As the Great Recession unreeled beginning in late 2008 and early 2009, furniture sales took a hit in High Point and Las Vegas, the two great international furniture markets in North America. The industry was ripe for reorganization.

Overnight, High Point’s largest chunk of furniture-showroom real estate transferred to Las Vegas. The details of the deal dribbled out in March 2011. Bob Maricich had joined the World Market Center in Las Vegas as CEO in January 2008 after spending 11 years leading Century Furniture Industries, based in Hickory.

Maricich put together a new company, based in Las Vegas, called International Market Centers that acquired the World Market Center there and began buying up the largest showrooms in High Point with major financing from Bain Capital and Oaktree Capital Group in March 2011.

The biggest showroom in High Point, the International Home Furnishings Center, takes up a full block of South Hamilton Street and dwarfs the Municipal Building, housing city government, across the street. With an assessed tax value of $74.7 million in 2009, a consortium of local interests owned the building at the time. A month after acquiring the International Home Furnishings Center, the new International Market Centers, or IMC, purchased the Market Square showroom, also from local owners. Completing its buying spree, IMC closed on Showplace, a giant showroom in High Point that resembles a wave, taking it off the hands of a Chicago investment group.

While High Point faced challenges, it was troubles with the market in Las Vegas that precipitated Maricich’s courtship with Bain.

“We formed the company to buy the assets of all three buildings [in Las Vegas], the 59 acres; it was in foreclosure,” Maricich told home-furnishings reporter Ellen Gefen, “as well as buying two properties in foreclosure here in High Point: Merchandise Mart properties and Showplace properties.”

Maricich has said that IMC raised about $1.1 billion to buy the High Point properties, with about 92 percent of the financing coming from Bain and Oaktree.

Once led by Republican presidential candidate Mitt Romney, Bain’s reputation for snapping up distressed businesses, squeezing out the profits and then ruthlessly decommissioning them was highlighted during the 2012 election.

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But in 2011, as Maricich unveiled IMC and attempted to calm the nerves of industry operatives in High Point and Las Vegas, the CEO argued against that notion.

“If you look at this investment of over a billion dollars — about a billion and one — there’s no financial thesis where shrinking or closing or cost-cutting is a way to success,” Maricich told Gefen. “The way to success is growing, putting buyers and sellers together more often, more effectively and more efficiently.”

As a result of IMC’s buying spree, the company’s real estate holdings in High Point total $268.3 million, or 42.6 percent of the entire downtown. The next largest competitor, Maple Leaf Holdings — owned by Statesville businessman David DeFehr — controls less than a tenth of what IMC owns. Prior to the merger engineered by Maricich, International Home Furnishings Center was the largest real estate owner in High Point, with properties valued at $150.7 million, or 19.7 percent of the market.

While IMC has consolidated control over the premier showrooms in High Point, a host of smaller players have clung to smaller properties scattered about downtown, attempting to wring out profits by leasing space to exhibitors at lower rates. Steele Street Partners of Winchester, Va. has hung on, while the Greensboro owners of the Commerce & Design building sold their property to an investment group from southern California for 15.7 percent below assessed value in 2012.

The consolidation of the furniture industry and the shakeout of mid-level players has coincided with a dramatic shrinkage of aggregate real estate wealth in downtown since the beginning of the recession. Exactly 20 percent of downtown High Point’s real estate wealth has evaporated, from $764.1 million in 2009 to $629.2 million in 2014, with a eight-year revaluation by the Guilford County Tax Assessor falling in 2012.

In comparison, downtowns in the neighboring cities of Winston-Salem and Greensboro have experienced robust growth through the recession, with the development of the Wake Forest Innovation Quarter in the former and new investment around the Downtown Greenway and the Rail Yard area in the latter. While the overall tax base rose across Guilford County during the 2012 revaluation, the opposite occurred in High Point.

As a result of the erosion of the tax base in downtown High Point, primarily because of the deterioration of showroom values, the city of High Point has lost $687,263 in annual tax revenue, while Guilford County has lost $774,999 To make up for the resulting shortfall in revenue, the city raised the tax rate in 2012.

“I had a very simple conception of what had been happening here in terms of the International Market Center and this very strange relationship you have to your downtown, which is dominated by a single entity,” Andrés Duany, an urban planner from Miami, told a High Point audience in May 2013. “It’s the most complete monoculture I’ve ever seen with the International Market Centers.

“It serves you well because it pays you a great deal of taxes,” Duany continued, “but on the other hand when it’s gone the whole downtown hibernates. And you’ve actually adjusted to this very peculiar position.”

As the city’s greatest single asset, Duany said, the furniture industry is also the greatest threat to the city.

“The tax base comes substantially from one great monoculture,” he said. “If that monoculture sneezes, there’s not much of a Plan B. Already, your housing taxes are higher than your competing cities nearby. So this is a place without a Plan B.”

Duany came to High Point for a sizable fee covered by a group of private investors, including High Point University, at the invitation of the non-profit City Project to come up with a strategy for catalyzing reinvestment in the city’s core. At the heart of Duany’s recommendations is to make High Point appealing to educated, poorly capitalized young people with the notion of creating an entrepreneurial cohort to eventually diversify the city’s economy. A master plan produced with local architect Peter Freeman laid out a number of specific recommendations, including redeveloping an area called the Pit, creating a public gathering space in front of the downtown library and de-emphasizing car traffic on North Main Street.

Just when many revitalization supporters hoped the plans would begin to bear fruit, the city council redirected City Project’s executive director, whose salary is paid by the city, to a broader, less targeted portfolio of responsibilities. Council members have balked at the notion of reducing car traffic on North Main, which would require a bond referendum. They’ve resisted efforts to replace surface parking in front of the library with a public gathering place, while approving halting progress on the Pit. Duany’s enthusiasm for the idea of sprinkling shipping containers around empty parking lots and inviting in retailers and restaurateurs met with particular disdain from elected officials.

With council members mired in parochial concerns from their constituents in the city’s six wards, a unified vision around a single, transformative project seems like an ever-diminishing prospect.

A blistering assessment by Maricich, the IMC CEO, to a group of furniture-industry insiders at the High Point Country Club in late March should have provided a jolt to city council.

Aggregate real-estate value per acre of downtown High Point — 2009: $2.0 million; 2014: $1.6 million
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