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Nearly 100 businesses in Watauga receive PPP loans of $150,000 or more

BOONE — Nearly 100 businesses in Watauga County have received Paycheck Protection Program loans of $150,000 or more, according to records released last month.

On July 6, the Trump Administration disclosed a database via the Small Business Administration detailing businesses across the country that received more than $150,000 in funds through the Paycheck Protection Program.

The allotments were one of the more significant programs to be implemented as part of the CARES Act, which provided economic relief to help mitigate the effects of the COVID-19 pandemic. The information was provided in part due to pressure from Congress as well as organizations such as ProPublica, a nonprofit organization of investigative journalists, filing suit under the Freedom of Information Act.

The federal government provided $659 billion to businesses nationwide through PPP, and banks across the country approved nearly 5 million loans with 661,218 businesses and organizations qualifying for loans between $150,000 and $10 million. In North Carolina, 121,913 businesses received loans, the vast majority of which were less than the $150,000 mark.

Businesses, nonprofits and other organizations with 500 employees or fewer were eligible to borrow as much as 250 percent of monthly payroll expenses to cover employee salaries between Feb. 15 and June 30. Additionally, businesses were able to use the loan amounts to cover interest on mortgages, rent payments, leases, utilities and coronavirus-related expenses.

PPP loans have a 1 percent interest rate with the potential for the loan to be completely forgiven if certain criteria are met.

Photo submitted 

Cindy Clawson answers phone calls from customers for Boone Drug Inc.

The loans are eligible to be forgiven depending on the number of employees the business retained. For example, if nine out of 10 employees were retained and the one remaining employee was terminated, 90 percent of the loan amount that the business received would be forgiven. Businesses had until Aug. 8 to apply for PPP loans, after the initial date had been extended from June 30.

Another wave of PPP stimulus funds was introduced by Sen. Marco Rubio (R-FL.) and Sen. Susan Collins (R-Maine) ahead of Congress’s scheduled recess from Aug. 10 to Sep. 7, but the bill stalled during negotiations. The bill would have taken the $128 billion in funds left over from the first wave of funding and increased it to $190 billion, while focusing on sustaining businesses that had lost 50 percent of their revenue.

“It’s a shame because the new bill was specific for businesses that are still in trouble that showed a 50 percent loss in revenue to help them stay in business until (the pandemic) gets better. It’s sad, it really is. It could have been a great package, but we just don’t know,” Vincent Muratore, president of Stone Bank’s SBA Division, said.

Muratore shared Rubio’s sentiments that a new round of layoffs could come throughout the months of July and August until the Senate reconvenes after Labor Day weekend. Unprecedented nationwide unemployment has gradually decreased since the height of the pandemic. In July, unemployment improved to 10.2 percent from 11.1 percent in June after reaching near Depression-era unemployment at 14.7 percent in April.

According to Muratore, the most severely affected industries continue to be hospitality, restaurants and fitness centers/gyms, the latter of which have been ordered to remain closed in N.C. Despite the negative consequences of the pandemic, Muratore remains positive about the country’s economic outlook.

“There’s still new business being done,” Muratore said. “Our little bank has over 100 million impending SBA loans. So we still have businesses that believe and are looking to get business, acquire businesses, start businesses even in this environment, which is very optimistic.”

The effects of the PPP program locally have been significant and far reaching, as many businesses have accessed the funds and have been able to retain employees and staff through the publicly financed loans.

Grandfather Mountain Stewardship Foundation is just one of the many businesses or organizations that was able to finance its employees and operations for the timebeing. The GMSF received a loan amount between $350,000 and $1 million on April 6 and was able to retain 97 employees.

According to GMSF President and Executive Director Jesse Pope, the nature park was hit hard by the economic repercussions of the pandemic, as its board had to make the difficult decision on March 14 to close the park. Throughout the first two weeks of the closure, the park was able to retain its staff, but as the prolonged effects of the pandemic became apparent, it had to reverse course and furloughed about 30 part-time positions for three to four weeks until these positions were called back when the park reopened on May 15.

