Redevelopment of the Project Pascalis Properties and a 4-story, 228-vehicle, $7 million “structured parking solution” for national lab project leads Aiken City Council’s development priority listfor 2023.
by Don Moniak
February 28, 2023 Updated March 4, 2023.
One hour and fifty minutes into its Monday, February 27, 2023 meeting, with the audience dwindled to a fraction of its original size, Aiken City Council quickly and quietly approved three “action items” (1) from its January 27, 2023 “New Horizons” work session. With the exception of the Powderhouse Road to Whiskey Road connector road that will facilitate largescale development and city growth, the prioritized actions involve the future of former city administrative properties and the city’s commercial property portfolio known as the Project Pascalis properties.
The vote on the matter took place during the “petitions and resolutions” portion of the meeting. If the wording of the priority list—coupled with its lateness on the agenda—was intended to mask controversy, the effort was successful. Nobody in the audience addressed the topic.
For the second consecutive year, a “structured parking solution” is in the works, this time in support of the proposed Savannah River National Laboratory (SRNL) “Workforce Development” office building and computational laboratory (2) that is currently on center stage in the city’s latest downtown demolition and redevelopment efforts. Council intends to further subsidize the federal lab’s new off-site facility—which already has a $20 million plutonium funds allocation—with hospitality tax revenues and plutonium settlement funds presently allocated to downtown and Northside redevelopment.
At the top of the priority list is:
“Downtown core improvements to include upgrades to Richland Avenue parcels, construction of a surface parking lot on Newberry Street, and pursuing a structured parking solution adjacent to the current Municipal Building.”
In this case, some translation is necessary:
“Richland Avenue parcels” = Project Pascalis properties stretching from Hotel Aiken to Warneke Cleaners.
“Surface parking lot” = 86 vehicle parking lot on the 100 block of NW Newberry Street on property owned by the Aiken Corporation.
“Structured Parking solution” = a $7 million, 228-vehicle, four-story parking garage between the new City Hall on Chesterfield and the Aiken Corporation’s Newberry Street building, where Department of Energy (DOE)/ Savannah River Site (SRS) contractor Amentum is presently the tenant.
(Update: On March 3rd, the City of Aiken and Cranston Engineering submitted an application to the city’s Design Review Board for a three-story, 162-vehicle parking garage).
According to the meeting minutes for the New Horizons workshop held the morning of Friday, January 27th at the Lessie B Price Senior and Youth Center, City Manager Stuart Bedenbaugh told Council he already “submitted an application for the $20 million” of plutonium settlement funds for the “SRS lab.” He added that:
“We want to construct the parking garage concurrent with any construction for the Lab.”
“ The proposed parking garage would be for 228 spaces. It would be a four level garage with the fourth level not covered,” is estimated to cost $7 million, and would be on both city and Aiken Corporation property.
“ The Aiken Corporation has a lot on Newberry Street which could be used for parking with about 86 spaces.” (There are actually three adjacent lots totalling 1.0 acre).
The 320 combined parking spaces “should provide the parking needed for the Lab.”
“We could fund a portion of the cost for a parking garage from the plutonium funds. We also have some funds from the Hospitality Tax that could be used by borrowing from the Hospitality Tax revenue to pay for a portion of a garage.”
The downtown national lab office complex has endured an interesting ride in its first month of public visibility. After the project was introduced with great fanfare and finality on January 23rd, the vision was tempered during a public forum on Feburary 6th regarding a project “feasibility study.”
At that meeting, moderator K.T. Jacobs stated, “what was said (two weeks prior) is not necessarily what is going to happen” and there were no drawings, blueprints, or plans to review. Jacobs, representing the architectural firm of McMillan, Pazdan, and Smith, chose not to disclose the firm’s “client for this study is the Aiken Corporation, not the City of Aiken,” until Feburary 23rd. If the lab project proceeds as planned, the Aiken Corporation will likely be the lab facility’s landlord.
During its February 13th meeting, City Council was relatively muted about the project, with a few members claiming it was still new to them. But Council was made aware the path forward for the lab project will not be as contentious as Project Pascalis, when support was articulated by Luis Rinaldini— who is a plaintiff in the ongoing Blake et al vs City of Aiken et al lawsuit alleging multiple violations of state and local law during the Project Pascalis process. Rinaldini stated:
“The consequence of your actions is that, for example on the Savannah River National Lab deal, you are now a negative despite all your good work on it. The public reception was very hostile and we’re having to work very hard to turn them around. If we defend you they hate us for defending you… I personally am a big supporter of that project.”
Later, when speaking about Council’s plan to assume the duties of the AMDC, Rinaldini, who is also an Historic Aiken Foundation board member, stated that “we’re trying to explain to the community why a preservation organization and others might support the lab project.”
Also during the February 13th meeting, during a discussion on plutonium settlement funds utilization, Historic Aiken Foundation President Linda Johnson spoke in favor of paying off the $9.6 Project Pascalis debt from the $25 million settlement allocation. Johnson also suggested a path for Aiken’s northside—-which currently stands to receive little or no funding from the plutonium funds allocation—to receive a few million dollars from future sales of the properties, stating:
“Regarding the fact that we have $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. She said she 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.”
Last night, Council adopted its path forward on the lab project without ever saying its name, contradicting the decisional timeline put forth during the February 6th public forum (3). Prior to the meeting, Council was scheduled to “receive a legal briefing on the Blake v. City of Aiken lawsuit,” during a closed-door Executive Session. The lawsuit is presently in a mediation phase (4). Council provided no comments about the briefing.
(1) City Manager Stuart Bedenbaugh’s supporting memorandum for New Horizon’s Action Items.
