Loosey Goosey
Part Three in a Three-part Story

CORRECTION 10/11/2023: An auto-correction error placed the word, “billion” in the following sentence, which has been corrected to read: “The primary blame for the creation of this now-$7.7 million project was attributed to lack of communication, lack of oversight, and lack of a clear budget.”

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

In 2002, the headlines began to convey concerns over the real-world cost of the public-private development project between the City of Aiken and the Aiken Corporation.

February 9, 2002 headline: “Council has stage fright – community playhouse seeks $1.5 million to finish theater”¹⁷

Those costs came into sharp focus in February 2002. City Council members seemed blindsided, saying they’d never been consulted on the project’s cost overruns. City Manager Roger LeDuc said, “I just found out with the mayor about a month ago.” ¹⁷

Angie Fitzgerald, president of the Aiken Community Playhouse board of directors, said that the playhouse had been forced to seek additional funding from the City because of the multi-use nature of the building. 

Indeed, the scope of the facility had morphed from being a new home for the Aiken Community Playhouse in 1998 to serving as a combo “center for performing arts,” the headquarters for an international nuclear-industry contractor, and a meeting and events center for the City of Aiken.

Over the prior two years, the Aiken Community Playhouse had not only lost naming rights for the facility, but had seen three name changes — the Westinghouse Performing Arts Theater (2000); the Aiken Center for Performing Arts, (2001), and the Washington Center for the Performing Arts (2002). And they had yet to even open.

The increased costs were due to, among other things, the changed scope of the project and the “design-as-you-go approach” that became necessary to expedite construction in order to meet the Washington Group’s move-in deadline. Juxtaposed with the posh accoutrements, such as expensive, state-of-the-art audio visuals and other technologies to accommodate corporate clients. was the reality that, with funds scraping rock bottom, the work of finishing the interior of the Playhouse side of the building would need to rely on volunteer labor.

Community complaints had been ongoing since the summer of 2001 about the ungainly appearance of the rear side of the Playhouse, which had been sheathed in green metal siding, rather than the brick used on the front facade and the Washington Group’s portion of the building. According to Aiken Corporation meeting minutes, there was discussion over having a mural painted or having the City horticulturist plant some greenery to cover the metal siding on the Playhouse rear.

The February 9, 2002 editorial page of the Aiken Standard featured a letter by local citizen Nancy Wilds, one of the co-founders of the Historic Aiken Foundation (HAF).

This facade, as seen in the October 2023 photos, below, is visible from a number of vantage points, including Park Avenue, Chesterfield Street, the Municipal parking lot, and the AU parking lot off of Park Avenue that also serves Neon Fig and other businesses. The exterior areas of the City-owned Playhouse are unkempt in places.

October 2023: Views of the green metal facade and other exterior features of the City-owned Playhouse side of the Amentum building as seen from the AU Health and Neon Fig parking lot off of Park Avenue

October 2023: Park Avenue view of the green metal facade of the Playhouse side of the Amentum building.

October 2023: The rear views of the Playhouse facade as seen from the Municipal parking lot and Chesterfield Street

February 15, 2002 headline: “Playhouse Now Needs $1.1M”¹⁸

On February 14, Aiken City Council members toured the building. The $1.5 million funding request by the playhouse had been reduced to $1.1 million by a few downgrades, such as limiting the use of carpeting in the auditorium and eliminating a luxury box. 

Aiken Corporation chairman Wade Brodie explained that the playhouse needed additional funding due to “a misunderstanding of the financial terms for the facility,” including $229,620 for land costs, $240,160 for architectural fees, $30,000 in site preparation fees, and an additional $250,000 in ‘soft cost.” ¹⁸

Mr. Brodie also indicated that the cost had ballooned due to change orders associated with the multi-use nature of the facility, which was to be used by “the actors, the Washington Group, and other community groups.”¹⁸

Onlookers to the unfolding saga had difficulty reconciling the various numbers being tossed back and forth like so much Monopoly money.

