“No public official, public member, or public employee may make, participate in making, or in any way attempt to use his office, membership, or employment to influence a governmental decision in which he, a family member, an individual with whom he is associated, or a business with which he is associated has an economic interest.” (SC 8-13-700(B))
Towards the end of their half hour meeting on October 11, 2021, Aiken City Council members enjoyed a lighthearted moment at the expense of this fundamental anti-corruption statute.
Mayor Osbon: Item number one is a request from the Kiwanis Club to hang banners in the downtown to promote Aiken’s Bacon and Brews event. I don’t know that we need any comment from staff…so at this time I would entertain a motion.”
Councilman Ed Girardeau: Question, I’m a member of Kiwanis, and should I recuse myself?
City Attorney Gary Smith: Are you gonna profit from the banners being raised up? I guess it wouldn’t hurt to recuse just to make sure you’re not having any impropriety.”
“Ed Girardeau: “Ok, yeah, recuse me.”
The exchange was followed by a round of laughter from Council members, as seen in this video.
Any casual observer was unaware this was an inside joke. Earlier in the meeting, City Attorney Gary Smith had recused himself, in writing, from an Executive Session legal discussion regarding property whose owners had employed a partner in his law firm. The recusal was not noted in the meeting minutes (1), and it is unknown who provided the legal advice in Smith’s absence. It is the only known written recusal by Smith in 2021 or 2022.
This recusal was obtained by Aiken resident Kelly Cornelius via a Freedom of Information Act Request.
There were no such insider jokes or chuckling during Council’s recent two-hour plus meeting on November 14, 2022. The meeting featured a serious discussion about conflicts of interest rules in the Equine Committee’s bylaws, and City Attorney Gary Smith formally recusing himself twice as many times as he had between January 1, 2021 and October 1, 2022.
Smith recused himself for the second reading of the repeal of the Newberry Street privatization ordinance, and again during discussion and voting on a resolution regarding a property negotiation involving his business partner Mary Guynn. As reported in The Pascalis Attorneys, Smith has been more notable for a lack of recusals in the past two years, which have been cited in three lawsuits alleging violations of South Carolina ethics laws.
The absence of recusals by the City Attorney also reflected poorly on City Council. No members recognized a conflict of interest during multiple potential and probable conflict of interest circumstances; such as when Smith was present and acting in his official capacity during discussions and/or votes to:
Pass a $10 million municipal bond for the Aiken Municipal Development Commission (AMDC) to purchase properties associated with the secretive Project Pascalis demolition and redevelopment effort. Smith’s law partner Ray Massey was deeply involved in the project as an investor, and signed a contract to purchase the properties at half the price paid for by the AMDC a month prior. The contract was eventually terminated two months after a major lawsuit was filed seeking an injunction against the project.
Sell city-owned property bequested by the estate of Mattie C. Hall in the early 1970’s to his law firm associate Scott Patterson for the deeply discounted price of $150,000, as reported in The City of Aiken’s Mattie C. Hall Property.
Propose the sale of city-owned downtown property to another Ray Massey firm at a deeply discounted price.
The more direct discussion on ethics occurred shortly after Smith’s second recusal, during approval of the Equine Committee’s bylaws. Councilwoman Kay Brohl raised a question regarding the following clause:
“To avoid a conflict of interest, which occurs when an individual uses his or her committee position for personal economic benefit, a member may recuse themselves from the topic discussion and vote. In the case of recusal, the member does not count for establishing a quorum. All members of the Committee are considered to be ‘public members’ under state law, and therefore subject to the Ethics Act and other applicable conduct requirements established in the Code of Laws of South Carolina.”
At issue was whether the word “subsequent” should be inserted before the word “vote,” but the larger issue was addressed by Aiken resident and attorney Lucy Knowles, who stated:
“My suggestion is while you’re changing it you should change ‘may” to ‘must’. That is because that’s a requirement of state law that they have to recuse.”