(2) During the January 23, 2023 “State of the City” public relations extravaganza, SRNL Director Majidi described the office complex not only as a workforce development facility, but one for computational work.
“SRNL employees will perform some of our computational modeling and simulation. We’ll have a team of employees working with the university to increase our engagement with faculty postdoctoral and graduate students interns and minority serving institution programs. Some of our employees will work on non-proliferation training programs while other will work on Workforce Development and HR functions moreover as a collaboration Hub.”
(3) SRNL downtown office facility “Feasibility Study” schedule presented on February 6, 2023:
(4) A mediator was assigned to the Pascalis lawsuit on January 31, 2023.
The following letter, signed by 39 South Carolina taxpayers and residents as of February 27, 2023, has been sent to the ten-person South Carolina Joint Bond Review Committee (JBRC), which is tasked to “study and monitor policies and procedures relating to the approval of permanent improvement projects and to the issuance of State general obligation and institutional bonds; to evaluate the effect of current and past policies on the bond credit rating of the State; and provide advisory assistance in the establishment of future capital management policies.”
Any state-funded capital project must be reviewed and approved by the committee. The committee last met on January 25, 2023, and is next scheduled to meet on March 23, 2023.
Dear Joint Bond Review Committee members,
On Monday night, February 27, 2023, Aiken City Council will vote on the second reading of an ordinance to “amend the 2022-2023 Budget to include Plutonium Settlement Funds.”
The proposed amendment involves $16.1 million of the $25 million allocated in Line Item 72(I) of the Savannah River Site Litigation appropriations in House Bill 290: “City of Aiken/Aiken County- Redevelopment and Economic Development in Downtown and Aiken’s Northside Toward I-20, $25,000,000.” According to the Executive Budget Office, the funds are intended for “revitalization and redevelopment for areas that have fallen into disrepair or are currently underutilized.”
This line item is one of the few allocations in the final legislative appropriation of settlement funds that was not project specific. While the funding was approved by the State’s Joint Bond Review Committee, Part 72.1 of the legislation requires “Funds in this item may be released to fund an eligible project at the direction of the Executive Budget Office, upon the Executive Budget Office’s receipt of a written request from the receiving county.” According to Aiken County Council, the county has yet to receive this $25 million disbursement from the Executive Budget Office.
We undersigned citizen tax payers of South Carolina request the Joint Bond Review Committee reconsider the $25 million disbursement of Savannah River Site Litigation Funds, to allow for a project-specific approach to releasing these state funds and avoid any subsequent wasteful or unintended expenditures.
1. The $3 million proposal to repair the Fairfield Street Bridge in downtown Aiken, which has been closed due to structural deficiencies since 2017, should be approved. This project clearly falls within the broad project purpose of “revitalization and redevelopment for areas that have fallen into disrepair or are currently underutilized.”
2. The $3.5 million proposal for the Northside Gravity Sewer project should be deferred until the City of Aiken identifies how this project on unincorporated county property affects county residents, notifies County residents of its annexation and growth plans, and reports whether this project is primarily maintenance-related or expansionist in scope. It is unclear how this project qualifies as a “revitalization and redevelopment effort for areas that have fallen into disrepair or are currently underutilized.”
3. The $9.6 million proposal to pay off the principal of the General Obligation bond used to “purchase downtown property” should be rejected. The properties in question are presently known as the “Pascalis properties” and were purchased by the Aiken Municipal Development Commission (AMDC) through a grant from the City of Aiken raised via this general obligation bond. The properties were purchased as part of a demolition and redevelopment plan involving half a block of downtown Aiken, known as Project Pascalis, that was formally canceled by the developer and the AMDC in September, 2022.
The reasons to reject this $9.6 million project request are as follows:
a. The true nature of the property purchases were not revealed to citizen taxpayers during the approval and hearing process.
When the bond ordinance was approved following during two public readings in August 2021, City Council and the AMDC presented the funds as necessary for a “land bank” proposal to purchase “blighted” properties in Aiken’s ~575-acre “Parkway District.” In reality, it was a proposal to purchase seven properties, held in an assignment contract by the Aiken Chamber of Commerce, from two property owners in a 1.7 acre area where nine small businesses were operating.
Only one building in the Pascalis demolition zone lacked a tenant, and the two buildings associated with the Hotel Aiken were closed for a reported renovation. It was not a blighted area and had not been declared a blighted area.
This basic information about the actual real estate purchase intentions was withheld from citizens of Aiken until the first week of November, 2021, when the AMDC announced Project Pascalis , a $75-100 million project involving the demolition and redevelopment of the 1.7 acres and forced relocation of nine small businesses.
b. The properties were purchased without due diligence and were an unnecessary and ill-advised investment of taxpayer funds. The properties were purchased for $9.5 million without the AMDC or City of Aiken conducting any appraisals, and only required property inspections on two of the seven properties. After the Chamber of Commerce took assignment of the properties in late May of 2021, two developers offered the AMDC only $1 million for the most prominent property, the Hotel Aiken, in response to a solicitation for proposals that was not publicly advertised as mandated by SC Community Development Law. This offer was less than half the agreed-to price of $2.25 million in the assignment contract.
Existing Aiken County appraisal data, which City officials routinely use as a point of reference for other purchases and sales of city properties, showed the property + improvement values were collectively appraised by the Aiken County assessor at $4.683 million of market value. But since the AMDC intended to demolish the property, it essentially paid $9.5 million (not including demolition costs) for land with an appraised market value of $1.487 million. On a per-square-foot basis, the AMDC paid nearly five times more than the Aiken County appraised market values of the land at surrounding business properties. Notwithstanding the fact that the AMDC essentially assigned a zero value to the buildings on the seven properties (which were consigned to demolition), an alternative evaluation using recent sales of nearby business properties indicated the AMDC overpaid by “only” a factor of almost three.
