Some City of Aiken decisions are first made by the Aiken Corporation before formal approval by City Council. Most recently, a $250,000 no-bid contract was awarded to the Aiken Corporation by Aiken City Council three months after the Aiken Corporation hired its own contractor to pursue the downtown Savannah River National Laboratory project.

In addition, City Manager Stuart Bedenbaugh committed to paying for sewer and water infrastructure for a downtown housing development ten months before it was presented to City Council; and agreed to give away the right-of-way on a portion of Lancaster Street to the Aiken Corporation, without formal Council approval.

(Update: Council members Lessie Price and Gail Diggs did resign from Aiken Corporation at the end of March, 2023; leaving no representation from the City on the Aiken Corporation Board of Directors.)

by Don Moniak

April 7, 2023

With the exception of Aiken City Council members Lessie Price and Gail Diggs, who recently expressed their intentions to resign from the Aiken Corporation Board of Directors, the Aiken Corporation Board has no elected officials. Unlike the soon to be defunct Aiken Municipal Development Commission (AMDC), the Aiken Corporation is not a distinct, incorporated, separate body politic authorized to conduct any munipical policy or decision-making. Yet it does.

On March 8, 2023, The Aiken Corporation Executive Committee made two decisions affecting its downtown Aiken interests, which now intersect even more closely with the City’s downtown property interests. According to the meeting minutes of the City of Aiken’s preferred non-profit, charitable organization:

1. “Motion was made by Ms. Martha Lockhart and seconded by Mr. Norman Dunagan to appoint a seven -member committee to oversee Aiken Corporation/LED’s role in their downtown development projects. Motion unanimously approved.”

2. After a one hour Executive Session, a “motion was made by Mr. Pat Cunning and seconded by Mr. Sam Erb to accept the proposed Professional Services Agreement with the City of Aiken.” The agreement names the Aiken Corporation as “The Developer” for the pre-development phase of the proposed Savannah River National Laboratory (SNRL) downtown off-site office complex ( presently being referred to as Project Labscalis).

The seven-member downtown sub-committee is composed of Chamber of Commerce President David Jameson, Chamber of Commerce Executive Committee member Charlie Hartz, City of Aiken Planning Commissioner Sam Erb, Pat Cunning, Karen Daly, Aiken Corporation Chair Arthur “Buzz” Rich, and Chamber of Commerce Executive Committee Chair Jason Rabun; who is also the Vice-Chairman of the City of Aiken Planning Commission.

Listed as an attendee, via phone, at the meeting was City Councilwoman Lessie Price. There is no record of her recusal from the vote to accept the proposed Professional Services Agreement with the City of Aiken. One month prior, at the Aiken Corporations’ February 8th Executive meeting, Price and fellow Councilwoman Gail Diggs were present for a vote to “sign an agreement with the City of Aiken to share in the cost of hiring McMillan, Pazdan & Smith Architecture” for the Labscalis project. Aiken Corporation secretly hired the firm in December 2022.

Listed as a guest at the February 8th meeting was Linda Johnson, President of the Historic Aiken Foundation (HAF), who endorsed the SNRL project shortly after the city announced its plans. HAF Board Member Luis Rinaldini, who is also a plaintiff in the Blake et al vs City of Aiken et al lawsuit against Project Pascalis has also stated he “is personally a big supporter of the (SRNL) project.”

Council Approval of the Aiken Corporation’s Labscalis Contract

On March 13th, Councilwomen Price and Diggs (who was not at the March 8th meeting) did recuse themselves from the City Council vote to enter into the Professional Services Agreement with the Aiken Corporation—a no-bid contract worth up to $250,000. The contract also mandates the Aiken Corporation hire a lawyer to negotiate leases with third parties like the Savannah River National Laboratory.

