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Developers bid for Showplace

By Larry Thomas -- Furniture Today, August 31, 2009

HIGH POINT — Three North Carolina developers who have a minority stake in Showplace and several other High Point showrooms said last week they've reached a tentative agreement to become majority owners of the properties.

The agreement came days after the properties were placed in receivership because the current majority owner, Walton Street Capital, defaulted on an $81 million note.

Terms of the transaction were not disclosed, and the deal must be approved by the lender before the ownership transfer can take place. Until then, the court-appointed receiver, Charlotte-based Lincoln-Harris LLC, will continue to manage the properties.

The North Carolina men, High Point residents Maurice Hull and Coy Williard Jr. and Charlotte resident Paul Bell, formed a company called Capstone Showplace Management and teamed with Walton Street Capital to buy the properties in the fall of 2005.

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Street “overleveraged their position, and would not fund improvements we wanted to make to the properties and had withdrawn most of their capital.”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

“Capstone Showplace is working to resolve these issues created by Walton Street with the lender and close the transaction,” the three said in a statement announcing their agreement to acquire Walton Street's stake.

The receivership 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.

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.

Officials of Lincoln Harris said 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. And the building's largest tenant, upholstery major Berkline, has extended its lease.

Among the changes to be implemented for the upcoming market is a new restaurant, 100 High, that will be in the Showplace West space formerly occupied by Noble's Restaurant.

Faulkenberry said 100 High will host several public and private parties during market and also will provide food service for market attendees.

He didn't rule out the possibility of the restaurant remaining open year-round, but said no decision would be made until after market.

“We are especially pleased with the food offerings that will be available at 100 High and this location remaining the destination of choice,” he said.

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

Aug 26, 2009

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