Month: April 2003

Last month’s news of a $2.4 million check-kiting scheme, perpetrated by John C. Reid and allegedly other executives of Ivy Industries against Albemarle First Bank, cast the story in sharp terms: A local bank would have to recover from a sizable fraud. A study of recent SEC filings by Albemarle First, however, indicates an institution that has been afflicted with growing credit problems since at least the fall of 2001. Moreover, the damage comes at the bank’s own hands, namely, in the bank’s own words from “poor underwriting and aggressive lending practices.”

Quarterly and annual Federal filings reveal that while the bank’s loan portfolio grew by 73 percent in 2001, it was forced early the following year to conduct an in-depth review of that portfolio. Questionable lending practices spurred Albemarle First to substantially increase its provisions for loan losses during a nine-month period extending into at least the middle of 2002.

Albemarle First would appear to be under double pressure now to restore its performance soon. Following disclosure of the Ivy Industries fraud, the bank’s share price fell 27 percent and on heavy trading volume. With news of the check-kite, industry observers predicted bad news for shareholders at the end of the current quarter—a loss of $1.94 per share.

The big question now is how long the effects of the bank’s poor lending practices will linger. At the end of the fourth quarter of 2001, Albemarle First added $735,000 to its provisions for loan loss. By the third quarter of 2002, an additional $700,000 had to be included. As the bank started to clear the slate of bad loans, an increasing number have had to be written off—the cost to the bank known in industry terms as “net charge-offs.” For Albemarle First, the percentage of net charge-offs to the total number of loans climbed to 1.63 percent in last year’s fourth quarter, the worst rating in the state among peer banks of a similar asset size. Albemarle First’s assets total $96 million.

While the poor loan performance is an issue for Albemarle First and its shareholders, “the more interesting thing,” according to Joe Maloney, the bank and thrift editor at SNL Financial, “is management’s own complaints of poor underwriting standards within the company, rather than the numbers themselves.”

Steve Marascia, a stock analyst at Anderson and Strudwick, says many of the problem loans can be blamed on Albemarle First’s former CEO, Charles C. Paschall. “Loans are not like a petri dish where it evolves overnight,” he says. “You have to go back and cull through all the loans and clean them out. It’s like a porch on the edge of a house that’s rotting. You don’t know how much you have to strip away until you get started.” Marascia’s firm, it should be noted, has a close relationship with Albemarle First, having underwritten the bank’s secondary stock offering in 2001.

“If management is correct in their assessment and they progress forward, it’s not a problem,” Marascia says. “If you continue to see more and more of the loans come under reclassification, that’s a problem.”

According to an April 2 news release, the bank recently exercised its stock warrants in an attempt to obtain more capital. President and CEO Thomas M. Boyd, Jr. said in the release that this action “will allow the Bank to maintain its momentum and grow its market position.”—Aaron Carico

 

Growing pains

Slow-growth group says sprawl is a regional problem

We’re here with the view that whatever Albemarle does with its growth will have impacts on the surrounding counties, both foreseen and unforeseen,” Nelson County resident Al Weed told about a dozen people at Westminster Presbyterian Church on Thursday, April 3. Weed spoke as vice president of Advocates for a Sustainable Albemarle Population (ASAP). The group heard reports from Buckingham, Fluvanna, Greene, Nelson and Orange on how Albemarle’s “growth management” affects its contiguous neighbors.

Albemarle is trying to protect its scenic appeal by limiting development in rural areas and channeling new residents into designated “growth areas.” The result, says Weed, “is that we’re just encouraging sprawl and working against the critical mass that would warrant public transportation.”

The problem is that Albemarle continues to draw retirees and young professionals who want both Blue Ridge vistas and specialty martinis. Albemarle’s land-use policies have restricted housing supply and inflated real estate prices, so people are moving to subdivisions in Greene and Fluvanna and commuting to their jobs in Charlottesville/Albemarle.

“Some people are willing to drive an hour and a half to get to work,” said Dan Holmes, a member of the Piedmont Environmental Council who spoke about Orange County.

Albemarle’s spillover has already made Fluvanna and Greene two of the fastest-growing counties in Virginia. But that development isn’t paying for itself. While subdivisions add to the tax rolls, the new residents also demand expensive services, especially schools. As a result, Greene is in debt and Fluvanna’s supervisors recently approved two controversial power plants to add millions in taxes without adding residents.

