$271,250 of “Indefinite” Local Annual Subsidies for Federal Contractor

by Don Moniak
March 28, 2023

According to a recently obtained “Savannah River Litigation Settlement Fund Request Form,” the City of Aiken’s estimated annual operating costs for the proposed Savannah River National Laboratory’s (SRNL) “Workforce Development” office complex in downtown Aiken is at least $271,250.00; or $2.71 million over the first ten years. This annual subsidy for the lab facility, which is expected to require allocations of hospitality tax revenues, was omitted by city officials during the announcement of the project and during subsequent public discussions. 

The request form contains the $20 million dollar request to South Carolina’s Executive Budget Office for “SRS/National Laboratory Off-Site Infrastructure.” The money was allocated to any public body in Aiken County by the General Assembly for the purpose of such a facility, but still requires formal project approval through the budget office and the legislative Joint Bond Review Committee (JBRC). 

Even though consultants and city council members have stated the decision is “not a done deal,” the funding request confirms the City’s intent to build a 45,000 square foot office complex for SRNL on a half-acre of property currently under the control of the nearly defunct Aiken Municipal Development Commission (AMDC).

According to SRNL director Dr. Vahid Majidi, the downtown lab office complex is intended to house unspecified computational work, nonproliferation (1) training programs, and human resources: 

“SRNL employees will perform some of our computational modeling and simulation. We’ll  have a team of employees working with the university to increase our engagement with faculty postdoctoral and graduate students interns and minority serving institution programs. Some of our employees will work on non-proliferation training programs while other will work on Workforce Development and HR functions moreover as a collaboration Hub.” (2)

As reported in There Must Be a Joke in There Somewhere, Dr. Majidi stressed that the downtown facility will not involve “chemical hoods or hazardous materials,” but did not elaborate on the depth of often-classified and secretive non-proliferation work that will occur at the facility. 

The Justification 

According to the “Project Description and Justification,” the downtown location was chosen “because of the walking distance proximity to cultural amenities, dining, retail stores, and lodging.”  The facility will be a “shared event/exhibition space and office space” where employees of SRNL’s contractor Battelle Savannah River Alliance (BSRA) will work on “critical projects for SRNL as part of the university consortium.” (3)

A justification for the facility not previously disclosed is “hosting and training non-U.S. citizens, which is currently difficult to do within the highly-secured areas at the Savannah River Site.”

This justification is contradicted by the SRNL lease at the the Advanced Research Center (ARC) off-site facility in Aiken County’s  422-acre Caroll H. Warner Savannah River Research Campus.  SRNL is also tasked by DOE with operating a second off-site facility, the 60,000 square foot Advanced Manufacturing Collaborative at USC-Aiken that is presently under construction and is expected to cost $50 million.

Costs 

The total $20 million in upfront project costs do not include land acquisition, the $7.0 million estimated cost of a parking garage for the facility, or the $250,000 “predevelopment” contract with the Aiken Corporation that is part planning, part marketing.(4) There is, however, $2.7 million in “unknowns” in the “contingency” column. The remainder of the $17.3 million in known estimated costs are: 

• $2.0 million for architectural and engineering professional services
• $1.5 million for site development, for which only “demolition” is the description.
• $13.8 million for new construction of the 45,000 square foot, T-shaped, three-story facility 

The annual operating costs, all of which are described as recurring “indefinitely,” are broken down into three categories: 

• Utilities: $157,000, at a cost of $3.50 per square foot. 
• Maintenance and Repairs: $33,750, at a cost of $0.75 per square foot
• Salaries, Benefits, Payroll Taxes: $80,000 for “maintenance and facility management staff”

A note on the annual operating costs states: 

“SRNL (BSRA) has agreed to negotiate an operating agreement under which the tenant will be responsible for proportional utility, maintenance, tax and insurance obligations for the portion of the facility exclusively occupied by the tenant. The remaining proportional expense for the remaining shared public areas of the facility will be the responsibility of the City of Aiken funded by a variety of existing revenue streams to include hospitality taxes.” 

