Wednesday, April 24, 2024

The whitewater center’s rollicking ride

U.S. National Whitewater Center CEO Jeff Wise hung on through a recession, restructuring, tragedy and pandemic at one of the state’s hottest visitor attractions.

Skeptics who thought it was crazy to build a world-class whitewater rafting center near the Catawba River in west Charlotte looked like savants in 2009. The 270-acre project had opened three years earlier and was swimming in debt.

The opening coincided with the worst recession in decades, limiting the number of folks who had the money to spend $50 on a thrilling trip over the rapids. It was a time when it wasn’t clear if major banks would survive, much less a misunderstood water park. Nor did it help that getting to the park required driving on a winding road through neighborhoods filled with residents who didn’t appreciate the increased traffic in lightly populated west Mecklenburg County.

In its first few years, the U.S. National Whitewater Center broke even on its operations but lacked money to repay $38 million of loans issued by banks, foundations and wealthy local family offices. The initial plan of quickly repaying much of the debt had proven wildly optimistic.

CEO Jeff Wise recalls an early meeting with the project’s lenders in which he tossed his keys on a table and offered to hand over control to whoever could do a better job. After the banks spent $1 million on three consulting groups looking for improvements or a viable exit, they stuck with him.

“They said, ‘We could go hire somebody at a lot more money and throw them in that fire. But Wise created this mess, and he’s probably going to work harder than anyone because he owns the mess he created.’

“It wasn’t because I was a good guy. But if you are going to lay a big turd out there on the street, you’ve got to clean it up.”

A decade later, the U.S. National Whitewater Center is among North Carolina’s most popular tourist attractions, with more than 1 million visitors annually, many of whom enjoy hiking, biking or beer drinking while never getting on the water. The center has turned into a marketing advantage for Charlotte as it competes with Atlanta, Nashville and the Raleigh-Durham area to recruit young professionals who enjoy outdoor fun.

Meanwhile, Wise is earning about $350,000 annually, running a not-for-profit with annual revenue topping $25 million and a payroll of 1,000 full- and part-time workers. Plans call for park expansions in Columbia, S.C., and Greenville, S.C., and a hotel at the Charlotte park, once the pandemic subsides.

The center has overcome pushback from ungrateful neighbors, a deep recession, a tragic fatality and the 2020 pandemic. The reasons, according to people long affiliated with the park, include Wise’s single-minded determination, critical backing from one of Charlotte’s most influential power brokers, and the exploding popularity of outdoor adventure sports.

“Jeff Wise and [Chief Financial Officer] Jeff Shelton have done a phenomenal job broadening the scope and interest at the center,” says Bradford Barry, a Charlotte banker and former whitewater center board member.

The story would be entirely different if BofA and other lenders had not written off most of their loans in the recession, Wise says. No one else has replicated the project in the U.S., he says, “because who else is going to get $25 million of capital that they will never have to pay back?”

Things have changed: The center now produces cash flow to have paid off the loan had the lenders restructured the debt instead of canceling it, Wise says. Envisioned as a warm-weather operation, the center is drawing crowds year round as it adds attractions. On a Saturday evening in December, a mile-long parade of cars was entering the center, full of people wanting to ice skate and view the holiday lights.

“There are a lot of people who said we were dead on arrival,” Wise says. “I will tell you that I live to prove them wrong. No, I’m not really that shallow: I don’t do things to prove people wrong. But there are a lot of people who have written us off several times because they didn’t understand [the concept].”

Vic Howie’s dream

Jeff Wise didn’t come up with the idea for the whitewater center. Vic Howie did. Now a financial adviser in Charlotte, Howie worked for NationsBank’s sports-marketing division in the mid-1990s when the predecessor to BofA was a key sponsor of the 1996 Olympic Games in Atlanta. One of Howie’s assignments was to work with the U.S. whitewater team, which trained at the Nantahala Outdoor Center near Bryson City.

