Questions grow after collapse of South End Grocery, Cultural Center

ALBANY — Travon Jackson had a vision for the intersection of South Pearl Street and Madison Avenue.

On the southwest side, he worked to add vibrancy to the African American Cultural Center of the Capital Region and make it a place to celebrate the city’s Black community. On the northeast corner, Jackson in December 2022 achieved the long-sought dream of opening a grocery store to serve South End residents. 

But within nine months of the South End Grocery opening, both initiatives shut down. And one of Jackson’s biggest donors has unanswered questions about how tens of thousands of dollars were spent.

Jackson, 30, says he’s renegotiating the shuttered grocery store’s financing and rejects any suggestion that he used grant funding improperly. He blamed the closure of the Cultural Center on friction with its board. His development consulting nonprofit, Bluelight Development Group, was the center’s largest supporter. He said the board was “unable to hack it on their own without our guiding hand.”  

The story of the collapse of the two nonprofit organizations involves the complicated relationships among Jackson, the Cultural Center’s board, a group of local philanthropists and the regional financial institutions brought together to support the launch of the independent grocery store. Months after the store’s failure, much is unknown — including when, or whether, it will reopen.

A number of financial problems will likely complicate any effort to bring back or repurpose the store at 106 S. Pearl St., which closed in August after its lenders sent a default notice.

Albany County Executive Dan McCoy, who championed the project, once called the store “a great example of how the public and private sectors can come together to overcome big challenges.” It was hailed as a major step toward equity in a neighborhood that had suffered decades of government neglect and private disinvestment; established with the goal of providing fresh, healthy food to residents.

McCoy and other county officials declined to comment for this article, citing potential litigation.

Charles Touhey, a longtime developer of afforable housing and director of the Touhey Foundation, said his organization donated more than $111,000 to the Cultural Center in 2021. He now says those funds can’t be properly accounted for in the center’s bank records.

Touhey is married to Alice Green, one of the original founders of the decade-old Cultural Center and the executive director of the Center for Law and Justice, the well-known Albany-based social justice organization. The couple, along with other community members, are in the process of setting up a successor organization to the defunct one, to be called the Alice Moore Black Arts and Cultural Center.

Touhey was among several philanthropists and foundations who provided funding so Jackson and the Cultural Center could buy the former South Pearl Street McDonald’s from the Albany Housing Authority and convert it into a grocery store.

Touhey said he decided to come forward with his concerns after repeatedly seeking a full explanation of what happened to the foundation’s donations. The philanthropist added that he wanted the community to have a full understanding of what happened to the center and the store.

Two years ago, Touhey suggested that the Cultural Center should apply for a grant from his foundation to fix up its building at 135 S. Pearl St. The $61,125 in funding was intended to pay for roof repairs and an exterior paint job. The foundation agreed to provide an additional $50,000 to help cover the costs of the property purchase for the grocery store site.

The combined $111,125 appeared in the Cultural Center’s bank account on Sept. 23, 2021, three months before it bought the former McDonald’s. Bank records show that before the infusion, the center’s account held a balance of just 92 cents.

According to bank records provided to the Times Union, the $111,125 was largely gone from the Cultural Center’s accounts by the end of November 2021 — a full month before Jackson bought the former McDonald’s for $850,000.

From late September until the end of the year, the Cultural Center spent or transferred more than $133,000 from its main account. In the same span, the center also received $10,000 from Times Union Publisher and CEO George Hearst III and a $14,633 loan from the Community Improvement Loan Fund, a program from the national development nonprofit Grow America meant to support women and people of color as well as businesses in low- to moderate-income neighborhoods.

More than half of that $133,000 went to Jackson’s nonprofit development consulting firm, Bluelight Development, including more than $50,000 in October. Nearly all of the transfers to Bluelight are in amounts between $3,500 and $7,500.

Jackson said he transferred the money to Bluelight because he did not trust the Cultural Center’s board to manage its own finances. Jackson said that some of the expenses that Touhey raised questions about, such as $1,600 to National Grid, were costs to make sure the center could obtain the title to the former McDonald’s free and clear.

“Bluelight held the money, the donations that were made in the Cultural Center, in accounts for the benefit of the Cultural Center, because (the Cultural Center’s board) were not managed well or trusted to receive their own funds,” Jackson said.

He did not offer a specific reason why the Touhey Foundation’s $50,000 grant for the grocery store wasn’t moved over in a single transaction.

