A sewer grant, but sparse development in Shelby

acurliss@newsobserver.comJune 15, 2013 

The N.C. Rural Economic Development Center granted $149,000 to provide sewer so that a healthy company, Hallelujah Acres, could move across the street. The Rural Center says it created 20 jobs there. But that never happened as plans for a large mixed-use development stalled. The company's founder has a house in the development, along with five others. Hay bales stand where retail shops and other amenities were expected to provide the jobs.

ANDY CURLISS — acurliss@newsobserver.com Buy Photo

— The Villages of Hallelujah Acres was supposed to be a large mixed-use development on the outskirts of Shelby, with cottages, a chlorine-free pool, 1,000-seat amphitheater, organic orchards and the headquarters of a healthy living catalog and retail business run by the Rev. George Malkmus.

There, Malkmus would deliver his biblically inspired talks on eating raw fruits and vegetables and drinking carrot juice that he says cured his cancer. A 72-room hotel would let his visiting “health ministers” and others stay near his health store and other planned retail options.

Today, more than five years after the N.C. Rural Economic Development Center put $149,000 toward a sewer line to help make the project happen, its mostly grassy fields are dotted with hay bales, sliced up by roads that lead to dead ends.

Malkmus owns a $400,000 home there, alone near a large pond, and there are five other homes. But that’s it.

Malkmus’ Hallelujah Acres project might have seemed far-fetched, but the Rural Center, local governments and the state Department of Commerce, using federal funds, all contributed to the development’s $800,000 in sewer infrastructure, records show.

Hallelujah’s corporate offices and retail store had been across the street – in two buildings that are now mostly vacant. Malkmus has since moved his operation to Gastonia, to be closer to the Charlotte airport, he wrote in a blog post.

The Rural Center says it has created 20 jobs at Hallelujah Acres, though none exist there. The center doesn’t want the taxpayer money back.

A senator’s request

It says it will allow a planned charter school to substitute for the jobs that were promised by Malkmus. Pinnacle Classical Academy is now rehabbing a vacant Hallelujah building, and it has plans to build a campus on the land that was once part of the “villages” project.

The jobs switch came at the request of a state senator, Wes Westmoreland, a Republican. On General Assembly letterhead, he asked Rural Center President Billy Ray Hall to transfer the Hallelujah grant’s responsibility to Pinnacle.

Westmoreland serves as vice chairman of the charter school. The letter was written in September, before he left the Senate.

Westmoreland said he was not authorized to speak about the benefits of the deal to the school and referred questions to his predecessor, former state Sen. Debbie Clary, who is the charter school’s chairwoman. Clary, also the lobbyist for the state’s charter schools association, could not be reached.

Documents and interviews show that the charter school will end up with 56 acres for its campus at no cost.

The county bought that land from Hallelujah, at a discount, for $125,000. The county is deeding it to the charter school as it raises money for its campus, which would hook into the sewer that was funded by the Rural Center. The school says it will create 60 full-time jobs.

In the meantime, over the next two years, the school will set up in one of Hallelujah Acres’ old buildings, also at little cost. “We are giving them significant free rent,” Hallelujah chief financial officer Rob Pinion said in an interview.

Off the hook

The land deal let Hallelujah – and local governments – off the hook for repaying any government money because it did not create jobs. When county commissioners approved their part of the deal in December, one commissioner said it would relieve the county of “some grant predicaments we are in,” according to minutes of the meeting. That was on Dec. 18.

Two weeks before that, the Rural Center’s board had decided that it would not grant money to charter schools. Several charters had been seeking the center’s money to rehab old buildings. The decision, recommended by Hall, was that charter school jobs are not private jobs, and the Rural Center says a requirement in legislation to secure grant funding is that private jobs are created.

State law “defines charter schools as public schools,” the Rural Center decided, and “funding will not be provided for the support of public schools.”

Two months later, on Feb. 1 of this year, that changed, at least for Pinnacle Classical Academy. The center made formal an exception for the Shelby charter, releasing Hallelujah from the job promise.

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