The leases will be on at least two properties that are part of the Pascalis properties obtained by the AMDC in November 2021 with tax-payer monies funded by a general obligation bond issuance that has left the City $9.5 million in debt. The Aiken Chamber of Commerce played a critical role in the property deal, writing an earnest money check for $135,000 to take assignment of the $9.5 million Purchase and Sale Agreements between Weldon Wyatt’s WTC Investments, LLC (Agent: Ray Massey) and the Shah and Anderson families.

The March 13th vote passed unanimously, 4-0, as Mayor Rick Osbon also recused himself due to his personal business conflict of interest regarding the presence of Warneke Cleaners on soon to be city-owned property.

The contract now allows an organization dominated by Chamber of Commerce members to control property which the Chamber played an instrumental role in procuring on behalf of the AMDC and the City of Aiken. No Chamber members recused themselves from the February 8th or March 8th Aiken Corporation votes—unlike former AMDC commissioner David Jameson who recused himself on the November 9, 2021 AMDC vote to purchase the properties. (1)

This pattern is the reverse of past decisions by Council members. On August 5, 2020, Ms. Price and fellow councilmembers Ed Girardeau and Ed Woltz abstained from an Aiken Municipal Development Commission vote to allow “the Municipal Development Commission (to) write a letter to City Council asking them to take the Aiken Hotel off the Aiken Historic Register and address the condition of the Aiken Hotel and its renovation.”

After the three City Council members decided to abstain or recuse from AMDC votes that might come before City Council, the ordinance defining the AMDC’s membership requirements was changed to remove Council members from the commission.

City Manager Stuart Bedenbaugh and City Councilwoman Kay Brohl also attended the March 8th meeting. In his supporting memorandum on the March 13th Council vote, Mr. Bedenbaugh omitted the fact that the Aiken Corporation had already voted to accept the contract. During discussion of the agenda item, Ms. Brohl did not acknowledge her presence at March 8th meeting.

Aiken Corporation Decides, City Council Follows

The $250,000, no-bid, Aiken Corporation contract with the City fits a pattern, wherein some City of Aiken decisions are first made at Aiken Corporation meetings, and later presented to City Council for approval. Two examples in the past two years include a property deal on Lancaster Street and the South Company development on Union Street known as Union Street Station.

Lancaster Street Right of Way Proposed Giveaway

At the Aiken Corporation’s March 9, 2022, meeting, City Manager Bedenbaugh brought up an item of new business, the transfer of property on Lancaster Street to the Aiken Corporation—once the City obtained the property from the SC Department of Transportation (SCDOT):

“Mr. Bedenbaugh reported that the SCDOT plans to transfer the right- of-way of Lancaster Street between Barnwell Avenue and Edgefield Avenue to the City of  Aiken. Once it is transferred, the City will deed the property to the Aiken Corporation for potential development. Chairman Rich reported that he believes the property is potentially large enough to build five or more residences and that the Corporation has already been contacted by a potential developer to either buy or develop the property.”

Two months later, the minutes read: 

“Chairman Rich reported that the City is still waiting on SCDOT to turn over the property to them. Once that happens, the City will donate to Aiken Corporation. Based on the layout of the property, approximately 10 houses could be built.  Aiken Corporation needs to decide on what to do with the property, whether to build on it or sell it.” 

The July 2022  minutes read: 

“Mr. Stuart Bedenbaugh reported that he has the paperwork 
from DOT stating that the property has been transferred to the City and he will include on the City Council’s July agenda to transfer the strip of land on Lancaster to the Aiken Corp.”

In August 2022 the deed was reported to be enroute to the City, but no updates on the Lancaster Street giveaway have occurred since. The Aiken County land database does not show any change in property ownership on that block. (2) The impact of ~3,000 citizen signatures on the Do It Right! Alliance legal petition to prohibit a similar property giveaway on Newberry Street on the stalled Lancaster Street process is unknown.

