Corporate Coup:
Part Two in a Three-Part Story

1998-1999: The Playhouse Considers a Move
2000-2001: The Amentum Model: “Corporate Coup”
NEXT: 2002: The Amentum Model: “Loosey Goosey”

The super-sized January 28, 2000 Aiken Standard headline was subtitled, “Government Services picks Aiken for HQ” — a development that signaled a paradigm shift in the Playhouse project. Newberry Hall had been the site of an announcement that day, “sure to keep area economic development officials and downtown business owners grinning for months.”¹¹

According to the article, Morrison Knudsen Government Services Group, (GSG) “decided to locate its corporate headquarters in downtown Aiken.” The new building was to be located on Newberry Street at the site of the Mark II theater and other properties purchased six months earlier by the City. 

Governor Jim Hodges, Mayor Cavanaugh and other dignitaries were on hand for the occasion. Governor Hodges said “Today’s announcement reaffirms the long-standing partnership between Westinghouse and the Aiken community… and strengthens that commitment to economic development.” ¹¹

Mayor Cavanaugh said, “It’s a great time here for Aiken,”¹¹ and expressed hope that folks attending meetings and conferences would be inspired to move to Aiken. 

Morrison Knudsen GSG was holder of a number of defense contracts, including the Westinghouse Savannah River Co. contract. Morrison Knudsen GSG’s new corporate headquarters was estimated to cost $3 million dollars and would share the building space with the Aiken Community Playhouse. The expected move-in date was spring 2001. The GSG side of the building was to be funded through private sources, and the playhouse side through public funding. The City of Aiken, (owner of the property) and the Aiken Corporation were to oversee the work, including both the construction and design stages, which were slated to begin immediately. 

Below the fold on the front page with this January 28, 2000 headline was a smaller headline, that read, “Sharing the Stage,” which described the building that would house the new Morrison Knudsen GSG headquarters. Designed by McDonald Law, the structure was described as a “two story brick structure comprised of two 18,000 square foot facilities joined by a 2,500 square foot, two-story lobby and courtyard.” At the top of the article was an architectural rendering of the building that exists there today. 

One can only imagine the amount of work it must have taken behind the scenes over the prior six months to pull together this done deal. Taking center stage was the SRS contractor, whose move-in date was just over a year away.

February 9, 2000: Sub-Chapter S Corporation to own the Westinghouse side of the building

The Aiken Corporation board discussed several key issues in their February meeting, including:

• The logistics of building ownership. Morrison Knudsen GSG, now referred to as Westinghouse, didn’t want to own the building, nor did the City, which desired the ability to collect taxes on the property.
• The logistics of leasing the building and the impact that long-term leasing might have on the Aiken Corporation’s tax-exempt status.
• The possibility of establishing a sub-chapter S-Corporation and revising the organization’s charter to address some of these issues.

Excerpts from the Aiken Corporation minutes 2/9/2000
(Click images to view full size)

March 7, 2000: Aiken Corporation to own the Westinghouse side of the building

The Aiken Corporation met on March 7. In the wake of City Council’s recent vote to sell approximately one half of the Newberry properties at cost to the Aiken Corporation, the board discussed their willingness to develop “the Westinghouse property,” the terms of the loan necessary to doing this, and the proposed leasing agreement with Westinghouse. A motion was made and approved to move forward with the development, ownership and leasing of the Westinghouse property in close cooperation with the City.

Buzz Rich was to develop a lease with Westinghouse and an agreement between the City of Aiken and the Aiken Corporation. Speed was of the essence, as Westinghouse desired occupying the facility by this same time next year.

The wisdom of establishing a subchapter S corporation was raised, and agreement was reached to seek a second opinion.

Excerpt from Aiken Corporation minutes 3/7/2000
(Click image to view full size)

April 12, 2000: City of Aiken to own Westinghouse side of the building. Also: Project costs exceed original estimates.

Discussion in the April 2000 Aiken Corporation meeting focused on the the updated construction costs for the Playhouse, which had exceeded original estimates. Discussion ensued on additional funding sources.

It was also determined that, due to the requirement for a “firewall” to separate property owners, the Aiken Corporation would not own the Westinghouse building, after all, but would instead lease the property from the City and lease the building to Westinghouse.

May 2, 2000 newspaper headline: “Westinghouse deal discussed by City Council”¹²

Aiken City Council held a special meeting to work out the logistics of the planned  home for Westinghouse and the Playhouse. Counsel passed two memorandums of understanding (MOUs) regarding the new building to be constructed where the “abandoned” Mark Twin Cinema and the Whittle Building currently stood. One MOU was to specify the role between the City and Aiken Corporation regarding ownership of the Westinghouse side of the building. 

The second MOU concerned the Playhouse side of the building. The shell of this portion of the building would be constructed by the City, but the Playhouse would be responsible for finishing the interior. The City’s expenses were not to exceed $1.5 million for the construction.

Importantly, the second MOU also addressed concerns over the Playhouse’s inability to raise sufficient funds to relocate. It was decided that, if the Playhouse didn’t have an operational theater in the new building by January 1, 2003, the city had the right to terminate the MOU and/or lease. 

Lease arrangements on the building were formalized. The City owned the land; the Aiken Corporation would hold the lease on the WGSG side of the building which it would, in turn, lease to WGSG; the City would lease the other side to the Aiken Community Playhouse for $1 per year. 

According to Aiken Corporation’s May 2000 meeting minutes, the organization entered into a MOU with Westinghouse for a 10-year lease. They agreed to form the Subchaper S Corporation, LED. This would resolve issues over activities that were not included in the Aiken Corporation’s charter and/or could threaten their tax-exempt status.

