Tax Increment Financing is a complex system that allows local governments to finance development projects with the revenue generated by the development. It is a part of South Carolina Community Development Law because the legislature found that:
Incentives must be provided for redevelopment in areas which are, or threaten to become, predominantly slum or blighted. (1)
The process is highly controversial because the revenues generated by TIF come at the expense of future tax revenues, the system has led to a lowering of criteria for determining blight and its precursors, it generally functions as a taxpayer subsidy for developers, and the program is open to abuse and subject to corruption. (2).
In Aiken County, TIF has earned a bad reputation from two instances. More than a decade ago there was a failed effort to convince County Council to use TIF for residential developments on undeveloped land. The City of North Augusta has used TIF to fund its Riverfront Park (originally “Project Jackson”) development after the Aiken School Board approved it, which provoked litigation against the city that ultimately was decided in the South Carolina Supreme Court.
So TIF is a touchy subject, and city officials like to defend Project Pascalis plans by speaking negatively about TIF. For example, during the May 9, 2022 Aiken City Council public hearing regarding privatization of Newberry Street, council member Kay Brohl emphatically declared:
We are not North Augusta, we are not doing TIF.
The Aiken Municipal Development Commission (AMDC) and City of Aiken insist that TIF is unnecessary for Project Pascalis, mostly due to the existence of $25 million in South Carolina Plutonium Settlement funds allocated to “Downtown and Northside Development.”
As it turns out, the City of Aiken is not as different from North Augusta as Ms. Brohl asserted. On April 27, 2021 AMDC Executive Director Tim O’Briant wrote the following message to Weldon Wyatt and Chip Goforth:
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.(2)
At no time have AMDC officials acknowledged that TIF was even an option, but clearly it was enough of an option to provoke a call for a legally required study. While City officials vehemently deny that TIF is an option for Project Pascalis, this email reveals the AMDC was considering it as a backup plan and preparing to use it.
With rising costs facing the development, will the City attempt to backtrack and return to a TIF scheme?
For Reference
(1.) Tax Increment Financing for Redevelopment, which the city could attempt apply to the “conservation area” in the Project Pascalis project area, is at: https://www.scstatehouse.gov/code/t31c006.php
Until now, the AMDC has only revealed Option 2A (1) from its early 2021 deliberations. Option 2A was forwarded to select developers, along with a project “summary” (2) in a private solicitation for a request for proposals for an area only encompassing the “Shah Property” and Newberry Hall — but not The Alley. This solicitation represented a change in the direction of the project management, but not in the overall project vision detailed in the never released Option 2, a vision involving a radical redevelopment of The Alley.
The Early Days of Project Pascalis: Option 2 Emerges
One week after the Aiken Municipal Development Commission (AMDC) announced a major, vaguely defined redevelopment effort named Project Pascalis, commission Chairman Keith Wood and Executive Director Tim O’Briant signed a cost sharing agreement with Weldon Wyatt’s GAC, LLC. (3) As with the Wyatt-Boudreaux agreement, references to “historic preservation” are absent. Demolition was the only consideration, and renovations were not options.
Boudreaux Group architecture and its two subconsultants moved forward with an aggressive schedule of site visits, workshops, research, and preliminary design. While the Boudreaux Group was working on behalf of GAC, LLC, it was also designing for the Alley property recently obtained by Ray Massey’s Aiken Alley Holdings, and city owned property across from it, although no agreement detailing this arrangement is publicly available yet.
The week of April 12 passed without the scheduled “presentation to city council and invited stakeholders,” and the AMDC only discussed the project in closed executive session on April 13th.
On April 15th, Weldon Wyatt and Newberry Hall’s Myrtle Anderson signed a purchase and sale agreement for $2 million and options for the business’ operators to negotiate to repurchase a new building, operate the new conference center, and even be compensated for lost income during construction.
Four days later the “Project Pascalis Conceptual Plans” were complete and ready for review. The plan’s aerial view continued to match the description in the Boudreaux-Wyatt agreement, with the Aiken Antique Mall and the east half of The Alley remaining in the project footprint.
(Note: click on images, below, to enlarge views).
Option 2: First-floor view of Project Pascalis footprint
The conceptual plans, obtained on July 2, 2022, via a Freedom of Information Act request, featured “Option 2,” with the Hotel Aiken and Laurens properties replaced by ground floor retail below a three story apartment complex, a “Boutique Hotel” at the corner of Richland and Newberry, a conference center/apartments/garage complex replacing Newberry Hall, and street pattern changes on Richland and Newberry Street.
Option 2: Five-story “Boutique Hotel” at the corner of Richland and Newberry. To the left is the 5-story conference center/parking garage/apartments complex at the corner of Newberry and The Alley.
Most dramatically, the plan envisioned retail space topped by four stories of apartments on the north side of The Alley; three stories across from it on city owned property, and a three story, elevated, enclosed walkway above the east entrance connecting apartments and providing a pathway to the parking garage.