Left out of the request form is the fact that the City of Aiken intends to maintain “control” of the facility by leasing it to its long time private partner, the quasi-governmental, not for profit Aiken Corporation. 

On March 13, 2023, four members of Aiken City Council approved a no-bid, $250,000 contract (4) with the Aiken Corporation to pay the architectural firm of McMillan Pazden and Smith (MPS) to conduct “pre-development” work on the project ranging from “public engagement,” “stakeholder interviews,” site evaluation including its “historical nature,” learning the city’s zoning laws and comprehensive plan, and “assisting the planning team in developing guiding principles for the overall form and massing of any proposed buildings as well as their impact on the pedestrian experience.” The contract also included backdating prior commitments between the Aiken Corporation and MPS. (5)

Another part of the contract requires the Aiken Corporation to hire a lawyer “ to provide legal services” including “drafting a lease between Developer and Third Parties.”

Three Council members properly recused themselves from the vote to comply with state ethics laws: 

• Councilwomen Gail Diggs and Lessie Price, who are voting members of the Aiken Corporation; but who, on March 27th, expressed their intention to resign from the Aiken Corporation Board of Directors.
• Mayor Rick Osbon, an owner of Osbon Cleaners whose only downtown and North Aiken competitor is Warneke Cleaners, whose existing location will be demolished and relocated. 

Status of the Funding Request. 

The $20 million request was sent to Aiken County Administrator Clay Killian prior to January 27, 2023.  Mr. Killian did not sign and approve the request, and forward it to the state’s Executive Budget Office, until March 14, 2023–too late for submission for the Joint Bond Review Committee’s (JBRC) March 22, 2023 meeting agenda. The $20 million line item remains unallocated until the request is approved by the JBRC.

The JBRC approved  $27.1 million of plutonium funds for three projects in January 2023, and were asked to reconsider one request. No reply has been forthcoming.

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  * Editor’s Note: Project “Labscalis” is a hybrid term used to refer to the Savannah River National Laboratory (SRNL) Workforce Development Center being proposed on properties obtained by the Aiken Municipal Development Commission (AMDC) as the core area for the demolition and redevelopment endeavor known as Project Pascalis. Thus, Labscalis.
  (May 18, 2023.)
  
  Footnotes: 

(1) A key element of SRNL’s mission is nuclear nonproliferation, an intelligence program and very broad field that ranges from treaty verification to detecting and recovering lost or stolen nuclear materials. SRNL describes the program area as, “supporting the intelligence needs of the United States.  SRNL employs its unique expertise in nuclear technologies, Weapons of Mass Destruction (WMD) signatures, and regional security analysis to examine foreign programs in support of DOE, the Intelligence community, and other U.S. government organizations.  As part of the Interagency Treaty Process, SRNL provides support to NNSA and other government organizations for their participation in the process that develops U.S. positions on the Nuclear Nonproliferation Treaty and the Fissile Material Cutoff Treaty, as well as other agreements required for nuclear trade with other countries.” 

This work is primarily under the auspices of the National Nuclear Security Administration (NNSA), with some contract work with other federal agencies. The NNSA is also responsible for producing nuclear weapons for deployment by the Department of Defense; and insuring the safety, security, and reliability of the U.S. nuclear weapons arsenal. 

(2) From Dr. Majidi’s comments at the January 23, 2023 “State of the City” jamboree. The full comments, taken from the You Tube transcript and edited for clarity were: 

“Well good good evening everybody just want to remind you it’s a Kinder year. So we’re going to start on that note. Five years ago ago I moved to Aiken to become the director of Savannah River National Laboratory. I came here because the laboratory had a reputation for being able to consistently get the work done but also because I knew it had the largest potential for growth amongst all National Laboratories. 

