Colic. The very word strikes fear into every horse owner. Mild cases can often be managed medically and resolved without ever leaving the farm, but for cases that end up requiring surgery, time is the greatest enemy. Having access to a full-service surgery center nearby is one of the best chances owners can give their horses for a successful outcome. A surgical facility with a full-time equine surgeon capable of performing colic surgery is something that Aiken, despite its high horse population, has been sorely without until recently.
Dr. Sabrina Jacobs, owner and founder of Performance Equine Vets, is responsible for bringing these full-time surgeons to Aiken. Jacobs, who specializes in reproduction, opened Performance in 2004, and it has been expanding ever since. She employs board-certified surgeons, field vets, internal medicine specialists and veterinary assistants. The over 50-acre facility is home to a hospital and surgery center, a reproduction facility with neonatal intensive care and, most recently, a small animal department.
Prior to the recent addition of these full-time surgeons, the options for horses requiring colic surgery in Aiken were few. In the past, Jacobs would fly in a surgeon when available, but colics requiring surgery don’t wait, and the need for a full-time equine surgeon in Aiken was one she worked hard to fill. The only other option was referring and shipping the horses to either Tryon, North Carolina or to the University of Georgia in Athens. The three-hour drive to either facility can spell the difference in the outcome of a colic surgery, so having access to emergency surgery 24/7 in Aiken is a game changer.
The fragile nature of a horse’s digestive system and associated fear of colic shapes most horse owners’ daily choices for feed, hay, turn-out and supplements in constant efforts to prevent it, and “it” comes in many forms including sand, gas, an impaction, a strangulating lipoma and other causes. If the horse does not respond to medical management for colic, then surgery is the only life saving option left.
Two weeks ago my greatest fear was realized, as I arrived for evening chores and found my horse was down, cast on the fence, and thrashing in pain. I phoned a friend to help me extricate him from the fence, and I phoned Performance Equine, who immediately sent a vet on the way. My friend showed up and, on his way, he must have sounded the alarm because, within minutes, a small army of at least ten nearby concerned horse people surrounded us. They stayed to help until the vet arrived, and we waited what seemed like an eternity but was only about 35 minutes. Darkness fell on the pasture, but the collective energy pulling for this horse to survive was palpable, and I will be forever grateful for their support. The sense of community and shared love for our horses confirmed that, despite the battle with Aiken officials to save historic downtown over the last year, I had indeed made the right choice to make Aiken my new home.
The field vet and her assistant arrived, and, initially, my horse responded to treatment, but it didn’t last long. Two hours later he became uncomfortable again so he was transported to Performance for the remainder of the night to be treated there. By early the next morning, he was on the surgery table. Because we shipped him to the clinic when he became uncomfortable, he was already at the facility when the time came to make the decision for surgery. Not having to drive several hours to the nearest University helped give him the best chance of survival.
The continuum of care here is also extremely important, as it was already set up through the field vet that hauling him to the clinic would be the plan, should he become uncomfortable after her visit. There was no time wasted in a referral process. Friends called the clinic when we got him loaded and underway, and internal medicine vet, Dr. Rachelle Thompson, was waiting upon our arrival. She had already been briefed by the field vet, Dr. Hamrick, who initially treated him at the farm. Dr. Thompson oversaw his care throughout the night until the decision was made to take him to surgery when he was not responding to medical management — and while he was still a good candidate for surgery. Surgeon Dr. Stephanie Caston performed the surgery that would save his life. Internal Medicine Specialist Dr. Thompson stayed with him and assisted with the procedure, and then resumed his care upon recovery all the way through to his discharge. The transition from the field visit to hospitalization to surgery, all under one practice, contributed to a successful outcome and cannot be overstated.
A Rare Breed is Becoming Even More Rare
Equine vets, whether they be surgeons, specialists, or field vets have always been a different breed, a special breed. And they need to be. These vets put in long hours, in all weather, and it usually pays quite a bit less than their small animal counterparts can command working a 9-5 job spaying cats. Equine surgeons have always been in limited supply because of the extensive training they require, but today there is actually a documented shortage of all equine vets. A July 2023 article by Justin High, DVM inQuarter Horse News accurately describes the situation saying” The expectations, standards and history within equine veterinary medicine were built by hard-working, task-oriented perfectionists who laid the ground work where few people these days care to walk.”
In today’s culture filled with millennials who want balance in their life, good old fashioned grit is becoming nearly extinct, and that appears to be one of the main reasons identified for the shortage. The internal medicine vet assigned to my horse (who didn’t even look old enough to be a vet) possessed that grit in spades. She was on call and working every day my horse was hospitalized and throughout the weekend. Dr. Rachelle Thompson is the stuff real equine vets are made of and a rarity of her generation no matter what profession they are in.
Staying Independent – Performance defies the odds
The clinic is solely owned by Jacobs and in a time when veterinarian-owned facilities are becoming a rarity. Similar to the trend in human medicine, many veterinarian-owned practices are being bought up by much larger corporations. From a horse owner’s prospective, I feel the benefit to patients of having an independently-owned facility is the autonomy of your doctor regarding medical decisions. Corporate-owned facilities can shackle doctors by dictating cost-saving measures handed down by third parties whose job it is to mind the profit margin, and whose decisions might not always constitute the highest standard of care.
Hats off to Dr. Jacobs for bucking the current trend of corporately- owned facilities, for assembling a team of dedicated vets, and for raising the bar in Aiken by providing 24/7 access to life saving emergency surgery. As more horse people continue to find and migrate to Aiken the need for quality care only continues to grow, and Jacobs is answering the call.
Dr. Stephanie Caston (left), Dr. Rachelle Thompson (center), Dr. Sabrina Jacobs (right)
A big thank you to Dr. Sabrina Jacobs, Dr. Rachelle Thompson, Dr. Stephanie Caston, Dr. Brianna Hamrick, and to Technicians Cheyenne, Victoria, Emily and all of the staff at Performance for the best Christmas present ever — my horse’s life.
We were sidelined for this year’s Hoofbeats parade but thanks to Performance we are already looking forward to that stirrup cup in front of the Willcox next year.
Divestment of Pascalis project properties, a short history of the Pascalis properties, and the question of future allocations of property sales proceeds.