After seeing Sydney, Australia, create a downtown whitewater course for the 2000 Olympic Games, Howie and Charlotte lawyer Chet Rabon started promoting the idea for a similar venue in Charlotte’s center city. In early 2001, they joined others to incorporate Charlotte Whitewater Park Inc., which Howie calls “easily the most outrageous nonprofit ever created in North Carolina.”

The idea impressed some local leaders who wanted to revitalize downtown Charlotte, which went to sleep after office workers signed off by 6 p.m. every night. Politicians liked tying the city to the top teams of U.S. whitewater rafting — like gymnastics, the sport gains popularity after every Olympic Games, Howie says.

[/media-credit] The recirculating river for whitewater rafting is not connected to the nearby Catawba River. But visitors have lots of paddling options.
The Sept. 11 terrorist attack froze planning for many ventures, including the center. Howie remained confident, though he didn’t want to give up his bank job to work on the project full time. “I know how to start an entrepreneurial business, but then I know enough to get out of the way.”

The timing was right, then, when Wise called Howie and asked how he could become the project’s executive director. “I told Jeff that he would have to raise his own salary, which didn’t bother him. He said, ‘I’ll figure out how to make the money.’”

Wise, 55, had learned the art of fundraising after an unusual career switch. The Charlotte native earned a bachelor’s from the University of Richmond then a law degree at Emory University in 1989. He spent the next six years as a litigator at a law firm in Georgia’s capital, growing disenchanted with legal work.

“Atlanta was a great place to be a young, single professional, but it wasn’t where I wanted to put down roots. I was trying to figure out how to get back home, but I knew I didn’t want to practice law anymore. When I got to law school, I thought I’d do it for a few years, and all of a sudden, you get stuck doing a job.”

In 1995, Wise quit, packed up his apartment and moved back to Charlotte with no definitive plans. “Everybody looked at me and said, ‘What are you going to do?’ I came back, and I was bartending just to figure out how to make some money. I just started networking.”

A friend suggested Wise contact Charlotte banker Wes Sturges, who hired him to help raise $11 million to start First Commerce Bank. “I was literally smiling and dialing,” Wise says, calling potential investors. “It was fun, and it was one of the best business-development experiences you could ever want. There were times when we thought, ‘Man, we gotta shut the doors because we’re not getting there.’ But we got it done.”

Wise was a big asset, says former First Commerce CFO Pressley Ridgill, later the CEO of Greensboro’s NewBridge Bank. “Jeff was an attorney and a smart guy who could talk to anybody. He didn’t mind if the people had money or not. He could talk to a wall.”

[/media-credit] The center has hosted the Olympic Games trials for the U.S. canoe and kayak teams, a connection that helped spark early interest in the project.
First Commerce opened in 1996, but Wise had no interest in a bank job. He joined the late Charlotte commercial contractor and developer David Sidbury, helping raise money and connect with other real estate companies on various projects. Wise also helped a Charlotte surgeon start Consentys, an electronic medical-records business that never thrived.

The essential backer

Facing a personal fork in the road in late 2000, Wise says he told his friend Jeff Shelton — who became the center’s longtime CFO — that he wanted to focus on one of two projects: Form an investor group to buy the Charlotte Hornets NBA team or develop the whitewater center championed by Howie and others. The basketball idea was a lark: Hornets owners George Shinn and Ray Wooldridge were losing tens of millions of dollars and feuding with city leaders over plans for a new arena. They decamped for New Orleans in 2002, prompting the NBA to put a new franchise in the Queen City that is now owned by Michael Jordan.

Instead, Wise wrote a business plan for a whitewater park that he shared with Howie. He concluded that the preferred downtown site, which now houses the AvidXchange Music Factory, was too small. Instead, Wise focused on a county-owned plot near the Catawba River, 13 miles west of the center city. Few Charlotteans knew of the site except for Wise and other avid mountain bikers. The county had long-term plans to make it a park.

