$148,000 for What: The Aiken Corporation’s Empty Invoice.
No confirmation of contract accountability.
McMillan Pazdan and Smith’s no-bid contracts.
No final payments to RPM Development Partners

By Don Moniak
October 23, 2023

As of mid-September, the City of Aiken has spent an additional $204,449 for predevelopment work on commercial properties acquired for Project Pascalis and still owned by the city. Most of the work completed to date, such as building assessments and related laser scans, has not been publicly disclosed. In the case of the Aiken Corporation’s $250,000 no-bid contract with the city, there is little documentation that contractual tasks have been completed.

$148,000 for What? 

On March 13, 2023, Aiken City Council approved a $250,000 no-bid, professional services contract with the Aiken Corporation. The purpose of the contract was for “pre-development” services for the proposed $20 million downtown Savannah River National Laboratory (SRNL) “Workforce Development “ office complex.

The facility was planned at the time for three or more of the “Pascalis properties,” part of the set of seven downtown properties purchased in November, 2021 for $9.5 million by the Aiken Municipal Development Commission (AMDC). The funds for the purchase derived from a $9.6 million general obligation municipal bond issuance paid off in April 2023 with plutonium settlement funds.

The architectural firm of McMillan, Pazdan, and Smith (MPS) was identified as the Aiken Corporation’s only subcontractor to perform the predevelopment work. As reported in Three Missing Pages, MPS had previously signed a City-approved contract with the Aiken Corporation in December of 2022, in support of the latter’s secret agreement to pursue control of the SRNL project on behalf of the City.

The predevelopment contract also mandated that Aiken Corporation “hire an attorney to provide legal services to Developer regarding this project. Such services may include, but not necessarily be limited to, drafting a lease between Developer and third parties as applicable relating to the property described herein.”

According to meeting minutes, Aiken Corporation hired Aiken Attorney Kevin Pethick one month after City Council approved the contract, to “represent the Aiken Corporation as legal representative regarding a proposed agreement with the Savannah River National Laboratory.”

In mid-July the Department of Energy and Savannah River National Laboratory jointly issued a statement disavowing any role in the project; other than acknowledging SRNL’s interest in leasing office space “should it become available.”

In response to a Freedom of Information Act (FOIA) Request for Aiken Corporation invoices submitted to the City of Aiken, the City provided a single invoice for $148,096.00 (Figure 1). As of September 13, 2023, MPS had billed Aiken Corporation $140,966.50; while Austin & Pethick Law Firm had billed $7,129.50 (1).

This one-page invoice is composed only of a series of invoice numbers from the two subcontractors and contains no details of the work completed using taxpayer funds. Compare this submission to previous invoices submitted to the City, such as that by McMillan Pazdan and Smith (Figure 2) and Cranston Engineering (Figure 3).

What is known of the work that was completed for $148,000? 

FIrst, very little of what was defined in the scope of work has been publicly disclosed, if it was even completed. The contractually obligated work that has yet to be publicly disclosed, reported, or provided should include:

• A website documenting proceedings of public meetings and “stakeholder” meetings.
• Assessments of Richland Avenue buildings (Taj Aiken, Holley House, and McGhee Building/CC Johnson Drug Store) and Warneke Cleaners. 
• Public comments submitted via Nationallabprojectaiken@mcmillanpazdansmith.com

Second, much of what was provided to date is either not within the contract’s scope of work, or is primarily public relations work. The Aiken Corporation’s webpage devoted to the project only contains: 

• Two “guest columns” by contractor representatives Arthur “Buzz” Rich and Jason Rabun. 
• A “guest column” by project advocate Mayor Rick Osbon
• A “Frequently Asked Questions” page with one-sentence answers to ten questions. 
• As reported in 45,000 Square Feet Without a Tenant, a “feasibility study,” dominated by graphics, devoid of data, and plagued with inconsistencies.
• One page of “detailed project information,” half of which is talking points in favor of the project. 
• Handwritten public comments submitted at a September 14, 2023 meeting, but not the comments submitted via Nationallabprojectaiken@mcmillanpazdansmith.com.