Such growth hasn’t spread as rapidly in Nelson and Orange. Buckingham, with only 16,000 people and two stoplights, remains in many ways pristine. In those counties, landowners are looking for ways to head off subdivisions. Layers of political obstacles stand in their way, however.

ASAP’s strategies for “growth management” all hinge on public willingness to accept government restrictions on development. But each speaker reported the political climate in their respective counties is hostile to regulation. Ironically, most of ASAP’s members are “come-heres” says Weed. Yet, County supervisors typically draw their power from older natives fiercely devoted to property rights.

Also, Weed noted that Virginia gives localities far less power to control development than do states like Maryland. That’s unlikely to change, says Weed, because homebuilders, real estate agents and auto dealerships––all of whom profit from sprawl––rank among the top contributors to State politicians.

In Fluvanna, Marvin Moss says, active citizens have infused preservationism into the local political culture. ASAP, whose membership consists largely of politically active landowners, seems intent on recreating Fluvanna’s success regionally.

“ASAP will take positions on growth issues,” said Weed. “The more we branch out our network, the more the political powers will listen to us.”––John Borgmeyer

 

Grant’s tome

School Board member bows out via e-mail

March 28, Gary Grant, holding the at-large seat for the Albemarle County School Board, sent out an announcement in place of his regular constituents’ report. He couldn’t have described the School Board session that evening—as per usual in his mass e-mails—even if he’d wanted to. Halfway through the six-hour meeting, he‘d put down his pen and ceased to take notes.

A few hours later at 1:30am, Grant, who in 1999 ran as the “information candidate,” began to craft his public decision not to seek a second term with the Board.

“Last night, in the midst of a presentation on school redistricting frameworks, I finally honestly admitted to myself that I was sitting someplace I didn’t want to be nine months from now,” he wrote.

“To those of you who may think I’m a jerk or hate my guts, I wish you improving days. I’m at peace with myself.”

For fellow School Board members, the sudden announcement came as a surprise, though not a shock.

“I am very sorry to hear it,” says Ken Boyd, representing the Rivanna School District. “Gary always offered an honest opinion that was truly a breath of fresh air.”

But Boyd, elected to the School Board for his first four-year term in 2000, also will desert the Board in December to run for the Rivanna seat on the Board of County Supervisors.

“There are an awful lot of demands put on School Board members’ time and members themselves for the decisions they have to make,” says Boyd.

As it stands now, three seats are up for grabs in November elections for the School Board: Grant’s at-large seat and the Rivanna and White Hall district seats. But with a filing deadline of June 10, only one candidate has yet announced his intentions to run: Murray Elementary PTO President Brian Wheeler.

“I will be disappointed if I go into this thing uncontested,” says Wheeler. “I’ll focus my campaign on getting my message out and people to the polls, but I’ll have to be more creative with my words and my points.”

Although Wheeler speculates that a lack of fire in Grant’s belly for a strenuous and County-wide race prompted his withdrawal, neither he nor seemingly anyone else has a solid remedy for Grant’s obvious frustration.

“It will be interesting to see what is written or said about my decision not to seek another term,” Grant wrote. “Only three folks—me, myself and I—know the truth.”—Kathryn E. Goodson

 

Artful enterprise

Local non-profits work around the recession

The decision behind the admission charge at Fridays After Five reportedly came down to one factor: economic recession, which has dried up the supply of sponsorship funds for the once free event. Charlottesville Downtown Foundation, which hosts Fridays, may be pleading the empty-coffers case, but other players in the local arts non-profit world have carried on in troubled times.

Piedmont Council of the Arts Director Nancy Brockman has seen the needs of arts non-profits increase due to the cuts in State funding, including a $350,000 cut to the budget of the Virginia Commission for the Arts.

“And since we’re in a recession, gifts from corporate donors have been more difficult to get also,” she says. “In a climate like this, in order to survive, everyone has to look at unique ways of fundraising, like special-events fundraising.” Putting its effort where its mouth is, PCA itself recently threw a Philanthropist of the Year benefit. “You have to get creative.”

Or, in some cases, more businesslike. Leah Stoddard, director of Second Street Gallery, says that since she took over the non-profit mainstay in 2000 she’s had to reconfigure her position to help maintain, and grow, the gallery.