These analyses in the summer of 2022 were validated in November 2022 by the revelation that the AMDC had signed a contract to sell the properties to the newly formed development consortium RPM Development Partners for $5 million, just one month after the commission had paid $9.5 million.
c.Aiken City Council counted its chickens a year before they hatched. According to the Executive Budget Office’s description of the entire $25 million line item allocation, submitted to the JBRC in January 2023, the City of Aiken’s “plan also includes the acquisition and assembly of land or properties for the purpose of redevelopment in the downtown area to promote economic development for the city, it’s residents and visitors
In reality, the bond was approved in August 2021, with the expectation of future allocation of plutonium funds, months before a single budgetary proposal was issued in the legislature. The bond was finalized in October 2021 and the properties were purchased in November 2021. Aiken City Council took an ill-advised risk by committing taxpayer funds in the expectation of state reimbursement from the Savannah River Site litigation settlement; which has resulted in a foolish expenditure of taxpayer funds.
The AMDC’s and City Council’s manifold instances of careless disregard for well-established business practices and fiduciary responsibilities should not be so easily finessed by conveniently applying Plutonium Settlement Funds to pay off the bond. In short, the proceeds from the bond issuance were used to further the folly of an illegally-formulated, ill-defined, and mismanaged project–which has now found a home in Aiken City Council’s dustbin.
d. There is no project. Since Project Pascalis was canceled in September, 2022, the general obligation bond is no longer associated with a redevelopment project or any project at all. Paying off the principal is not a development strategy, it is a bail-out strategy. Furthermore, the details of the failed project that resulted in the AMDC and City of Aiken owning seven properties in the downtown commercial district have yet to be fully revealed to taxpaying citizens. At a minimum, a full, independent financial and project audit should be completed prior to any state funds being released to the City of Aiken to pay off this unwise debt.
Summary: City Council has announced its intentions to transfer the Pascalis properties from AMDC control to city control and dissolve the AMDC. There is no development project presently involved with any of the properties. There is only a feasibility study underway for three of the properties. After the city takes control, it will replace the AMDC as a commercial real estate landlord for the six businesses that did not yield to the AMDC’s pressure to relocate; at least until the properties are sold on the open market, or transferred to another party.
Paying off the general obligation bond condones the city’s ill-advised investment, which no longer qualifies as a redevelopment project. Paying the debt for a failed project is not worthy of plutonium settlement funds that are intended to address real community needs: education, infrastructure, and well-planned economic development for the common good.
Thank you,
Donald Moniak (and 38 South Carolina Taxpayers and Residents)
Part I: ~ $86,000 + for “Convention Center” Planning
by Don Moniak
On January 23, 2023, Aiken Economic Development Director Tim O’Briant and Finance Director Kim Rooks co-signed a $36,799.93 check to the Aiken based law firm of Hull Barrett. The check was reimbursement for the firm’s fifteen months of legal counsel on behalf of Newberry Hall in Aiken, LLC (Agent: Patrick Carlisle) during negotiations with the Aiken Municipal Development Commission (AMDC). The lengthy negotiations involved “convention center lease and operating agreements,” consulting agreements, and existing lease agreements.
The invoice from Hull Barrett, PC.
This payment closed another chapter on the Project Pascalis story, this one involving the City of Aiken’s pursuit of a downtown conference center. The check to Hull Barrett raised the costs of all Pascalis project work specific to conference center planning to approximately $86,000.
More than half of the costs were in legal fees, and another $30,800 was spent on market surveys conducted by Chicago-based consultants, money that left the community and the state. In addition to the Newberry Hall of Aiken negotiations and document reviews, the costs included a ground lease appraisal for a possible long-term lease of the city’s former historic municipal building at 214 Park Avenue.
Table 1: Direct Project Pascalis Convention/Conference Center Costs.
Party
Role
Task
Cost
Hull-Barrett
Newberry Hall Legal Counsel
Negotiation of Legal Agreements
$36,799.93
Pope-Flynn
AMDC Legal Counsel
Negotiation and Review of Legal Agreements
$7,052.00
Capstone Services
Project Manager
Review of Legal Agreements
$1,615.00
HVS Consulting
Consultant
Conference Center Market Review
$6,000.00
AECOM Technical Services
Consultant
Project Pascalis Market Review
$24,800.00
McNeil Appraisal Services
Appraiser
Ground Lease Appraisal of 214 Park Ave
$9,700.00
Total
$85,966.93
Additional factors that would better reflect the true, total costs of conference center planning and design include city staff labor (1), Boudreaux Group’s work for the first, secret Project Pascalis effort in early 2021 (2), Cranston Engineering’s support in 2022 of the second Project Pascalis effort (3), and design work by the second Pascalis Project developer, RPM Development Partners, under a cost sharing agreement with the AMDC. However, these costs are difficult to break down by project area.
The Convention Center and The Mayor’s Vision
A downtown conference or convention center with a capacity of 500 people, along with a 100-room hotel, downtown apartments, and a parking garage, were the stated goal of Mayor Rick Osbon and City Council, articulated in the Mayor’s March 2021 letter to the AMDC:
“Explore meeting the existing demand for a conference/convention facility that will fulfill the persistent call from regional membership organizations and others who have indicated they would host regular large events in our charming and historic city if there were an appropriate venue here to meet their needs. Such a venue would need to be adjacent to sufficient first-class lodging to accommodate as many as 500 overnight and multi-night attendees.”