Excerpts from Aiken Corporation minutes May 10, 2000
(Click on image to view full size)

June 14, 2000: The $3.5 Million Westinghouse Property

Aiken Corporation was working on finalizing the MOU for a 99-year lease with the City of Aiken, with discussion and agreements being forged on costs for the mortgage, maintenance, and parking. All area banks, except Wachovia, signed a commitment letter for permanent financing for the Westinghouse building.

Motions were made and passed for Aiken Corporation to:

• Purchase part of the lot with the blue house (on Chesterfield) for Westinghouse parking, with the cost of the land, demolition and paving to be rolled into the Westinghouse lease payment.
• Purchase steel outside of the contract for General Contractor.
• Enter into a circulated loan agreement with the City of Aiken for a mortgage of, at a maximum, $3,500,000 for the construction of the Westinghouse property .
• Open a checking account for construction, plus another account for lease payments.

Excerpts from Aiken Corporation minutes 6/14/2000
(Click image to view full size)

June 29, 2000 headline: “Building set to begin for new ACP location.”¹³

The low bid for the construction had been submitted by local contractor H.G. Reynolds. The demolition of the Newberry Street buildings was scheduled for July, pending the signing of the final lease agreements. The winner of the contract was to build the shell of the building, and complete the interior on the Westinghouse Government Services Group (WGSG) side of the building. The “up fitting” of the playhouse side would be determined at the conclusion of the ACP’s 2001 fundraising campaign. 

July 12, 2000 headline: “Contributions pouring in for ACP campaign”¹⁴

With the demolition of the Mark II Theater and the next door Whittle bulding underway, donations began pouring into the Aiken Community Playhouse, which was tasked with raising $1.2 million to move into the building. Bechtel Savannah River and Weldon Wyatt each pledged $50,000, and Westinghouse pledged $400,000 to the campaign. The Subchapter S Corporation, LED, was now a major player in the Westinghouse project.

Excerpt from Aiken Corporation minutes 7/12/2000
(Click image for full-size view)

August 8, 2000: “Groundbreaking for ACP complex to be held Aug 21.”¹⁵

Ground was broken for what was now being described as a $6 million dollar project. Mayor Cavanaugh, called the project “the most diverse and most interesting public private partnership in perhaps the history of Aiken.”

It was thought that the visibility of the playhouse would be boosted by the presence and shared lobby with the SRS contractor, whose name had recently morphed again, this time from “Westinghouse GSG” to “Washington Government.”

The Playhouse had so far raised $250,000 to fund their half of the two-story building. By April 2001, the earlier-quoted $1.2 necessary to fund their half of the building would jump to $1.6 million.

Excerpt from Aiken Corporation minutes 8/9/2000
(Click image for full-size view)

August 2000-December 2001

For the following 18 months, from August 2000 onward, the hardworking playhouse group would hold numerous fundraisers and benefits, which included joint efforts with the larger community. With the help of the equestrian community, the playhouse held a series of benefits, including polo matches, a carriage parade, and a dinner dance. A champagne brunch was held at Whitney Field and Ford Conger Field.

The Women of Woodside held a garden party and a home tour. Numerous Aiken homes were opened to tour and events to benefit the playhouse, including Joyce Cottage and Nancy Wilds’ 18th century Zahara Plantation. In May 2001, a large donation by Mr. and Mrs. R. Dale Phelon put the fundraiser over the $1 million mark. The new auditorium was to be named in their honor. A “design house event” was held in a Kalmia Hills home in September 2001 to benefit the playhouse. During the December 2001 holidays, the playhouse held a dinner theater benefit.

Various excerpts from Aiken Corporation minutes¹⁶ during construction provide a glimpse into the scramble of activities between financing, fundraising, leasing agreements, and creating parking spaces for what was now being called “The Washington Group/Playhouse.”

Two Asides: Willow Run and the Railroad Depot

Among the items of interest in the 2000-2001 Aiken Corporation minutes was the Aiken Corporation’s purchase of the “Willow Run” property on Beaufort Street to build a spec building — a private-public development project that promised to lure industry to the site. The spec building was completed in 2003. Afterward, it stood unoccupied and unsold for almost 20 years before the property finally sold, and the building was demolished. The year is 2023. A readily-accessed financial accounting of this venture, from start to finish, should be made available to the public.

Excerpt from Aiken Corporation minutes 10/10/2001
(Click image for full-size view)

Also among the 2000-2001 Aiken Corporation minutes were ongoing, early negotiations with Friends of the Railroad Depot regarding the “reconstruction” of a railroad depot on the grounds of the former Southern Railway passenger station that the City demolished in 1954. The Railroad Depot would finally be constructed in 2008-2010, drawing even more controversy then the Washington Group/Playhouse project.

Excerpt from Aiken Corporation minutes 11/8/2000
(Click image for full-size view)

A Mammoth Yard Sale

In late January 2002, the Aiken Community Playhouse capped off their 18-month fundraising efforts with a “mammoth yard sale.” Two weeks later, the Aiken Corporation’s chickens would come home to roost.

Next: The Amentum Model: “Loosey Goosey”

11. Burton, Adam, “Corporate Coup,” Aiken Standard, January 28, 2000.
12. Burton, Adam, “Westinghouse Deal Discussed by City CouncilAiken Standard, May 2, 2000
13. Burton, Adam, “Building Set to Begin for New ACP Location,” Aiken Standard, June 29, 2000
14. Burton, Adam, “Contributions Pouring in for ACP Campaign,” Aiken Standard, July 12, 2000
15. Burton, Adam, “Groundbreaking for ACP Complex to Be Held Aug 21,” Aiken Standard, August 8, 2000.
16: Excerpts (below) from various Aiken Corporation minutes from Nov 2000-Dec 2001. Click to view full size.