“It’s not any particular reason. It’s just in installments rather than in bulk,” Jackson said. “That’s literally just how it was processed. It was just accounting.”

There is also a $5,250 transfer from the Cultural Center’s account to a Cash App account belonging to Jackson’s wife, Jayonna Jackson. Jackson said the money was reimbursement for services his wife provided at the Cultural Center.

The center’s board does not have an explanation for three written checks totaling $11,100. Jackson said he provided the board with documentation for that spending.

It is not clear how closely the Cultural Center’s board tracked its finances. Its former treasurer, Larry Mauldin, did not return calls for comment.

According to copies of checks provided to the Times Union, only $35,125 could be traced to roofing repairs and a painting contractor for the Cultural Center. The building’s paint job was never completed, and Touhey said the painting contractor was paid $20,000 of what was supposed to be a $46,000 job, leaving $26,000 from the repair grant unaccounted for.

Jackson said the contractor, Albany Artisans, was paid in full and that he would provide documentation of that payment to the Times Union, but did not. Charles Hacker, the owner of Albany Artisans, did not return calls for comment.

On Dec. 30, 2021, someone deposited a check for $2,850 into the Cultural Center’s account. Without it, the nonprofit would have entered the new year with just $26.87.

The $111,125 in grants from Touhey was not the end of his contribution to the grocery store and Cultural Center that year.

Just days before finalizing the site purchase on Dec. 17, Jackson called Touhey, Hearst and Chet Opalka, another well-known philanthropist and a co-founder of Albany Molecular Research. Jackson made a desperate plea: He was $200,000 short of the $850,000 he needed to close on the property. Without a $66,666 check from each of them, the sale wouldn’t happen.

All three wrote checks to Bluelight Development Group. Touhey’s check came from his personal account.

A Troy native and an accomplished athlete at Troy High School, Jackson earned an academic scholarship to Morehouse College in Georgia, according to a 2011 article in the Troy Record.

Jackson regularly represented to people that he became independently wealthy as an investment banker in Chicago, but turned to nonprofit work as a way of giving back. In an interview earlier this month, Opalka said he believed Jackson “presumably made a fair amount of money when he was in Chicago.”

According to his LinkedIn page, Jackson spent three summers as an analyst at BMO Capital Markets, the investment banking subsidiary of Canadian Bank of Montreal. After graduating from Morehouse in May 2015, he began working as an underwriter for the New York Business Development Corp. that fall and founded Bluelight Development Group in August 2016.

Jackson joined the Cultural Center’s board in 2017, and quickly became its executive director. In exchange, the board allowed him to use its building at 135 S. Pearl St. as Bluelight’s base of operations.

The Cultural Center’s former president, Linda Jackson-Chalmers, said it had struggled financially over the years, particularly coming out of the coronavirus pandemic. Jackson was the one who “helped keep the lights and the operation going,” Jackson-Chalmers said. (The two are not related.)

While nonprofits are supposed to submit annual tax paperwork to the IRS and the state Attorney General’s Charities Bureau, the only tax return for the Cultural Center available on the state’s website lists Jackson’s 2019 compensation at $28,846. In other years, he worked in a volunteer capacity, according to Jackson-Chalmers and Jackson.

It is not clear how Jackson supported himself during the time he was running Bluelight Development, the Cultural Center and — beginning in December 2022 — the grocery store. Bluelight’s 990 forms, the primary tool the IRS uses to gather information about tax-exempt organizations, do not show him drawing a salary for the years 2020 through 2022. But as the nonprofit’s revenue rose, so did its expenses, including nearly $35,000 for travel in 2021 and more than $28,000 for supplies. Those numbers, respectively, rose to more than $42,000 and $60,000 in 2022. On the 2022 filing, Jackson claimed he and his wife worked 70 hours a week for no salary. 

Jackson’s arrival on the board had solved several problems. The Cultural Center had always struggled to fund raise and had no permanent staff to guide it. But Jackson was a charismatic fundraiser with powerful backers.

The most crucial was his relationship with Opalka, who met Jackson when he was a teenager through the Capital Region Sponsor-A-Scholar program. Opalka had continued to support Jackson, financially and personally.

“I’ve given them a couple thousand dollars a month for a few years now just to support Bluelight,” Opalka told the Times Union.

Opalka said he had never questioned where the money was going or how it was being spent.

Since returning to the Capital Region, Jackson immersed himself in county agencies and charitable foundations, building relationships that allowed him to tap into resources the center might not have otherwise had when it came time to raise funds for a grocery store.