Mayor Osbon’s letter was delivered two weeks after City Council adopted the $115,000 AECOM prepared Economic Development Strategic Master Plan, and the AMDC’s vague announcement of “Project Pascalis.” At the time, the project was only known to involve an unnamed, “well-capitalized, seasoned investor” seeking to revitalize unidentified areas in the city’s historic and treasured Parkway District. Three weeks after the Mayor’s letter, conceptual designs of a new hotel, conference center, parking garage, and apartments were in the hands of the AMDC—but not shared with the citizenry.
The Market Surveys: $30,800+
The Mayor articulated his vision, and the concept designs were completed, prior to any market surveys being conducted. In May 2021, the AMDC commissioned the first of two assessments, paying Chicago-based AECOM Technical Services $24,800 (4) to conduct a market and financial analysis for its downtown plan. Prior to procuring the study, AMDC Executive Director Tim O’Briant also described the intent of the study as a supporting document for potential Tax Increment Financing:
“Here is the proposal for a full market study related to Project Pascalis from AECOM. Such as report would be required by law if the County considers a TIF for the project. I’d like to get these guys, or another firm if you have suggestions, started so we can be ready for the TIF debate ASAP. Let’s discuss.”
“Presumes that a private operator can run the food and beverage business at break- even, with a focus on banquets and local events rather than conventions and trade shows
• Subsidy is likely needed to offset debt service on construction cost
• Estimated annual debt service: $300,000
Based on a total development cost per square foot of $221 in 2021 dollars-“
The AMDC purchased the seven Pascalis properties in November 2021 for $9.5 million. AMDC later procured, for $6,000, the services of Chicago-based HVS Convention, Sports & Entertainment Facilities Consulting to conduct a “Proposed Conference Center Market Analysis.” (5)
HVS conducted interviews with “key informants,” but did not identify any by name. Among the underwhelming take-aways from the interviews were:
Downtown Aiken lacks a ballroom to host banquets of 300 or more.
Several events are lost annually to North Augusta, Augusta, and other nearby cities due to lack of facilities.
Opinions vary, but most agree there is occasional need for banquet seating capacity of 300 to 500.
Marketing and selling the facility will require significant investment in staff and other costs, especially in the first few years.
A City-owned conference center could require ongoing subsidies.
In terms of demand, HVS concurred with AECOM: there was low demand for conventions and trade shows without signficant taxpayer investments in marketing the venue. The demand forecast was for six conferences annually in the first few years of operation, and ten conferences annually after a “dedicated marketing and sales staff” was in place.
The Newberry Hall Negotiations: $45,000+
Among the seven properties the AMDC purchased was the “Anderson property”, home to popular event and catering facility Newberry Hall. The commission paid $2 million, more than 2.5 times the appraised market value of $712,000 listed by the Aiken County Assessor. The intent of the AMDC and its developers was to demolish the Newberry Hall building, first built in 1965, and replace it with another conference center, in conjunction with a five-story parking garage and apartments.
This was all made possible when the owners of Newberry Hall exercised a one-time waiver on an existing option to purchase the property. As described in the Newberry Hall lease:
“Section 5 of the Lease provides Carlisle with a purchase option (the “Option”) that would be triggered by the closing of the Purchase. Anderson and Carlisle desire that Commission close the Purchase without triggering the Option and have requested that Carlisle grant a one-time waiver of the Option to allow Carlisle and Commission more time to attempt to finalize an Operating Agreement.” (4)
The option was possibly negated by the high sales price originally offered by Weldon Wyatt’s WTC Investments, which was also negotiated with the Anderson family by members of the Smith, Massey, Brodie, Guynn, and Mayes law firm. Eight months after the first contract for $2 million was signed for the Anderson Property, Massey signed, on behalf of RPM Development Partners, a purchase and sale agreement with the AMDC for the Pascalis properties at nearly half the AMDC’s purchase price—-$5 million for properties that were bought with $9.5 of debt bonds issued by the city.
Bill submitted to WTC Investments, LLC, the property aquisition arm of the first Project Pascalis developer, GAC, LLC (Agent: Weldon Wyatt). This bill was obtained via a Freedom of Information Act request and first reported in The Pascalis Attorneys.
As reported in The Pascalis Evictees, the “Amended Lease Agreement (Second Amendment)” included options for compensation for lost income during demolition and reconstruction, purchase of a new building following a complicated appraisal process, and negotiating to operate a new conference or convention center. According to the appraisal clause, the owners of Newberry Hall had, as a tenant, reportedly invested $350,000 to improve the popular facility. (4)
Between October 15, 2021 and January 17, 2023, when Hull Barrett submitted its invoice, negotiations for operation of a future conference center and other matters, held between representatives of the AMDC and Newberry Hall, resulted in:
Five “letters of intent”
The November 2021 “Second Amendment to the Lease Agreement.”
A ‘Third Amendment to the Lease Agreement,” which required two versions.
Nine versions of the “Convention Center Lease and Operating Agreement.”
An agreement to amend lease.
Five versions of consulting agreements.
In response to a request for copies of the legal documents that were paid for with public funds, Aiken Economic Development Director Tim O’Briant responded:
“Legal expenses related to a potential displacement of Newberry Hall were paid by agreement with the owners. The work product of their attorney and his services on their behalf is their attorney-client privilege to waive or maintain. Please contact them directly. As you know, the project was canceled and no draft of any agreement was ever produced for, presented to or considered by the AMDC and/or Aiken City Council due to that cancellation. No further records beyond the invoice will be provided.”
