Progress continues on the $20 million downtown “Mixed Use” facility, which the City of Aiken hopes the Savannah River National Laboratory (SRNL) will eventually occupy as a “workforce development facility.” However, two years after the project was announced with great fanfare, there is still no lease agreement with SRNL’s contractor, Battelle Savannah River Alliance (BSRA); deep federal budget cuts could further threaten the viability of any new leases for federal contractors.

Recently, SRNL/BSRA officials were dissuaded by the Department of Energy (DOE) from attending the facility groundbreaking, and were ordered by DOE to have the SRNL logo removed from project signage. Is the City of Aiken creeping towards a misappropriation of the $20 million by constructing what is essentially a “spec” building on behalf of its nonprofit “partner” organization the Aiken Corporation?

by Don Moniak
March 17, 2025

Two years ago, the $20 million downtown Savannah River National Laboratory (SRNL) project, funded by State of South Carolina “Plutonium Settlement” funds, was in its early predevelopment stages. At the time, the preferred location (1) was on a portion of the former Project Pascalis footprint where an L-shaped, 3-story, 45,000 square-foot building was proposed on the Warneke Cleaners and Holley House motel properties.

Also, at that time, the primary envisioned use for the property was that of workforce development (2) for the SRNL contractor, Battelle Savannah River Site (BSRA).

The great fanfare during the project introduction left no doubt about that intent. The top two floors were to be office space, and the ground floor was to be primarily a showcase for the lab, a place for public interactions where scientific poster sessions would adorn the halls.

That vision faded sometime in the summer of 2023 when the prospect of a long-term lease grew fainter(3). In September 2023, the Aiken Corporation, with an unofficial acquiescence by Aiken City Council, chose to locate a three-story, 36,000-square-foot facility on its own property on Newberry Street–that property was acquired by ACorp in July 2022 for $650,000. A series of emails from the September to November, 2023, time period also showed city officials discussing a building without any committed tenant; one that could be used for an entity other than SRNL.

With the Newberry Street decision made, the City and Aiken Corporation collaborated on moving forward with the design contract. First, the Aiken Corporation hired the architectural firm of Cheatham, Fletcher, and Scott to conduct design work. Then, the City took over the project and hired Cheatham as the City’s contractor. In other words, the City utilized an unofficial, indirect procurement process to hire an architectural firm for a contract exceeding one million dollars.

Between the time of the award of the design contract and the award of a construction contract to the firm of Allen-Batchelor Construction, the City bought the property for $752,230.23; a sum that included two years of interest on the Aiken Corporation loan and city and county taxes for 2022 and 2023. (Figure 1)

The Groundbreaking

On January 27, 2025, just over two years to the day of the project announcement, a ceremonial groundbreaking took place.

Missing from the groundbreaking festivities were representatives from SRNL. Also missing from the project sign was the SRNL logo. This was not the original intent of SRNL officials, who accepted an invitation to the function on January 10th, 2025. On January 20th, though, an event occurred which changed everything.

That event– a new Presidential administration came into power, and suddenly, federal leases were being canceled, funds were being frozen, and talk of selling off federal buildings was in the air.

On January 24th, SRNL Assistant Director Sharon Mara wrote to city officials that, per DOE guidance, the lab would not have a presence that day (Figure 2); and per DOE order, the lab logo could not adorn the project sign (Figure 3). However, lease discussions could continue.

This is not the first indication that future SRNL occupation of the facility would range from possible to precarious, or maybe not at all. As reported in One-Year Lease after One-Year Lease, as of January 2024, the SRNL contractor only had DOE permission to negotiate one-year leases, not longer-term five or even ten-year leases. In fact, by the time the facility is finished, BSRA’s first five-year contract is due to expire. Although a five-year renewal is expected, a renegotiated lower contract price is quite possible.

Still, eighteen months has passed since the siting decision was made, and there is still no lease or even a memorandum of understanding between the parties. The likelihood of DOE/SRNL permitting BSRA to enter into any new lease agreement may now possibly be fading away.

Who could occupy the facility if SRNL/BSRA does not, and who would own the building?

