Evergreen museum property could go on the auction block
Creditor is allowed to foreclose on property following nonprofit's failure to pay $1.9 million
Troubles continue for the Evergreen aviation empire as the space museum and waterpark at the McMinnville campus potentially face a public auction next month for their landlords failure to pay a $1.9 million debt stemming from construction costs.
In December 2014 Hoffman Construction, the company that built the air and space museums as well as the waterpark, filed a foreclosure suit against the Michael King Smith foundation, a nonprofit that owns a number of Evergreen assets including the space museum and waterpark properties.
Hoffmans $1.9 million claim stemmed from a 2013 promissory note of $8.5 million to be paid by the nonprofit. To secure that amount the Michael King Smith Foundation put up the space museum as collateral.
The foundation subsequently failed to pay the $8.5 million in full and in February 2014 signed a payment agreement with Hoffman that included an amended promissory note for $1.9 million. That amount was due in April 2014 and was secured by placing the waterpark as collateral.
The foundation also failed to meet the payment agreement by the April deadline and eight months later Hoffman filed for permission to foreclose on the secured properties.
In July the foreclosure was approved in Yamhill County Circuit Court and last month Yamhill County Sheriff Tim Svenson issued a writ of execution to sell the Evergreen Space Museum and Wings & Waves Waterpark property at a public auction in November.
The museum will continue operating as usual despite the pending auction, according to museum spokesperson Melissa Grace.
We have been notified that our landlord, the Michael King Smith Education Foundation, has received a writ of execution on the sale of both the Space Museum and Wings & Waves Waterpark, Grace said in an Oct. 13 statement. Museum management is actively working on solutions to address this situation with the landlord.
Financial woes are nothing new for the Evergreen family of companies and nonprofits, which have been hit with problem after problem since Evergreen International Airlines filed for bankruptcy in late 2013, citing more than $500 million in debt and about $100 million in assets. More than 5,000 companies and individuals came forward seeking payment for services rendered to EIA.
Over the following year EIA sold off a number of its assets including planes and properties. One of EIAs subsidiaries, Evergreen Helicopters, sold to Erickson Air-Crane Inc. for $250 million in a deal that included 64 aircrafts.
As that massive bankruptcy case continued to unfold, another subsidiary, Evergreen Vintage Aircraft, filed for bankruptcy in December 2014, fueling speculation that the museum would be affected by the case as EVA owned some of its buildings, land and aircraft.
The EVA bankruptcy had followed years of the holding company accruing debt and interest and in 2014 defaulting on its loans, including failing to pay more than $41 million to its single largest creditor, Umpqua Bank.
A settlement and sale of EVAs assets was approved earlier this year with $20.5 million, the vast majority of the proceeds, guaranteed to go to the bank. Although some of the planes that were sold as part of the deal were transported back east, most stayed at the air museum. The facility also renegotiated its lease with the Boston-based Collings Foundation.
The sheriffs sale is scheduled for 10 a.m. Nov. 30 on the front steps of the county courthouse in McMinnville.JW_DISQUS_ADD_A_COMMENT