Governor sells property to owner of adult video stores

The man who bought a failed sporting goods store this week from Gov. Nathan Deal owns a chain of adult video and novelty stores but says he plans to open a pawnshop in Habersham County.

Steve A. Diamond of Santa Maria, Calif., is the owner of Diamond Video World, also known as Diamond Adult World, which has four locations in California selling sex toys, DVDS, lingerie, oils and lubricants, according to its website.

Diamond on Monday signed documents to pay $750,000 for the site of the former sporting goods store, which Deal's daughter ran. Deal is financing the transaction himself, which means the governor could be responsible for outstanding debt if Diamond's business fails.

Deal's accountant, Jimmy Allen, said he spoke with Diamond on Friday after reporters asked him about the man’s business background. He was assured that Diamond plans to open a pawnshop on the property, not an adult video store. Deal did not know Diamond was involved in that kind of business, Allen said.

"All I can tell you is his principal business is the pawnshop business," Allen told The Atlanta Journal-Constitution.

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The governor's office referred questions to Allen.

Allen said he asked Diamond specifically whether he planned to open an adult business on the property in Northeast Georgia and was told "absolutely not."

Efforts to reach Diamond were unsuccessful. A woman who answered the phone at Diamond Video World said he was out of town this week.

Allen said that on his bank documents Diamond said he intends to open a "large item" pawnshop, where people could sell boats, cars, trucks and guns.

"His son-in-law and daughter will be running the pawn operation," Allen said, adding that Diamond also owns several pawnshops in California.

The Northeast Georgian newspaper of Cornelia reported Friday that Diamond’s son-in-law, Robert Cartee, is a retired film producer.

According to the Internet Movie Database website, “Rob” Cartee is the producer of a documentary about the horrors of pre-war Iraq as well as such titles as “From Lust Till Dawn,” “Porn-star Party” and “Motel 69.”

Efforts to reach Cartee were unsuccessful.

If Diamond fails to meet the terms of the sale, Deal would be responsible for any remaining unpaid debt.

But Allen said he considers chances of that “pretty slim.”

The governor's accountant described Diamond as a man of substantial means who would lose his $150,000 down payment and monthly payments of about $4,500 if he failed to complete the purchase.

If that happened, Allen said Deal could potentially take action against Diamond, and the governor retains the ability to sell the building to another party.

The sale of the property is important to Deal as the governor continues to climb out of debt. Allen said the profit from the sale will lower Deal's overall debt to about $600,000. In 2009-2010, Deal was $2.4 million in debt, thanks in large part to the loan he guaranteed for his daughter and son-in-law to open the sporting goods store, called Wilder Outdoors.

The store failed in 2009, costing Deal an additional $2 million in direct investment losses. When Deal's daughter and son-in-law filed for bankruptcy, the outstanding debt transferred to Deal.

The governor's private residence in Hall County is also for sale for just under $1 million, and Allen said Deal and his wife, Sandra, have about $800,000 in equity in the home, more than enough to wipe out the remaining debt.

The news of the sale of the Wilder Outdoors property brought Deal relief. But then when Diamond’s business background came to light, it prompted some ribbing about the conservative Republican governor on the political website Peach Pundit.

But Habersham County neighbors and potential competitors didn't seem concerned.

Randy Herrin, co-owner of Forest Lane Pawn Shop, outside nearby Cornelia, said a little competition wouldn’t hurt his business, which he described as an “old-fashioned pawnshop.”

The owner of the new business, a pilot, has already approached Jim Tatum, at Habersham Aviation, about renting a hangar at the county airport. Tatum said he doesn’t have any open space, and the freeze on funds at the Federal Aviation Administration has put his plans to expand on hold.

Wilder Outdoors has been empty for several years, but other than overgrown grass, the building looks pretty good, Tatum said. “I think somebody stole all the air conditioners, but they’re not too hard to replace.”

Tatum said there have been several pawnshops in the county, and he doubts a new one would raise any eyebrows. On the other hand, local residents wouldn’t like it if the new owner decided to open another adult video store, Tatum said.

“I’d probably be more lenient about it than some of the other people in the county,” he said, “but this is pretty much the Bible Belt up here.”

No owners have approached the city for permitting or business licenses, Baldwin Mayor Jerry Neace said.

“If it’s a legitimate business, we’re glad to see anything to help the city with getting economic development started,” he said.

On the other hand, Baldwin residents remember that about 10 years ago a Florida businessman bought a property in nearby Lavonia to open a biscuit restaurant. Instead, he put in a topless bar.

“It’s a little scary,” one Baldwin resident said.

Staff writer Scott Trubey contributed to this article.

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