Just three years ago the Department of Energy acted on their long-standing vision of an enduring National Laboratory in South Carolina and created an opportunity for the lab to be operated as an independent National Laboratory. The purpose of a National  Laboratory is to address large complex research and development challenges with a multi-disciplinary approach. Savannah River National Laboratory is the newest National Laboratory under the Department of Energy.  Nationwide there are 17 DOE National Labs and SRNL is the only lab in Carolina serving the Southeast region of the United States along with our good partners at Oakridge National Laboratories. 

[Mayor Osbon adjusts his microphone] 

One disadvantage of being a short laboratory director is that somebody else has to adjust your microphone for you. 

Today our laboratory is operated by a vital cooperatorion with University of South Carolina Clemson, South Carolina State, University of Georgia, and Georgia Institute of Technology. 

Our mission is ensuring America’s security and prosperity by addressing its energy environmental and nuclear challenges through transformative Science and Technology Solutions. We create high quality jobs in central Savannah River area, and our enduring economic engine attracting not only professionals from all across the country but also Advanced science and technology-based companies to CSRA. 

SRNL achieved its Mission by attracting motivating and training a diverse and highly skilled Workforce to execute on complex DOE programs. This new facility in Aitkin allows a laboratory to have a more direct presence in the community we serve with the goal of developing a pipeline of new Talent as well as developing the existing employee base. It will also complement our brand new Advanced manufacturing collaborative as USC Aiken, creating a hub for partnership with industry and Academia. 

What else are we planning to put in this building? 

“I should emphasize that this Savannah River National Laboratory building is being designed for only computational administrative work we don’t have any chemicals hoods or hazardous material in this facility uh….” 

[very light applause and few laughs from the crowd]

“There is a joke there somewhere right?” 

“SRNL employees will perform some of our computational modeling and simulation. We’ll  have a team of employees working with the university to increase our engagement with faculty postdoctoral and graduate students interns and minority serving institution programs. Some of our employees will work on non-proliferation training programs while other will work on Workforce Development and HR functions moreover as a collaboration Hub.” 

This facility will host faculty and students and allows for scientific Gatherings including technical discussions poster presentations and other student programs. We will have the Next Generation classroom space for training sessions and will support remote learning environments. It will host science and technology engineering and math camps for Teacher development workshops but a specific focus on K-12. 

University of South Carolina Aiken will have an enduring presence through their Workforce Development program. I’m very much looking forward to expanding our activities with USCA on both, in this new facility and advanced manufacturing collaborative building [Applause]

But most  importantly this building is the community face of the laboratory. A portion of this  building will be open to the public to Foster Community awareness of the work we do at SRNL, and its benefits to the society. The lobby will display our most recent scientific work, and this facility is the first stop for all new laboratory employee upon their entry for onboarding and training. 

It takes a great Community to make something like this possible I want to make sure that I take a moment to recognize Governor Henry mcmaster’s hard work to identify this need and to allocate a 20 million dollar for this facility. We’re grateful for Governor McMaster’s  enduring support. Moreover, we’re grateful to the South Carolina state legislatures for their wisdom to recognize the need and the necessity for this building to help us bring the laboratory to the community. I also want to recognize the city of Aiken, the Mayor’s office,  and the city council members for their steadfast supports to bring this project to reality. I want to recognize the Department of Energy for selecting the Battelle Savannah River Alliance as the management and operating company for the laboratory, to create an enduring capability in South Carolina. this building along with the advanced manufacturing collaborative brings the Savannah River National Laboratory into the Heart of the Aging Community we plan to be a productive citizens and hope to have a broader impact to our community.”

(3) As reported in “Offsite Infrastructure,” SRNL’s most vital missions involve nuclear weapons work and risk reduction from Cold War era nuclear weaponry materials production—most notably plutonium production. 

(4) The resolution in support of the Aiken Corporation contract with the City of Aiken; and the MPS letter to the Aiken Corporation

(5) The partial contract, which does not contain backdated agreements between MPS and Aiken Corporation, is available on pages 223-234 in the March 13, 2023 meeting agenda packet.

The minutes from that meeting are available on pages 19-23 of the March 27, 2023 meeting agenda packet.