The second rendition of the City of Aiken’s $100 million plus downtown demolition and redevelopment endeavor known as Project Pascalis might be ending soon. If so, the future of seven properties collectively known as the Pascalis Properties will be subjected to intense public scrutiny.

A review of the limited information pertaining to the bidding and proposal process that resulted in Project Pascalis Part II provides some insights into the possible future of the Pascalis Properties. Specifically, the best available information indicates that: 

• Hotel Aiken/Holley House-only redevelopment option remains a strong option, and a successful hotel or residential complex can emerge in the absence of a garage and conference center; 
• Two developers interested in a hotel-only option were rejected primarily on the basis of their limited interest, in spite of the AMDC considering them “experienced,” “successful,” and “impressive;” and
• The City of Aiken’s expectations of recovering its $9.6 investment in commercial downtown properties is unrealistic. 

The Short Life of the Project Pascalis, Part I

When the Aiken Municipal Development Commission (AMDC) announced the existence of Project Pascalis  on March 17, 2021,  three firms were involved with an effort to consolidate downtown Aiken properties in the pursuit of a large-scale demolition and redevelopment effort: 

• Aiken Alley Holdings, LLC; represented by local investor and attorney Ray Massey; 
• GAC, LLC; the Pascalis project developer represented by local investor and developer Weldon Wyatt; 
• WTC Investments, LLC; a Wyatt family firm that served as the property procurement arm of GAC, LLC. 

As reported in part three of Project Pascalis Includes the Alley, one of the property negotiators for WTC Investments was Ray Massey. The properties controlled by his Aiken Alley Holdings investor group were fully integrated into the project design. 

During the first week of May, 2021, the first Project Pascalis development effort collapsed when Weldon Wyatt’s GAC, LLC abruptly withdrew from the project.  To salvage the endeavor, the AMDC pursued an option in its Cost Sharing Agreement with GAC to take control of properties under contract to GAC via WTC Investments.  The Aiken Chamber of Commerce “advanced” the AMDC $135,000 to hold Wyatt’s $9.5 million of purchase and sale agreements with the Shah and Anderson families under an “assignment” status.  

Pascalis Project Part II Begins

After the first of the property assignments was completed on May 14th, the AMDC pursued a private Request for Proposals (RFP) with select developers, a process that is alleged to have violated South Carolina Community Development law. (1)

Between May 19-21, 2021, the Aiken Municipal Development Commission secretly sent out a request for proposals to select developers without any public advertisement  of the RFP as required by SC Community Development law. The deadline for proposals was set for June 7, 2021.  The following three items — Pascalis summary ProjectPascalis_Option2a_05.03.21 (002), and Pascalis footprint — were sent, as follows, to developers the AMDC chose as candidates:

Pascalis summary, a two-page background document with “preliminary details” that defined the project as involving the following elements: 

1. Limited service hotel offering 100 +/- rooms (Privately constructed, owned, operated )
2. Conference Center of not less than 25,000 square feet with full banquet facilities to include commercial kitchen (to be owned and operated by the AMDC)
3. Parking garage servicing both the hotel and conference center with no fewer than 400 spaces (to be owned by the AMDC)
4.   If the site allows and it proves economically feasible, 60 +/- residential units wrapping the parking structure. These may be rental or owner-occupies units. (Privately funded, owned, operated)

Among the preliminary details was an offer of a half-acre of Newberry Street for development, and a description of Pascalis properties as being under AMDC control: 

“ The Aiken Municipal Development Commission holds contracts to purchase roughly 1.6 acres in the downtown and anticipates realigning the Newberry Street frontage in the project area to make an additional .5 acres available for the redevelopment.” 

ProjectPascalis_Option2a_05.03.21 (002), a scaled back conceptual plan developed the first week of May, 2021 by GAC/AMDC contractor Boudreaux Group as Wyatt was threatening to exit to project. 

Whereas the original Option 2 involved four to five-story residential buildings flanking The Alley on properties controlled by, or being pursued by, Aiken Alley Holdings, LLC, Option 2A involved only properties under control by the AMDC. Figure 1 illustrates the difference between the two projects. 

Pascalis footprint, a one-page map on Aiken County’s public.net land records database, produced on May 17th, 2021. 