(Update: The final RFQ is available here. The two key changes are that Warneke Cleaners was added to the bundle of properties to be marketed, and the portion of the Beckman Building on Laurens Street, SW was removed from the list).
by Don Moniak December 11, 2023
Aiken City Council will hold its final work session and regular meeting of the calendar year tonite, at 111 Chesterfield Street, South. The Work Session begins at 6 p.m. and has a single agenda item—an update on the stormwater runoff induced “ravine” along Hollow Creek in Woodside Plantation. Remediation costs for that project are presently estimated to be in the $2 million range. More details on the “ravine” issue are provided in this Information Release.
Also on the agenda is a closed-door Executive Session, an event that has become routine, whether justified or not. More information on the this scheduled Executive Session, and a less justifiable session held on September 11th, is provided in this Executive Session Background article.
But it is the last agenda item of the regular meeting, a draft Solicitation for Real Estate Services for the Pascalis project properties, that will draw the most interest.
Introduction to Divestment Agenda Item
The last official action, other than adjournment, of the last scheduled Aiken City Council meeting for this calendar year, will involve the future of five of the seven AMDC-purchased and City-owned Pascalis project properties—the Hotel Aiken, Holley House Motel, the McGhee Building, Taj Aiken Restaurant, and a portion of the Beckman Building on Laurens Street.
Also at issue is the future of seven businesses that are currently City of Aiken tenants. Taj Aiken Restaurant, Security Finance, and Flawless Glow Cosmetics are tenants in properties to be put up for sale. Warneke Cleaners, Vampire Penguin, and Ginger Bee are tenants with an entirely unknown and uncertain future. Tenant Newberry Hall is currently in negotiations with the City of Aiken to purchase its property, an option built into its previous and current lease arrangement.
This very last agenda discussion and approval item is also the most awaited:
Approval of Solicitation for Real Estate Services for Property Located Along Laurens Street SW, Richland Avenue West and Newberry Street SW.”
The Solicitation is designed to facilitate the marketing and sale of four of the Pascalis properties and a portion of a fifth. Only one property, the former Holley House Motel, is eligible for demolition under the proposal; historic renovation or reuse is mandated for the other properties.
This draft procurement document, which is likely to be approved by City Council, shows that the City of Aiken is moving forward in divesting itself of its commercial real estate acquired to pursue Project Pascalis; and doing so by contracting with an experienced, professional real estate firm—which was noticeably lacking during the original Pascalis property acquisition process.
The history of the properties is outlined in brief in Part One of this article. The details of the solicitation are in Part Two, followed by the lingering questions in Part Three.
Figure 1: Properties considered for the original, early 2021, Pascalis project demolition and redevelopment zone. 213 Park Avenue, the former Municipal Building, was not a part of that effort, but was added to the mix in April 2022.
Part One: A Short History of the Pascalis Properties.
Tonight’s meeting will occur three years after the Aiken Economic Development Department wrote in its monthly report that it “continued to work with ownership and various suitors interested in acquiring and redeveloping the Hotel Aiken.”
Between December 2020 and March 2021, the City of Aiken and its Municipal Development Commission (AMDC) first pursued a strategy, in tandem with private investors, that was articulated in the AECOM Master Economic Development Plan for the city of Aiken:
“Engage in partnerships to assemble land/properties for redevelopment in target growth areas.”
“Explore options for property acquisition by the City/Aiken Municipal Development Commission of parcels that can be acquired, assembled, and developed for medium-to- high-density mixed-use, mixed-income residential development.”
The AECOM report’s basis for these strategies and goals was that downtown has too many property owners:
“One of the major barriers to new development/redevelopment is fragmented property ownership. This makes it difficult for both public and private entities to assemble land for larger-scale redevelopment.”
For the original Pascalis project, several individual properties were combined into a single development area in March and April of 2021 by private investors WTC Investors LLC (Agent Ray Massey) and Aiken Alley Holdings LLC (Agent Ray Massey). The purpose of Project Pascalis was to demolish the historic buildings and redevelop the properties into a modern hotel, apartments, conference center, parking garage, and retail space. As shown in The Changing Views of Project Pascalis, that vision evolved over time but never deviated from the original purpose.
The Brinkley Building portion of the City of Aiken’s former Municipal Building at 213 Park Avenue, SW. The entire Municipal Building was later added as a proposed site for the conference center.
A portion of Newberry Street, SW, owned by the City of Aiken.
The timeline of offers, transactions, and purchases is as follows:
March 2, 2021: WTC Investments signed a Purchase and Sale Agreement (PSA) for the Shah Properties for $7.5 million, depositing $100,000 in earnest funds.
March 15, 2021: Aiken Alley Holdings purchased the three Alley properties for $2,025,000. The newly formed investment group also was pursuing the State Farm building at 117 Newberry Street at the same time. (link)
March 17-22, 2021: The first Project Pascalis project announcement was made, although no details were provided; and WTC Investment’s development arm, GAC LLC, signed a predevelopment cost-sharing agreement with the AMDC—which was not publicly disclosed.
April 15, 2021: WTC Investments signed a purchase and sale agreement for the Anderson Property for $2 million, depositing $35,000 in earnest funds.
April 19, 2021: The first Project Pascalis concept plans were completed—but not publicly released. They show a complex of four to five-story apartments, a hotel, and a parking garage; with a conference center and retail on the ground floors.
April 30-May 6, 2021. WTC/GAC withdrew from its agreement with the AMDC and a series of negotiation meetings ensued between WTC’s Weldon Wyatt and city officials. (The decision for the City to obtain the properties via the AMDC is believed to have been made at a final May 6th meeting.)
May 22, 2021: The Aiken Chamber of Commerce took “assignment” of the Shah Properties PSA, and WTC was reimbursed its $100,000 of earnest money.
June 3, 2021: The Chamber took assignment of the Anderson property, and WTC was reimbursed its $35,000 earnest money.
June 8, 2021: Aiken Alley Holdings purchased the “State Farm” property at 121 Newberry Street SW for $675,000.
August 25, 2021. City of Aiken approved a $10 million general obligation municipal bond issuance to fund AMDC property purchases in the ~950-acre “Parkway District.” There was no public disclosure that a two-acre portion of downtown Aiken was under assignment to the Chamber of Commerce, with options for the City or AMDC to purchase. (Figure 2). The bond issuance was made two months later.