By then, Wise had learned a fact of life in Charlotte fundraising: Little happens unless a major corporate leader steps out front. One such elite was Alan Dickson, whose family-controlled Ruddick Corp. owned the Harris Teeter grocery chain before its $2.4 billion sale to Kroger in 2013.

Wise arranged a meeting at Ruddick’s downtown office. “Mr. Dickson came out and, as always, looked very dapper with a coat and tie. He said, ‘I don’t know why we’re here, but you’ve got five minutes. If you’re looking for money, I don’t think this is a good fit because our foundation focuses on health issues.’”

[/media-credit] Alan Dickson
The duo met for two-and-a-half hours. “It was classic Mr. Dickson. It was really a due diligence session because he was asking all kinds of questions and trying to shoot things down,” Wise says.

“The thing hit several of his hot-button issues. He loved anything that’s got a bit of challenge but that made sense. And it made sense to him. He really liked the fact that there was a business model behind it. It was market driven, though he understood we were a not-for-profit.”

Dickson told Wise he thought a well-run center would attract many visitors, which would enable private financing rather than relying on philanthropy. He also said he didn’t want to be on the board because he was nearing 70 and seeking to wind down his affairs. (He died in 2012 at age 81.)

Dickson later chaired the center’s board for many years. A love for nearby Gaston County, where his family’s American & Efird textile company operated for generations, also inspired him. (It is now owned by Greensboro-based Elevate Textiles.)

“[The center] didn’t become real until you had Mr. Dickson putting his arm around us for all of the leadership in this community to see,” Wise says. Over the next few months, he and Dickson made many visits to local leaders, asking for financial commitments.

“I had the vision,” Howie says, “but Alan Dickson convinced his friends to bring in big money to the project.”

Ultimately, about nine local banks lent the center about $23 million, while a second $15 million note included local foundations run by Duke Energy, TIAA and families. Giants BofA and First Union, then run by locally based CEOs, took part along with smaller ones including NewDominion Bank and American Commercial Bank. Dickson was a BofA director, while his brother, Stuart, was on First Union’s board. First Union later merged with Wachovia and was bought by Wells Fargo in 2008.

Wise also structured $7 million of financing from Mecklenburg County, $2 million from the city of Charlotte and $3 million from Gaston County and the towns of Belmont and Mount Holly. The local governments agreed to pay the center $1.7 million annually for seven years, a key cash flow. Because Mecklenburg County had planned to spend at least $7 million to develop a park at the site, it got a recreational and economic development asset essentially for free.

By comparison, the city and Mecklenburg County invested about $193 million of public funds into the downtown NASCAR Hall of Fame, which opened in 2010. The racing museum has never met its attendance projections.

The write-off

In its first two years, 2007 and 2008, the whitewater center made a tiny operating profit, buoyed by the local governments’ payments. But repaying the $38 million in private-sector debt looked highly unlikely. While the center was popular, Wise overestimated the ability to collect $1 million in annual sponsorship revenue and underestimated operating costs. Instead of two marketing staffers, for example, the center employs nine.

So Wise asked lenders to stretch out the financing over more years. Instead, they agreed to write down the $38 million to about $12.5 million, including about $6.4 million to be repaid if the center’s fortunes improved significantly. The latter payment, which bankers call a “hope note,” was Dickson’s idea, Wise says. The entire $12.5 million was repaid over the next few years.

“We were the luckiest sons of guns because we raised the money and built the center in the best economic times, and we got the loan forgiven in the worst of times,” Wise says. “You have to remember that the banks were writing stuff off left and right, and we were a blip on their spreadsheets. They had auditors on their backs. They needed to get their books right-sized.”

Whitewater is the brand, but operators realized greater potential in land activities including zip lines, ropes courses and biking.

