UPDATE: High Point's Showplace could be in receivership for years

Existing staff remains in place, but new managers join team

Larry Thomas -- Furniture Today, August 26, 2009

HIGH POINT — Showplace and four other downtown showroom properties here have been placed into receivership by a Guilford County judge after their owners defaulted on an $81 million note.

Rick King, left, Richie Faulkenberry and David Oddo have joined the management team of Showplace. They are from Lincoln Harris, the firm that is running the High Point showroom operator while it is in receivership. Existing Showplace staff also remains in place, including Joanna Easter, chief operating officer.

An order from Guilford County Superior Court Judge Lindsay Davis Jr. doesn't say how much of the note is in arrears, but says the note holder, Bank of America, can take possession of the property and "receive all rents and other income" when the owners default.

Davis named the Charlotte, N.C.-based real estate services firm of Lincoln Harris LLC to manage the properties while they are in receivership — a process that could take a few months or stretch into several years.

The receivership involves Showplace and Showplace West (the former First Factors building at 101 S. Main St.), as well as smaller showroom buildings at 200 N. Hamilton, 320 N. Hamilton and 330 N. Hamilton. All told, the properties have more than 700,000 square feet of showroom space, including about 470,000 square feet in Showplace.

It's the third largest group of showroom properties in High Point, after the International Home Furnishings Center and Merchandise Mart Properties Inc. holdings.

The majority owner of the Showplace properties, the private equity firm Walton Street Capital, acquired controlling interest in 2005.

Walton Street was joined by three North Carolina developers, High Point residents Maurice Hull and Coy Williard Jr. and Charlotte resident Paul Bell, who took a minority interest in the project and formed a company called Capstone Showplace Management to oversee the showrooms.

Hull, Williard and Bell appeared to be caught off-guard by the receivership order, issuing a statement Tuesday claiming that Walton Street "overleveraged their position, and would not fund improvements we wanted to make to the properties and had withdrawn most of their capital."

The three said Walton Street tried to obtain new loan terms, and when those talks broke down, a lawsuit that led to the appointment of a receiver was filed.

They said they did not recognize the seriousness of the dispute between Walton Street and the lender, and said they had been talking to the private equity firm about Capstone buying the Walton Street stake in the properties.

Officials of Lincoln Harris stressed that the existing staff at Showplace, including chief operating officer Joanna Easter, will remain in place. However, several Lincoln Harris employees are being added to the staff, including Rick King, director of marketing, and Dave Oddo, senior vice president. King is the former vice president and general manager of case goods and occasional resource Bluefish Home.

The additional staffers will allow the existing staff to focus on leasing, tenant relations and showroom development for the High Point Market, while the added staff from Lincoln Harris will concentrate on areas such as marketing, operations, finance and human relations.

"We want Lincoln Harris to be transparent to the end-user," said Richie Faulkenberry, a senior vice president at the firm who is overseeing the Showplace project. "Showplace is an incomparable event venue and we are excited about the opportunity to develop the facility's potential and position it for even greater success."

Since Lincoln Harris was appointed receiver on Aug. 7, he said the occupancy rate already is up 18% at Showplace, noting that several new tenants have leased space for the October market. Plus, the building's largest tenant, upholstery major Berkline, has extended its lease.

A new restaurant called 100 High will be open in Showplace West during market, and Showplace will host a market kick-off party there, Faulkenberry added.

"Our tenants know Showplace for our great service and all of the amenities and events we offer to enhance the value of their experience at market and make the buyers feel right at home," said King.