Figure 2: In August 2021 Aiken City Council authorized $10 million in bonds for the AMDC to purchase property in the “Parkway District” (blue line is approximate boundary). The area under contract for impending purchase or sale, represented by the red box, was not identified or otherwise disclosed during the bond proceedings.
November 9, 2021: Using funds from the October 25, 2021, bond issuance, the AMDC purchased the Shah and Anderson properties for $9.5 million.
December 27, 2021: Ray Massey, representing CTR LLC, signed a pre-sales agreement to purchase the city’s Brinkley Building for $750,000. City Council was presented with the proposed sale on January 25, 2022, but chose not to move forward. (Proposed Sale agreement begins at Page 256).
March 28 and May 9, 2022: Aiken City Council held hearings on an ordinance to privatize a portion of Newberry Street SW which the AMDC had deemed essential to the success of the project. The ordinance involved conveying city property to RPM Development Partners, in exchange for the Aiken Alley Holdings property at 121 Newberry Street, SW. During this period, the AMDC announced the conference center location would be moved to 213 Park Avenue NW.
September 14, 2022: RPM Development Partners terminated the contract. The AMDC followed suit two weeks later, calling it a “purported” contract.
November 2022 to September 2023: In partnership with the Aiken Corporation, the City pursued plans to locate the Savannah River National Laboratory (SRNL) “Workforce Development Center” on all or parts of four of the Pascalis properties. Highlights of the partnership included the January 23, 2023 announcement, and the March 13th approval of a $250,000, no-bid, predevelopment contract with Aiken Corporation; with the architectural firm of McMillan, Pazdan, and Smith as subcontractor.
September 25, 2023. The Aiken Corporation selected its own property on Newberry Street, NW, for the SRNL office complex, which by then was rebranded as a mere “Mixed-Use” spec buildings.
December 11, 2023: Aiken City Council to vote on draft Solicitation of Real Estate Services to be facilitated by the city’s procurement department.
Part 2: The Draft Solicitation for Real Estate Services.
The Draft Solicitation prepared by City staff, which is subject to City Council approval, is prefaced by the City Manager’s brief memorandum on Page 99 of the agenda.
“Council has directed staff to develop a solicitation document to select a real estate firm experienced in marketing property for adaptive reuse and renovation primarily fronting the southern side of the 200 block of Richland Avenue West. A draft document follows this memorandum for Council’s consideration.”
The date of this directive is unknown, but City Council has met in closed-door Executive Session several times in 2023 to discuss the sale or lease of these city properties.
The opening to the Request is as follows:
“The City of Aiken [City] is seeking a qualified firm to provide Real Estate Brokerage services to assist the City with the sale of property. The City desires to engage a licensed and successful commercial real estate broker to market and sell commercial real estate property owned by the City for historic renovation and adaptive reuse.”
Prominent aspects of the RFQ include:
1. The exclusion of two properties, Warneke Cleaners and Newberry Hall; as well as 2/3rds of the Beckman Building at 106 Laurens St, SW. In regard to the latter, only Flawless Glow Cosmetics is listed, which is one-third of the ground floor shops in the historic Beckman Building. The Newberry Hall tenant holds a lease with the legal option to purchase that property, and are currently negotiating with the City to do so.
2. Historic renovation and adaptive reuse is mandated for all properties, except the Holly House Motel on Bee Lane constructed in the 1970’s:
“All structures on identified property must be purchased for historic renovation and adaptive reuse, with the exception of property located at 112 Bee Lane SW and identified as tax parcel number 121- 21-08-001. That property may be renovated and/or adaptively reused or demolished as the identified buyer sees fit; and the services required include: “Develop and implement marketing plans to sell City property for historic renovation and adaptive reuse.”
Because of this provision, fifty percent of the bid award ratings will be based on the firm’s experience with marketing and selling historic properties and experience with historic property tax credits.
3. Properties can be offered singularly or can be consolidated:
Solicit purchase proposals for specific properties. Provide assistance as requested by the City, with post-contract due diligence requirements and closing.”
4. Appraisals are required.
5. The contractor will represent the City of Aiken during site visits.
6. There are no deadline dates attached to the draft RFQ.
Part Three: Lingering Questions
Why did this process take so long?
On January 23, 2023, Mayor Rick Osbon promised a Request for Proposals for the Hotel Aiken within two months, a commitment made at the same time as the optimistic and hyped announcement of the SRNL downtown office complex project.
There are a few factors beyond some expected bureaucratic inertia for the subsequent, eleven-month delay. Among them are
1. Most of the properties were under consideration for the SRNL project until late September of this year, and it appears that even the Hotel Aiken was under consideration for the SRNL project. The Hotel Aiken Stabilization Report, from Bennett Preservation and Engineeering which was commissioned in late March of 2023, analyzed the option of repurposing the building for office use.
The Bennett report was not completed until September 21st, four days before the Aiken Corporation issued its recommendation to locate the Mixed Use/(SRNL) office building on its own Newberry Street, NW property.
2. The City of Aiken did not take official ownership of the properties until June 19th of this year. The process was delayed by at least two months when City Council chose an unexpected route. Instead of retaining the AMDC while transferring the commission’s properties and assets to the City, as proposed on March 13th, Council chose to dissolve the AMDC and have the properties automatically revert to City control.
What will the City do with the money?
The City of Aiken paid for the Pascalis properties with $9.6 million from a $25 million allocation of State of South Carolina plutonium settlement funds. The allocation specified the use of the $25 million for “Downtown and Northside/Hwy 1 Corridor Redevelopment and Development.”
The $25 million was one of the few plutonium settlement allocations that was vague in purpose; the rest of the legislative allocations for this region were for specific property developments such as industrial parks, and projects such as the new Aiken Technical College Nursing program building and the Barnwell County High School.
Will the City of Aiken choose to follow its traditional path of depositing property sales proceeds into its general fund? Or will it choose to return proceeds to its special plutonium settlement funds account? That issue does not appear to be on any present or future agenda.
Does the City have any choice in the matter? Did the intent of legislative language of “development and redevelopment” involve the option of buying and selling commercial real estate and using the proceeds—whether they sell for a loss or gain—to fund projects not intended by the legislative allocation?