The Union Street Station Housing Development Utilities Subsidy

At the October, 13, 2021, Aiken Corporation meeting, City Manager Stuart Bedenbaugh committed the city to funding the water and sewer costs for the South Company’s proposed Union Street Station development on Union Street adjacent to Gyles Park— for which the Aiken Corporation had been offering assistance since January of 2021. (3) The minutes read:

“Mr. Cunning asked if the City committed to providing water and sewer to the properties. City Manager Stuart Bedenbaugh stated yes, the City will provide water and sewer.”

The Aiken Corporation continued discussing the development and the development progressed. The “First Reading of an Ordinance Approving A Development Agreement with The South Company” was brought before City Council ten months later, on August 8, 2022. In his supporting memorandum, City Manager Bedenbaugh wrote, in part, about the “Union Street Station” development:

“As part of our staff review of the project, we determined the existing water and sewer lines in the area must be replaced to provide adequate service to the new development and the surrounding neighborhood.”

No mention was made of the Aiken Corporation’s role in the process; and Councilwoman Price and Diggs, who were Aiken Corporation Board members at the time, voted with the rest of Council to unanimously approve the ordinance on both August 8th and again on the Second Reading on August 22, 2022. Councilwoman Price actually made the motion on August 22, which was seconded by Councilwoman Diggs.

One notable portion of the agreement (4) to provide the South Company up to $169,749 in taxpayer funds to provide water and sewer for six single-family housing units is:

“ The Developer shall promptly and fully comply with all regulations and ordinances of the  City applicable to the Project to include landscaping and signage ordinances with the written exception of any variances agreed to and approved by the City. “

On December 21, 2022, City of Aiken Stormwater Administrator Samantha Pollack issued a cease and desist order to Ed Dudley of Union Street Station due to the lack of a stormwater permit. The order read:

“This stop work order is being served based on a site visit conducted on December 21, 2022 in which unauthorized grading has been observed, no sediment and erosion controls are in place, and no NOI has been submitted to the City of Aiken.”

At the next Aiken Corporation meeting, the incident was discussed, and the minutes read:

“Chairman Rich reported that he sent an email to Mr. South’s attorney, 
Morris Rudnick, stating that he would rather discuss matters with him instead of Mr. South. He  sent Mr. Rudnick a list of items that need to be completed. There is a cease and desist order sign  on the door of the house on Union Street. It was suggested to leave the project on hold until the items are addressed on the list.”

The cease and desist order from City of Aiken officials has not been raised during any meetings of the Aiken City Council that approved a $169,749 subsidy to a downtown developer.

Footnotes:

(1) The meeting minutes for the November 9, 2021 AMDC meeting include the following statements regarding the AMDC resolution to “accept assignment of options to purchase real property from the Greater Aiken Chamber of Commerce in connection with Project Pascalis.”

AMDC Executive Director Tim O’Briant stated: “The Greater Aiken Chamber of Commerce and their Executive Committee stepped in and agreed to hold those options and make available the sum of $135,000 to pay the earnest money on the contract. Today this resolution will repay the Chamber of Commerce for their advance for the options to purchase the property.”

“The motion was approved by the Commission, with Mr. Verenes and Mr. Jameson abstaining from participating in the discussion and voting on the resolution.”

(2) The Aiken County property database still shows the Lancaster Street parcel as having no ownership, like SCDOT Right of Ways elsewhere in the City.

(3) On August 11, 2021, the minutes show the following vote taken:

“Chairman Rich made a motion seconded by Sam Erb for the Aiken Corporation to purchase the property from the  South’s for the sum of $90,000.00. South would then be given an exclusive option for a 24 month  period after the sale to repurchase the property at the sum of $17,500 per lot with the requirement  that the lots be purchased in numerical order, 1-6. They would be required to purchase the first lot within four months. South would also be required to finish all land layout as required by the  City and to have a final recorded subdivision plat before closing. The motion was unanimously  approved with the abstention of Tim Simmons. “

According to the Aiken County property data base, the property is still owned by

(4) The Agreement with the South Company is on Pages 71-81 of the August 22, 2022 City Council Agenda Packet.