In actuality, the “Second Amendment to the Lease Agreement” was a final document that was publicly disclosed, and any subsequent lease agreements for a city tenant are subject to disclosure. No legal expenses were included in the relocation agreements for five other potential Pascalis evictees. (7)
According to legal invoices contained in the AMDC Financial Binder (pages 155-172) , the Columbia and Spartanburg based law firm of Pope-Flynn was responsible for protecting the legal interests of the AMDC, and thus the financial interests of Aiken city taxpayers, during conference center negotiations. Pope-Flynn billed the AMDC more than twenty hours and $7,000 for review of contracts, letters of intent, conference calls, and other work relevant to the negotiations.
An example of Pope-Flynn’s billings for Newberry Hall and conference center related work.
According to invoices on pages 44-59 of the financial binder, Aiken County based project manager Capstone Services also assisted in the review and discussion of the agreements and contracts. Upwards of seventeen hours and $1700 was devoted to tasks such as “reviewing pros and cons of conference center delivery method.”
The Ground Lease Appraisal: $9,700+
In April 2022 the AMDC decided, without any public input or formal City Council approval, to pursue a conference center at the soon to be vacated Municipal Building at 214 Park Avenue. As reported in Why is the City of Aiken Toying with 113 Downtown Jobs, the discussion leading to the decision occurred in back channels involving the city’s reportedly independent Design Review Board and AMDC Executive Director Tim O’Briant.
Following the announcement, O’Briant procured the services of local appraiser Thomas McNeil to conduct a “Ground Lease Appraisal” of the historic Municipal Building. His Appraisal and Ground Lease Market Survey was submitted to Tim O’Briant on June 6, 2022.
The purpose of the report was to:
“Assist the client in establishing a Ground Lease rental rate for the subject tracts, one parcel, as well as form an opinion of value of the subject site on the basis of the Ground Lease rental rate and other data. This report is contingent upon and made on the basis of the hypothetical condition that the improvements situated on the site, redeveloped as a portion of Project Pascalis and specifically denoted as the forty-six thousand gross leasable square foot, more or less conference center and commercial space, exists upon the site as of the effective date of this report.”
McNeil defined a ground lease as, “an agreement in which a tenant is permitted to develop a piece of property during the lease period, after which the land and all improvements are turned over to the property owner… In the case of a ground lease, generally one party owns the land (i.e. fee simple interest) while a separate party owns the improvements (i.e. leasehold interest). In most cases, the owner of the land leases the land to the owner of the improvements for an extended period of time (20 – 100 years).”
The ground lease appraisal was hampered by a lack of “comparable properties,” specifically ground leases in the Aiken market area. Ironically, one of few local “ground leases” cited in the report included the new Taco Bell on Whiskey Road. That private redevelopment project was made possible after the locally owned bowling alley was demolished as the result of another City of Aiken project.
By using an “Income Capitalization Approach” that postulated an annual income to the property owner of $104,157 for twenty years, supplemented by a limited local ground lease comparison approach, McNeil concluded the ground-lease value of the subject real estate, “on the basis of any and all assumptions, extraordinary assumptions and hypothetical conditions contained herein to be $2,200,000.00 TWO MILLION TWO HUNDRED THOUSAND DOLLARS.”
(1) Staff time devoted to any aspect of Project Pascalis is unknown. Monthly reports from the two person, $165,000 a year City of Aiken Economic Development Department provided no breakdown of time devoted to any Pascalis related tasks.
(2) The conceptual plans for the first Project Pascalis effort were completed by the Boudreaux Group, on behalf of then project developer Weldon Wyatt, were publicly disclosed only after a Freedom of Information Act request in June 2022. The AMDC compensated Wyatt’s GAC, LLC $14,417.50 for the overall effort after the developer withdrew from the project less than two months after the first announcement.
(3) Cranston Engineering billed the City of Aiken for $33,692.93 for professional services in support of “Raines development” in downtown Aiken between March and July of 2022. The invoices are on pages 86-90 of the FOIA-induced AMDC Financial Binder.
Cranston also received $18,504.00 for a condition assessment of 214 Park Avenue. Although this bill was paid for by the AMDC, the project was requested in September of 2021, prior to any proposal for a conference center at the Municipal Building.
“The development of the Project contemplates that the improvements on the Property would be demolished and replaced with a larger conference center and kitchen and that Carlisle would be compensated for loss of income during interruption of Carlisle’ s business and would lease the replacement conference center and kitchen pursuant to a replacement lease and operating agreement, the terms of which are under discussion but are not finalized (the “Operating Agreement”).
D. Section 5 of the Lease provides Carlisle with a purchase option (the “Option”) that would be triggered by the closing of the Purchase.
E. Anderson and Carlisle desire to that Commission close the Purchase without triggering the Option and have requested that Carlisle grant a one-time waiver of the Option to allow Carlisle and Commission more time to attempt to finalize an Operating Agreement.
NOW, THEREFORE, for ten dollars and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby covenant and agree as follows:
1. One-Time Waiver of Option. Carlisle consents to the closing of the Purchase by Commission and agrees that closing of the Purchase by Commission shall not trigger the Option. Except for this one-time waiver by Carlisle of the triggering of the Option, the Option shall remain in full force and effect and shall be applicable to any future transactions that would otherwise trigger the Option.”
2. Negotiation of Operating Agreement. Carlisle and Commission shall continue good-faith negotiations of the Operating Agreement based on the latest draft of the letter of intent currently being discussed by them. However, the letter of intent has not been approved, and Carlisle and Commission agree that neither of them shall have any liability or obligations to the other for failure to enter into an Operating Agreement.