“We applied for PPP funds as soon as we could in order to retain our staff through the closure. We had already spent the funds before the deadline was extended, so the increase in time was not very helpful for us, since we used almost all our funds on payroll. Payroll is one of our largest expenses, since we own all the buildings and facilities. We did use some of our funds on qualifying utilities, but most of the funds were used for payroll,” Pope said.

While temporarily closed, the park lost about 50 percent of its revenue in March, 100 percent in April and 70 percent in May. Since the park’s revenue is closely tied with its operations, it is expecting a decrease in revenue between 50 and 60 percent by the end of the year as it continues to operate at half capacity.

Pope said that the PPP program helped cover about five weeks of payroll during a “critical time” in which it had almost no revenue coming in.

Jamie Shell / Photo courtesy Grandfather Mountain Stewardship Foundation 

The Grandfather Mountain Stewardship Foundation is just one of many businesses or organizations that was able to finance its employees and operations for the time being.

“If it wasn’t for the PPP loan and some great philanthropists stepping up to help, we would be in a really different financial situation right now,” Pope said. “We are really concerned about the fall and winter as it remains uncertain how our revenues will be impacted into the fall season. The SBA loans have been a constant moving target. We are just now receiving information on how to apply for forgiveness of the first PPP loan. We will wait and see how the loan forgiveness process goes, to decide whether or not we will apply for further assistance.”

On a positive note, Pope praised the local banks which have stepped up to help answer questions and make the process as simple of possible. Pope mentioned Mountain Community Bank and Hallie Willis specifically, whose staff worked during weekends to process thousands of loans for small businesses in the community.

Lees-McRae College received a loan between $1 million and $2 million on April 9 and was able to retain 223 employees. College President Lee King said the organization used the entire loan amount to maintain full employment levels throughout the pandemic.

“The PPP loans allowed us to maintain our full staffing levels and they placed us in a strong position to be able to welcome back our students and resume normal operations this week,” King said.

Several local businesses showed up as having retained zero employees in the SBA PPP database. One such business is Sugar Mountain Resort. However, Gunther Jochl, president/owner of Sugar Mountain Resort and mayor of the Village of Sugar Mountain, said that the number is inaccurate.

“Not only did we use (the money) for employees that we have, we also retained more employees than we usually do because they didn’t have a job to go back to,” Jochl said. “We filed the PPP plan with the bank like we’re supposed to and they have all the information. We didn’t have to shut down. We (were able) to retain everyone.”

Sugar Mountain Resort has been operating throughout the pandemic and has hosted events such as its Fourth of July celebration, the Fine Art & Master Crafts Festival, and a mountain bike championship held this past weekend.

“We hired the normal scope of people,” Jochl said. “Instead of one lift for mountain biking, we’ve been operating two lifts. So we’ve been doing good. Of course, we have additional expenses with protective equipment for the employees and the customers, and we have specific guidelines that we have to follow to apply (for the loans). Whatever doesn’t get forgiven we have to pay back at an interest rate.”

In Watauga County, 95 businesses were included in the SBA database, with two businesses, Glenbridge Health & Rehabilitation Center and Jackson Sumner and Associates, receiving loans between $1 million and $2 million.

For Watauga County-based business and local landmark Tweetsie Railroad, its loan, in the $350,000 to $1 million range, is key to its survival and success due to the pandemic’s effect on business. The state health department ordered the local amusement park to close after it briefly reopened for limited train rides only this summer.

According to Tweetsie Railroad President Chris Robbins, reopening of the park remains uncertain at this time.

When Boone businesses started shutting down in March, Tim Herdklotz — the co-owner of Booneshine Brewing Co. — said his business didn’t have the ability to keep operating at the same capacity as it was pre-pandemic with its 60 employees. Even though the business had to release part of its staff, Booneshine tried to help its employees in several ways, such as offering one free meal each day the business was open while offering take-out.

Photo courtesy of Booneshine 

As an employee at Booneshine, Charlie Ritter wears a mask and gloves while serving customers.

“It’s a challenging time for running any business, especially a small business,” Herdklotz said. “We decided as a business that we were going to react to this out of a place of hope rather than fear. It doesn’t make things easy. It doesn’t mean we don’t have a lot of concern. We’re just continuing to have a hopeful outlook, and continuing to look to see how to make things better for our employees and community in the future.”

