March 30, 2010; Tampa Tribune | It seemed like a good idea at the time. A nonprofit takes over abandoned buildings and turns them into new workspaces, creating jobs and helping seed the revitalization of distressed communities, especially in rural America. But for the nonprofit pushing it, the idea has failed to root, and now SeedAmerica Foundation has gone bankrupt.
According to the Tampa Tribune, SeedAmerica filed for Chapter 11 bankruptcy protection last week. The paper reports that the charity lists on its Web site 15 large factory and industrial buildings among its assets. However, court documents show the nonprofit with liabilities of between $10 million and $50 million.
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Although the abandoned buildings were donated to the nonprofit, problems apparently started when it began taking out loans against the properties and using the money to pay bills. As credit markets tightened, loans became harder to secure and eventually SeedAmerica couldn’t meet its payroll.
For communities that had invested their hopes in SeedAmerica, its failure is a blow. For instance, instead of turning a former 700,000-square-foot printing plant in Salem, Ill., into new office space, the building is being demolished and with it hope for jobs and tax revenues for the city. Like the old saying goes, “it was just an idea.”—Bruce Trachteberg