3. Failure to Enter into Operating Agreement. The Lease will continue in full force and effect after the Effective Date, with Carlisle being the “lessee” thereunder and Commission being the “lessor” thereunder. Failure of Carlisle and Commission to execute an Operating Agreement within five (5) years after the Effective Date shall trigger Carlisle’s Option to purchase the Property to the same extent as if “lessor” delivers to “lessee” notice of intention to sell the Property under Section 5(i) of the Lease. The closing of the purchase and sale of the Option shall be made under the same procedure as outlined in Section 5 of the Lease, except that the purchase price shall be determined by an appraisal as described below.”
Appraisal. The purchase price for the Property under the Option shall be the cash equivalent price at which the Property would change hands between a hypothetical willing buyer and a hypothetical willing seller, neither being under a compulsion to buy or sell and both having reasonable knowledge of relevant facts, as determined by an appraisal, minus $350,000 (which is the amount paid by Carlisle for leasehold improvements) (the “Appraised Value”). After the Option is triggered, Carlisle and Commission shall attempt to agree on an appraiser to perform the appraisal for ten (10) days. If Carlisle and Commission cannot agree on an appraiser within such ten-day period, each shall appoint a MAI appraiser who is approved to conduct appraisals for commercial properties located in Aiken, South Carolina by Security Federal Bank, First Community Bank, or First Citizens Bank by each party delivering notice of the identity of its respective appraiser to the other within twenty (20) days after the expiration o f such ten-day period . If the two appraisers cannot agree on an Appraised Value of the Property within thirty (30) days after the last of them is appointed, then within five (5) days, they shall appoint a third appraiser. The third appraiser shall determine the appraised value of the Property within thirty (30) days after such appraiser’s appointment. The Appraised Value shall be the average of the two (2) appraisals which are closest to each other. Commission and Carlisle shall each pay the costs of the appraiser appointed by them, and one-half (1/2) of the cost of the third appraiser. The purchase price as determined herein shall be conclusive and binding on Commission and Carlisle. If any party fails to appoint an appraiser within the time required herein, the Appraised Value shall be determined by the appraiser appointed by the other party and shall be conclusive and binding upon the Commission and Carlisle. In recognition that Commission may pay greater than fair market value for properties as part of economic development activities, properties acquired by Commission for the Project or otherwise shall be excluded from comparable sales by the appraisers conducting the appraisals. This Section shall supersede Section 5(ii) of the Lease.
(7) The generic relocation assistance agreements for all other AMDC tenants on Pascalis properties reads:
“Upon the Tenant vacating the Premises, the Commission shall provide relocation assistance in the form of a single payment calculated as the amount paid by the Tenant as Rent to the Commission to such date, beginning with the Rent paid by the Tenant for the month of December 2021, less any amounts paid by the Commission to any property manager or property management agency .for the management of the Premises and the collection of Rent.”
(8) The McNeil Appraisal Invoice (below) The Ground Lease survey was obtained via a FOIA request and is available here.
It has been another barren year for the sweetgum in my backyard. In years past, I cursed this giant, 30-inch diameter tree growing on my back property line, especially when trying to get my mower to hack through the seemingly millions of seedpods (also known as gumballs) that it had dropped on my lawn. For the past two years, however, there have been few of the seedpods to be found, which saddens me.
The American sweetgum, Liquidambar styracifluatre, in summer
Most people recognize the star-shaped leaves of this tree in the spring and summer. For those who have stepped barefoot on any of its spiky seed pods — aptly named “the sandspurs of the forest” — this tree will not be forgotten.
Sweetgum pods appear to hang onto the trees throughout much of the winter– giving the impression of a holiday tree decorated with ornaments. Quite a contrast with the sameness of the surrounding winter landscape. Two years ago, I discovered another reason to appreciate those seedpod “gumballs.” Looking upward one day at the bare branches against the gray of a winter sky, I noticed the silhouettes of numerous birds, clinging upside-down, swinging on the “ornaments.” I was astounded.
I could not determine the identity of the birds, so I searched the internet. It turns out that numerous birds visit the sweetgums in winter. Could it have been a flock of goldfinches that I saw? They are said to be especially fond of the seeds within the pods and flock in large numbers to feast. Or perhaps it was a mix of the many birds — chickadees, juncos, sparrows, cardinals, towhees and wrens, to name a few — who utilize this food source. Meanwhile, on the ground, mourning doves, turkeys, quail and ducks also gobble up the falling seeds. I read of one scientific study where a wood duck was dissected, and over 1,000 of the tiny, winged sweetgum seeds were found in its crop.
For the past two years, however, the pods have been absent — and also, with that, the flocks of birds. It all has to do with the cleverness of trees. It takes a lot of effort for a tree to produce a seed crop. It is costly, energy-wise, and doing so actually stunts the growth of the tree. If they were to produce a bumper crop of seeds every year, the critter population that eats those seeds would explode– devouring all in sight. Wild nut and fruit trees have overcome this problem by regularly limiting output. Low production years keep the critter populations down… and then, a massive explosion of seeds in one year (more than the critters can handle) will assure the survival of the seeds and the continuation of the species . Pretty wily, eh? (How do they do that?)
Sweetgum seed pods ripening with the arrival of autumn
Most of my childhood years were lived aside the dirt roads in Aiken’s horse district, which was our playground. Among the countless trees to climb was one very large sweetgum, where I sometimes took refuge. Being the best climber in the neighborhood, I was actually the only one who could scale the height of that trunk to reach the higher branches, which extended over the dirt road. From this vantage point, I could see the neighborhood rooftops, trees, and the sky beyond. The tree was all mine, so I had all the time in the world to dream of the things that an eleven-year-old boy dreams of; to crush the leaves of the tree and smell their aromatic scent; to study the neat lines of holes drilled by a sapsucker into the trunk of the tree.