Albany County, the CapCom credit union and Key Bank loaned the grocery project a total of $500,000. A number of foundations and nonprofits gave financial support or promised in-kind donations to make the store a reality.

The funding Jackson pulled together from benefactors, nonprofits, private businesses and Albany County allowed him to do something that had been discussed for years but never done: the creation of a grocery store aimed solely at providing fresh food to South End residents.

After the site purchase in December 2021, the former McDonald’s needed extensive renovations to transform it from a boarded-up fast-food restaurant into a functioning grocery store.

At the time, Jackson said the plan was to lease the site to an established grocer or bring in the Food Bank of Northeastern NY and Capital Roots to help run the business. But those plans fell through, leaving Jackson to operate the store.

For the first year after the purchase, its mortgage was paid on time as the store slowly took shape. It finally opened Dec. 27, 2022, drawing praise from city and county officials.

Jackson hired staff, and his wife worked as the general manager. He was often at the counter, cashing out customers’ purchases. Jackson said neither he nor his wife ever took a paycheck from the store. He refused to sell tobacco products, alcohol or lottery tickets — items that are profit drivers at many grocery stores. He cast it as a moral imperative to provide residents with healthy products, noting there were plenty of other locations in the city that sold those wares.

In early 2023, the store began falling behind on its mortgage payments. Jackson responded to lenders’ entreaties by saying that any revenue would first go toward providing food for residents. He tried to convince the banks and Albany County to convert their loans into grants.

At one point, the nonprofit Business For Good spoke to Jackson and Jackson-Chalmers, the Cultural Center president, about having the Saratoga Springs-based organization step in and assist but were told the help wasn’t needed. 

In addition to a basic failure to generate sufficient revenue, other problems with the store — including a leaky roof and problematic plumbing — continued to sap its meager resources. The store shut down for six weeks over the summer after a fire extinguisher accidentally discharged.

It reopened in August, but a default notice from the three lenders went out at the end of the month. Jackson publicly insisted the store wasn’t closing. He hoped to use a $1.5 million federal grant that Bluelight Development had applied for — but had not yet received — from U.S. Rep. Paul Tonko’s office as a solution to the store’s financial woes.

Tonko’s office quickly squashed that idea, noting that the grant was supposed to be for new construction and was part of Congress’ 2024 budget that had not (and has not) been passed.

Jackson “just never really was able to build a coalition and surround himself with the people that he needed to make things work,” Opalka said.

Things were no better on the other side of Madison and South Pearl: The Cultural Center had lost its nonprofit status because Jackson and the board failed to file required tax paperwork with the IRS. It had no money and was no longer putting on any programming. (The last event the center hosted and promoted was a drag brunch in August.) Jackson-Chalmers declined to discuss why the Cultural Center had not filed its IRS paperwork.

In September, the Cultural Center’s board voted to dissolve the organization, despite Jackson’s opposition.

Jackson blamed the board for the center’s collapse, saying they feared the consequences of the grocery store’s mortgage debt and left him “holding the bag.” Several former board members did not return calls for comment.

It’s not clear what might happen next to the grocery store property.

Touhey said that rather than going through a traditional foreclosure, the most likely scenario involves the lenders and the Cultural Center agreeing to transfer the deed in exchange for erasing the mortgage debt.

It is not clear to whom the deed would be transferred, and several factors could complicate the property’s future ownership.

The first is that the Cultural Center’s board and Jackson did not secure a property tax exemption for the grocery store. According to Albany County tax records, there is already $36,077 in property taxes and interest due. And at least one former contractor has filed a lien on the property.

Jackson asserts that he maintains control of the property and is in discussions with lenders about reopening.

“It’s all just business conversation,” he said. “Can’t reveal details, but it is in keeping with what I said previously. We’re going to fully satisfy the mortgages. And we’re just working out a way to do that.”

Regardless of the site’s future, Touhey and Opalka said they still want to see a grocery store in the South End, whether at the Pearl Street location or elsewhere. Albany County recently put out a request for development firms to offer ideas on how they might redevelop the county office complex a few blocks south on South Pearl Street. The site has long been suggested as the potential home for a grocery store.

“I’m hoping that after the dust settles, we can get a group together and someone to actually take a leadership position who knows how to run that business and then turn it into the silk purse it should be,” Opalka said.

*A previous version of this story incorrectly stated the role Business for Good offered to play with the South End Grocery store.