This question arose during Council’s two hearings on the proposal to spend $15.5 million on the following:
$9.6 million to pay off the bond that funded the Pascalis property purchases. $3.5 million for the “Northside Sewer Lift Station” project north of I-20 between Exits 18 and 22. $3.0 million for construction of a new Fairfield Street Bridge. $0.4 million to make up for the budget shortfall for the now “paused” Farmer’s Market/Williamsburg Street redevelopment project. (this line item was added for the second hearing on April 10th)
During the first Public Hearing on Feburary 13th, I asked:
“What are you going to do with the money that comes when you do sell some of these properties? Will it be returned to this fund or go to the General Fund?”
Linda Johnson of the Historic Aiken Foundation followed up on that a few minutes later:
“I wanted to follow up on the last comments that Mr. Moniak made. Regarding the fact that we got $9.6 million to use to pay off the bond, presumably sometime in the future we could recoup some of that by selling properties, etc. (We) would like to see the City make a commitment to set aside the recouped money for special projects, possibly something like more for the Northside, which did not really get a big part of the money. Maybe addressing historic properties that Council has heard about from other speakers tonight. Council could consider keeping any money the city gets back separate and using it for special projects.”
During the final hearing on the Plutonium funds on April 10th, I asked:
“If the property is sold to a private party what happens to the money? Does it get returned to the State? ….If the city pockets the money, what will it do with it? Is it legal to take state funds for a project, claim that project involves property purchases for the project and then sell the property for either a loss or a profit (after the project is cancelled?)”
On April 10th, Councilwoman Lessie Price unsuccessfully attempted to persuade the rest of Council to set aside $4 million of the remaining $8.5 million for Northside projects, as intended in the legislation. Her pleas were not only met with indifference, but two Council members chose to belittle the effort privately via text messages. In the end, only Councilwoman Gail Diggs joined Ms. Price in voting against the $15.5 million budget amendment, with the five other members voting in favor.
The Aiken Corporation is presently moving forward as the City of Aiken’s preferred, sole-source, developer of a $20 million “Mixed-Use” downtown office complex being funded by State of South Carolina plutonium settlement funds.
Since the money is allocated for use in developing “offsite” infrastructure for the Department of Energy’s (DOE) Savannah River National Laboratory (SRNL), Aiken Corporation is seeking a long-term lease arrangement with the SRNL operating contractor, Battelle Savannah River Site (BSRA); but has yet to ink any agreement.
The project’s high profile has renewed discussion regarding the relationship of the City of Aiken to the Aiken Corporation.
A review of Aiken Corporation and City of Aiken records indicates the Aiken Corporation is not a subsidiary of the City of Aiken, was not created by Aiken City Council, and does not serve at the discretion of the City Council. Aiken Corporation is a stand-alone, private, not-for-profit organization with a long-standing partnership with City Council that was established by a resolution, but not by ordinance. The Aiken Corporation also is not a Community Development Corporation as defined by South Carolina Law.
Aiken City Council cannot dissolve the Aiken Corporation, but it can defund it. Only the Aiken Corporation’s Board of Directors can dissolve the organization itself. If that were to happen, its assets and properties would be transferred back to the City of Aiken.
The City and Aiken Corporation also have a Landlord-Tenant relationship. The City of Aiken has a 99-year ground lease arrangement with Aiken Corporation for the property upon which the Aiken Corporation’s “Amentum” office building is situated.The City of Aiken has the right to sell the property to a third party and, under certain conditions, can terminate the ground lease and take ownership of the facility. The Existing Landlord-Tenant Relationship
The Aiken Corporation (ACorp) is best described as a not-for-profit organization whose primary contributor is the City of Aiken. Its major source of income derives from a quarter-million dollars per year of rental revenues (1) from its Newberry Street office building currently leased by the Amentum Company. The organization also has a Subchapter S company called L.E.D. Inc. which acts as its property management arm.
All income is designated for use to advance the Aiken Corporation’s mission “to diversify and expand the City’s economic base and improve the quality of life in Aiken.”
The most recent three-year lease between ACorp/LED and Amentum was signed on January 23, 2023. The current rent is $20,500 per month.
The Aiken Corporation Building sits on property owned by the City of Aiken. In December of 2000, the City signed a 99-year “ground lease” with the Aiken Corporation, giving them control of the property as well as an option to purchase it. While taxes are paid by ACorp on the building itself, the actual land is exempt from taxation due to its government ownership (Figure 1).
Figure 1: Aiken County Assessor’s Office property values for the Aiken Corporation (Amentum) building at 106 Newberry Street, SW. Land value and assessment is set at $0 due to City of Aiken ownership. Aiken Corporation owns the building, which was funded by City of Aiken loans, and has leased it to a series of Savannah River Site contractors since 2001. The City of Aiken owns the actual land and leases it to Aiken Corporation under the terms of a 99-year ground lease.
Aiken Corporation, and its subsidiary the Aiken Downtown Development Association (ADDA), is, and always has been, dependent upon city resources. Annual financial reports (2) consistently show the City of Aiken is its largest, and generally its only, contributor (Figure 2). The City’s purchase of the Newberry Street property was financed by twenty years of rental revenue from facility lease-holders (3). City staff assists the organization with its monthly books. Even the largest contribution in 2022, a 25-acre parcel of land off York Street, was originally intended as a donation to the City of Aiken. (4).
Figure 2: FY 2022 (July 1, 2021 to June 30, 2022) Aiken Corporation tax filing, showing the City of Aiken as the sole contributor. In FY 2021, the city’s contribution was $60,000. Other cash funds in FY 2022 were derived from fundraisers ($25,546) and ADDA membership dues ($18,000).
The 99-year ground lease includes a provision allowing the City to sell the property, at which time Aiken Corporation could exercise the right of first refusal and purchase the property. Another provision allows the City, as landlord, to terminate the lease under certain conditions, and take ownership of the building (5).
In a sense, the Aiken Corporation could be viewed more as a steward of City property than a landlord in its own right. It owns a building that can revert to city property, and does not own the property upon which the building sits.
Aiken Corporation Charts a New Future.
One year ago, the organization seemed to be almost a historical footnote, an increasingly obsolete entity that was almost entirely displaced in 2019 by the ordinance establishing the Aiken Municipal Development Commission (AMDC).
As detailed in the three-part series The Amentum Model, the Aiken Corporation’s heyday was from the late 1990s to about 2010. The organization has been relatively dormant since that time. Today’s organization mostly deals in six-figure projects whose budgeting is, directly and indirectly, entirely dependent upon City of Aiken contributions, land transfers, loan forgiveness, and use of city assets.
