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Local News

March 1, 2014

State to audit failed health center

Site got $2.3M grant, closed in four years


Government grants intended to spur economic development, he noted, always carry a degree of risk. And while Maranatha and some other projects are examples of how good intentions never led to the expected results, there are many examples of companies using such grants as springboards to success, he said.

Advocates for Maranatha, whose ranks in 2009 included then-County Economic Developer Jody Zakrevsky, had high hopes for the health club, predicting it had the potential to create dozens of jobs.

The health center that was built includes gyms, fitness rooms and rooms for classes and conferences.

The application for state funding included upbeat language about the chances of the business succeeding, stating “local orthopedists, physical therapists, counselors, and fitness instructors have expressed interest in leasing the available tenant space of 7,500 square-feet.” 

Robert Nied, a local resident who is also the director of the Center for Sustainable Rural Communities, said the collapse of Maranatha raises serious questions.”There was no accounting and no oversight of that project from the beginning,” he said. “There never was a viable business plan. The taxpayers deserve an accounting of how that money was spent.”

One goal of the project, according to the application for state funding, was to restore a historic Dutch barn on the property. But instead of being restored, the barn ended up being demolished during the construction of the facility, Nied said. The reason given for dismantling the barn, he recalled, was that it was damaged during the construction project.

Local officials said rumors have surfaced that a pharmaceutical firm with ties in the region might be interested in acquiring the facility and its 23 acres of surrounding land. But it is expected that the foreclosure action would have to be resolved first, officials said.

Parshall said he’d like to see the State University at Cobleskill acquire the property, which sits about a mile from its campus. That would be one way for the state to recoup some of the losses it sustained from making a bet on a business model that didn’t work, he said.

However, a spokeswoman for the college said she has seen no indication that college officials are interested in acquiring Maranatha.

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