Herdklotz and Booneshine co-owner Carson Coatney have invested quite a bit in the last two years into moving the brewery to its new location on the east side of Boone. Herdklotz said the brewery has a fair amount of debt as a small business, and when the pandemic hit it was important that the two owners figure out how to sustain the business moving forward.

When Herdklotz and Coatney heard about the PPP loan, Booneshine immediately submitted an application. Herdklotz said the $240,000 the business received through the loan helped Booneshine retain some staff while they were only offering take-out, as well as to bring the brewery back to its full staffing capacity during Phase 2. Funding from the PPP loan was used toward payroll with some put toward the use of utilities, Herdklotz said. Booneshine plans to apply for PPP loan forgiveness through the Small Business Administration when applications potentially open in August.

The pandemic’s ever-changing conditions continue to have an evolving effect of businesses such as Boone Drug Inc., said company president Corey Furman. Boone Drug has had to reduce its hours of operations at some locations, curtail employee hours and add new policies such as isolation and cleaning procedures. Furman added that Boone Drug has experienced a significant reduction in sales during the last few months.

“We receive new information at least two to three times a week of things we might want to consider changing or some regulation that forces us to change things we’re doing,” Furman said.

Boone Drug was a PPP loan recipient in the $350,000 to $1 million range for its 15 locations. Furman said the business is going to give back PPP funds that weren’t used for paying employees for any COVID-19-related issues. The issues could be paying an employee during quarantine while waiting on a test result, paying an individual who is caring for a sick loved one or other situations covered under the CARES Act, Furman said. PPP funds were not going to be used for items such as utilities, as those elements do not fluctuate depending on sales, Furman said.

To help the communities it serves during the pandemic, Boone Drug has added curbside delivery, provided free hand sanitizer and added a free prescription home delivery service in the county.

In Ashe County, helping to cover a majority of its staffing, Ashe Services for Aging received a loan between $350,000 and $1 million, which has helped to keep its members safe and the ship afloat, according to Executive Director Patricia Calloway.

“We were advised by our audit firm that it was an option. We employ between 140 and 150 people, depending on the given day. That amount was what would have been necessary to cover that eight weeks,” Calloway said. “At the time, we were very uncertain about a lot of our funding sources. We are funded through a variety of grants, senior services and Medicaid, a lot of sources that were uncertain.”

At the same time, the senior center had to worry about more than just funding. Calloway said that the combination of higher-risk individuals in a congregate setting made the fear of an outbreak the immediate focus, and not having to worry about whether they could pay their staff was one less hurdle.

Photo by Ian Taylor 

Phillip Medley of Parker Tie rings up a hammer on Thursday, Aug. 6. Parker Tie is just one of many businesses or organizations that was able to finance its employees and operations through assistance during the COVID-19 pandemic Paycheck Protection Program. According to a database from the Small Business Administration, Parker Tie retained 32 jobs as a result of a loan from the program.

“It was huge. We were able to focus our efforts and our energy into serving the people in our community in the best and safest way possible,” Calloway said.

Calloway added that the senior center’s finance officers and audit team had to work in tandem with LifeStore Bank in a long process to get the loan approved and completed. Calloway said that the senior center received roughly $600,000, enough to completely cover salaries, mortgages, benefits and utilities for eight weeks.

“We felt like it was necessary that we felt safeguarded so we could focus on the work we were doing,” Calloway said.

To view the SBA PPP database in its entirety, visit projects.propublica.org/coronavirus/bailouts and enter a zip code to see the business name, loan amount, industry type, number of jobs retained, the lender and the date the loan was approved.

Jamie Shell, Kayla Lasure, Ian Taylor and Moss Brennan contributed reporting to this story. Moss Brennan created the dashboard below.


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App State faculty among plaintiffs suing UNC system to delay in-person classes

RALEIGH — Two Appalachian State University faculty members are part of a group of 17 other faculty and staff in the University of North Carolina system who are listed as plaintiffs in a class-action lawsuit and motion for a temporary restraining order against the system filed on Aug. 10 in Wake County Superior Court.

