University of Southern Mississippi officials are “disappointed” that a sublease agreement with the Mississippi Community Education Center – one that resulted in a $5 million payment to the university’s athletic foundation and the construction of a new volleyball facility – did not live up to its promises.
MCEC – which is suspending services after a state investigation netted its founder and former state officials for embezzlement – made the payment to sublease all athletic facilities at the university, supposedly “for various activities that benefit the area’s underserved population.”
Mississippi Today first reported the payment and sublease terms.
In a Feb. 13 email to Mississippi Today, James Coll, the university’s chief communication officer, said “MCEC has utilized athletics facilities, including Reed Green Coliseum, for events such as the Healthy Teens Rally.”
However, in a Feb. 28 statement, officials from the university admitted they are “disappointed that the concept (of services provided by MCEC) has not materialized to the extent presented to the University – through no fault of USM.”
The Feb. 28 statement adds that “if MCEC should vacate or abandon the leased Premises and fail to use any part of the Premises for a period of twelve consecutive months, then MCEC would be considered in default and the Foundation shall be entitled to terminate the Sublease, with no refund of Rent.”
An additional statement from Coll to Mississippi Today said “it is now apparent that MCEC is unlikely to continue as an active partner in the agreement” and that the athletic foundation is “looking forward to initiating conversations with the appropriate state agency and leaders about how its athletics facilities … can be used to the benefit of Mississippi families and individuals in the spirit of the original agreement.”
Under the terms of the agreement, the university serves as lessor of facilities – or landlord – while MCEC “develops and conducts programming.”
The extent of such programming – and the populations the programming served – is unclear, and university officials did not respond to a request for comment by press time Wednesday.
The PineBelt NEWS also requested an update on the status of any conversations between the university and state agencies and if the $5 million payment – or any part of it – will be returned to the state.
Nancy New, founder of MCEC, made the payment to USM in October 2017. She served on the athletic foundation’s board and is a 1974 graduate of the university.
The $5 million payment was used by university officials to build the new volleyball facility, which is officially known as the Wellness Center. The building cost $7 million, and the $2 million difference was made up by donations from individual donors, Coll said.
The facility, which has yet to open, will house the women’s volleyball program and feature courts, training facilities, locker rooms, classrooms, meeting spaces and administrative offices, including planned offices for MCEC.
On Feb. 3, New was one of six people charged in what State Auditor Shad White said was the “largest embezzlement scheme that the office had seen in at least 20 years.” Also arrested was John Davis, the former executive director of the Mississippi Department of Human Services.
According to White, the arrests were the culmination of an eight-month investigation into “the misappropriation of funds from the Temporary Assistance for Needy Families program.”
New and Davis, along with the four others, pleaded not guilty to charges of conspiracy to steal more than $4 million in grant funds. According to Mississippi Today, the alleged theft “would explain what happened to just seven percent of all funds Human Services gave the nonprofit since 2016 … the state has very little accounting to show what happened to the rest.”
In his original statement, Coll said the athletic foundation “entered into the agreement following the review of University and Athletic Foundation attorneys, outside counsel, and the approval of the Attorney General’s office and IHL Board of Trustees.”
However, the Feb. 28 statement – issued to “clarify a few points regarding recent media reports” – contradicts Coll’s earlier remarks and says that the IHL board “does not have the jurisdiction to approve or disapprove agreements made between the Athletic Foundation and outside entities, such as the MCEC … the IHL board did not vote to approve an agreement.”
According to their website, MCEC has closed down numerous programs due to the suspension of grant awards, but “is operational and will continue to operate its after-school and re-entry programs.”
Media requests were redirected to Amanda Barbour, an attorney at Jackson’s Butler Snow law firm. Barbour did not respond to questions from The PineBelt NEWS by press time.