In contrast to its usual six-figure projects, ACorp is currently pursuing an eight-figure project involving $20 million of the State of South Carolina’s plutonium settlement. The funds were legislatively allocated to Aiken County for, “Off-site Infrastructure Improvements for SRS/National Lab, including the Aiken Technology/Innovation Corridor.” The City of Aiken was awarded the funds after SRNL declared a preference for locating the facility within the city.
The project goal originally involved construction of a 45,000 square-foot office building on the downtown “Pascalis properties” for use by SRNL. The project has devolved into a 36,000 square-foot “Mixed-Use” facility, a colloquial term for a “Spec” building. On September 25th, ACorp’s Board adopted the recommendation of its subcontractor, McMillan Pazdan and Smith, to locate the facility on its newly acquired, one-acre Newberry Street, NW property; and not on property acquired by the city for the Pascalis project.
Despite the downsizing and movement to undeveloped vacant lots, the rough cost estimate of $20 million has not changed. Although unequivocally intended for use by SRNL, the future use has also devolved into mere speculation that SRNL will sign a long-term lease. Such an arrangement could net ACorp upwards of a half-million dollars in additional rental income; income that would be entirely dependent upon the budgetary whims of the federal government.
To sign a lease, SRNL’s operating contractor needs approval from the Department of Energy, as well as an annual allocation of upwards of a half-million dollars from the SRS annual budget. To date, this has not occurred. In July of this year DOE/SRNL distanced itself from the project.
The pursuit of this lucrative project in the downtown retail district began shortly after the cancellation of Project Pascalis. Following the AMDC vote to end that effort, the City of Aiken reinvigorated the Aiken Corporation by secretly enlisting it to pursue the $20 million SRNL project.
The Aiken Corp’s public prominence took a step up in March of this year, when it entered into a no-bid, $250,000 contract with the City in which it was cited as “The Developer.” The development role was contractually limited to “pre-development,” which included the pursuit of long-term leases with third parties—understood to mean the Savannah River National Laboratory.
Despite continued uncertainties and a lack of amendments to the March 13th contract, Aiken Corporation has moved forward with a Request for Qualifications (RFQ) to provide Architectural and Engineering services for the proposed “Mixed-Use” facility.
Figure 3: The Aiken Corporation website homepage features three men toasting with drafts of beer in front of the former Aiken Brew Pub, which is currently being renovated with private funds.
Mixed Messages About the Relationship.
Despite, its 27-year history and the emergence of the $20 million SRNL project as an Aiken Corporation endeavor, its actual relationship with the City remains murky.
This past April, City Attorney Gary Smith wrote to the South Carolina Ethics Commission that,
“The Aiken Corporation is a 501(c)(3) corporation that was formed by (Aiken) City Council in 1995 to promote economic development in the City of Aiken. Historically, two City Council members have served on the Board of Directors of Alken Corporation. The Bylaws of the Aiken Corporation provide that in the event of dissolution, the residual assets of the organization will be turned over to the City of Aiken to be used exclusively for public purposes.”
The Ethics Commission then issued an informal opinion that referred to the Aiken Corporation as an example of “a board, foundation, agency, etc. which is an arm or child of the council, i.e. created by council and existing solely at the discretion of council.”
On September 25th of this year, four other descriptions emerged.
On the morning of the 25th, the ACorp Board of Directors approved a recommendation for siting the “Mixed-Use” office building it hopes to lease to SRNL. K.J. Jacobs, representing Aiken Corporation subcontractor McMcMillan Pazdan and Smith, described his firm’s client as a “subsidiary:”
“The City does not control (the Old Hospital) site. We looked at the four sites controlled by the City or its subsidiaries.”
The context for that description was the elimination of the Old Hospital property from SRNL project consideration, and selection of its own property on Newberry Street NW; a process described in The Bomb Plant Reveal…Bombs.
Mr. Jacob’s assessment was not verified at Aiken City Council’s meeting that evening, where ACorp officers presented its recommendation to build the SRNL/“Mixed-Use” facility on its own property, which itself was acquired in an unusual fashion.
The discussion began at the fourteen-minute mark of the video-taped meeting. Board member Sam Erb cited the organization as a “Community Development Corporation,” which by legal definition is an independent organization; but did not describe the relationship.
Then, in response to a request by Aiken resident Lisa Smith for Council to explain the relationship between the two entities, Mayor Rick Osbon stated that the Aiken Corporation “seems almost like a cousin to the City.” His assessment was followed by ACorp Chairman Buzz Rich’s description of the relationship as a “private-public partnership.”
A review of the history and the terminology suggests that Buzz Rich had the only accurate description—that Aiken Corporation is a private organization that has maintained a long-term partnership with the City.
Is the Aiken Corporation a Community Development Corporation?
Unless the City or Aiken Corporation can provide evidence to the contrary, the answer is no. The ACorp’s incorporation papers from 1995 identify the organization as a 501(c)(3) “formed exclusively for charitable purposes,” with the mission to “diversify and expand the city’s economic base and to improve the quality of life in Aiken.” Early efforts towards that mission are described in a 2009 USC-Aiken Economic Impact Study.
Neither its founding documents nor its by-laws specify that ACorp is a Community Development Corporation (CDC). The Aiken Corporation meets only two of the six legal criteria (6) for a CDC as defined by SC 34, Chapter 43.
Downtown Aiken is a high-rent district, relative to Aiken County as a whole. On a per-capita and median income basis, the City of Aiken is one of the more affluent municipalities in South Carolina.
While the Aiken Corporation did conduct work on the Toole Hill housing redevelopment project earlier in this century, its primary mission has been focused on downtown Aiken, not on the low-income areas of Aiken. Presently, there are no representatives from Aiken’s lower income Northside communities on its Board of Directors, nor are any required per its recently amended by-laws.
Simply put, the Aiken Corporation is not a South Carolina Community Development Corporation.
Is Aiken Corporation a subsidiary of the City of Aiken that serves at the discretion of City Council?
This question has a two-part answer. City Council could choose to both defund ACorp and terminate its 27 year-old partnership established by resolution. But Aiken City Council cannot dissolve the organization. City officials, including City Attorney Gary Smith, have declined to offer evidence to the contrary.
Unlike the Aiken Municipal Development Commission (AMDC), the Aiken Corporation was not created by Aiken City Council. Whereas the AMDC was formed by a stand-alone ordinance, the Acorp was independently formed.