“When I first started here all I did was curate. Three years later I’m doing a lot more fundraising than I ever did,” she says. “But that’s kind of inevitable. The most successful art organizations are the ones that are responsible with their money, and are proactive instead of reactive.”

To that end, SSG has made several structural changes to better secure funding. It has established a grant-seeking committee, instituted an exhibit-sponsorship program, sent targeted mailings and increased community participation to gain public awareness.

The goal, Stoddard says, is to let people know what their investment buys. “I’ve been in museums where money comes in and they say ‘Yay!’ but don’t go back and not only thank [donors], but tell them what they get [for their donation],” she says. “Rather than assume people do things for us, we have to redouble our efforts to show them what their support does.”

For one local philanthropy, tough times provide an excuse to allocate more money since now it’s needed most. John Redick, executive director of the Charlottesville-Albemarle Community Foundation, encouraged his donors to beef up their giving in awareness of the needs of arts groups. The Foundation, which manages the charities of Dave Matthews Band and group manager Coran Capshaw, among others, gave $2.7 million last year, compared with $2.1 million in 2001.

Still, Redick recognizes most non-profits are hurting and the CACF can’t help them all. “If we share a mutual frustration, it’s that their needs are growing, and even though our funds are growing we don’t have enough to cover them. It’s a shared anguish.”—Eric Rezsnyak

Liberals like to think, conservatives like to have their opinions thrown back at them,” said cartoonist and writer Ted Rall during his speech to a packed auditorium in the Albemarle County Office Building on Wednesday, March 26. The wild cheering that followed this proclamation, however, seemed to contradict Rall’s claim.

The Charlottesville Center for Peace and Justice and C-VILLE Weekly invited Rall to deliver a live version of the vitriolic anti-Bush essays regularly printed in this paper’s AfterThought section. Rall has made a career of stirring up controversy, first as a cartoonist skewering modern life and, more recently, as a journalist reporting on America’s activity in the Middle East and Central Asia. His fury has escalated with Bush’s invasion of Iraq, and last week the alternative weekly newspaper New York Press placed Rall second on its list of “50 Most Loathsome New Yorkers.”

Rall’s talent for irritating the hell out of people partially explained the presence of two uniformed Albemarle County Police officers eyeing the crowd as it gathered for Rall’s talk. But nothing more deviant than the happy munching of crackers and brie broke out before Rall’s talk, as the crowd of 200 sipped organic green tea from paper cups and admired the witty protest pins and bumper stickers that read, for example: “Join the Army. Travel to exotic distant lands, meet exciting, unusual people and kill them.”

Indeed, the cops didn’t have much to worry about. Most of Rall’s speech, which framed the Afghan and Iraq war as a Bushie ploy for oil, met with universal applause. The audience cheered loudest not when Rall made a good point, however, but when he got personal––and Rall seemed to take Limbaughian pleasure in appealing to the lowest common denominator. “Bush is a drooling, inarticulate buffoon,” said Rall. The crowd went wild.

The only tense moment came when an obviously agitated speaker stomped down a side aisle toward Rall. “What is your definition of terrorism?” he shouted, pacing and gesturing as he spoke. He took issue with Rall’s flippant use of the word “shit” to describe people and architecture––as in, both the U.S. Army and Al Qaeda “blow shit up.” One officer moved slowly toward Rall, and the crowd began to heckle the speaker, who apparently left the auditorium.

To answer the question, Rall said he believed “terrorism” was a bogus concept. “George Washington and Thomas Jefferson used terrorist tactics,” he said. “When you win, they call you a freedom fighter. When you lose, you’re a terrorist.”

At his best, Rall, who has traveled widely in the Middle East, delivered little-reported facts: That Bush met with the Taliban between January and July 2001 to lobby for Unocal, an energy company that wants to build an oil pipeline between the Caspian Basin and the Persian Gulf; that key U.S. appointments in Afghanistan, including President Hamid Karzai and special envoy Zalmay Khalilzad, worked for Unocal; that Afghanistan after its American “liberation” is just as brutal, repressive and undemocratic as it ever was.

For all his well-informed criticism, however, Rall offered no constructive ideas of his own and frequently indulged in profane insults that appealed to the emotions––instead of the intellects––of some audience members and seemed to bore others. After the presentation, one woman chastised him for his use of the word “pussies” to describe both mainstream media and Democrats.

