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Local News

March 1, 2014

State to audit failed health center

Site got $2.3M grant, closed in four years

Four years after state officials announced in a chirpy press release that a $2.3 million economic development grant was being awarded to build the Maranatha Family Center in Schoharie County, the fitness and health facility closed after it failed to generate enough business to sustain itself.

That was last September. Today, the 85,000-square-foot building building today stands in Richmondville as an example of a project that raised hopes and expectations but in the end consumed significant taxpayer dollars that officials now admit will never be fully recovered.

On Friday, a spokesman for the state Comptroller’s Office in Albany confirmed the agency is conducting an audit related to the administration of the grant funds that flowed through the town government to the limited liability corporation behind Maranatha. The audit is expected to be completed later this year, said Brian Butry, a spokesman for Comptroller Thomas DiNapoli.

Meanwhile, the state Business Development Corp. is seeking to recover $1.85 million through a foreclosure action initiated in December against the developer, Stella McKenna.

Finding a buyer for the property may take many months if not longer, said Marvin Parshall Jr., the Richmondville town attorney.

“It’s a slow-going process to get to the foreclosure proceeding,” Parshall said.

Among the factors complicating the property’s status: five banks were involved in the loan structure for Maranatha and the business had obtained a tax break in the form of a payment in lieu of taxes (PILOT) arrangement. McKenna’s corporation had also received a $650,000 grant. In addition, the Schoharie County Industrial Development Agency had loaned the business $35,000.

Assemblyman Pete Lopez, R-Schoharie, said the closing of Maranatha has left members of the local community “saddened and frustrated.”

“Certainly,” he said, “we hate to see a business fail, and we hate to see a resource lost to the community.”

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