The 99-page complaint requests that the court issue a declaratory judgment citing an increased risk of COVID-19 infection to employees as they are asked to work on campus. The lawsuit seeks a temporary restraining order as well as preliminary and permanent injunctions to delay reopening public universities to in-person instruction.

The lawsuit was filed the first day that students were able to move back onto App State’s campus and just one week before classes resume with plans for both in-person and online classes. According to university spokesperson Megan Hayes, 900 students moved into residence halls on Aug. 10 with 1,050 more slated for the following day.

App State faculty members Clark Maddux, the director of the Watauga Residential College and a professor of interdisciplinary studies, along with Matthew Robinson, a professor in the Department of Government and Justice Studies, have both entered into the lawsuit as plaintiffs. Both Maddux and Robinson are members of the Faculty Senate at App State.

Hayes said the university is aware of the lawsuit that was filed, and that App State’s Office of General Counsel has compiled court-requested documentation and supporting materials. She added that the university will work closely with the UNC system Office of General Counsel. Requests for comment from the UNC system, Maddux and Robinson were not returned as of presstime.

The complaint stated that the conduct of the UNC system is “negligent, reckless and/or ultra-hazardous.” Arguments for the restraining order and injunction — outlined in the third claim for relief — stated that the injunction was sought to prevent institutions from violating an employee’s right under state law to a safe workplace that is free from recognized hazards or dangerous activities that are “likely to cause them injury or death.”

Gary Shipman, of Shipman and Wright LLP, the firm representing the plaintiffs, referenced N.C. General Statute 95-129, which states that employers “shall furnish to each of his employees conditions of employment and a place of employment free from recognized hazards that are causing or are likely to cause death or serious injury or serious physical harm to his employees.”

Shipman said that he doesn’t think that anyone disputes, or has scientific room to dispute, that reopening campuses to students increases the risk of UNC system employees’ exposure to COVID-19.

“There is no scientific evidence to support the notion that relying upon students to wear masks, self-report symptoms and social distance will keep employees and the communities where these campuses are located safe, and we already know that students (as a group) are not going to strictly comply with these requirements,” Shipman said.

The injunction also seeks positive action involving the change of existing conditions, including the doing or undoing of any acts that are necessary to protect the rights, health and safety of the plaintiffs and others.

Shipman said that those involved in making the decision to reopen the UNC system campuses did so with the knowledge that it places employees at a greater risk of exposure to COVID-19 than they would have otherwise been exposed to had the system limited the number of students on campus and held classes completely online to start fall 2020.

“We filed a lawsuit that seeks nothing more than what the law requires — that the University of North Carolina and its constituent institutions and the governor of North Carolina provide employees a safe workplace; one that is free from the increased risks of exposure to COVID-19; and to insure that these employees maintain their constitutional right to work and earn a livelihood; and continue to enjoy ‘life, liberty and the pursuit of happiness,’” Shipman said.

Shipman added that the plaintiffs contend that the law does not permit the UNC system or Gov. Roy Cooper to force employees to “work in conditions that place them at an increased risk of getting sick, being unable to work, being hospitalized and even dying.”

The decision must be made to place the safety of employees and the communities where UNC system campuses are located above financial concerns associated with not returning students campuses, he said.


5.1 magnitude earthquake shakes northwestern NC

SPARTA — A 5.1 magnitude earthquake occurred four kilometers south-southeast of Sparta at 8:07 a.m. on Sunday, Aug. 9, according to the U.S. Geological Survey.

The USGS reported that the earthquake occurred at a depth of 3.7 kilometers.

According to USGS, the earthquake followed a 2.6 magnitude quake that occurred in the same location, two miles from Sparta at 1:57 a.m. The first earthquake was considered minor on the Richter magnitude scale, while the second was considered moderate.

“It was the largest earthquake to hit the state since 1916, when a magnitude 5.5 quake occurred near Skyland,” the Associated Press reported.

A community internet intensity map generated by reports submitted to USGS indicate that the quake was felt as far away as Kentucky and coastal North and South Carolina.