“My New Year’s resolution was to cut down on profanity,” says Rall. “But when I get in front of a crowd, I can’t help it.”

––John Borgmeyer

 

Weapons of mass distraction

Sperry protest sparks anti- and pro-war sentiments

Route 29, outside the brick walls of Sperry Marine, was a spectacle the morning of Friday, March 28. Police cars, police and protestors. I asked four children who had joined the protest what the company did here. “Build weapons of mass destruction,” they answered.

Yes, civil disobedience had struck again. Blocking Sperry’s entrance, chained to a cement barrel, five anti-war protestors lay dead, at least seemingly so—a visual reminder of casualties in the United States-led war on Iraq.

Sperry Marine is a division of Northrop Grummon, which manufactures, among other things, attack targeting pods for F-16s and radar for “fire and forget” Longbow Hellfire missiles. The local Sperry facility has recently won multi-million dollar contracts for attack submarine radar systems, navigational systems for Iroquois naval destroyers and surveillance systems for Kuwait patrol boats.

The protestors see a significant link between Sperry’s weapons systems, what they deem as an “illegitimate” war on Iraq, and the bloodshed that has ensued.

Shelly Stern held an American flag boasting the message: “There’s no flag large enough to cover the shame of killing innocent people.” Stern sees a rational, moral argument for such anti-war tactics. “These five people are standing in solidarity with 4.5 million human beings in Baghdad who have no choice but to suffer.”

Not everyone agrees. Across Route 29 from the dozens of anti-war protestors stood 10 pro-war protestors, many of whom came from the nearby military recruiting center. “I think they’re the village idiots,” said one. He supports their right to free speech. “I just don’t like what they’re doing…I think they should pack their bags and get in my truck and I’ll drive them out of the country personally.”

Their reasons for backing the war seem equally rational, citing the hypocrisy of the United Nations, the involvement of Russia and U.S. benevolence. “We’re giving the oil back,” said one. Is the Iraq war related to September 11? “It’s got something to do with it.”

By most accounts, the police handled the disruption admirably. “We don’t want anybody to get hurt,” said police media liaison officer Earl Newton. “I’d prefer that they would move on. They’ve made their point. They can get on with their lives and we can get on back to doing what we’re supposed to be doing.” However, in the protestors’ minds, business as usual will just perpetuate more bloodshed overseas.—Brian Wimer

 

Creative differences

Heading west, local director leaves the comfort zone

On April 5, Teresa Dowell-Vest will be the keynote speaker for the Third Annual Black Women’s Leadership Conference: Express Yourself! Black Women and Creativity. It will take place at the Darden Business School. This appearance will be one of Dowell-Vest’s last in Charlottesville—at least for a while.

Although she’s graced local stages with her play Vinegar Hill, directed such works as Seven Guitars and The Darker Face of the Earth, the onetime Charlottesville High School drama teacher and lifelong resident Dowell-Vest has decided to take her show on the road.

She will relocate to Los Angeles, where she hopes to pitch her idea for a TV show called “Black Faces,” featuring a black theater company based in a small Southern town. She recently discussed her plans with C-VILLE. An edited transcript of that conversation follows.

 

Kathryn E. Goodson: What will your role be in the upcoming Black Women’s Leadership conference?

Teresa Dowell-Vest: I will be stressing to these women that change can be brought about through creative means. I’ll be looking back into history, focusing my attention on women of color in Virginia who have literally changed the world through the arts—Ella Fitzgerald, Pearl Bailey, Maggie Lena Walker, who was the first woman in the U.S. to become president of a local bank, and Irene Morgan, who refused to give up her bus seat to a white person 11 years before Rosa Parks.

It takes a creative person to accomplish just about everything, including public speaking, education, even banking. Your creative self makes you that much more dynamic and powerful in every way.

 

You’ve been a drama teacher, a playwright, CEO of The Dowell-Vest Communications Group and program director of the African American Heritage Program with the Virginia Foundation for the Humanities. Has it been hard to settle down creatively in Charlottesville?

I think it gets tough when the services you have to offer are just not that badly needed. The creative things I had envisioned doing, I soon realized Charlottesville was not the market for them. That’s when you find yourself shaping your creativity around the market.

Charlottesville is a comfortable, nestled place. If I wanted to just do community theater, then I’d stay. I need another step forward.

 

You describe Charlottesville as not being very receptive to black females in the arts. How?