The Equine Committee may not seem like a potential hotbed for conflict of interests, but local equestrian non-profits routinely receive funding from city accomodations tax revenues to help market their events. The city also contributed a million dollars in 2020 from hospitality and capital projects sales tax revenues to the Aiken Steeplechase Foundation for the purchase of its new venue.
The entire exchange solidified a subsequent contention, made by Aiken resident Luis Rinaldini, that the city needs to change the current relationship with its attorneys. Rinaldini, who helped found the Do It Right! Alliance and is a plaintiff in the Blake et al vs City of Aiken et al lawsuit, made the case against “continuing with the same cast of characters” in the wake of the failure of Project Pascalis:
“The City of Aiken has just witnessed the cancellation of the 100 million dollar Pascalis project. It’s undoubtedly maybe the largest in its history….yet here were are two months after cancellation and Council hasn’t said anything. I just don’t think that’s smart or a good idea. I think the public wants to know what council feels about this process, and unfortunately your silence isn’t helpful.
”You must see that saying nothing and pursuing business as usual isn’t going to work and it’s just going to make you look arrogant and tone deaf. Citizens want to reasonable change from Council. They want transparency, good governance and fiscal responsibility.
“And there are three other things citizens are looking for. They want a change in the composition and functioning of the Design Review Board, a change in the composition and functioning of the AMDC if it is not going to be abolished, and a change in the city’s relationship with its attorneys.”
On September 1, 2020 the City of Aiken’s Design Review Board (DRB) held a discussion of a “Demolition by Neglect” request for the Hotel Aiken. Further discussion was scheduled but did not materialize at the Board’s subsequent meeting.
On Thursday, November, 17, 2022, more than one year after a city commission assumed ownership of the building, the Board will conduct a Special Workshop to hear “receive information on claims of demolition by neglect concerning 235 Richland Avenue W (Hotel Aiken), 106 Laurens Street SW, and 205 Richland Avenue W (CC Johnson Pharmacy).” The 67-page workshop agenda contains some documentation of the existing condition of buildings officially owned by the City of Aiken’s Municipal Development Commission. (AMDC)—which is entirely funded and permitted to exist by the City of Aiken—as well as the details of the “Demolition by Neglect” rule (1) in the city’s zoning ordinance.
The meeting is being held at the request of Aiken resident and architect Martin Buckley and the Historic Aiken Foundation. Buckley first requested that “Demolition by Neglect” be placed on a meeting agenda in a July 27, 2022, hand-delivered letter to Board chairman McDonald Law, in which he wrote:
“The Hotel Aiken is a significant historical asset to the City of Aiken. It is one of only two early, three story structures in the downtown area. The hotel is cited in Henry Worcester Smith’s Life and Sport in Aiken and in Wilkin Byrd’s A Splendid Time and numerous other publications and periodicals.
”I would like you, and the Board, to examine and consider the Hotel Aiken building and property with the object of determining if it meets the requirements for Demolition by Neglect (per section 5.1.6 of the Zoning Ordinance of the City of Aiken). “
The letter was not answered until August 18th, when DRB attorney James Holley denied the request on the basis that “the DRB approved the demolition of the Hotel Aiken at its meeting on March 1, 2022, subject to certain conditions, and issued a Certificate of Appropriateness to that effect. The decision has become final under applicable law.”
Buckley responded in a September 6th letter to Holley by asking “How can a Certificate of Appropriateness be both final and conditional?” He went on to repeat concerns with the condition of the hotel and asked why the Beckman Building (aka the “Palmetto Block”) at 106 Laurens Street, SW, was approved for demolition when it is in good condition and the city has issued business licenses for three shops contained in it.
Holley did not respond again until September 26, 2022, twelve days after the demolition applicant RPM Development Partners, LLC (RPM) terminated its contract to purchase the hotel and six other properties from the AMDC.
