By Alexis Aguirre
Ten years ago, pastor James Jacobs and his wife left everything behind to spread the word of God in Central Texas – more specifically in Kyle. Jacobs has been a pastor for 22 years, with the majority spent in Washington state.
But in the process of building his dream church in 2007, Jacobs and the church was swindled by a bad actor for roughly $2 million
Through trial and tribulation, Jacobs’ and his congregation have since opened a new church and are now looking beyond their trial by fire.
Jacobs’ connection to the area began when he started preaching at the Alkek Library at Texas State University in 2005. He then created plans to build a 21,000 square-foot church that could hold over 500 people.
“At the time, Kyle was in a growing area,” Jacobs said. “There wasn’t any large church in this area that was visible. That’s why we came. There was a need.”
Contracts were drawn out for the church in 2006 and a loan for $1.9 million was obtained from with Foundation Capital Resources. The money from the loan would be paid to contractor Richard A. Humphrey, who would ultimately never finish the project.
In 2009, the Hays Free Press reported that Humphrey, who was the CEO of Church Builders Inc., out of Ovilla, TX, had swindled two other churches, including the Kyle United Methodist Church, in similar fashions. Humphrey had earned construction deals, but abandoned the projects while escaping with those funds.
“He was referred to us by another friend from another church and we thought we could trust him,” Jacobs said. “He didn’t turn out to be any good.”
Once Jacobs realized that Humphrey had taken more money from the bank he contacted Humphrey only to be told that all the money was gone.
In an Oct. 7 letter to the editor, Jacobs wrote that the church was also the victim of a “predatory loan company,” which encouraged the church to borrow more money than necessary, but failed to check on the progress of construction while releasing funds to Humphrey.
By May 2007, the contractor was gone, all the money was spent, and only 50 percent of the building was finished.
In December 2008, Jacobs, who decided the church needed to be finished, opted to borrow more money to hire another contractor. By the end of the process, the entire loan from Foundation Capital had “ballooned to almost $2.7 million.”
“Foundation Capital just reconstructed the loan to make it bigger,” Jacobs said. “So we’re never going to get out of that hole.”
Jacobs then began the process to sue Humphrey in civil court. But before they could go to court, Humphrey died of natural causes.
The completed structure now stands at 400 Old Post Road in Kyle. Jacobs kept the church in Kyle before deciding to move due to high mortgage rates.
According to Jacobs, the property and the facility will be foreclosed upon. The total loss nears $3.3 million, which includes the $640,000 used to purchase the land.
Jacobs has since opened a new church now located at a permanent location in Buda. The building holds just over 240 people, less than half of what the original building was expected to hold. The church changed its name to a Place of Grace.
“The idea behind the name was that you name where you’re going rather than trying to remember where you’ve been,” Jacobs said. “We call it the Place of Grace, because it was by the grace of God that we found the place here. We named it after our future.”