Layoffs, complaints plague SeedAmerica

[Pale Blue Dot]

Source: Atlanta Journal-Constitution

Doing good, in SeedAmerica’s case, means taking donations of vacant industrial buildings, renting them to small businesses and using some of the proceeds to start a Christian-based business school.

In 2007, SeedAmerica CFO Wayne Norris, CEO Joseph Johnson and vice president Steve Shelby (from left to right) posed for a photograph outside their Alpharetta office. Johnson is the only one still with the company.

Companies that give their buildings to the Alpharetta-based non-profit can take a tax deduction that, in theory at least, is worth more than a sale.

Now, just three years after acquiring its first property, SeedAmerica is staggering. The company recently laid off the bulk of its workforce — about 50 people — after having little success leasing space and seeing its credit dry up.

“You’re getting buildings that have been sitting empty for years that other people couldn’t sell or lease,” said former SeedAmerica employee Dane Becker. None of the properties is in Georgia.

Becker and other ex-employees due thousands of dollars in back pay, and a development official in Illinois, are questioning SeedAmerica’s sincerity.

“I feel like we got bamboozled,” said Tracey McDaneld, economic director in Salem, Ill., a town of 9,000.

Read more: http://www.ajc.com/business/content/business/stories/2008/08/15/seedamerica_layoffs_complaints.html

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This is disgusting.

[TechBear_Seattle]

1. This isn't necessarily a case of fraud

I'm willing to give these people the benefit of the doubt, and say they were honest about their plans.

As the quoted article said, the group was getting buildings that had been sitting empty that the previous owners had not been able to lease or sell. If the building had been making money, there would be no business reason to turn off a revenue stream. That sounds like a major flaw in their business model. Couple that with the economic downturn that has already driven a lot of small business into extinction and made plans for expansion untenable, and this becomes just one of the nine out of ten new business ventures that fail within five years.

[Pale Blue Dot]

2. When somebody says that they're going to use the proceeds to fund

a "Christian business school" that should have been the first clue that this was either fraud that the creators were not terribly bright.