One winter, a perilous winter ice storm wrenched and felled a large limb from the tree. Come spring, when I climbed up to investigate, I saw numbers of honeybees and other insects swarmed to drink from the sap that was oozing out of the large wound left by missing limb. Birds were, likewise, attracted to the sap and its attendant insects. Not knowing if the tree was poisonous, I tried a tiny bit of the sap…. aromatic, slightly bitter, slightly sweet. Nothing to inspire further curiosity.
I later learned that dried sweetgum sap has long been a traditional treat for Southerners… relished as a chewing gum, before chewing gum ever became a readily available commodity.
The sap of the sweetgum appears to have some surprising medicinal qualities. Traditionally, it has been used to treat coughs, ulcers and skin problems. More recently, extracts of it have been found to be a strong antimicrobial agent, effective against even multi-drug resistant bacteria. Also, the sap possesses antifungal properties, and may suppress hypertension. Extracts of the seeds contain anticonvulsant properties; a possible treatment for epilepsy.
One of the many striking hues in the sweetgum’s autumn palette.
These days, while the trend among home owners and municipalities is cutting down sweetgum trees to keep those pesky gumballs from littering the landscape, I think I will keep mine… for the birds; and for the thirty plus species of moths and butterflies it hosts, including the beautiful luna and promethea moths; and for the stunning maroons, oranges and yellows of its fall foliage. And, as concerns those cursed gumballs, maybe I can fashion some decorative Christmas wreaths from them. Sweetgum trees are not so bad.
Contributor Burt Glover became an accidental naturalist during his earliest childhood days exploring the dirt roads, backyards, polo field and barns of the Magnolia-Knox-Mead neighborhood of 1950s Aiken. Birds are his first love, and he can identify an impressive range by song alone. He asserts that he is an observer, not an expert, on the topics of his writings, which range from birds, box turtles, frogs and foraging, to wasps, weeds, weather and beyond
Tag-Team Legal Research and the Do It Right! Alliance Petition
by Don Moniak Updated February 25, 2023.
According to legal department invoices (1), in May of 2022 the City of Aiken spent at least $4,147.50 on legal fees to address the threat of a citizen-led petition aimed at defeating key elements of Project Pascalis. Two outside, contract lawyers from Columbia and the Upstate billed the city 16.5 hours to conduct research into the legal issues surrounding the Do It Right! Alliance petition drive that began on May 11, 2022. When the attorneys were conferencing and comparing notes, the City of Aiken paid more than $500 per hour collectively on legal fees.
Table 1: Attorney Fees to “Research SC Initiative and Referendum Laws on Pending Petition
Attorney
Hours Billed
Rate/Hour
Billing
Daniel Plyler
6.2
$250
$1550.00
Melissa Seagar (Paralegal)
1.5
$100
$150.00
James Holley
8.9
$275
$2447.50
Exerting “Political Clout”: The Petition Begins
On May 9, 2022, Aiken City Council voted 6-1 to approve privatizing a portion of publicly-owned Newberry Street. The recipient of Council’s largesse was the consortium known as RPM Development Partners, which at the time was the private half of the public-private partnership known as Project Pascalis. The official public half was the Aiken Municipal Development Commmission (AMDC).
The vote was a tipping point for the increasingly controversial downtown demolition and redevelopment effort. Two days later more than one hundred people gathered on the lawn of a private home in Aiken to attend the first organizing meeting of a grassroots group called the Do It Right! Alliance. “Charm, Not Chaos,” was announced that day as a slogan that would eventually find its way onto hundreds of protest signs around town.
The meeting was spread by word of mouth, but was open to all citizens and local media. A seven-page handout was openly available that succinctly presented the case that Project Pascalis was both the wrong approach for downtown Aiken, and was unlawful. In regard to the law, among the key points in support of litigation, and reiterated by Aiken resident and organizer Luis Rinaldini were that:
RPM was not selected properly as a developer.
City Ordinance required the Design Review Board to deny the demolition request for the vacant Hotel Aiken and the occupied Beckman Building at 106 Laurens Street.
The AMDC was not acting according to an approved plan.
Numerous conflicts of interest had not been addressed
While litigation was one goal, Rinaldini presented the newfound group’s three-prong strategy for defeating Project Pascalis. At the top of the list was a citizen petition, followed by “create good alternatives,” and litigation. A petition offering ordinances to “Overturn or Undo what the City is doing” was presented as the means to project “Political Clout.”
From the Do It Right Alliance May 11th handout. Notes that day indicate the orginal goal of the petition was 2500 signatures, which in retrospect was an underestimate of the city’s electorate.
The Do It Right petition, complete and ready for signatures, was introduced and volunteer petitioners were sought. The basis for the petition was a seldom used state law titled “Initiative and Referendum.”
Section 5-17-10 of South Carolina State law permits the proposal of ordinances via petition of at least fifteen percent of the registered voters of any municipality:
“The electors of a municipality may propose any ordinance, except an ordinance appropriating money or authorizing the levy of taxes. Any initiated ordinance may be submitted to the council by a petition signed by qualified electors of the municipality equal in number to at least fifteen percent of the registered voters at the last regular municipal election and certified by the municipal election commission as being in accordance with the provisions of this section.”
If a City Council fails to act on a petition, or institutes an ordinance “substantially different from that set forth in the petition,” then Section 5-17-30 mandated a referendum within one year.
The Do It Right! Alliance petition (3) proposed not one ordinance, but four:
1. Prohibit the closing of any part of Newberry Street and any intrusion into Newberry Street/Parkways. 2. Require the city and its commissions and boards to “follow the requirements of the City’s Old Aiken Master Plan and the Old Aiken Design Guidelines. 3. Require the city to “take all necessary steps to grant landmark status to the Johnson Pharmacy, the Hotel Aiken, and the historic 19th century orginal street grid of the city.” 4. Abolish the AMDC and transfer its real property and any other assets to the City of Aiken.