In spite of this fact, Holley wrote in a two paragraph letter that “some of the issues you mention in your recent letter may be resolved by the court in the pending litigation which concerns, in part, the DRB’s consideration of the application for the demolition of the property referenced in your letters.” (If Holley was aware of the contract termination, he failed to acknowledge it, and has refused to answer questions pertaining to that knowledge posed in a November 4, 2022 email.(2))
On September 30th, the day after the AMDC also voted to render its contract with RPM “null and void,” Buckley made a second request by email to McDonald Law and the Board for a demolition by neglect discussion, writing:
”Now that Project Pascalis is officially ended, the certificate of appropriateness for the demolition of the hotel is no longer valid.”
The letter was ignored. DRB Chairman McDonald Law did not respond to a subsequent October 18th letter from Buckley until October 31st, by which time the Historic Aiken Foundation—which is one of nine plaintiffs in the cited litigation—had become even more involved with the request. In his email, Law wrote that a special work session would be considered in a few weeks, and that since the Pascalis developer had withdrawn, “It’s possible we’ll take a vote in the coming months to make it official.”
At the DRB’s November 1, 2022, meeting that was attended by only four members, attorney Holley refused to allow public comment on the issue, stating that the property’s “owner,” should be present. Perhaps because his current contract (3) with the city requires him to assist both the independent, “quasi-judicial” DRB and the city, Holley has pursued the unusual path of arguing on behalf of the owner (the City and the AMDC) while also denying requests for a demolition by neglect discussion by the Board he represent and insists is independent.
A chimney on the CC Johnson Drug Store, October 9, 2022 remains in the same condition as on November 9, 2021 ( Photo by Don Moniak)
The Pascalis Properties’ Minimal Maintenance Landlord
On November 9, 2021 the Aiken Municipal Development Commission (AMDC) used funds provided by a City of Aiken municipal bond issuance to purchase seven downtown properties for a collective $9.6 million: the Beckman Building at 106 Laurens St, SW, the Hotel Aiken, Holley House Motel, Taj Aiken Restaurant, McGhee Building, Warneke’s Cleaners, and Newberry Hall. The AMDC proposed demolition and redevelopment of its newly acquired properties and coined its efforts “Project Pascalis.” The wisdom of that purchase has been questioned ever since, including in “How Much Project Pascalis Can Aiken Citizens Stand? ”
Following the “As-Is” purchase, the AMDC did not act to further secure, stabilize, or otherwise maintain its new properties until mid-March, 2022; and not until after the March 1, 2022 DRB decision to conditionally approve the demolition of the vacant Hotel Aiken and Berkman Building—which was and still is occupied by three businesses: Beyond Bijou, Vampire Penguin, and Ginger Bee.
By all indications, property maintenance to comply with city codes was deferred to help justify the demolition decision. An accumulation of debris behind the buildings, a product of a failed renovation effort, remained in place until August, 2022; the same month the commission finally removed the same tree growing out of a Beckman Building window that it had exploited as an example of “blight” at the time of the purchase.
As reported in The City’s Management of the Hotel Aiken, no intrusion alarm system was installed until after a break-in, and the Historic Aiken Foundation raised concerns about the lack of hotel security and maintenance. No effort to address known leaks in the roof were undertaken until August, 2022; and no reported efforts have been made to stop roof leaks in the historic CC Johnson Drug Store in the McGhee Building or in the Beckman Building. Throughout this time the AMDC spent most of its $12,000 to $15,000 rental revenues on Project Pascalis consultants and reports, and not on property maintenance.
There has been no indication that the Design Review Board, whose Chairman has shown undue bias towards demolition of the Pascalis properties, has any concern for the current condition of the properties. The Board has the opportunity on November 17th to rectify that perception.
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Footnotes
(1) Demolition by Neglect. City ordinance 5.2.4(B) reads:
DemolitionbyNeglect. The following provisions shall take effect six months after the effective date of this Ordinance.