Choosing a Developer

On June 8, 2021, the AMDC met in closed-door, Executive Session for one hour to discuss the proposals. A June 10th memo from Tim O’Briant cautioning about a lobbying effort by one developer provides some insight to the process: 

“In all cases, please refer any questions about the status of the selection or the process to me. While I am pursuing discussions with the single selected developer, I will not be informing other firms of that and until late next week at the earliest. I know I don’t need to remind you that any discussion of what occurred in executive session could be very damaging to the process.” 

A review of seven proposals from the May-June, 2021 solicitation effort was summarized by AMDC officials in an undated (see footnote 1) table that was not released (in response to a FOIA request) until March, 2022; and remains partially redacted. Titled “Pascalis offers comparison_Redacted,” the table (Figure 2) contains brief assessments of seven proposals with the following ranked elements: 

• Completeness of the proposal
• Financial contribution and Land Purchase price
• Experience with similar projects
• Local Ties
• Enforceability of the offer

1. The Raines Group Proposal? 

The highest ranked proposal was third from the top; it was described as “exceptionally complete” and comments on its “local ties” are the most extensive.

The proposal is most likely to have originated from the Raines Group of Florence, SC, based on the following facts: 

a. Raines Group was eventually named as the lead developer within the Pascalis development firm RPM Development Partners, which stands for Raines, (Lat) Purser, and (Ray) Massey—who is also the firm’s agent. RPM Development Partners registered for business in South Carolina on October 27, 2021—one month after Massey helped organize an AMDC trip to Florence, SC for a meeting with Raines and a tour of their properties.  Massey and local investors were also credited by the AMDC for having assembled the Raines-led team.

b. The bidder, described as having “nationwide experience,” offered: “to purchase the AMDC properties in November, 2021 for $9.5 million in exchange for an agreement that AMDC would purchase the property back if no project proceeds due to a lack of action by City/AMDC after 12 months of due diligence.” 

Ray Massey had full knowledge of the AMDC/Chamber of Commerce’s purchase price, as he had helped negotiate the original purchase and sale agreements and also was the agent for WTC Investments, LLC when it transferred control of downtown property purchase and sale agreements to the Aiken Chamber of Commerce. No other firm came close to offering the exact purchase price for the seven properties in question. 

c.  The 12-month deadline in the proposal is similar to a deadline in the reported Purchase and Sale Agreement with RPM Development Partners.

While the AMDC did purchase the Pascalis properties on November 9, 2021, a Master Development Agreement (MDA) was being negotiated in October, 2021. (2) It is likely that negotiations to sell the properties to RPM fell through, leading to a December 3, 2021 AMDC announcement of a Purchase and Sale agreement between the AMDC and RPM Development Partners. In the announcement, the AMDC wrote: 

“The initial Purchase and Sale Agreement (PSA) announced today gives the AMDC and RPM until no later than Summer 2022 to come to terms on a mutually beneficial Master Development Agreement.”

2. The Hotel Only Developer

One unknown developer offered only to purchase the hotel at a “deeply discounted price of $1.0 million,” and presented no interest in the AMDC-required apartments, parking garage, and conference center. Since the bidder was described as a “successful hotel developer with a good portion of successful projects,” it is evident that a conference center and garage are unnecessary elements for a new or renovated Hotel Aiken. 

The $1.0 million offer closely matches Aiken County’s 2021 land appraisal for the Hotel Aiken, supporting the conclusion in How Much Project Pascalis Can Aiken Taxpayers Stand? that the value of the property purchased by the AMDC is equal to the land value minus the demolition value—at least perhaps in the mind of one successful hotel developer. 

This developer received a score of only 47%. 

3. The Hotel Renovation to Apartments Developer. 

A third developer proposed to “pay market value for current hotel Aiken site only,” and a “renovation and conversion to apartments.” This earned them a 0 out of 3 score in the “completeness of proposal” category. 

This developer was described as having: 

“an impressive resume of redevelopment projects, adaptive reuse, (redacted words) (but no) direct experience with large scale new construction of a similar project.” 

This developer received a score of only 40%, despite rating 3 of 3 in the “local ties” department. The developer may involve John Gumpert of Camden Partners, who is spearheading efforts to repurpose the old Aiken County Hospital; and the old Vaucluse and Warrenville Mills in Aiken County’s Horse Creek Valley. 