According to the Associated Press, there were no reports of serious injuries, but some minor structural damage was reported in Sparta, as well as cracks in roads. Alleghany County, which includes Sparta, declared a state of emergency Sunday afternoon, according to AP.

The USGS said on its website that there were chances for one or more aftershocks in the next week, forecasting a 45 percent chance for earthquakes of magnitude 3 or greater, the Associated Press reported.

Watauga County Emergency Services posted on Facebook that there were no initial reports of any damage from the quake in Watauga County.


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App State student move-in begins Aug. 10, classes start Aug. 17

BOONE — Students began moving into Appalachian State dorms on Aug. 10, and fall classes begin Aug. 17. The university on Aug. 1 announced a new “Student Life” webpage outlining what campus life will “be like in fall 2020 and beyond.”

“The Appalachian experience will be different in many ways this fall than in years past due to COVID-19, yet students can still expect the caring approach to their growth and development App State has long been known for,” the webpage, part of the university’s recovery website, states. “You also will be called upon to be responsible community members who value the safety and wellbeing of others and demonstrate this in all your actions.”

After moving all instruction online and closing many campus facilities halfway through the spring semester and throughout the summer due to COVID-19, Appalachian and other public University of North Carolina system universities are set to return to at least partial in-person instruction this fall.

The reopening of campuses comes as the state has reported its highest numbers of new cases over the past month, peaking at 2,481 new cases reported on July 18. But on Aug. 5, Gov. Roy Cooper and health secretary Mandy Cohen said they believe the state’s COVID-19 metrics are beginning to stabilize.

With 293 total COVID-19 cases among county residents as of Aug. 5, Watauga’s numbers were lower per capita than many other counties in the state, with 52.2 cases per 10,000 residents (Duplin County had the state’s highest per-capita rate of cases, with 333.8 cases per 10,000 residents as of Aug. 5, according to the Raleigh News & Observer).

But 18- to 24-year-olds account for more than a third (36 percent) of Watauga’s cases, and faculty at Appalachian have expressed concerns for weeks about the increased potential for exposure when thousands of students return to campus from other areas. On Aug. 10, a class-action lawsuit was filed in Wake County by UNC system faculty and staff, aimed at forcing the UNC system to delay in-person classes this fall.

University leaders have said they have carefully considered the potential impacts of reopening the campus along with the “detrimental economic and emotional impacts” that moving to all online instruction could have on students, employees and citizens of the region.

New first-year and transfer students are moving into App State residence halls between Aug. 10 and Aug. 13, with returning students moving in between Aug. 14 and 16.

In a July 2 letter to faculty, Chancellor Sheri Everts and Interim Provost Heather Norris indicated that “entry testing” for all returning students, faculty and staff was not being recommended by the Centers for Disease Control.

According to the CDC’s Interim Considerations for Institutions of Higher Education Administrators for SARS-CoV-2 Testing, which was updated June 30, “Testing of all students, faculty and staff for COVID-19 before allowing campus entry (entry testing) has not been systematically studied. It is unknown if entry testing in (institutions of higher education) provides any additional reduction in person-to-person transmission of the virus beyond what would be expected with implementation of other infection preventive measures. Therefore, CDC does not recommend entry testing of all returning students, faculty and staff.

“However,” the CDC added, “some IHEs are planning to adopt and implement this testing approach.”

According to University Housing, residents and families moving in will be required to wear face coverings throughout the move-in process, and face coverings will be provided to students as part of their move-in packet. Unlike previous move-in days, no volunteers will be available to help with move-in this year, and students are limited to one family member or move-in helper inside the residence hall, the office noted.

Two of the four new residence halls being constructed near the stadium will open this fall — Thunder Hill and Raven Rocks.

Asked if residence halls will be at full capacity, Appalachian State spokesperson Megan Hayes said, “We have increased single-room capacity in order to accommodate students with health conditions.”

Hayes also noted that students will be required to wear masks in hallways and common areas, and only residents will be allowed inside their residence halls after move-in.

A year ago, App State announced its intention to increase enrollment from its fall 2019 count of 19,280 to 20,000 in fall 2020, and as of April, university leaders said the institution was on target to meet that goal.