On February 26, 2024, Aiken City Council approved a “Framework Agreement” for future agreements with the Aiken Corporation regarding the project. This agreement required ACorp to relinquish ownership if SRNL/BSRA was not a tenant. (Pages 202-204)

The anticipated path forward was that the City of Aiken would purchase the Newberry Street property from Aiken Corporation, use the remainder of the $20 million Plutonium Settlement allocation to construct the facility, and then sell the facility and property to a yet-to-be-identified, for-profit subsidiary of the not-for-profit Aiken Corporation. (4)

When the facility is completed, the City will transfer ownership “pursuant to the terms of a subsequent Purchase Sale Agreement…which will, among other terms, specify a deed restriction providing for the return of the subject property to the City should the (Aiken Corporation) no longer desire to own or lease the building to an appropriate tenant.” (emphasis added). 

The intent of this latter clause, which appears to dictate that Aiken Corporation will own the building only if SRNL is a tenant, was indicated in City Manager Bedenbaugh’s supporting memorandum that the Aiken Corporation’s “to-be-formed entity will lease the building to SRNL.” (emphasis added.) 

At the February 26th meeting, City Manager Stuart Bedenbaugh was asked to define “appropriate tenant.” He did so in a manner that implied some wiggle room, stating:

“There is kind of a clawback, should that not follow through or the mission changes.”

He noted that he would define an appropriate tenant as “based on a mission that is similar to what is stated in the opening paragraph of the National Lab or its successor agency.” 

On January 27, 2025, Aiken City Council approved a new agreement, a Memorandum of Understanding (MOU), with Aiken Corporation and its newly formed, for-profit property management company called Aiken Ventures LLC. Just as ACorp’s for-profit property management company, LED Inc., manages the downtown Amentum Building, Aiken Ventures LLC will manage the “Mixed Use” building on behalf of Aiken Corporation and the City of Aiken.

Missing from the January 27th MOU is the clawback provision and any reference to a deed restriction. Instead of Aiken Corporation ownership being contingent upon SRNL’s contractor being a tenant, the language in this agreement appears to provide a loophole:

“Ventures is expected to enter into a lease with SRNL, whereby SRNL will lease the second and third floors of the property on such terms and conditions as may be agreed between Ventures and SRNL.”

There is no contingency plan in the case of the SRNL contractor being unable to obtain DOE permission to obtain a lease.

There does remain, however, a “rent-free alternative.”

The original purpose of the $20 million was not to build a private “mixed-use” office building. It was not to further subsidize the City of Aiken nor its private partner the Aiken Corporation with an annual flow of federal funds that could be better put to better use.

The legislative intent was to construct “off-site infrastructure” for an institution whose operating contractor includes the state’s university system as part of the Battelle Savannah River Alliance. The only justification for awarding plutonium settlement funds for use by one of the defendant’s institutions, SRNL, was that the state is committed to an investment in the Battelle-led alliance from its university system. That commitment specifically included a workforce development facility.

If the City of Aiken truly wants the SRNL contractor to have a downtown presence, it would be wise to begin considering the option of deeding the property to one or all three of the State’s three major universities.

Footnotes

(1) The original choice by SRNL was the City’s parking lot property next to the City of Aiken Municipal Building, where a two-story garage topped by an office building was visualized in September 2022.

(2). As reported in The SRNL Project Was a Component of Project Pascalis, the facility constitutes the first stage in a much larger, $120 million state-funded program to Battelle Savannah River Alliance for SRNL workforce development.

(3) As reported in One-Year Lease After One-Year Lease, the prospect of a long-term lease became bleak by January 2024. To this day, there is still no signed lease or even a Memorandum of Understanding between SRNL, Aiken Corporation, and City of Aiken.

(4) The February 2024 “Framework Agreements” states that to pay for the facility, the City “will provide financing to Corporation, which it anticipates providing on an interest-free basis.” Thus, much of the rent proceeds will be used to pay for a building that was already paid for with the plutonium funds.

This provision is absent in the January 2025 MOU, which states that the City will deed the property to Aiken Corporation’s for profit Aiken Ventures LLC; and that if the property is put on the market the City has the right to buy it back for $1.