No Documentation of Contract Administration

The FOIA request for Aiken Corporation invoices also included requests for two sets of documents related to the no-bid contract:

• “Copies of all administrative contract inspections, audits, or other similar processes designed to ensure contract compliance. “
• “Any amendments to the contract, including but not limited to the expanded scope of work identified by Aiken Corp President Buzz Rich to review more than one site. These amendments could include memos to and from Aiken Corporation to City of Aiken.”

The City of Aiken’s response to these two requests was that no responsive documents exist. They could provide no evidence of contract administration and monitoring, and no change orders; even though one substantive alteration is known to have occurred that was not approved by the Aiken Corporation’s Executive Committee nor its client the City of Aiken.

The McMillan Pazdan and Smith No-Bid Agreements

Two weeks after Aiken City Council authorized the $250,000 no-bid contract with Aiken Corporation,  MPS Principal David Moore signed three separate professional service agreements (3) with the City of Aiken worth a collective $60,454. The city’s procurement webpage, which shows all recent bid packages such as the Proactive Tree Work Request for Qualifications, does not contain information for the following work in the city’s agreements with MPS:

• $12,097 for Laser Scan and Architectural Services for Hotel Aiken. 
• $24,980 for Architectural Services for Hotel Aiken. 
• $23,377 for Laser Scan and Architectural Services for Richland Avenue Buildings (Taj Aiken and McGhee Building, which overlaps with the Aiken Corporation contract).

The laser scans themselves cost $12,464 and were conducted by the firm Quantum Reality Capture,

The details of these agreements and the invoices to date can be viewed via the response to FOIA request 306-2023.

As of September 30th, $55,353 has been paid to MPS for their work (see Figure 2 for example) but no reports or data from this taxpayer-funded project have been publicly disclosed. 

No More Reimbursements for RPM Development Partners to Date

The Aiken Corporation-City of Aiken SRNL project partnership is one successor to the failed Pascalis project. Project Pascalis was funded by the City of Aiken but run by the City’s Municipal Development Commission (AMDC).  The AMDC’s “preferred developer” was a consortium of companies collectivvely formed into RPM Development Partners, LLC.  

The December 4, 2021, Purchase and Sale Agreement (PSA) between the AMDC and RPM included a clause for RPM to be reimbursed half of its design and predevelopment costs, up to $150,000. This indicated a predevelopment cost of $300,000; a mere $50,000 more for a project up to five times larger than the SRNL/Mixed Use project.

On September 14, 2022 RPM terminated its role in the PSA, and two weeks later the AMDC followed suit. After a search for “RPM” and “Raines” in the city’s financial records archive yielded no results, a FOIA request was submitted for any RPM invoices after September 30, 2022.

The City’s response was a singular Cranston Engineering invoice from August 2022 for $2,863 for Pascalis design work (Figure 3), completed under the terms of the City’s contract with Cranston (3).

This was one of seven Cranston invoices submitted for Pascalis design and predevelopment work, titled “Project Pascalis Conceptual Support” in “support of Raines-led development.” In total, Cranston’s subcontracting work for Raines Corporation, and thus RPM, netted Cranston an additional $41,579.00.

The lack of additional payments to RPM indicates that the two experienced developers in the project, Raines Company and Lat Purser Company, have yet to seek additional reimbursement of up to $105,000 for their costs.

Footnotes:

(1) In response to a FOIA request from Kelly Cornelius for MPS invoices to Aiken Corporation, the City provided the same Aiken Corporation invoice. No MPS invoices have been disclosed.

(2) It should be noted here that the City of Aiken’s procurement ordinance allows for professional service contracts of under $25,000 without any bidding process or approval by City Council:

“Except for agreements for less than $25,000.00 and that are provided for in the annual operating budget of a department, agreements for professional services shall state the terms and conditions and shall be approved by city council.“

The question that arises is, if the MPS agreements had been consolidated as a single contract, would a request for bids have been necessary?

(3) It should be noted here that, in contrast to Aiken Corporation and MPS’ no-bid contracts, Cranston Engineering was awarded its three-year contract through a normal, more rigorous procurement process that involved three competing bidders. The Cranston professional services agreement was awarded in 2021. A “Staff Augmentation” agreement from March 2023 allows Cranston to supplement the city’s engineering staff with Cranston employees.