But speaking Aug. 5, Hayes said, “Our enrollment models show strong progress toward our goals, but nationwide, colleges and universities are facing uncertainty, and we are no exception. There is no enrollment model that we feel accurately reflects the effects of a global pandemic.”

In a summer-long calling campaign, the university reached out to every new and returning student to offer support and answer questions, Hayes said, and of more than 7,100 students reached, 92 percent indicated they planned to enroll for the fall 2020 semester, Hayes said. Final fall enrollment numbers are reported in early September.

Appalachian has scheduled a variety of course types “to allow greater physical distancing in classrooms and flexibility for faculty and student needs.” They include:

• face-to-face courses held in classrooms arranged to provide six feet of physical distancing;

• hybrid, which has both online and face-to-face components, including rotating student groups, synchronous broadcast and HyFlex, in which students have multiple options to achieve course goals; and

• online courses (synchronous or asynchronous), in which students will participate from their residences or other designated learning areas across campus set up for physical distancing.

Hayes said that currently, the fall schedule consists of 30 percent face-to-face classes, 30 percent hybrid classes and 40 percent remote/online classes.

Hayes said that department chairs and deans began working with faculty in March to assess and meet course delivery preferences for fall, and that faculty have been offered opportunities to reassess and update their requests.

“All schedules submitted to Academic Affairs in late June were approved, and we are still working to assist faculty who are requesting adjustments in response to the recent changes with Watauga County Schools,” Hayes said, referring to the public school system’s decision to delay its hybrid in-person and remote learning plan by nine weeks, beginning the school year completely online.

Asked if any faculty member who had requested to teach online-only had instead been required to teach a hybrid or face-to-face course, Hayes said, “I don’t have documentation of each chair’s process, but since March, we have been working to meet faculty teaching preferences and continue to do so.”

Tuition and fees are charged at the beginning of the semester and will remain in place regardless of changes in instructional format, Hayes said. The university’s recovery website indicates that regardless of delivery method, campus services such as tutoring, advising, the writing center, peer academic coaching, counseling, student health services and more will be available to students — in a remote format when necessary.

“Tuition and fees directly impact our ability to provide meaningful educational programs, experiences and services,” Hayes said.

The university’s recovery website states that “the UNC system has shared that in the event institutions are able to offer financial relief to students — in the form of refunds or other measures — they would certainly like to do so. This will be a system decision and we await further guidance.”

Seth Kimpler, a senior at Appalachian State, started a petition via the change.org website calling on the university to reduce tuition and fee rates for the 2020-21 academic year. The petition had 190 signatures as of Aug. 11.

“With enrollment for the school being down this year, and many services/activities such as gyms, computer labs and sports being closed and/or canceled, the school is passing off the financial implications onto students by still charging full tuition and fees despite offering an obviously sub-par product expected of a school of this size,” Kimpler said. “Because of this, I have created a petition directed at Chancellor Sheri Everts and the Appalachian Board of (Trustees) asking that they lower the tuition/fees for this academic year to account for the services/activities that we the students will be paying for but unable to utilize.”

Face coverings are required to be worn by students, faculty and staff on campus, except when alone in private spaces.

“We are relying on members of our community to adhere to these standards, but when necessary, we also will enforce these behaviors,” Appalachian’s recovery website states. “This will include asking students who do not have a face covering to leave the classroom, campus building or other venue and only return when they have a face covering. Students who continue to violate this policy may be subject to further action per the Code of Student Conduct. Similarly, employees who do not wear a face covering may be subject to disciplinary action based on our policies regarding employee performance and behaviors in the workplace.”

Students, as well as faculty and staff, will be expected to self-administer daily health checks for COVID-19 symptoms using an online tool.

Dining halls will have modified hours and new practices for safe-serving, physical distancing and more frequent and enhanced cleaning. Students will follow designated paths to serving stations and limited seating areas, and face coverings are required in all dining halls and retail locations, except when eating or drinking. Mobile ordering through the Grubhub app and self-pick-up will help provide a contact-free option.

For more information about the fall semester at Appalachian, visit appstate.edu/recovery.