County commissioner loses nursery and home to foreclosure
Bob Terry hopes Fisher Farms can reinvent itself after financial troubles
It hasnt been a particularly happy New Year for Bob Terry.
In the last seven months the veteran Washington County Commissioner has lost his plant nursery outside Gaston and his home overlooking the Tualatin Valley between Hillsboro and Scholls both casualties, he says, of Oregons long economic downturn and global financial changes.
But the acerbic businessman and politician has hopes that Fisher Farms will re-emerge with or without him.
I took it from a small farm to a very large business, and a nationally known business, Terry said of the former Oregon Garden Products, which he took over in 1988.
I may be 70 years old. But I can tell you I do not feel like a typical 70-year-old. Bob Terry is not going to sit on his front porch and whittle whistles.
Terry freely responded to questions last week by reporters from the Pamplin Media Group and the Capital Press, a Salem-based agricultural news website and newspaper, about foreclosure proceedings involving his nursery and his home on Hillsboros far south side.
The Dutch-based bank that owns most of Fisher Farms LLCs land went to court last year to seek $16 million it says the company owes it.
The company is not able to support even the interest payments associated with this level of debt, the suit alleges.
Rabobank N.A. filed the suit June 2, 2015, in Washington County Circuit Court, although Fisher Farms was paying its creditors.
Nobody lost a penny on Fisher Farms. I made certain that every creditor got paid; the only one that did not get paid was the bank, Terry said. We prided ourselves, and I did, on doing as much business locally as we could. I did not want to see any of our local businesses get hurt.
Neither Rabobank nor the court-designated receiver, Global Ventures Inc. of Bellevue, Wash., responded to inquiries about the case.
Nothing in the court filings mentions Terrys status as a Washington County commissioner or suggests that he used his official position in any way.
Before he was elected in 2010 to the District 4 seat, which covers the western part of the county including Banks, Cornelius, Forest Grove, Gaston, Hillsboro and North Plains Terry was a public member of the Washington County Budget Committee for 12 years. The committee consists of the five elected commissioners and five public members.
The county had nothing to do with what happened to Fisher Farms. It has not affected me here in the county, Terry said. I enjoy what I do in the county, I have made a big difference here for the community and its citizens, and I want to continue doing it.
Terry declined his first chance in 1987 to take over what had been Oregon Garden Products. He was living in Missouri at the time.
The first time I came out, I said Im a finance guy who understands finance, manufacturing, wholesaling and warehousing. Rolling rocks and trying to make rocks grow, thats not what I do, Terry said. The bank came back to me and wanted me to come back out and take another look at it.
I got into the business, I learned the business. One thing Ill say: For the most part, and its still very true today, the people in the nursery industry across the country are very good to deal with. They pay their bills.
Still, Terry said, its tough and competitive.
Re-wholesalers account for 44.2 percent of Fisher Farms business; garden centers, 34 percent; Costco, its only big-box store customer, 11.7 percent; and other growers, 10.2 percent.
The Great Recession hit in 2007 when the housing bubble burst and financial markets collapsed the following year adding to Terrys woes.
Terry said the industry indicators were there, as 10 percent growth in the value of Oregon nursery products in 2006 was followed by just 2 percent growth in 2007, according to U.S. Department of Agriculture. (Until 2014, when cattle took over the top spot, plant nursery stock led Oregon agricultural production as measured by value for most of the past two decades.)
When the recession hit, I was able to sit down with them (bank officials), and we did a roadmap as to how we were going to get out of this, because I saw it coming in 2007, he said.
A changing bank
Terry was able to create that roadmap because of a business relationship with Rabobank, a cooperative bank founded in 1898 to lend money to Dutch farmers. Based near Amsterdam, Rabobank specializes in food and agribusiness and is among the worlds largest banks. As of June 30, 2015, its loans to plant nurseries amounted to 1.68 billion euros, although its loans to beef and dairy cattle topped the list at more than 25 billion euros.
Rabobank N.A., on whose advisory board Terry once sat, is based in Roseville, Calif., outside Sacramento.
But that relationship changed because of a corporate shakeup that sent elsewhere the Rabobank people Terry knew. Part of the shakeup stemmed from the parent bank having to assume some European debt obligations from Frances largest bank, BNP Paribas, which owns Bank of the West.
It was a good relationship until all the changes in Rabobank, Terry said. What this really is about is a lesson as to how we are in an international economy today.
The relationship also changed after Rabobanks economic consultant forecast an early recovery in 2010. Based on that projection which proved erroneous the bank extended a $10.5 million line of credit to Fisher Farms for the next five years.
That turned out to be our worst year and their worst year, said Terry.
The next year was only marginally better, and signs of a real recovery became evident only in 2014.
We continued to do business, and we lost money every year a lot of money, Terry said.
I kept telling the bank and they did not want to hear that once construction begins, it does not affect the nursery industry until those cranes come down, the grounds are level, you are building houses until the paint is on and the driveways are in ... and then we get to do the business.
According to the Oregon Department of Agriculture, there were 4,667 plant nurseries at the end of 2007 and 3,145 at the end of 2015 a drop of one-third. About 40 of them filed for bankruptcy between 2008 and 2013.
Rabobank the largest financier of Dutch horticulture reported financial problems in 2015 with growers, shippers and retailers in its domestic nursery industry.
Terry is a former president of the Oregon Association of Nurseries and of the American Nursery & Landscape Association, now known as AmericanHort after a 2014 merger with The Association of Horticulture Professionals.
Meanwhile, Terry sold his home to a Rabobank affiliate in 2012 on the condition that he continue to live there for a period and he put his $1 million gain back into Fisher Farms.
How many people would do that? I believed in the business and the employees. I put my home (profit) in to do the right thing, Terry said, adding he thought at the time that as long as the economy stays where it is, it will do fine. They just needed to wait.
Into the future
But the new Rabobank executives in California chose not to do so.
He says, Lets get out of our last nursery in Oregon, no more working with us, were done, Terry said of the changeover.
What is so disappointing to me and everybody else is that we made it through the recession. At the time when we needed another year to get there and all this (foreclosure proceedings) hit, they would not stay the course. In 2015, the company would have made money. In 2016, we would have doubled what we made in 2015.
Net income for the first 11 months of 2015 was reported by the receiver at $1.4 million, although receivers expenses cut into that figure.
Terrys former home, which is 7,635 square feet, has been on the market since August 2015 and is listed at $1.75 million. They will sell it for less than I sold it to them for, he said.
He and his wife Penny moved out of the Southwest Peaks View Drive house in July 2015 and currently reside elsewhere in the area, although Terry declined to disclose his new address.
According to the receivers report of July 15, 2015, the resurgence of the housing market should bode well for the future of Fisher Farms because of a growing demand for nursery stock.
Fisher is well positioned to be able to capitalize on these shortages as it has product already produced to come through increased housing starts, it says.
The receiver says it has rejected three bids to buy Fisher Farms because all of them undervalue assets.
I think Fisher Farms will survive, Terry said. It should survive. Somebody should buy it, unless the bank just decides its going to walk and do an auction and be done with it this spring.
Mateusz Perkowski of the Capital Press contributed to this story.