Prevention of DemolitionbyNeglect of Exterior. No owner or person with an interest in real property which is designated an Historic Site (Ord. 04142003A) in any part of the City or any property in an Historic District, whether that property is occupied or not, shall permit the structure or property to fall into a serious state of disrepair or to remain in a serious state of disrepair so as to result in the deterioration of any exterior architectural feature which would, in the judgment of the Board, produce a detrimental effect upon the character of the structure or property, or, if the structure or property is in an Historic District, upon the district. Examples of such deterioration include:
a. deterioration of exterior walls or other vertical supports;
b. deterioration of roofs or other horizontal members;
c. deterioration of exterior chimneys;
d. deterioration or crumbling of exterior stucco or mortar;
e. ineffective waterproofing of exterior walls, roofs or foundations, including broken windows or doors;
f. deterioration of any exterior feature so as to create a hazardous condition which could make demolition necessary for the public safety; or
g. deterioration or removal of any unique exterior architectural feature which would detract from the original architectural style.
Prevention of DemolitionbyNeglect of Interior. No owner or person with an interest in real property which is designated an Historic Site (Ord. 04142003A) in any part of the City, or any property in an Historic District, whether that property is occupied or not, shall permit the interior portions of such structure or property to fall into a serious state of disrepair which, in the judgment of the Board, produces a detrimental effect upon the structural integrity of such structure or property which could make demolition necessary for the public safety.
(2) The following email sent on November 4, 2022 to Attorney Jim Holley and Chairman Law has not been answered:
To: James Holley, City of Aiken Design Review Board Counsel Mr. Holly,
This letter is written to try to determine when yourself, DRB attorney Andrew Lindemann, and the Design Review Board (DRB or Board) became aware that Project Pascalis developer RPM Development Partners, LLC had withdrawn from the project, and by doing so rendered moot “CERD22-0001023, “Approval to Demolish the former Hotel Aiken and associated shops and structures.”
1. On July 27, 2022, Aiken resident Martin Buckley hand delivered a letter to DRB Chairman McDonald Law requesting the DRB:
“examine and consider the Hotel Aiken building and property with the object of determining if it meets the requirements for Demolition by Neglect) per section 5.1.6B of the Zoning Ordinance of the City of Aiken.”
2. On August 18, 2022, you responded, in part, on behalf of Mr. Law:
“The DRB approved the demolition of the Hotel Aiken at its meeting on March 1, 2022, subject to certain conditions, and issued a Certificate of Appropriateness to that effect. That decision has become final under applicable law.”
3. The “certain conditions” unmentioned in your letter but specified by the DRB on March 1, 2022 for Application #CERD22-0001023: “Approval to Demolish the former Hotel Aiken and associated shops and structures,” were: • No demolition take place without fully approved plans/elevations by the DRB to include adequate public input; and • If the approved plans do not materialize, or if the current owners (AMDC) do not come to terms with the current Applicants to transfer ownership of the properties, this Certificate of Appropriateness for demolition is moot and will not transfer to another Applicant.”
4. On September 6, 2022 Mr Buckley responded to your letter, asking, in part:
“How can a Certificate of Appropriateness (COA) be both final and conditional? The two conditions have not been met and there has been no observable progress in meeting those conditions in the last two months.”
He also raised the issue of the “Palmetto Block,” also known as the Berkman Building, which was inaccurately referred to as “Associated Shops” in the application:
“Why did the AMDC and City staff fail to disclose to the Design Review Board material facts about the Palmetto Block on Laurens Street that was part of the application for demolition and was approved for demolition?” The Palmetto Block is older than the hotel and in good condition. I am sure the City would not issue business licenses for the shops if the building was structurally unsound. In fact the structural engineering report applies only to the hotel. The Palmetto Block is not eligible or appropriate for demolition under the City’s Zoning Ordinance and the Old Aiken Overlay Guidelines. All of these facts would be material to the decision to include the Palmetto Block in the COA and were omitted either intentionally or negligently from the application.”
