Astoria Builders Supply Co. has closed the doors of its two construction and home improvement stores in Clatsop County and will auction off its remaining assets next week. This sale marks Clatsop Countys largest business reorganization of the Great Recession.

The auctions, scheduled for Oct. 10 and 11, will be used to pay off the stores creditors, who say Astoria Builders Supply Co. owes them more than $1.2 million. The company that operates the two stores, located in Astoria and Gearhart, was a staple of Clatsop County for decades before unpaid debts began piling up. The company was placed in receivership in late July after creditors filed a civil suit in Clatsop County Circuit Court seeking payments.

The auctions come as the company that owns the properties on which the two stores are located moves ahead with its own petition for Chapter 11 bankruptcy. That company, SFRP Group, filed for bankruptcy in late July to stop a foreclosure sale of the land where the stores are located. Chpeter 11 bankruptcy allows a corporation to reorganize.

Astoria business owners Randy and Deborah Stemper are the principal owners of both SFRP Group and Astoria Builders Supply. The two companies, which are legally separate, are intertwined financially: aside from having the same ownership, Astoria Builders Supply is a tenant and pays rent to SFRP Group.

Revitalization Partners of Seattle is the firm acting as the court-appointed receiver for Astoria Builders Supply and will be responsible for accounting for the proceeds of the auctions and liquidating the companys remaining assets.

The receiver will ask the court for instructions on payment to creditors, said David Hercher, an attorney for Revitalization Partners.

Since SFRP Group staved off a foreclosure sale in July that would have sold the properties outright, more details have emerged about that companys money problems.

A decline in the construction of new homes in 2009 and the addition of more retail competition in the form of the big-box store Home Depot in Warrenton placed added pressure on SFRP Group, which owes more than $5 million in liabilities, court records show.

And in a July 2009 article published in Oregon Business, Randy Stemper said the financial stability of Astoria Builders Supply had definitely been affected by Home Depot.

Seven months prior, in February, Bank of America agreed to loan SFRP?Group $1.8 million. The following month, the two parties entered into an interest rate swap. SFRP Group still owes about $1.7 million on the loan and $262,829 on the rate swap, according to court documents. The company also owes $31,084 to the county in outstanding property taxes for 2010 and 2011. The county has not taken any action on the back taxes.

After the rate swap, Bank of America hired real estate brokerage firm Cushman & Wakefield to conduct an independent assessment of SFRP Groups two properties. The firm reported that competition from Home Depot, Coast Hardware and ProBuild, coupled with a downturn in the home construction market, were expected to place further financial constraints on the retailers.

Nonetheless, Cushman & Wakefield’s valuation report concluded that Astoria Builders Supply was adequately positioned within its market area and projected net appreciation in real estate values to be fair-to-moderate.

Meanwhile, GE Commercial Finance Business Property Corporation says it is owed $603,254, while General Electric Capital Corp. says its owed nearly $2.7 million, plus interest fees and other expenses, according to court records.

The financial hardships come as a major blow to the Clatsop County institution.

The Stemper family has owned Astoria Builders Supply Co. since 1961. Randy Stemper bought the company from his family in 1987 and, over the years, invested money and resources into making the stores buildings sturdier and more capable of withstanding wild fluctuations in weather.

A 1996 flood and windstorm severly damaged Astoria Builders Supplys roof. But that was fixed in short order. By 2001, a structurally re-engineered building anchored to pilings set 60 feet into the bedrock was completed.

SFRP Group has until Nov. 26 to file a plan for reorganization in U.S. Bankruptcy Court. Calls to the Stempers listed home phone number went to voicemail, which was full.