In fact, according to a June 5, 2002, memorandum from Aiken staff attorney Richard Pearce to Aiken City Council, “Aiken Corporation is not a division of the City of Aiken.”
There is no reason today to doubt Mr. Pearce’s 21-year-old assessment. Whereas the now dissolved AMDC was created by, and served at the discretion of City Council, the Aiken Corporation’s relationship with the Aiken City Council only involves a vague partnership contract not much different than the City’s relationship with the Chamber of Commerce.
”The outline for the Aiken Corporation includes resolutions with the Aiken Corporation, the Chamber of Commerce, and the Aiken Economic Development Partnership. Each of these resolutions simply states that the city will continue to cooperate with each of the groups.”
During the same meeting, Council approved a contract with Aiken Corporation to:
“begin a cooperative economic development effort, led by The Aiken Corporation, and supported by the City of Aiken; to jointly undertake the planning activities required to identify the specific goals and resources necessary for success; and to develop agreements that clearly identify the roles and responsibilities of each party in this endeavor.”
As such, Aiken Corporation can be viewed as an independent party that is dependent upon City of Aiken funding, but not as a subsidiary controlled by the City of Aiken.
Since it was not created by, and does not serve at the discretion of City Council, Council members Lessie Price and Gail Diggs clearly made the correct decision in late March of this year to resign from the Aiken Corporation Board of Directors in order to avoid any potential conflicts of interest. However, the absence of city officials as voting Board members leaves most decisions involving city funds in the hands of a self-appointed, unelected, private organization.
Summary
As a partner, the Aiken Corporation has been an erratic force in City politics and development. The peak of its influence was in the early 2000’s, followed by a slow waning. Its diminished power could be fully reversed with the infusion of a $20 million capital investment from the State of South Carolina via the City of Aiken.
If the “Mixed Use” office building ultimately houses SRNL, the Aiken Corporation stands to yield upwards of a half-million dollars in annual rental revenue. It can then use that revenue derived from government investment to influence downtown area development, but with little to no local government oversight.
Aiken Corporation has attempted to portray its role as an investor, but in reality, the organization has not taken any real risks in its pursuit of developer status and ultimate ownership. Its role is one of a classic rentseeker.
Whether the process in place even complies with the legislative intent of the $20 million allocation for an SRNL facility is questionable. A letter sent in September of this year to State Senators Tom Young and Shane Massey, asking “How is this not a misappropriation of funds?” has yet to be answered.
Footnotes:
(1) While the gross rental income hovers around $240,000 a year, the reported net income is closer to half of that. For example, in FY 2022, Aiken Corporation reported $240,000 in income and $112,000 in rental expenses.
“It is agreed that the rental payments hereunder constitute payment to Landlord for the value of the land which is stated to be One Hundred Twenty Thousand and No/ IOOs ($ 120, 000.00) Dollars. The One Thousand Three and No/ IOOs ($ 1, 003. 00) Dollars per month payable by Lessee to Landlord is scheduled to amortize the sum of $ 120, 000. 00 in 240 equal, consecutive monthly payments at Eight (8%) percent interest per a n n u m . Therefore, for purposes of exercising the option described hereinbelow in Paragraph ” 3″, the land will be fully paid for by Lessee in 20 years after the first payment due hereunder. After such 20 year period, Lessee shall pay to Landlord only the sum of One ($ 1. 00) Dollar per year for rent hereunder.”
“Potential Land Gift – Stuart Bedenbaugh reported that he was approached by Brad Brodie about donating some property on the northeast side of York St, across from the Vocational Rehab Center. Mr. Bedenbaugh stated that the City is not interested in obtaining the land but thought Aiken Corp would be. There are 25 acres of land where trees were removed, which is against the City’s Tree Ordinance. It will be August 2022 when the development restrictions will be lifted.”
(5) Section 14 of the Ground Lease states:
“Landlord reserves the right to terminate this Lease, and to re- enter and possess the whole of the Leased Premises without further notice or demand:
a) Upon any general assignment for the benefit of creditors of Tenant; b) Upon the leveying oa a write of execution or attachment against the property of Tenant and the same not being dismissed within sixty (60) days; c) Upon failure of Tenant to pay any installment of rent after sixty(60) days written notice that same is due; d) Upon failure of Tenant to perform all and singular the terms of any mortgage executed by Tenant (and the Note required thereby) to which Landlord has subordinated its interest; e) Upon failure of Tenant to perform any other covenant required to be performed by Tenant after thirty (30) days written notice from Landlord, or in the event more than thirty (30) days is required to perform such covenant, the failure of Tenant to c o m m e n c e the performance thereof within thirty ( 30) days and thereafter to diligently pursue such performance to completion.
(6) South Carolina state law 34-43-20(2) states:
“Community development corporation” means a nonprofit corporation which:
(a) is chartered pursuant to Chapter 31, Title 33.
(b) is tax exempt pursuant to Section 501(c)(3) of the Internal Revenue Code of 1986, as amended;
(c) has a primary mission of developing and improving low-income communities and neighborhoods through economic and related development;
(d) has activities and decisions initiated, managed, and controlled by the constituents of those local communities;
(e) has a primary function of developing projects and activities designed to enhance the economic opportunities of the people in the community served, including efforts to enable them to become owners and managers of small businesses and producers of affordable housing and jobs in the community served;
(f) does not provide credit, capital, or other assistance from public funds in an amount greater than twenty-five thousand dollars at one time or in one transaction. The department may adjust that dollar amount in the manner provided in Section 37-1-109.”
The Aiken Corporation only meets criteria (a) and (b):
The organization’s primary mission is not targeted towards low-income communities, as most of its work involves development in the high-rent downtown Aiken retail district.
Few of its activities are initiated by constituents, and most are initiated by its Board of Directors and City staff.
Few if any efforts are made to assist people to become owners and managers of small businesses and producers of affordable housing.
Most of the organization’s transactions exceed $25,000 and involve public funds or rental revenues derived from a very generous, 99-year lease on city-owned property.
Related Articles, in descending order of publication:
The Aiken Corporation Building was published in conjunction with this article to illustrate the changes in corporate tenancy in the Aiken Corporation Building.
Aiken’s Cousin Problem… covers the recommendation of the Aiken Corporation’s Newberry Street, NW property for the SRNL/“Mixed-Use” project; and the history of the acquisition of that property.
