

An SEC filing states, "Clinton F. Walker is the Founder and CEO of Remodel Auction of Charlotte, NC. From April/2003 to January/2006, he was General Manager of Patton General Contracting of Charlotte, which is a home remodeling company where Walker sold home improvement contracts and trained new salesmen. From November/1999 to January 2003, he was Vice President of 21st Equity Partners of Charlotte."

In 2003, an SEC lawsuit against 21st Equity Partners and Clint F. Walker, obliquely referred to the principals as two of "several recidivist stock promoters and two attorneys in a "pump and dump" market-manipulation case. The SEC suit alleged that Walker, among other defendants and companies under their control, violated the securities-registration and anti-fraud provisions of the federal securities law. Walker's firm entered into a fraudulent trade with stock promoters using offshore corporations in the Cayman Islands, Belize, and Bermuda. Among the 2DoTrade bogus claims: that the corporation "was testing an anti-anthrax compound called "ATHOQ" at a hospital and a university in the UK for imminent distribution in the United States. In reality, ATHOQ was a sham, and no anthrax or product distribution ever occurred." The SEC sought a penny-stock bar against Walker.

It was the same year that Shiver, in Homestead, and out of government service decided to become a land developer. In a poor dilapidated neighborhood, Shiver was paid $310,000 over a two-year period, finally giving up after failing to develop the land by selling it to Homestead for $1.9 million. A county audit report later noted, "According to the appraisal report, the only comparable in the area had a value at the time of sale that was much lower than the CRA purchase price." Of the serial failures of Homestead to account for public moneys, a professor at the University of Miami law school's ethics center told the Miami Herald, "It is scandalous and unfortunately all too typical of South Florida's political culture of cronyism and public nonaccountability. The public ought to be hopping mad,'' said Tony Alfieri, who teaches at the University of Miami's law school and directs an ethics center.

Walker and his partner engaged directly with the 2DoTrade promoters in a stock trading scheme that enlisted primary money men from Florida, called MCG Partners Inc. and an attorney licensed in Florida, Michael Karsch. Karsch shows up in a Broward controversy that strikes a refrain familiar to six degrees of separation: outlandish business dreams skirting the law and underlined by the bizarre. In 2003, the same year Karsch became embroiled in 2DoTrade, a business associate in Boca Raton was involved in a deal to convert an 18-acre cemetery into a land development. Through Karsch, two widows were instigated to sell the cemetery for $6.1 million even though its price was realistically, at the time, as much as $40 million.

His MGC partner, on corporate filings of the State of Florida, is Neil Swartz in Boca Raton. Swartz's brother, Mark, was CFO of Tyco whose CEO, Dennis Kozlowski is now doing time in federal prison after falling from one of the highest corporate perches in America. In 2002, Mark Swartz and Dennis Kozlowski were undisclosed shareholders of a public corporation, first called Global Technology Marketing International, then called TargitMail, then bought by a company called GourmetMarket.com, that changed the corporate name to TargitInteractive. GourmetMarket.com was owned by iiGroup, whose CEO was Neil Swartz. In a late 2001 SEC filing, TargetInteractive expressed concerns that negative cash flows "raise substantial doubt about the company's ability to continue as a going concern."

Six degrees of separation from Neil Swartz to Michael Karsch to Clint Walker to Steve Shiver and Alan Harper: a distance lost in the field of aspirants clamoring for the safest position on the Wall Street witches broom flying trillions of derivatives based on mortgage banking, roadways to suburbs, cement, asphalt, rock mines, buses and trains; first showering a rain of commissions and compensation long before the debt cratered in the balance of the federal treasury and the balance sheet of US taxpayers.

Everyone wanted a piece of that action, including the good citizens and burghers of Maggie Valley. On the other hand, one might well wonder by what strange twist of fate did a bucolic community at the edge of the Blue Ridge Parkway end up on a lanyard hoist by South Florida connections?

In November 2009, The Mountaineer reported, "M Point Productions, the Miami-based company who brought the House of Terror to Ghost Town this fall, is in negotiations with city officials trying to nail down a deal to build a replica of Ghost Town in Miami as a limited time winter attraction. M Point's CEO Peter Regalado Abad said if all goes according to plan, construction will begin in Miami next month in preparation of a February opening. Plans call for a short stint in Miami, February through March, so entertainers and employees can return to Maggie in time to prepare for the slated May 14 park opening." Dolly Parton's sister was going to rescue the entertainment programming. Anonymous foreign investors were going to ride to the rescue.

In March 2010, the mayor of Maggie Valley Roger McElroy told the Smoky Mountain News, that he just hopes Ghost Town stays an amusement park "rather than getting turned into a real estate development." But in truth, real estate development is what Ghost Town investors wanted. What else was there? Basket weaving? Furniture making? NASCAR?

Ghost Town, for its investors, was a core attraction to lure future condo farms and as much sprawl as its owners could gin up, as fast as possible, connected by big roads to the highway. For Harper, the transportation and land development entrepreneur, it always worked. It is the story of Florida. Bring 'em in, sell 'em plots of land. In 2006, it was nothing but blue skies.

Back in the day, Shiver gave an interview (May 15, 2003, Center for Digital Government) that concluded: "When I was going into college I knew that I was going to be a performer. I had been in a Miami boy's choir for six or seven years, and I was a performing artist. I knew for a fact that was what I was going to do." And he did.

The taxpayers and homeowners and businesses of Homestead, Florida might nod to the assessment of one business owner in Maggie Valley who lent money to Ghost Town, "A closed amusement park is one thing. A failed amusement park is much worse… it has always had a problem of being undercapitalized."

Now a shell corporation built on the record of penny stock operators cited by the SEC will attempt to gin up new investors of millions of shares of stock in a minority ownership of Allen Harper's bad assets plus 100 lots in Savannah, GA. It will be a real estate play. The economy will turn around. People on limited incomes will seek out amusement parks close to home. Asheville is growing. Atlanta is not far away.

But Maggie Valley is already putting out another anchor, in the post-Ghost Town era. Flowers. Lots of them. Everyone is going to put in flower beds. Beautiful flowers to attract tourists like bees to the pollen of a fruiting tree.

What Steve Shiver needs more than Ghost Town is a ghost writer. He has born witness to so much skullduggery that a well told tell-all of the tales and their actors – rising to mayor of the most corrupt little city in America, Homestead, to becoming right hand man to Alex Penelas, the Miami Dade mayor who cost Al Gore the 2000 presidential election, then turning over a new leaf in Maggie Valley only to be caught up in a land slide his negligence may have triggered.

We live in a curious time where any reality – however weird or self-serving—can sell in the hothouse of tin-plated public vanities. Shiver may be twice as broke and half as charismatic, but he could be a hundred times more interesting if he put it all down on paper. If he wanted to make serious money, he would have to do the 12 step program to purge hubris, abandon bravura, the hallmark earnestness, the 100 percent assurance that if there is blame, it is always someone else fault. With a deft touch, he could make it all back. Millions. Just like the little train that could.

Alan Farago, conservation chair of Friends of the Everglades, lives in south Florida. He can be reached at: afarago@bellsouth.net

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