March 10, 2002 headline: “Arts Center Debate Expected — Aiken City Council to Consider $935k loan to finish downtown theater”¹⁹

With March 2002 also came the realization that the Aiken Community Playhouse — which had started out in November 1998 with the ambitious dream of buying and renovating an old theater for $500,000 — was now deeply in debt. Playhouse members were forced to hold out their hats to finish construction of the Playhouse portion of this elaborate structure, whose cost was now clocking at $4.2 million for a theater that belonged to the City of Aiken, not the theater group.

The playhouse group — which had earlier committed to raising $441,000 through “an aggressive capital improvement campaign,”¹⁹ for the demolish-and-rebuild option brought to their table in March 1999 — saw their commitment jump several times, finally arriving at over $2 million in March 2002. The requested $935k loan to the Playhouse was to be repaid to the City and was not part of the City’s own $2.2 million “commitment” to the cost of the Playhouse side of the structure.

Meanwhile, on the other side of the building, the non-profit Aiken Corporation had inherited the $3.5 million dollar Washington Group building without fronting any money of their own.  Despite a lack of investment, the Aiken Corporation’s newly-created, for-profit arm in this public-private development project, known as LED of Aiken, Inc, would, according to newspaper accounts, receive $29,000 per month in rent from the lucrative SRS federal contractor tenant that the Aiken Corporation had courted two years earlier to locate its corporate headquarters in Aiken.

As the tally of these still-mounting costs continued to come into focus, the heat from City Council members, the local newspaper editor, and local citizens reached critical mass. City Council, which had initially been critical of the Playhouse for increasing costs, came to the realization that the Playhouse was the least responsible party for what the newspaper described as “the headlong race to complete the Washington Government office project and the theater without sufficient regard for the mounting cost.”¹⁹

The primary blame for the creation of this now-$7.7 million project was attributed to lack of communication, lack of oversight, and lack of a clear budget.¹⁹

City leaders admitted, “mistakes were made” in the development of the Washington Center for Performing Arts, and “efforts are underway to sort out how they occurred.” ¹⁹

March 12, 2002 headline: “Washington Center for the Performing Arts – Smith: ‘It’s still loosey-goosey’ — Theater funding moving ahead, confusion remains.”²⁰

As the local paper recounted, the only thing that City Council and the Aiken Corporation could agree on in the Monday night City Council meeting was that there was enough blame to go around regarding the confused financing. 

Councilman Richard (Dick) Smith said, “It’s still loosey-goosey. When we start talking about money in a project this large, we need to have that written down.”²⁰

Councilman Smith said that a lack of oversight had left everyone unsure of who was paying for what, and when they agreed on it. He called for a complete audit and said that future projects should call for an overall projects manager responsible to the City.

Council member Pat Cunning remarked, “Nobody ever said, ‘That’s your budget, live with it.’”²⁰

In this same meeting, City Council discussed two different loan proposals before them — one to Aiken Corporation for $3.5 million dollars as a mortgage for the Washington Government office complex; another to the Aiken Community Playhouse for $935k to complete the work on the interior while awaiting outstanding pledges and other anticipated income.

The City also agreed to fund over $700k in land and architectural costs paid by the Playhouse when the group earlier anticipated owning the building. 

Regarding the Aiken Community Playhouse agreement to raise $1.6 million to fund construction of the City-owned building, Council member Mike Anaclerio deemed it “unfair to expect a civic group to bear such a burden in funding the project,” saying, “My main case is that no other organization in the city has ever paid this size of a share for their project.”²⁰

City Council meeting minutes March 11, 2022. Click to view full size.

March 13, 2002: Aiken Standard editorial headline: “Let’s learn from errors downtown.”²¹

An Aiken Standard editorial page piece titled, “Let’s learn from errors downtown,” ascribed the cause of what it termed “consternation” over the project to “the lack of oversight on the construction and an escalation of costs that has apparently caught everyone concerned unaware.” ²¹

“The ensuing confusion has led to requests for loans, bickering over payments, and questions of who is to pay how much for what.” ²¹

Paragraphs later, the piece concluded, “Few will question the worthiness of the project on Newberry Street. It will be a feather in Aiken’s cap for decades. The manner in which the overall project was handled, however, leaves much to be desired.”²¹

March 18, 2002: Special meeting Work Session between the City of Aiken and the Aiken Corporation

Questions and concerns were raised over the terms of the two loans before City Council, as well as the language of the ordinances and the degree of oversight the City might exercise with future Aiken Corporation projects. These questions and concerns would spark, at times, to contentiousness during the later public hearing on March 25.