Although Gumpert has denied any involvement in the Hotel Aiken, this proposal indicates at least one unidentified developer believed the Hotel Aiken was suitable for renovation. Because the proposal remains sealed and publicly unavailable, any possible preference for historic preservation tax credit funding is unknown. 

Conclusions

The AMDC’s ill-advised, and probably illegal, May 2021, Request for Proposals does provide insights into the possible future of the Pascalis properties.  Unsealing all the proposals, which have been blocked from public view through the excessive and possibly illegal use of SC Freedom of Information Act exemptions, can only add value to the upcoming dialogue and debate. (3)

First, two developers with interest only in the Hotel Aiken property were rejected largely due to that limited interest.  At least two highly experienced, successful developers offered Hotel Aiken-only proposals — an indication that industry experts believe apartments or a hotel could be built on the site of the Hotel Aiken in the absence a conference center, apartments, or a parking garage. 

Second, the AMDC solicitation process was strongly biased towards demolition and reconstruction.  As a result, no consideration was given to the prospect of funding through historic preservation tax credits. 

Third, only one developer expressed interest in paying $9.6 million for the Pascalis properties. In the end, no final, hard offer occurred and the AMDC and City of Aiken were left as downtown commercial property owners. The likelihood of the city recovering its costs to date appears to be exceedingly low. 

________________

References and Footnotes: 

(1) This entire process occurred behind closed doors, in spite of, or perhaps because of, the fact the project was announced with great fanfare on March 17, 2021. No further information on this solicitation process has been released by the AMDC, which has claimed since May of this year that the solicitation process remains open. Aiken City Manager Stuart Bedenbaugh has denied the release any correspondence that accompanied the solicitation, or any other information related to the original solicitation. 

The only additional information that has been released is a December 13, 2021 Request for Proposals that was publicly advertised in the Aiken Standard on December 13, 2021; ten days after the AMDC announced the selection of its preferred developer for Project Pascalis. The ad ran again on December 20, 2021, and the deadline date for proposals was December 22, 2021. 

Allegations of violations of South Carolina Community Development Law can be read on Pages 44-46 in Blake et al vs City of Aiken et al:

https://aikenchronicles.com/wp-content/uploads/2022/07/20220705_Filed_Summons_and_Complaint.pdf

(2) The October, 2021 invoice from Project Pascalis project manager Capstone Services indicates negotiations on a Master Development Agreement with the selected developer.

(3) The redactions in the review table are now six months old. Several of the candidates received very low scores and were rejected by the AMDC. There is little to no justification for applying the SC FOIA exemptions #5 and #9, as City of Aiken City Manager and Record Custodian Stuart Bedenbaugh has maintained.

SC FOIA records exemption #5: “Documents of and documents incidental to proposed contractual arrangements and documents of and documents incidental to proposed sales or purchases of property”; and

SC FOIA records examption #9: “Memoranda, correspondence, documents, and working papers relative to efforts or activities of a public body and of a person or entity employed by or authorized to act for or on behalf of a public body to attract business or industry to invest within South Carolina;”

This process was conducted using public funds, and the records created during the process should be publicly available to allow for a fully informed public debate.

As reported in The AECOM Plan, Andy Cajka is President of Southern Hospitality Group, which was recruited during the collapse of Project Pascalis, Part I.:

The first Pascalis project collapsed in early May when Weldon Wyatt withdrew from the deal. As part of the negotiations to salvage the deal, Mayor Osbon met with Weldon Wyatt and Greenville based developer Andy Cajka, President of Greenville, SC based Southern Hospitality Group. A memorandum from Tim O’Briant to AMDC members Jameson, Chris Verenes, and Chairman Keith Wood described the meeting: 

“The Mayor and Weldon met with Andy on Monday, I was out of town, apparently shg hotels will possibly deliver a LOI (letter of intent) regarding the hotel this week. The mayor agreed the meeting went well and Andy was engaged in making a deal that would be privately funded based on the public dollars and incentives driving the project. Mayor indicates he deferred question about Friday negotiations and City’s position on deal points citing my absence and his lack of information on the subject.”