5. On September 14, 2022, legal counsel for the “current Applicants,” RPM Development Partners, LLC, mailed a letter (attached) to the Executive Director (Tim O’Briant) of the current owner, the AMDC, that terminated the Purchase and Sale agreement between the AMDC and RPM:
“As you know, the Due Diligence Period for my client the Developer expires on September 15, 2022 pursuant to the Second Amendment to Purchase and Sale Agreement dated June 20, 2022. To date, the Commission has been unable to make the necessary progress on its performance under the Agreement, and we understand that the Commission is not able to proceed, for reasons other than any failure by Developer, including that the Commission intends to materially change the substantive components of the proposed Redevelopment Project as originally contemplated in the Agreement. As a result, most of the various Development Agreements contemplated under the Agreement have not been finalized or obtained. At this point it would not be possible for the Commission to complete the Closing as contemplated under the Agreement within the required time under the Agreement. For these reasons, Developer is forced to exercise its rights to terminate the Agreement and to require reimbursement of Developer’s costs and expenses by the Commission.”
AMDC attorney Gary Pope, Jr. acknowledged this letter and reality a week later. (email attached).
6. On September 26, 2022, you wrote to Martin Buckley, in response to his letter of September 6, 2022:
“I have no further comments in addition to those in my letter of August 18.
In addition, some of the issues you mention in your recent letter may be resolved by the court in the pending litigation which concerns, in part, the DRB’s consideration of the application for the demolition of the property referenced in your letters.”
Since the letter did not address the newly raised issues regarding the Palmetto Block, are these issues being ignored, or did you fail to read the September 6th letter?
Other questions that arise from this exchange and associated events include: a. When did the AMDC (owner) or RPM (applicant) make the DRB’s legal counsel aware of the termination of their agreement? Since your contract with the City of Aiken (attached) includes “conferring with City management as needed; and providing related services,” shouldn’t you have been informed of the development on September 14th, as well as the lack of progress dating back to June 29th? After all, AMDC lawyer Gary Pope Jr did confer with you on May 9, 2022 regarding the Newberry Street privatization ordinance:
(from Pope-Flynn invoice to AMDC, May 2022).
b. When was the DRB made aware the agreement had been terminated, which in turn rendered the COA moot?
c. Why has the DRB failed to act to confirm the Certificate of Appropriateness moot, null, and /or void, more than one month after the AMDC confirmed (although without disclosing the September 14th letter) on September 29, 2022 that its contract with RPM was null and void?
d. The DRB and its counsel must be aware that AMDC Chair Keith Wood and Vice Chair Chris Verenes have accused AMDC “staff” of deceiving the commission. Yet the AMDC itself deceived Aiken citizens by withholding the contents of the September 14th letter. Did the AMDC and/or staff also deceive the DRB and its counsel, or did the DRB and/or its counsel participate in the deception? This sequence of events is detailed here: https://aikenchronicles.com/2022/10/15/portions-rescinded-but-no-cancellation/
e. There are three existing businesses, Ginger Bee, Vampire Penguin, and Beyond Bijou, currently operating in a building the DRB condemned to demolition with “certain conditions.” Does the DRB, as a body, only see the gutters, windows, fascia, and other exterior elements in its discussions of the old Aiken business district, and not the people who work and conduct business there?
f. Is the Design Review Board institutionally capable of addressing a large-scale effort such as Project Pascalis that is within its purview?
Since your letters cited in paragraphs 1-6 above referred to the Board and the “owners” of the Hotel Aiken (and other Project Pascalis properties), I have cc’ed Board members and the Aiken Municipal Development Commission (AMDC).
Please note that while the deed to these properties does list the AMDC, it is the City of Aiken that paid for the properties, and the AMDC is a part of, and fully funded (except for its rental revenue) by the City of Aiken. The AMDC might be the owner on paper, but the City of Aiken and its citizens own the properties.
Thank You, Donald Moniak Eureka Research, LLC PO Box 112 Vaucluse, SC 29850 803-617-9736