Note that the minutes for the March 18 special meeting are currently mis-filed under March 11 in the City records. Click this link to view the 5-page minutes of this meeting.

March 25, 2002: Calls for an independent, third-party audit

Before City Council during the March 25 public hearing were the second readings on two ordinances — one authorizing the City to lend the Playhouse $935k, another authorizing the City to lend up to $3.5 million to LED of Aiken, Inc. the newly created, for-profit subchapter S Corporation, to which the Aiken Corporation was the sole shareholder.

Discussions initially centered on the terms of the loan to Aiken Corporation and LED of Aiken, Inc., whose names were used interchangeably in discussion. Concerns also went to the existing language in the ordinance, which had the Aiken Corporation agreeing to “cooperate” with City Council on any new projects using funds derived from revenue on the Washington Group building. Councilwoman Jane Vaughters made a case for changing the language to “must agree” with City Council. Further discussion led to a compromise of “will mutually agree” with the City Council, but this was defeated when put to a vote.

From here, the discussion turned to a call from Councilman Richard Smith for an amendment to the ordinance to to require a financial audit and a management audit of the relationship between the Aiken Corporation and the City of Aiken. His motion was seconded by Councilwoman Jane Vaughters.

According to the minutes, Councilman Cunning expressed concern over the cost of such an audit and pointed out that the city taxpayer would have to pay for such an audit.

Councilman Smith stated a rough cost would be $10,000-$15,000 and said, when you’re talking about a $3.5 million project, this would not be too much to spend to make sure things are done “completely right in the future.”

Mayor Cavanaugh questioned hiring someone to make an investigation of something. Councilman Smith responded that he would not call this an investigation, but an independent management audit. According ot the minutes, Councilman Smith stated that he “did not feel this could be done objectively in-house.”

Deliberation ensued, followed by Councilman Smith withdrawing his motion to require an independent, third-party management and financial audit. Councilwoman Vaughters agreed to the withdrawal. The matter of a management audit was to be discussed at the work session on April 8, 2002. 

This stage of the history is not well-served in this recap. The full text of the March 25 minutes, provided below, must be read to capture the important nuances of these discussions.

Aiken City Council minutes 3/25/2002. 16 pages. Click to view full size.

April 5, 2002 Letter to the editor: “The taxpayer has a right to know what happened.”²²

Letter to the Editor, Aiken Standard, April 5, 2002

April 8, 2002: Independent, third-party audit is off the table and replaced with an in-house management audit.

From Aiken City Council work session minutes, April 8, 2002. Click to view full size.

The April 8 minutes recapped Councilman Smith’s earlier request for independent audits as a requirement of the loan, in order to review the financial, legal and business aspects of the construction and the relationship between the Aiken Corporation and the City of Aiken. Smith had given Council an outline of the various points that he wanted raised in these audits and wanted further discussed with City Council.

In what appeared to be a matter of compromise, Councilmembers Smith and Vaughters agreed that, given Council’s concerns over the cost, an in-house audit would be fine. Councilman Smith said that he wanted the Aiken Corporation, in concert with City staff, to prepare written statements to the questions which he raised, that could be looked at and evaluated. Then they could decide what to do in the future.

May 1, 2002 headline: “Construction process at Washington Complex under review.”²³ 

The in-house management audit by City of Aiken staff attorney, Richard Pearce, was underway. A set of questions, including those earlier provided by Councilman Smith, were reportedly being posed to all parties involved in the project — the members of the Aiken Corporation, Washington Group, and Playhouse, in addition to the builder and the architect of the Newberry Street facility.