The three-part series The Amentum Model… chronicles the history of the development of the Aiken Corporation’s Newberry Street office building and the Aiken Performing Arts Center.
Letter to Battelle is a letter of concern regarding the project process and status to the Battelle Company’s chief liaison for the DOE/SRNL operating contract.
45,000 Square Feet Without a Tenant provides information about the DOE/SRNL disassociation with the project and the details of the DOE/SRNL operating contract.
A Question on Security is an unanswered letter to ACorp contractor McMillan Pazdan and Smith regarding Department of Homeland Security guidelines and rules for threat assessments at federal facilities.
The Future of Warneke Cleaners is an unanswered letter to Aiken Corporation contractor McMillan Pazdan and Smith regarding the zoning status of downtown dry cleaner.
Three Missing Pages covers the Aiken Corporation contract with the City of Aiken and provides extensive footnotes about the project timeline through April 2023.
Who Bought this Property chronicles how an Aiken Corporation loan from the City of Aiken was forgiven in exchange for ACorp purchasing a small property that facilitated the annexation of the new Steeplechase property.
The Agenda Setting Aiken Corporation describes how decisions are often made at Aiken Corporation Board meetings before being presented to City Council.
Project Labscalis Annual Operating Costs covers the total estimated costs for demolition and site prep, construction, and annual maintenance costs for the proposed SRNL building.
Also: Still no appraisals of Pascalis Properties, and City of Aiken continues to block release of Pascalis properties records.
by Don Moniak December 6, 2023.
In response to a Freedom of Information Act request (1) the City of Aiken has disclosed nine documents and reports from 2023 that are related to the Project Pascalis properties, including the Hotel Aiken, the Taj Aiken Restaurant, and the McGhee Building; aka as CC Johnson Drug Store. In total, work expenditures came close to $100,000 in expenditures; incurred in addition to the $250,000 contract between the City of Aiken and Aiken Corporation.
Most notable is the September 2023, Hotel Aiken Stabilization Report, from Bennett Preservation and Engineeering. The purpose of the analysis was, in part, to analyze two options for future use:
“In the first scenario, the structure is reused as a hotel or as a light residential structure without significant changes to either the use or the general construction. In the second scenario, the building is either reused for a heavier use classification, such as office use, or it is reused for residential use, but with significant weight increases, or with a need for significantly stiffer floor systems, such as might be required to support brittle finishes.”
The overall conclusion by Bennett is:
“We conclude that, overall, the building is relatively lightly framed, but if areas of deterioration are addressed and specific areas are strengthened, the building could be used for a residential reuse similar to that for which it was originally designed. If, on the other hand, the use of the building were to be changed, for example to office use, or even a modern, relatively heavy hotel use with significant weight in the guest rooms and brittle finishes and tile floors in the bathrooms, strengthening or supplementing of the floor framing and vertical load carrying systems would be appropriate, as would additional perpendicular shearwalls within the building to carry the additional seismic load.”
Also within the records disclosure are “as built” laser scan illustrations of the Hotel Aiken and adjacent Richland Avenue buildings; and the contractual letters of agreement for all the project work.
The documents released are in the table, with links, below:
In response to a request for appraisals of Pascalis project properties, the City of Aiken reported there are no appraisals to date. (Figure 1)
Figure 1: Response to 380-2023 FOIA request. Click to Enlarge.
Still exempt.
In response to a request for unredacted version of the May/June 2021 comparison table for Pascalis properties proposals and copies of all amended Purchase and Sale Agreements with RPM Development Partners,LLC, the City of Aiken declared the records as still exempt under FOIA regulations (Figure 2). The original Purchase and Sale Agreement from December 2021 was discovered being mistakenly online in the City’s document repository in November 2022, and subsequently released in Downtown Aiken Half-Price Sale.
“Pertaining to the three McMillan Pazdan and Smith agreements all made on March 26, 2023 1. Re MPS Project 023160.00 a. A copy of the Laser scan report, summary, or any other documents relative to the delivery of services. B. The computer model of the Hotel Aiken C. The proposal from Quantum Reality. 2. Re MPS 023160.00 a. The report by MPS regarding the Hotel Aiken. 3. Re: MPS 023173.00 a. The same items as with #1 of this request: the laser scan report or summary, The computer models for Richland Ave buildings and b. The report for recommendations for partial building demolition. Placing this information on the city’s website in a user friendly format is s a sufficient response.”
Twenty years have passed since the Aiken Corporation last took on a major project. If the City of Aiken is intent on awarding the Aiken Corporation a no-bid $20 million contract to develop the “mixed-use“ spec building, then City Council should, at the very least, hold discussions on the history of the Aiken Corporation’s Westinghouse/Washington/Amentum project from 1998-2002.
_____________
As documented in the October 2023 “Amentum Model”1 series, the “boondoggle” moniker has been attached to several Aiken Corporation projects over the past 20 years: the train depot, the Willow Run spec building, and the 2002 Westinghouse/Washington/Amentum building. This afterword, which includes updated information from recent FOIA (Freedom of Information Act) requests, focuses on the 2002 Westinghouse/Washington/Amentum building.
Sticker shock
According to a local newspaper headline in February 2002, the Aiken City Council reacted with “shock”2 upon learning that an additional $1.5 million was being requested to complete the Aiken Community Playhouse (Performing Arts Center) side of the building. The $1.5 million request brought this Aiken Corporation project — which had started at a modest $0.5 million in November 1998, then crept to $2.5 million in March 1999, then evolved to $6.0 million by August 2000 — to a new high of $7.7 million in February 2002.
Requests for the independent audit that never took place
In March-April 2002, the local newspaper editorial pages and City Council meetings featured numerous citizen requests for an independent, third-party audit to better understand the enormous escalations and costs to ensure this never happened again. As one citizen wrote, “There should be an independent third-party audit of the project to determine what went wrong and what went right, that would be a public document so that all citizens could have access to the report.”3
Two of the most vocal requests for an independent audit came from City Council members. According to the minutes of a March 25, 2002 second reading and public hearing on an ordinance to loan Aiken Corporation $3.5 million, Councilman Richard Smith said there should be “both a financial audit and a management audit of the relationship between the Aiken Corporation, and the city of Aiken.” He made a motion to amend the ordinance, as a term of the City’s loan to Aiken Corporation, for “an independent management audit,” and said that he “did not feel this could be done objectively in-house.”
