Gadsden--For much of the 20th century Gadsden, Alabama, was an important industrial center. But by 2000, Republic Steel had permanently closed and the Goodyear Tire plant had laid off thousands of workers. Today, if you mention the layoffs to folks like Donna Pruitt at the local barbecue joint, you hear their pain.
"When you said Goodyear, you thought Gadsden. When you said Steel Plant, you thought Gadsden. Now I guess the city in a way is having to reinvent."
Gadsden is a small working-class town where the average family makes just $24,000 a year. But the area is getting help from an unlikely cottage industry that's popped up: high-end luxury real estate.
At least four local companies sell property to rich people across the country. Cosmetics queen Mary Kay Ash used Gadsden's National Auction Group to sell her pink mansion in Dallas. NBA Star Karl Malone hired J.P. King Auction Company to sell his Utah estates. The King company started in 1915, selling mules. By 1992, J.P. King's great grandson Craig King was overseeing the auction of Kentucky's legendary Calumet Horse Farm for an astounding $17 million.
"That really helped people realize that you can take the super luxury properties to auction, just as you can the fine art and the nice antiques and still get a fair value."
Craig King was recently in Mount Pleasant, Texas, auctioning two custom built homes and 19 prime waterfront properties. Dozens of potential buyers crowded under a tent, enjoying wine and swanky hors d'oeuvres. John Fox came from Arizona to buy land he plans to flip.
"I attend probably 15 auctions a year. Many times if you have an auction like today you have the first few lots go to an end-user and then after that, when the end-users are gone the prices drop down that gives someone like myself an opportunity to buy it and put it back on the market and wait for another end-user to come by and buy it."
While much of the real estate market is softening, high-end properties continue to command big prices, says University of Alabama real estate expert Leonard Zumpano. Last year, there was an eleven percent hike in sales of homes priced over 5-million dollars.
"It's a rarified market. There aren't that many people who would qualify to purchase that home. By having an auction in a particular location at a particular date, you bring all those people who have the interest and ability to purchase that house to that property where it's available to the highest bidder."
"Sell Dreams, Not Dirt"... that's the advice of Gadsden auctioneer Craig King, printed in Donald Trump's latest book "The Best Real Estate Advice I Ever Received." Gadsden's luxury auction houses are helping the city dream big. Tom Quinn is president of the local chamber of commerce.
"You know I can remember when Pittsburg was an ugly city, when Chattanooga was an ugly city. And you know all these cities that have changed their economy because they've diversified are doing very, very well."
It's hard to quantify the auction houses impact on the Gadsden economy. City leaders say fostering entrepreneurs like these is just one part of their revitalization strategy. But new joint ventures with Sotheby's and the Wall Street Journal to draw attention to Gadsden's auction houses may help put a new public face on this former "company town".
-- Tanya Ott, April 2, 2007