June 10, 2002 headline: “Council to Discuss Audit on Downtown Complex.”²⁴

On Monday, June 10, the local newspaper, reported that the City’s in-house management audit had found, “no irregularities in the construction of the Washington government complex on Newberry Street” and that “communications breakdowns were responsible for much of the confusion in the project’s execution.” The total project cost was quoted as $5,441,858.11, not including the costs for land acquisition, demolition and professional services. ²⁴

According to the article, City manager Roger LeDuc stated that City Council would have the management audit “in hand” for that evening’s meeting, and that Council, “may choose to discuss the audit findings in any manner they deem appropriate.”²⁴

According to the meeting minutes, no discussion took place. The only mention of the audit was in the minutes of the work session that took place before the City Council meeting, where it was decided that Council would meet again the following week for a special work session at 7:00 a.m. on June 18 to review and discuss a number of items laid out by City Manager Roger LeDuc. The topic of the management audit was not among the items proposed for discussion. Councilman Smith asked that Council make time to discuss the Management Audit during the June 18 special work session

June 18, 2002: Discussion of management audit missing in 7:00 a.m. special work session

If discussion of the management audit took place during the 7:00 a.m. June 18 meeting — or during any other City Council meeting — that discussion is stubborn to be found in the record. Below is the only mention of the management audit in the June 18 special meeting.

October 10, 2023: Looking Back

Also stubborn to be found in City’s of Aiken records is the report from Richard Pearce’s management audit — something that should be an easily accessible part of the public record. After several attempts by experienced researchers to locate the management audit in the City records, a Freedom of Information Act (FOIA) request was filed on Tuesday, October 3, 2023 for the following:

• A copy of the management audit and financial audit(s) of the Aiken Corporation’s Washington Group/performing art center project as referenced in the April 8, 2002 City Council meeting minutes.
• The list of questions submitted to Richard Pearce for inclusion in the audit.
• A record of any discussions that took place among City Council regarding the completed audits.

The FOIA was completed the next day, on October 4, 2023, with a return of 220 pages of documents, which are available for viewing at the pdf below.

Included in this pdf are Richard Pearce’s management audit report and supporting documents. Not included among these 220 pages of documents is a copy of Councilman Smith’s original questions as submitted to Council and Richard Pearce.

Nor is there any record of discussion among City Council members on the completed audit.

Missing from the 220 pages of documents is the reportedly attached statement of opinion made by Aiken Community Playhouse second vice-president Philip H. Porter, Jr., which was referenced on page 124 (see image below) and again on page 127 of the above pdf.

On Thursday, October 5, 2023, a FOIA request for “the statement of opinion by Philip H. Porter, Jr. regarding project management systems” was filed. This results of this request are still pending. This any any other updates to this story may be published in a future epilogue to this story.

Learning from Our Errors

While the June-July 2002 meeting minutes did not reflect discussion on of the the management audit, the minutes did record discussion on the first and second readings on the Aiken Corporation’s next project — the upcoming 2003 construction of the Willow Run Business Park spec building. This project was a dismal failure. The spec building, completed in 2003, was finally demolished after 20 years of sitting empty.

The Aiken Corporation’s “Amentum model” went on to be repeated, albeit on a smaller scale, in the controversial 2008-2010 Railroad Depot project on Union Street — another public-private development project that promised to draw tourists and bring prosperity to the downtown. Numerous citizens spoke out in protest at the time.

One local resident, who described the Depot as a “boondoggle” in her 2007 letter to the editor, wrote,

“On Monday, the Depot project presenter used the Washington Center and Newberry Street as references. The Washington Center [now Amentum Center] project and the problems that are now glossed over were a big mess — changing designs, not enough money, incomplete business plan. How soon council forgets.”²⁵

Another local resident, who described the Depot project as a “D.C.-style bailout,” wrote in her 2010 letter to the editor:

“Ten years after the mayor and city council told taxpayers that the railroad depot would be privately funded, they have gone back on their promise, and now the pack taxpayer will be on the hook to complete and maintain the newest downtown money pit. I was one of six individuals who expressed concern over the transfer of ownership of the Depot to the city. We were told by the mayor and city council members that the Depot would ‘draw people to Aiken,’ and that ‘we didn’t understand the railroad depot’s benefit to the city….” ²⁶

City Councilman Dick Dewar, in a guest editorial published in the Aiken Standard on November 9, 2011, questioned the Aiken Corporation’s “financial and management acumen.”

