MIRACLE ON MAIN STREET
From big loss to being whole again, local store owners share their redemption story
By Michael Sullivan 12/12/2013
It was the best of times on the verge of the worst of times. It was late 2006 and America had been hit with an unmatched economic boom time. The real estate market had been superhot, with housing prices rising to new heights, investors making big bucks on flipping real estate, and anyone could buy a house no matter what they made or could put down. It was also a great time for businesses.
At that time, Keith and Francesca Richardson had been running their modest little angel store, Things From Heaven, in downtown Ventura for the previous 15 years. The inspiration to open such a store had come to Francesca in a dream — a deceased friend visited her and gave her a golden bound book about angels and how important it was for her to accept their guidance. And just like that, the happily married couple found their present location the very next day and went into the angel business.
“People told us that only fools would open a store with the shaky premise of being an angel-themed gift store,” Keith said.
Though it may have sounded insulting, in the scheme of things, it wasn’t such a far stretch from the truth. Keith noted that over the duration of running their business, they had seen dozens of angel stores fail, including an angel store owned by an opulent woman who had tried to model hers after the Richardsons’. The woman opened a two-story store, escalator included, in Pacific Palisades. Keith said it didn’t take long before the business failed.
They, however, were doing fairly well and times were good. And as everything was coming up green — the foreshadowing of the economic crash was only faintly being recognized at that time — the Richardsons received an offer they couldn’t refuse. Years earlier, when they first opened Things From Heaven, they had also opened an account with Mid-State Bank. Over time, the couple and the bank had formed an amicable relationship and so, when the manager came to them that year offering a line of credit of $100,000 to help grow their business, they saw it as a blessing.
“The manager said that we had been with them for 15 years and [he] wanted ‘to offer you something special,’ ” Keith said.
Maggie Contreras and Gabriella Rivera of Moorpark view some of the 23,000 notes and prayers left at a prayer shrine inside Heaven’s Gallery.
Photo by T. Christian Gapen
They accepted the offer. Soon after, Keith signed on the dotted line and took out a $100,000 line of credit on inventory-based collateral with interest-only payments. Their inventory was worth approximately $20,000. Over the next two years, they borrowed $60,000, buying new inventory by Andy Lakey — an artist who just recently died — who was renowned for his art that the blind could see, or rather, feel. But this blessing was about to turn sour. Though the Richardsons had consistently made their payments over the years, $500 a month, they didn’t realize the line of credit/loan had an expiration date.
“We didn’t know. We just signed the papers,” Francesca said, relaying she thought it was like credit card payments.
In 2009, when Rabobank, who purchased Mid-State Bank in 2007, called in the loan, with interest accrued, the couple followed the normal process, as many small business owners do, and got another loan to cover their original debt. This time the loan was for approximately $79,000 and would come due in a year. But in 2010, the country was in the midst of a financial crisis and regulators had clamped down on the banks. When the loan came due in full in 2010, the Richardsons weren’t so fortunate. This time, Rabobank had called in the loan — all or nothing. The couple were just two of many small-business owners who had pulled out a line of credit or a loan and been denied the ability to carry over the debt. The economy was in a tailspin and the regulators weren’t backing off.
Bill Watkins, Ph.D., executive director of the California Lutheran University Center for Economic Research and Forecasting and an associate professor of economics, said the financial meltdown of 2008 changed the way banks did business.
Often the case, a loan would be renewed, he said. “But as we know, everyone’s financial situation deteriorated. Small business owners were hit harder in general.”
A story published Jan. 10, 2010, on entrepreneur.com detailed the dramatic shift:
“In the first six months of last year , 38 percent of small businesses reported a decrease in their lines of credit or credit card limits, according to the National Small Business Association. More than 40 percent of small-business owners who had requested extensions of their credit lines were turned down, the National Federation of Independent Business reported, and many of those who received extensions were required to increase collateral, pay higher interest rates and/or agree to more stringent terms.”
Some of the inventory at Heaven’s Gallery includes original artwork by Andy Lakey who has some of his pieces hanging in the Vatican which were requested by Pope John Paul II in 1990.