It was painful for some, says Howie, who had joined American Commercial Bank. “We and other bankers had pie on our face, and we had to deal with it. Fortunately, the foundations and family offices got to write off their [loans] as contributions, which benefited their taxes.”

The period also marked an occasionally tense transition as the center’s initial backers gradually left the board. Howie, who departed in 2011, says Wise’s direct style turned off some people. “Jeff can be a very difficult person, and he and I went nose to nose and got in each other’s face at times,” he says. “There were times when we would try to bring in people who could help the center, but Jeff wouldn’t talk to them.”

A few politicians and media outlets criticized Wise, citing his salary and refusal to share information promptly. Wise says he attended every required meeting but never felt beholden to the government or press. “I don’t work for those people,” he says.

Ultimately, Wise had an ace in the hole. “There was a lot of discussion if Jeff was the right person,” Howie says. “But Alan Dickson was treating Jeff as if he was his son. … And if Alan hadn’t joined our board, we wouldn’t have gotten done what we needed to do.”

Growth spurt, then tragedy

Amid a recovery in which Charlotte became a hot spot for millennials, the whitewater center’s popularity surged. Revenue grew 30% to $20.4 million over the three years through late 2015. Augmenting its initial focus on water sports, the center gained broad appeal for its biking, hiking, zip lines, ropes courses, and rock climbing. A seasonal ice skating rink was added in 2019.

Selling annual passes for $219 and $6 parking passes for those who just enjoy the atmosphere proved effective.

Things were rolling until June 8, 2016, when Lauren Seitz and her Ohio church youth group visited the center. A few days later, Seitz, 18, died of a rare brain infection caused by the single-cell amoeba Naegleria fowleri, prompting a lawsuit against the center that was settled for undisclosed terms in early 2019.

While Seitz’s group had also visited Lake Norman, Lake Wylie, hotel pools and the nearby Carowinds theme park, her family concluded that she had contracted the infection at the center after riding in a raft that had overturned. The park shut down the water feature for two months and changed its filtration and disinfection systems.

Wise calls it the “worst day of his life” but says it is unclear if Seitz contracted the disease at the center. The settlement was a legal decision, he says. “It absolutely is the worst thing that ever happened. A young woman died. I don’t know that she died because of anything that happened out here. We’ll never know that. I know she was in a number of other water sources, and all of those will generally test positive.”

The incident underlined the risks of outdoor activity.

“Everything out here can kill you,” Wise says, citing a November incident in which a climber failed to clip into a wall and fell about 40 feet. “He’s fine, but you know, if he had fallen the wrong way, he’s dead.” About 1,500 people a day use standup paddle boards on the Catawba River, creating an inevitable drowning risk, while whitewater rafting is notoriously dangerous, the CEO says.

Wise’s initial fears that the death might force the center to close proved alarmist. After a 17% decline in revenue in the next fiscal year, the center rebounded nearly 50% to a record $25 million in the period ending in October, Wise says. Operating income, which is tied to volume, is also peaking, he says.

“The reason I think we have survived and come back is that the brand stands up. We are very, very serious professionals about creating this type of experience.”

The center plans to open affiliated outdoor parks in Greenville and Columbia over the next few years. Wise declined to share details but says they will have large climbing and fitness complexes and not focus on rafting.
In Charlotte, Wise foresees a hotel appealing to couples who want to raft, hike or bike during the day, enjoy a good meal and then spend the night.

Like golf and fishing, the center has benefited from the pandemic in a curious way. While the center’s food and beverage revenue has declined sharply, the desire to get outside has boosted visitor counts.

“I had a great job as a lawyer, but I got comfortable. I saw that it wasn’t going to challenge me,” Wise says. “That’s why we’re doing Greenville and Columbia. I need to keep making sure we are getting off the couch. Because we sell getting off the couch.”

Credit: Peggy Knaack
David Mildenberg
David Mildenberg
David Mildenberg is editor of Business North Carolina. Reach him at

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