Nonprofit founder Nancy New handed restaurateur Jeff Good a check for $200,000 and then ghosted.
The idea was for their organizations to partner to create a food recovery and reclamation center. They would take food that groceries and restaurants didn’t want — what people picture as a bruised apple or an ugly carrot — and turn it into ready-to-eat meals for the hungry.
In late 2018 when they conceived the concept, one of Good’s businesses, Soul City Hospitality, was already leasing and investing in an empty 16,000-square-foot warehouse with that kind of project in mind.
And New, a Greenwood native who held a multimillion-dollar state contract to spend federal welfare dollars with virtually no accountability, had the cash.
New is now awaiting trial within what officials have called the largest public embezzlement scheme in state history, and Good has nothing to show for the deal.
A recent independent audit of the Mississippi Department of Human Services labeled the $200,000 welfare payment to Soul City Hospitality as waste and abuse. It’s a sliver of the $12.4 million in such spending they identified. Officials have made no criminal allegations surrounding the Soul City deal.
Good, owner of three Jackson restaurants, told the accounting firm that after New handed him the check in February 2019 to cover a one-year lease, “not a hammer was lifted.” His team received no more communication from New’s nonprofit, Mississippi Community Education Center. The nonprofit did not provide paperwork needed for permitting, Good said. New did not place staff in the warehouse. Nothing happened during the lease period.
The building wasn’t in operation then and hasn’t been since.
Good was aware that New and John Davis, then-director for the Mississippi Department of Human Services, had discussed funding the project, an email shows. The department administers several federal grants. But Good told the forensic accountant that he didn’t know the money Soul City received had come from a federal program called Temporary Assistance for Needy Families — known as welfare.
“The energy sap was incredible,” Good said of the fallout. “Just imagine the punch in the gut.”
Good formed Soul City Hospitality LLC in 2014 alongside David Watkins Jr. — son of the Jackson developer who restored the King Edward hotel and was a controversial player in the failed deal to revitalize Farish Street.
Their goal was to create better pathways for Mississippi farmers to get their products into the commercial marketplace.
Watkins couldn’t understand the paradox of Mississippi’s food systems: Why businesses like Good’s restaurant, located in an agricultural state, didn’t sell more local food. Why a state known for having some of the richest soil also has some of the most hunger and worst nutrition.
Good and his partners wanted to see if they could solve the puzzle, he said, “to really try to make a change to the economics of the state.” His business secured a $3,000-a-month lease on the warehouse at the old farmer’s market on Woodrow Wilson in Jackson, property owned by University of Mississippi Medical Center.
The food hub project received a $100,000 grant from the USDA and a $315,000 construction grant from the Delta Regional Authority. Good and his partners also took out almost $700,000 in private debt to renovate the coolers, offices and production space, and in 2017, they opened the Up in Farms Food Hub.
The produce company, which Good said staffed about 20 people, lasted one season. It failed.
You name the problem, Good said, they encountered it. Farmers couldn’t reap the supply they thought they could, due to either the weather or not having enough farmhands. A lack of cold storage meant food went rotten. They faced worm infestations.
Down the supply chain, Good’s team struggled to sell the produce to local grocery stores or restaurants, in part because of the inconsistency.
The group shut down the operation and closed the facility in 2017 but maintained the $489-a-month lease with UMMC.
Enter Nancy New.
The Up in Farms Food Hub “had not worked well,” the latest audit report states, “and, in the fall of 2018, MCEC had approached them with the desire to rent the warehouse space and collaborate to achieve the objective of MCEC.”
Mississippi Community Education Center had started receiving tens of millions of welfare dollars from Mississippi Department of Human Services to run a state-sanctioned program called Families First for Mississippi.
Under the leadership of then-Gov. Phil Bryant and his appointed welfare director Davis, multiple state agencies began sending people in need — the homeless, those applying for food stamps or seeking a job — to Families First.
But past employees told Mississippi Today that nonprofit leaders never provided the support, or in many cases the funding, necessary for the programs to succeed. Millions of their grant dollars flowed instead to pie-in-the-sky projects run by the famous or politically connected, Mississippi Today has found.
To begin the new food project, New and Watkins signed a $16,620-a-month sublease — 34 times what Soul City was paying for the lease with UMMC.
The parties agreed the funds would be used to pay off the debt Soul City had incurred in construction and to make additional upgrades to the facility, Good told Mississippi Today. Soul City would act as a facilitator. New’s nonprofit was supposed to supply a project leader.
The partners also envisioned using the space for a small-business incubator, workforce training programs and nutrition education. The team’s project pitch listed dozens of other state agencies and organizations as partners.
Auditors said that they found no emails from Davis about the Soul City project, but an email between the other private partners says there was a “meeting with John Davis at MDHS,” where “Nancy and John tossed around some funding ideas” for the project.
Soul City Hospitality also represented that the state had approved the project for $1 million in state bonds, which it would not have to repay, that could be drawn down for additional construction on the building.
Instead of making monthly payments on the farmer’s market property, New paid for a years-long sublease upfront.
“According to the interview conducted of the Soul City representative, Jeff Good, he was surprised when after the contract was signed, he was handed the check for $200,000,” the audit reads.
A memorandum of understanding drafted two months before the beginning of the lease shows the original plan was for Families First to make a lump sum payment of $523,000 that would pay off Good’s company’s debt.
Good said that by the time an actual agreement between Soul City and New’s nonprofit was signed, it was the month-to-month sublease discussed in the audit. The audit says that even though the New nonprofit never took possession of the warehouse, Soul City did not return the lease payment because the business incurred costs as a result of the deal.
Shortly after signing the lease, New pulled away from the project to focus on opening a new Families First resource center inside the old renovated-hotel-turned-government-office on State Street after Davis had moved his executive office to a fancier building in the heart of downtown).
The resource center at the new office purported to address hunger. It conducted canned-food drives, raised money to buy turkeys for veterans around Thanksgiving and housed a food pantry containing mostly canned green beans and corn.
In the center, New’s staff created a mock farmer’s market, next to a fake bank and a second-hand clothes closet set up to look like a store.
Multiple former employees told Mississippi Today that Families First based its programming — such as these interactive displays mimicking life for the so-called productive citizen — on principles and beliefs about what people in poverty need, not scientific research or evidenced-based models.
Up in Farms, an offshoot of the Soul City Hospitality parent company, helped stock Families First’s mini market with fresh produce for the September 2019 ribbon cutting, which provided ample photo ops. But the food bins mostly sat empty after that.
Up in Farms still has some presence in the food-justice space. Last year, it received a $75,000 donation from Dole Packaged Foods reportedly to run its Farm-to-Table Training Center and provide 1,000 meals to those in need. It has partnered to host mini farmer’s markets at the local Boys & Girls Club.
The Up In Farms website is down, and it hasn’t posted to Facebook since 2018.
WAPT reported in June that Good’s restaurant company, Mangia Bene, was partnering with Dole and the Boys & Girls Club of Central Mississippi, who also gets welfare grants directly from the state, “to launch the Up In Farms Food Hub.”
The report said, “the goal of this proposed Woodrow Wilson location is to gather all the locally grown foods and produce and distribute it to people in need.”