In the next four months, volunteer petitioners would gather an estimated 3,000 signatures of City of Aiken registered voters; working through the heat of a typically hot, humid, sweltering South Carolina summer. The petitioners set up booths at events, outside of supporting businesses, and canvassed door-to-door.
Do It Right! Alliance Volunteers at a Highlands Music Festival event in Summer 2022.
The City’s Response: Hire More Lawyers
The “political clout” message was prescient. Although conducted in secret at the time, the immediate unofficial response to the petition was to assign two contract lawyers to the case, Daniel Plyler and James Holly.
Coincidental with the May 11th Do It Right! meeting, the City of Aiken retained Columbia, SC based law firm Smith Robinson Holler DuBose and Morgan, LLC as a “Special Counsel,” with attorney Daniel Plyler named as the “primary” legal representation. Although the Smith Robinson et al agreement (1) did not specify Project Pascalis as Plyler’s primary role, the belated removal of City Attorney Gary Smith from all involvement in the project was obviously the key motivating factor for obtaining additional outside counsel.
James Holly, a former Aiken City Attorney who is now based in Landrum, had already been retained on April 27, 2022, to represent the city’s Design Review Board; a move also made in large part due to conflicts of interest held by City Attorney Smith. Holly’s agreement with the city also included other tasks as requested.
Smith Robinson et al and Holly collectively devoted 16.5 hours to the research effort, reviewing court decisions, attorney general opinions, and other relevant material. After a week of separate research, attorneys Plyler and Holly conferenced, compared notes, and eventually prepared their findings for City Manager Stuart Bedenbaugh.
A portion of Attorney James Holly’s May 2022 invoice for Project Pascalis related work.
The findings of the two attorneys have not been disclosed. But various opinions from the Attorney General’s office regarding the law have been issued in response to nervous municipal leaders since the late 1970’s. In general, the AG’s office has opined that the petition and referendum law cannot be used to override zoning ordinances, but other ordinances are fair game. For example, a 1978 opinion informed then City of Lancaster Councilwoman Sarah Rivelin that petitions are not “merely advisory.”
If the attorneys were scanning current and past events, they also would have learned the petition and referendum tactic is popular in Folly Beach, SC. For example a petition in 2006 residents petitioned to change the height ordinance, an effort that led to an AG opinion that such an action conflicted with state zoning laws. Most recently, a petition to cap short-term rental licenses achieved a 25 percent signature rate; and following a denial by Folly Beach City Council it will head to a referendum.
1978 Attorney General’s office opinion regarding SC 5-17-10 and 5-17-30.
The Status of the Petition
According to petition organizers, the true number of necessary signatures for any petition is currently close to 4,000, signifcantly greater than the original 2500-3000 estimates. Even though the original goals were achieved but the count remained short, political clout was realized and strengthened after litigation was pursued nearly two months after the petition was launched and volunteers had laid foundational supports. The petition drive functioned as the alliance’s primary educational tool, and the lawsuit followed as another legal tool.
The effort to gain more signatures waned as the city began to cede ground. First, Project Pascalis was cancelled by the developers and the AMDC in September 2022, although some confusion over the real project status lingered. Then, Aiken City Council repealed the Newberry Street privatization ordinance in November 2022. In mid-January 2023, Council expressed its intent to transfer AMDC properties to the city and probably dissolve the commission. Finally, during the January 2023 “State of the City” address, Mayor Rick Osbon announced that an open, legal Request for Proposals for renovation or replacement of the Hotel Aiken would be forthcoming.
Since petition item number two is essentially an ordinance to require the city to obey its own ordinances, the only remaining proposed ordinance involves the landmark status for the historic grid, the CC Johnson Drug Store, and the Hotel Aiken. Whether the “political clout” achieved by the petition will compel city leaders to move forward on those demands remains an open question.
There is no plan to submit the petition to the city’s election commission. The Do It Right! Alliance, which was never formalized as an organization on paper, perserveres as an idea and a vision, with its most concrete representation being an open Facebook Group.
How Much is $4147.50?
During the summer of 2022, the city’s Smith-Hazel Park swimming pool suffered numerous shut downs to the lack of lifeguards. At the time, the city was paying its lifeguards $9.50 per hour, while other pools were paying their lifeguards $2 to $4 more per hour. If lifeguards were paid $15/hr, the minimum wage for city workers advocated by City Councilwoman Lessie Price, the legal fees could have covered seven weeks of a lifeguard’s wages, or nearly 280 hours.
The money spent left the Aiken area, and benefitted the economies of Columbia and Landrum, SC.
(Disclosure: Don Moniak is a frequent contributor to the Do It Right FB page and supported the informal group’s goals that helped contribute to the demise of Project Pascalis, Part II. ) “ (Updated February 25th to identify the home base of the contract attorneys and to credit local businesses with hosting petitions).
Footnotes
(1) Legal invoices were obtained via a September 2022, Freedom of Information Act request for all City of Aiken legal department invoices submitted in Calendary Years 2021 and 20222.
The invoices were redacted under a claim of “attorney-client” privilege. The fallacy of the city’s claim is exposed in The AMDC’s Most Inane Legal Bill?
Jim Holly’s invoice can be seen here Smith Morrison et al’s invoice can be seen here.
(2) The Daniel Plyler and James Holly agreements with the City of Aiken were obtained by Aiken area resident Kelly Cornelius via FOIA requests.