Councilman Smith’s motion was seconded by Councilwoman Jane Vaughters. Discussion ensued over the cost of an independent audit. Controversy was added by the concern that an independent audit constituted an “investigation” and that the Council’s critical discussion of the project was “insinuating” things. (See screenshot, below from meeting minutes).
In this same screenshot is a statement that carries sage perspective for the present: “Councilman Smith stated this is not aimed at people, but is talking about the institutions in which we work. He said this is to find out if there’s a better way for these institutions to interact. He said he felt it was worth an audit of how the Aiken Corporation and the city do business.”
Herein, Councilman Smith addressed a dynamic that still exists and has surfaced in recent projects, including Project Pascalis and the SRNL Lab project, where personal insult is perceived, or individual umbrage is taken, over critical discussions on institutions. This should raise a healthy degree of concern over whether the individuals involved have developed such a personal or psychological investment in the project or their relationships with their colleagues that they are blinded to seeing the institutions with objectivity.
At the end of the City Council’s March 25, 2002 discussion on the audit, Mayor Cavanaugh stated that he was “not ready to vote on an amendment on an evaluation at this point.” He wanted counsel to have a chance to review the proposed amendment in writing before making a decision. He stated the matter could be placed on the next work session for discussion, Councilman Smith withdrew his motion for the amendment for an independent, third-party audit, to which Councilwoman Vaughters agreed.
During the subsequent April 8, 2002 work session, an agreement was reached to conduct an in-house management audit. City Manager Roger LeDuc stated that, once the audit was completed, a work session would be scheduled to discuss the audit. In the meantime, a financial audit of the playhouse was to be completed.
This financial audit was not completed. With the independent, third-party audit now off the table, an in-house management audit was to be conducted by City Attorney, Richard Pearce. Integral to the audit was a list of points and questions that Councilman Smith had provided to Council and to all parties in the project. According to a May 1, 2002 newspaper article, “Smith said the questionnaire has the specific questions that he gave to council and wanted to use as the project assignment for an independent management audit.”4
According to this same newspaper article, “Pearce stated he will schedule a meeting to discuss the audit after all the questionnaires have been returned to his office.”4
The Pearce audit was completed on June 5, 2002. On June 10, City Manager, Roger LeDuc was quoted in the local newspaper stating that the Pearce audit revealed “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.” Mr. LeDuc said that a discussion on the audit would take place in that evening’s City Council meeting. 5
Requests for a discussion that never took place
The Pearce audit was not discussed in the June 10 City Council meeting, nor in the June 24 City Council meeting, despite several prior requests by Councilman Smith to have this discussion. The Pearce audit and a future financial audit were mentioned in brief, however, during a 7:00 a.m. City Council work session on June 18, 2002, as shown in the screenshot of the meeting minutes, below.
Requests for a financial audit that never took place
A FOIA filed on October 3, 2023 requested four items — the Pearce management audit, the financial audit(s), the list of questions that Councilman Smith submitted to Richard Pearce, and any records of Council discussions on the completed audits. The City responded on October 4 with one result — the PDF6 of the Pearce management audit:
Subsequent examination of the Pearce audit revealed a missing expert document, which prompted a second FOIA request on October 5.7 A response was received from the City on October 19, 2023:
“The City of Aiken has determined that it does not have a copy of ‘the statement opinion by Phillip H. Porter, Jr. regarding project management systems.’ The City also does not have any documents responsive to this request.”
Follow-up requests8 were made to the City on October 20 and November 1, 2023 for the other three items in the October 3 FOIA request. Responses from the City confirmed that the City is not “in possession” of the other three items. Two additional PDFs were provided, however, and were attached to the City’s October 19 Porter response.9 These PDFs contained two consolidated financial statements and accompanying information for 2001-2003 for the Aiken Corporation, and its newly-created, for-profit arm, LED of Aiken, Inc. Neither PDF contained a financial audit of the Washington Group (Amentum) project.
Requests for records
Twenty-one years down the road, the Pearce audit should have been posted online in the City of Aiken document repository, so that all citizens could have access to the report, but it was not. The filing of a FOIA (Freedom of Information Act) request was necessary to access the Pearce audit.
The situation today
Twenty years have passed since the Aiken Corporation last took on a major project. The Aiken Corporation is presently pursuing the $20 million spec building for SRNL. The Aiken Corporation board members have predicted a successful outcome for this project based on their expertise with the “Amentum Model,” as they have dubbed it.
If the City of Aiken is intent on awarding the Aiken Corporation a no-bid $20 million contract to develop the “mixed-use“ spec building, then City Council should, at the very least, hold discussions on the history of the Washington/Amentum project from 1998-2002 with particular focus on whatever audits were and were not conducted, so that the errors of the past are not repeated on an even grander scale.
From here — rather than asking the citizens of Aiken to take any individual’s word for it that the Amentum Model has ultimately been a success — show us, in dollars and cents over the past 25 years, how this is so. To paraphrase Councilman Smith’s words from 2002, this is not aimed at people, but at the institutions in which we work.
Concerning the Aiken Corporation, local citizens have a right to a clear understanding of how, or even why, the Aiken Corporation and the City do business together. It’s 2023, and the members of both of these institutions are still struggling decades later to explain the relationship. Officials on the Monday-night City Council dais are confusing colleagues and business partners with family. We, of course, expect family members to side with one another through thick and thin, but is this a way to run a city?
FOIA Request 334-2028, filed on October 5, 2023 and the City’s response, sent October 19, 2023. (Click image to view full size)
The City’s October 19, 2023 response to FOIA #334-2023 (Click image to view full size).
Follow-up correspondence from October 20, 2023-November 7, 2023 regarding FOIA requests 328-2023 and 334-2023. (Click images to view full size).
During the course of the November correspondence, above, the City’s October 19 response to FOIA request #334-2023 was amended to add two PDFs to “the two financial audits of the Aiken Corporation” that were referenced in City Solicitor Laura Jordan’s letter of November 7, 2023..
The amended response to FOIA Request #334-2023. (Click image to view full size).
These two audits contain consolidated financial statements and accompanying information (see attachments below) for the numerous 2001-2003 Aiken Corporation-LED projects, including the Washington-Playhouse (Amentum) project, however, there is no dedicated audit of the Washington-Playhouse (Amentum) project.
