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Chamber chairman files bankruptcy
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Forsyth County News

 

From fewer construction projects to more bankruptcies, the signs of the sluggish economy are everywhere.

It’s a fact John Kieffer, chairman of the Cumming-Forsyth County Chamber of Commerce's board, knows all too well.

Since launching his design and construction firm in 1996, Kieffer’s been the developer behind custom homes and various projects, including downtown's Cumming Station. But in 2007, the local construction market soured.

“The first year, second year, third year of this challenging economy, I kept continuing to believe that we could work our way through it,” he said. “No one expected this economy to be in the condition its in after so many years.

“Over the course of four or five years, you see everything that you’ve worked for dwindle in value and you exhaust all your savings and your resources to keep them afloat. But at some point, you have to make the decision that you can’t invest anymore. You have nothing left.”

After years of resistance, Kieffer has filed for Chapter 7 bankruptcy, citing about $18.7 million owed to various creditors.

While Cumming Station is 90 percent leased and supporting itself financially, two other projects have been struggling to launch.

Among them is Southern Vision LLC, a partnership Kieffer was in that purchased hunting tracts in south Georgia with the intention of improving and selling the property.

“Real estate values have dropped 50 to 60 percent,” he said. “I don’t see them being able to sell the land today for what we expected. So if we pay the loans, that will be a goal, that will be great.”

Another group, Blue Ridge 400 LLC, is another of Kieffer’s partnerships that purchased 67 acres of land in Dawson County with the goal of building a retail center, including some "big box" retailers and smaller out parcels.

Whether commercial or residential, real estate is just not moving. It’s a lesson Pam Sessions learned in October 2008.

The co-founder and chief executive of Hedgewood Properties Inc. was the founder of Vickery Village in Forsyth County.

The 214-acre commercial and residential development was dubbed the mixed-use project by which others would be measured.

After the economy began to slow, however, Wachovia Corp. (since taken over by Wells Fargo) foreclosed on all Hedgewood’s collateral at Vickery, including 200 lots, half of which were developed, and the entire commercial village, including about 35 shops.

Sessions noted the severity of the economy, saying the “development and building industries and all associated businesses have been among those hardest hit."

“I do not know of anyone, including high quality builders like John Kieffer, in these fields who have not been forced to reevaluate their business on some level.”

In 2010, U.S. District Court figures show 1,685 business-related Chapter 7 filings in north Georgia. In 2006, that number was 1,088.

All business bankruptcies in Georgia totaled about 2,131 last year, with 1,657 in 2006. Only central California and middle Florida courts handled more, with 5,241 and 3,210, respectively.

Forsyth County building permits have taken an even sharper turn. In 2006, 7,889 permits were approved, compared to just 4,248 in 2010.

James McCoy, president of the Cumming-Forsyth County Chamber of Commerce, said the statistics show the reality of the situation.

“The unfortunate thing is that John’s an example of this, Pam’s an example of this -- it doesn’t really matter about how great of a business person you are, the downturn cuts evenly,” he said.

“We cannot say any longer that it’s a reflection of business acumen, honesty, decency and integrity, because it’s not. It would be hard for me to think about too many people that have more integrity, more honesty, more decency and more business acumen.”

McCoy and Kieffer, who is also a former Forsyth County commissioner, have had a solid working relationship for years.

Their work together grew stronger when Kieffer became chairman of the chamber’s Small Business Advisory Council.

During the past year, Kieffer has met with McCoy, the chamber board, officers and members of the executive committee to discuss his personal financial situation.

“He was very open and honest with us, as John always is,” McCoy said.

Kieffer said the most important thing to him was that his bankruptcy would not reflect poorly on the chamber when he took over as board chairman Jan. 1.

“The role of the chamber is an important one in our community and that is first and foremost,” he said.

McCoy said the chamber board and officials were unanimous in their agreement that Kieffer’s personal finances were irrelevant to the value he would bring to the board.

“John is a man of enormous personal and professional integrity and has been a great leader in this community for many years,” he said. “The role of the chamber of commerce should be, and will always be, I hope, to support business people in good times and in challenging times.

“John having this sort of experience is actually, I hate to say this, but it's so incredibly common, particularly among people in the development business, that it really gives him an important perspective on the challenges of that industry that many great business people in our county are facing.”