The Department of Energy’s Savannah River Site (DOE/SRS) has only authorized the Savannah River National Laboratory’s (SRNL) management and operations contractor to pursue a series of one-year leases for space in the proposed $20 million “Mixed Use” office building that is currently under predevelopment by the Aiken Corporation.
While the publicly-funded downtown project keeps shrinking in size while costing the same, Aiken City Council is allowing Aiken Corporation to pursue further development before city staff has even prepared another no-bid contract for Council approval.
By Don Moniak
January 7, 2024
Aiken City Council is scheduled twice to discuss the proposed $20 million “Mixed Use” office building, also known as the “SRNL project,” during its January 8th regular meeting, The first, and more important, discussion is scheduled to occur behind closed doors during an Executive Session. The second discussion is a public hearing much later in the meeting. Both agenda items involve the relationship between the City of Aiken (COA) and the Aiken Corporation (ACorp) as it pertains to the SRNL project.
In March 2023, Aiken City Council signed a no-bid, $250,000 contract with the Aiken Corporation for predevelopment work on a proposed Savannah River National Laboratory (SRNL) “workforce development” office building. The scope of work for that contract was reportedly completed with the issuance of a “feasibility report” and a site location recommendation by Aiken Corporation.
The contract also authorized ACorp to negotiate lease agreements with “third parties.” The only known third party at this time is SRNL, which is fully owned by the U.S. Department of Energy, but managed and operated through a contract with the Battelle Savannah River Alliance (Battelle). Both DOE/SRS and Battelle must reach a mutual agreement for any facility leases.
Between the March 2023 COA/Acorp contract agreement and the September 25th site location recommendation, the proposed facility size shrunk from 45,000 square feet to 36,000 square feet, the project was rebranded as a generic “Mixed Use” spec building, while the estimated cost remained at $20 million. Now, ten months later, ACorp has only managed to obtain a commitment to negotiate a series of one-year leases; but has yet to report the signing of any Memorandum of Understanding.
Aiken City Council is presently allowing ACorp to move forward on the next stages of the $20 million project that is being funded with South Carolina’s plutonium settlement funds. Yet, Council has not approved the recommended facility location, nor does it have have a contract with ACorp to continue further development work.
The Closed Door Session
The first discussion is scheduled as a closed-door Executive Session to “to discuss a proposed contractual arrangement with the Aiken Corporation regarding the Savannah River National Laboratory (SRNL) downtown building project.” The justification for closing the doors is that the discussion involves “negotiations incident to a proposed contractual arrangement.”
South Carolina’s Freedom of Information Act allows for this vague exemption, but also allows public bodies the freedom to discuss these issues openly and in full public view. If City Council chooses to close the doors Monday evening, it will be opting to privately discuss the expenditure of millions of public monies on a publicly funded, private organization (ACorp) that, in turn, will seek to extract hundreds of thousands of dollars of rental revenue from a federal contractor subject to the vagaries federal budget shaving.
According to two letters in the meeting agenda documentation, there is no proposed contract, only a commitment to negotiate a contract. Battelle is only authorized by DOE/SRS to pursue a base one-year lease with options for up to nine one-year renewals with ACorp. The lease renewals are obviously dependent upon the availability of funds in DOE/SRS/SRNL annual budget.
In a December 14, 2023 letter, DOE/SRS granted Battelle “preliminary approval to move forward with the procurement action in support of real property leased space from the Aiken Corporation.”
The DOE/SRS approval letter was in response to a December 11, 2023, letter (Figure 1) from Battelle requesting:
“Programmatic Approval to move forward with a procurement action in support of real property leased space from the Aiken Corporation for a one (1) year base period lease estimated at $375,000 (to) $425,000 per year, with nine (9) additional (1) year option periods. The request is for approximately 25,000 square feet of office/collaborative space located in a future building in downtown Aiken with a projected cost of $15-$17 (per square foot). “ “
By comparison, the Amentum Company presently has a three-year lease at $20,500 per month ($246,000/year) for 20,000 square feet of office space in the ACorp’s Newberry Street building adjacent to the Aiken Performing Arts Center. Amentum’s square foot rate per year is $12.30, nearly one-third less than the upper rental rate under consideration by Battelle.
Battelle’s December 14th letter also contained the company’s first public reference, since the project was announced last year, that it is contractually obligated to provide an office building focused on workforce development (1):
“This future building was identified in BSRA’s proposal to manage and operate SRNL.”
The Public Hearing
The second discussion towards the end of the meeting will be a public hearing on the “First Reading of an Ordinance to Amend the FY-2023-24 Budget to Include $20 million of SRS Settlement Funds.”
The supporting memorandum (Figure 2) for the ordinance describes DOE’s, “conditional approval (for Battelle) to begin discussion with Aiken Corporation on a lease to occupy a portion of a ‘mixed use’ building in Aiken to be built on a currently vacant lot on the 100 block of Newberry Street, NW.”
As stated earlier, the ACorp’s Board has only recommended building the office building on its Newberry Street vacant lot. Aiken City Council has yet to act upon that recommendation which contradicted the originally specified location.
The memorandum goes on to state that, “City Staff is working with Aiken Corporation on an agreement that will be before Council at a future meeting in February.”
By that time, Aiken Corporation is expected to have chosen a firm for the million dollar plus job of designing this proposed $20 million “Mixed Use” facility; for which it only has one potential tenant that is unwilling to commit to more than a one-year lease.
Aiken City Council’s Cycle of Private Permission and Public Forgiveness
The existing situation is strikingly similar to the early stages of the project in December of 2022, when Aiken City Council met behind closed doors with ACorp and SRNL representatives. That meeting occurred after the ACorp had already signed its contract with the architectural firm of McMillan Pazdan and Smith to begin project work.
Council then withheld the existence of the updated project for more than a month.It’s contract with ACorp was not approved until three months after it secretly sanctioned the ACorp/MPS contract; that approval also allowed for reimbursement of project work during the three months preceding the COA/ACorp contract.
Today, Aiken Corporation is moving forward on a Request for Proposals for Architectural Design Services, even though the organization has no contract with the City of Aiken to pursue such services which are expected to easily exceed a million dollars.
Within a span of thirteen months, Aiken City Council has twice allowed ACorp to race ahead of Council’s official decision-making process; the latest example of this public body granting permission to a “partner” before seeking public approval, or forgiveness, of its decisions.
When it comes to downtown, Aiken Corporation continues to set the agenda, while Aiken City Council keeps following. The difference today is that instead of hundreds of thousands of dollars being involved, $20 million is at stake.
Footnote:
(1) Details of this contractual provision and the subsequent lobbying of plutonium settlement funds can be found in Offsite Infrastructure .