Photo by T. Christian Gapen
The Richardsons had become casualties of the crisis, despite their best efforts. At first, to try and remedy the situation, Keith attempted to get another loan from Rabobank to carry over the debt, but the bank said he wasn’t qualified. Keith then applied to get another loan with several banks, to no avail. The only next logical step for the Richardsons was to get an attorney to try and negotiate with the bank.
At the same time in 2010, Keith said that Rabobank had stopped taking payments, demanding the loan be paid only in full and refusing to take partial payments. In 2011, the bank did make an offer: if Keith paid down $60,000, then paid $1,000 monthly until his debt was cleared, a payment plan could be worked out. Though Keith offered to step up his regular $500 a month payments to $1,000 per month, paying down $60,000 was impossible. The recession had hit them hard, too. The original investment in the art sold slowly and whatever did sell sustained the Richardsons just enough to keep the doors open.
Over the years, all attempts to work out some sort of reasonable payment plan for the couple were denied. Keith and Francesca remained in limbo, unsure of what to do, and stressed from the bank’s debt collectors’ consistent calls for payment. In February 2013, they thought things might be headed in a positive direction when a person associated with Rabobank came to their store. Instead, the outlook was dismal.
“We thought, ‘He’s coming to work out something with us,’ ” Keith said. “Then he started shooting pictures of our stock.”
Keith called his attorney, who recommended bankruptcy, and they began the process.
By April, the principal balance grew to $93,484. Then in June, they were served with a lawsuit; Rabobank was seeking $150,000 in punitive damages. The Richardsons had no idea what they had gotten themselves into. They were advised by their attorney to continue with the bankruptcy and just throw everything into it. And they did.
In August, Rabobank foreclosed on Things From Heaven and the Richardsons lost possession of their store. Behind the scenes, however, things were brewing that would completely shift gears for the distraught couple.
As the shop lay dormant and other debt was beginning to build, specifically the rent, the landlord decided to intervene.
In September, the Richardsons received a call from their landlord, who asked, if they could get their inventory back, would they reopen their store? Of course, they said. With that, the landlord’s attorney and the bank began discussions. During the time the store was closed, the bank had put out a request for bids from stock liquidators and the numbers just didn’t add up. What with the cost to pay the rent as well as prepare the items for shipment and auction and the reality of how much their angel wares might actually bring in — the bank had apparently gotten in over its head.
In the end, the landlord negotiated with the bank and the bank sold the inventory from Things From Heaven for $1 to the landlord, according to the Richardsons. A Rabobank representative said the bank could not talk about any particular client issues and the landlord would not comment.
With every angel still in its place, the Richardsons made a deal with the landlord and bought back their store and paid their overdue rent. On Oct. 21, the Richardsons were discharged from their bankruptcy and reopened immediately, changing the name to Heaven’s Gallery. After the arduous experience with the bank and then losing their store, they learned several things, including that no one should take out a loan of credit but, more importantly, just what their store meant to others.
“We didn’t realize people depended on us so much,” Francesca said.
“We didn’t know it was so important,” Keith said, reflecting on what it’s like to be a business owner, dealing with day-to-day operations. Neither of them realized their special spot in the community before they were shut down.
For the months the store was closed, she had heard about the numerous customers who had cried and grieved over the apparent abrupt finale and others who were praying for the store to reopen.
“It’s more than an angel store. It’s an angel experience,” Keith said.
While the angel art is dynamic, featuring works of Andy Lakey, Sue Halstenberg and Bill Jeralds, the store also represents hope to many.
A spontaneous prayer shrine in the back of the store speaks for itself, with more than 23,000 prayers and various documented cases of the prayers being fulfilled, including 55 cases that addressed infertility and resulted in babies and, in one case, twins.
The Richardsons both see as a miracle the rapid turnaround when all hope seemed to be lost.
“It’s a reminder — kind of like that James Stewart movie, It’s a Wonderful Life,” Keith said.
“Sometimes it’s more than just what we see,” Francesca said.
Heaven’s Gallery is located at 365 E. Main St. in Downtown Ventura; 648-5689.