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Buck Stops Here: The wheels come off for revitalization entrepreneur
Journal Photo by Amanda Muschlitz
Terry King stands in front of King Plaza, the former Parkview Shopping Center, which he brought back to life in the late ’90s.
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Published: July 4, 2009
"I'm not going to use the excuse that I'm a dumb hillbilly that doesn't know better. I just didn't separate passion from business, and that's my fault."
-- Terry King
In the 1980s, Parkview Shopping Center was home to such nationally known stores as Winn-Dixie, Rose's and Eckerd's. Sears, Roebuck and Co. opened a surplus store there in 1982. The center was a mainstay of its Southside neighborhood, which was full of hard-working folks who lived in modest houses.
By the early 1990s, most of the stores were gone. The center was auctioned off in 1994 after its owner filed for bankruptcy. Many of the houses had become rental properties, and the Waughtown neighborhood and shopping center became known for drug deals and muggings in broad daylight.
Into the mix stepped Terry King, a self-described country boy with an eighth-grade education.
He bought half of the shopping center in 1996 for $450,000 and renamed it King Plaza, maxing out his credit card to $100,000 and taking a second mortgage on his house to finance the deal.
The shopping center became a success again, renting to national tenants such as Rent-A-Center and Jackson Hewitt Tax Service, much less King's own business, First Choice Custom Wheels and Tires. King became the darling of the neighborhood revitalization crowd, attracting visits from then U.S. Attorney General Janet Reno and Gov. Jim Hunt.
When King Plaza was fully leased in 2001, King felt confident enough to buy what became King's Midway Plaza in Midway
But by last year, it had all fallen apart.
The shopping centers are no longer his. He operates his business out of his house. And last week a judge agreed to give him a three-week extension as he tries to avoid a foreclosure on that house.
King is hooked up to a heart monitor that keeps track of his heart palpitations.
"The stress level is tremendous," he said recently as he sat at China Express restaurant in King Plaza. "And I'm ashamed, because I'm supposed to be smarter than this and tougher than this."
Rough early life
King was born in Pfafftown and spent his early years in a house that had no bathroom. He and his mother bounced around in Virginia and North Carolina. He never knew his father, he said, and life with his mother was hard.
At 15, he got a job at the Shell station at the corner of Robinhood and Peace Haven roads. He intended to train as a mechanic, but Reaves Davis, the owner of the station and the man who King describes as a godfather, had other plans. He told King he was a natural-born salesman and that he should be the front man at the station. Davis would do the mechanical work.
He worked 14 hours a day, seven days a week, King said. He loved the work and he loved earning his own money. He dropped out of Southwest Junior High in the eighth grade because the only subject he was good in was math.
He stayed at the station for 13 years and opened his own tire business in the late 1970s in the Winston Lake area. He moved that business to Sedge Garden in 1993.
He doesn't pretend to be a social scientist, but King said that he has always believed that low-key social interaction among blacks, whites and Hispanics is the way to break down racial barriers.
He had never had a chance to prove that theory until he heard about the problems at Parkview Shopping Center and decided to buy in.
He said he planned on using the profits from his tire business to pay off the loan for the center in about three years. King promised himself he wouldn't get caught up in the day-to-day management of the center, but would keep his energy on the tire business.
But a few weeks before his grand opening at the center, King realized he had a leaky roof -- and not just a few leaks. There was a foot of water on the floor.
"If it rained outside, it would rain for another 24 hours inside, with the water dripping down from the roof," he said. "Golly, I had no idea what a roof cost. It cost a quarter of a million dollars."
He estimated that he put about $500,000 into renovations at the center in the first few years in order to attract the caliber of merchants he wanted.
In 2001, he did $1 million worth of renovations to satisfy the national tenants who had signed leases.
He was used to flying by the seat of his pants, King said. When he would spend an extra $50,000 or even $100,000 on renovations, he said, he would just work that much harder to sell more tires and make up the difference.
"You can play games with small amounts of money and be OK if you've got the cash flow," he said. "But if you play games with hundreds of thousands of dollars, you can't keep up."
Began falling apart
King said that he doesn't understand exactly how things got away.
But as early as 2007, some of his merchants at the two shopping centers had trouble paying their rents. King said he felt sorry for them and let their debts mount.
Then some of the businesses closed and King spent money fixing up the abandoned spaces for new tenants, only to find that he was unable to rent the space.
By 2008, he estimated that he had lost about $300,000 between the renovations and unoccupied space.
Larry Eubanks, a retired lawyer, has been working to untangle King's financial mess. Eubanks, who met King 30 years ago when they used to race cars at Bowman Gray Stadium, said that he has reviewed a lot of King's documents.
Eubanks said that he believes that most of King's problems started when Ciena Capital, which held the loan on King Plaza, required King to set up two escrow accounts that eventually totaled $250,000.
The accounts were to be used for shopping-center operating costs and taxes.
King said he would make repairs at the center and submit bills to Ciena, but he was never reimbursed. Ciena went bankrupt in October 2008.
Without access to the money in escrow, King fell behind on his payments on the shopping center, Eubanks said.
He couldn't make his house payments either.
King made his last payment on King Plaza to Ciena Capital Inc. last July for $27,000. He said he owes $2.8 million on King Plaza, which was appraised for $4.1 million in 2007.
He made a last payment of $18,000 on King's Midway Plaza last August.
Last November was the last time he was able to pay his $1,953 mortgage on his house in Winston-Salem.
Pete Rodda, the Forsyth county tax assessor, said that according to his records, King Plaza LLC, King's company, still owns the center. But representatives from Wellington Advisers, a property-management company in Greensboro, have told King that they are holding the shopping center in receivership. The company did not return calls for comment.
Hunton & Williams LLP in Miami called King on June 16 to tell him that his loan with Ciena had been sold to Silver Point Capital in September 2008. Hunton & Williams did not return telephone calls seeking comment.
King's story mirrors the ups and downs of the economy.
"It's been a 14-year ride," King said. "Looks like it's over for me. I apologize to anyone who believes I let them down."
Eubanks said that he believes King's problem is that the scale of his business got too big and he had no partner to rely on to help with the details.
King said he always resisted the idea of getting a partner because he felt someone else might rein in his ideas. Now, King said, he realizes that might not have been a bad thing.
"I'm not going to use the excuse that I'm a dumb hillbilly that doesn't know better," King said. "I just didn't separate passion from business, and that's my fault."
■ Mary Giunca can be reached at 727-4089 or at mgiunca@wsjournal.com.
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