Speaking on the Railroad Depot project, Dewar wrote, “Without city Council approval, the Aiken Corporation expanded the scope of the depot project and in the process spent over $2 million and incurred debt of over $800,000.” ²⁷

Mr. Dewar went on to detail the then-latest requests by the Aiken Corporation — the third such request — to change the terms of their original $3.4 million loan to the City for the Newberry project. Mr. Dewar wrote:

“In summary, the Aiken corporation has repeatedly initiated projects for small amounts, or to be funded privately, but has an expanded the size incurring debt and responsibilities they cannot support. They then appeal to the city Council to use taxpayer dollars to meet these responsibilities. Given the history of financial and  management problems With the Aiken corporation, I think the city Council needs to restrict their ability to initiate projects without adequate funding.” ²⁷

Mr. Dewar called on his fellow council members to take the several actions, including to, “prohibit the Aiken corporation from spending money they don’t have. They must agree to stringent cost controls from City Council.” ²⁷

He finished saying that, “If City Council cannot get the Aiken Corporation under control, it should be dissolved.”²⁷

It’s been over two decades since the early lessons of the Aiken Corporation’s so-called Amentum Model went unheeded; it’s been over one decade since the lessons of the Railroad Depot project went unheeded.

The year is 2023, and we’re seven months into the latest Aiken Corporation project — a 3-story Savannah River National Lab complex that the Aiken Corporation is proposing to build on Newberry Street a block north of the Amentum building. Questions have already been raised about the Aiken Corporations’s financial and management acumen and lack of accountability. Promised deadlines have come and gone, and taxpayers are left wondering what was bought with the $250,000 awarded to the Aiken Corporation seven months ago.

Here, it must be emphasized that Aiken Corporation members are  neither elected by voters, nor appointed by elected officials, yet they have been given immense power over public resources. Elected officials no longer serve on the Aiken Corporation board, and there is no opportunity for public comment in Aiken Corporation meetings. What avenue can taxpayers pursue to hold the Aiken Corporation accountable with the power it holds with public resources?

The calls are ongoing for the City of Aiken to dissolve its relationship with the Aiken Corporation. In response, our City Council has been pressing harder still on the accelerator pedal, as if there is a hurry to get someplace before November.

The time for accountability is now — not some decades after the lessons from the latest corporate coup have been swept under the rug.

___________________

17. Daily, Karen, “Council Has Stage Fright – Community Playhouse seeks $1.5 million to finish theater,” Aiken Standard, February 9, 2002.
18. Lord, Phillip; Daily, Karen, “Playhouse Now Needs $1.1 million,” Aiken Standard, February 15, 2002.
19. Lord, Phillip, “Arts Center Debate Expected — Aiken City Council to Consider $935 loan to finish downtown theater,” Aiken Standard, March 10, 2002.
20. Daily, Karen, “Washington Center for the Performing Arts – Smith: ‘It’s still loosey-goosey. Theater funding moving ahead, confusion remains,” Aiken Standard, March 12, 2002.
21. Editorial: “Let’s learn from errors downtown,” Aiken Standard, March 13, 2002.
22. Wessinger, Tommy B., “Playhouse project needs independent audit,” Aiken Standard, April 5, 2002.
23. Daly, Karen, “Construction process at Washington Complex under review,” Aiken Standard, May 1, 2002.
24. City Council to Discuss Audit on Downtown Complex,” Aiken Standard, June 10, 2002.
25. Stoker, Jenne, “Depot Project a Boondoggle?” Aiken Standard, July 17, 2007.
26. Pate, Kathy, “Depot Project a D.C.-style Bailout,” Aiken Standard, August 23, 2010.
27. Dewar, Dick, “Aiken Corp. Needs to be More Accountable,” Aiken Standard, November 9, 2011.