The community is set in its ways, comfortable. It needs cultivation. For example, if beyond myself, there’s only one other African-American theater director in Charlottesville, you can get worn out in that respect. You’re proud of the work you do as a black female storyteller, until someone needs you to be a black woman storyteller. In the name of tokenism, it’s a very fine line to know why exactly you’ve been called upon.

In a general sense, Charlottesville could be a lot more nurturing in building up the Latino, gay and African-American communities in the way of the arts. Now, how is that done? I don’t know.

I would challenge the City to find ways to support the community theater and arts organizations, to attend the shows and submit to them what they would like to see performed there.

 

Have many people questioned your choice to leave instead of staying and serving the arts community?

Absolutely, so many. But this is not the market for the work I want to do. I’m not film director Tim Reid or Sissy Spacek, I cannot just open doors instantly.

It is a huge struggle for me personally though, whether I should leave and service my own personal goals, or stay and try to cultivate my town in the arts. That’s the point I find myself questioning—my own allegiance.—Kathryn E. Goodson

 

Funding Fridays

Who’s to blame for the CDF’s six-digit deficit?

Weeks after Charlottesville Downtown Foundation touched off a public outcry with its announcement that it would charge an entry fee of up to $5 for its popular Fridays After Five music event, which has been free to the public for 15 years, the group’s president continues to insist that collecting at the gate will be necessary to offset plummeting sponsorship dollars. Additionally, CDF President Michael Cvetanovich says, the non-profit group intends for the Fridays’ revenue to subsidize other CDF-sponsored community events. But at least one critic familiar with the inner workings of CDF scoffs at the notion that charging a fee is the only way to fill in a budget shortfall.

Finding additional sponsorship money is “not impossible, you just have to get creative,” says Karen Thorsey. She was events coordinator and an “unofficial fundraiser” for CDF for two years ending in 2001.

Cvetanovich characterizes CDF’s sponsorship drive as a struggle in recent years. From a high of about $150,000 two years ago, sponsorship pledges have declined to the $30,000 range this year, he says, leaving a deficit of as much as $120,000 to produce the live music shows at the Downtown Amphitheater. While staffing at CDF in recent years is easily characterized as a revolving door and some Downtown merchants—the organization’s major membership base—privately gripe about CDF management, Cvetanovich blames the poor economy exclusively for the declining sponsorship trend.

Thorsey agrees the current political and economic situation has made it harder to find sponsors, but says the story doesn’t end there. The CDF board comprises volunteers with full time jobs, she says, meaning they don’t have the time to devote to effective fundraising. A “lack of staff, direction and planning” contributed both to the loss of former sponsors and the dearth of new ones, she says.

As to the question of the “creative” sponsorship efforts that Thorsey says CDF lacks, Cvetanovich says the group is currently “discussing strategies to increase sponsorship.” CDF plans to form a committee to deal with it, he says, although he gave no further details.

Leaving aside the matter of how CDF got in the hole, there are other questions pertaining to exactly how much money CDF needs to make and why. According to CDF’s website, Fridays “attracts over 150,000 people to the Downtown Mall each season,” indicating that CDF could reap in excess of $500,000, more than three times its Fridays budget, from the $3-5 gate fee. Cvetanovich says the website is “way out of date” and that the cited annual attendance figure is “probably a gross exaggeration.” He puts attendance figures at closer to 100,000, which would still presumably generate a surplus for CDF. That extra revenue, according to Cvetanovich, would fund other, non-revenue generating CDF events such as the Dogwood Blues Festival and Court Days. Cvetanovich did not disclose the budget for those events.

Adding to CDF’s woes, the City responded to the fee-charging plan by raising rental and security costs for the event to $4,500 per week from about $650 when Fridays After Five was a free event. Oddly, although the City charge adds $92,400 to CDF’s financial burden during Fridays’ 24-week season, Cvetanovich says the additional cost is “not a significant problem.” He would not clarify if the City’s charges are included in this year’s operating budget for Fridays or if the $92,400 will accrue on top of the current budget.

With Fridays set to commence on April 25 with a performance by CC & Company, Cvetanovich and CDF seem short on time to pursue new sponsorship ideas, if they develop any. His best plan, apparently, is to hope and expect locals will sympathize with CDF’s plight. “We really didn’t want to add a gate charge,” he says.—Josh Russcol