These plans were never shared as promised in mid-March by AMDC officials. The plans were shown to some of Massey’s newly acquired tenants. One of them is Stacy O’Sullivan, co-owner of “Art and Soul” gallery in The Alley. In 2019, “Aiken Blend” wrote of her and business partner Kim Rising’s presence in The Alley in an “entrepreneur of the week” profile:
Art and Soul of Aiken isn’t exactly what you would call a “traditional” gallery. It is a place where local Aiken area artists can display their work in a free spirited and supportive space. Stacy O’Sullivan and Kim Rising established this co-op style business three years ago in a hidden store front on Richland Avenue. Two years ago, the business moved into the Alley. Since then, the two have had nothing but success. (4)
Their success must not have impressed her new landlords. O’Sullivan has described a visit from Massey and investment partner Todd Gaul, during which they revealed conceptual plans for their building, stating “We know this will take permits and such, but The City loves projects like this and it will not be a problem.”
O’Sullivan also describes an effort by Massey and Gaul to “illegally evict” them from their four-year old business home, and their intent to triple the rent, all while paying lip service to serious maintenance issues such as flooding in the recently renovated alley following heavy rains
Happy Days End
While Massey and Gaul might not have anticipated a problem with the city, they should have anticipated one with Weldon Wyatt, especially considering his abrupt and unexplained withdrawal in January, 2020 from a purchase contract with Aiken County for the “old hospital” property at 828 Richland Ave E.
Between April 19th and May 14th, two things happened. First, the preliminary cost estimates were completed on schedule. The estimates include a total budget of $118,372,104 and ninety eight cents; and total costs for “demolition and abatement” of the “Hotel Aiken, 108 Laurens Street, Holley House Motel, and Retail/Office Richland, Newberry, and The Alley” of $712,248. (5)
Second, the man described by the AMDC a month previously as an “experienced and well-capitalized” private developer bailed on yet another major development on Mayor Rick Osbon’s wish list. Similar to the unexplained cancellation of the “old hospital” deal, the reason for the Project Pascalis exit remains a mystery.
Instead of reassessing the project, AMDC officials scrambled to salvage the effort to demolish and reconstruct a major portion of historic downtown Aiken. As previously reported in A Project Pascalis Timeline, on May 14th “The Chamber of Commerce takes ‘assignment’ of the Shah property contracts, while the AMDC seeks funding to purchase them on behalf of the city. This all occurs behind closed doors.” (. ) Not until June 2 would the Chamber also arrange for “assignment” of the Newberry Hall property.
The absence of a contract continuation with Newberry Hall’s owners did not deter the AMDC from immediately seeking a new developer for both the Shah and Newberry properties. On May 19th the AMDC sent its private solicitations for Requests for Proposals to continue the project—minus the Aiken Alley Holdings property and the Aiken Antique Mall.
There is no known formal agreement between the AMDC and Aiken Alley Holdings, but some form of unwritten agreement must have remained. Six days after the Chamber of Commerce took one for the team by taking assignment of the Newberry Hall property, Aiken Alley Holdings, LLC closed on the purchase of longtime State Farm agent Joseph Harrison’s 121 Newberry Street for $675,000, adding to the holdings in the original Pascalis footprint.
Just over three months later, Massey was present at a “public meeting” at Victor’s Restaurant in Florence, SC hosted by the Raines Company. Two months later he was the agent for the newly formed RPM Development Partners, LLC; a consortium of Massey and other local, unnamed investors, the developers Rainesco and Lat Purser. In early December, 2021 RPM was named the Pascalis developer, pending a master agreement, although the legal advertisement for RFPs was not submitted until mid December.
(1) The AMDC placed “Option 2A” on its “transparency page, but not Option 2; probably because a FOIA or other official request only asked for information pertaining to the AMDC’s private RFP solicitation in May 2021. This is known in some circles as willful nondisclosure.
In the solicitation, the AMDC offers to privatize a part of Newberry Street. The entire solicitation remains secret to this day, withheld under a FOIA exemption by the City of Aiken, despite fact that FOIA clearly states the city “may” release the documents. The AMDC does not deny the solicitation is only for demolition, not renovation of Hotel Aiken and surrounding properties.
(5) Draft Preliminary Order of Magnitude Cost Estimate Analysis. Project Pascalis. Obtained via the SC Freedom of Information Act from the City of Aiken, July 2, 2022.
Page One view: Plaintiffs and Defendants in Project Pascalis lawsuit.
Lawyers for nine plaintiffs, including the Historic Aiken Foundation, Green Boundary Foundation and former City Councilperson Dick Dewar, filed a complaint in the Second Judicial Circuit of South Carolina against two dozen City of Aiken officials and a pair of development companies collaborating with the city to demolish and reconstruct a substantial portion of historic, downtown Aiken.
Pages one to thirty-six of the plea assiduously outline the legal basis for their claims, including South Carolina Community Development, Freedom of Information, Ethics and Government Accountability statutes; and City of Aiken zoning ordinances.
Pages 36 to 90 contain the general factual allegations and provide welcome summertime nonfiction for a majority of Aiken area residents who object to Project Pascalis. Like a good true white collar crime story, the allegations detail sham proceedings, citizens locked out of a distorted and confusing public process, conflict of interest violations from the Mayor to the City Attorney, and city boards that regulate the public while serving the developers they are charged with monitoring.
Recently obtained documents confirm the evolution of the $75-100 million downtown demolition and reconstruction effort known as Project Pascalis. While one of the earliest project descriptions indicated a greater presence on Laurens Street, every conceptual design from the early days includes substantial development in The Alley, and an absence of options for renovating historic buildings such as the Hotel Aiken.
Today, The Alley is in the midst of the project area, yet city officials have denied or downplayed any plans that may impact the popular gathering area and its businesses, just as officials withheld conceptual designs from 2021—just four years removed from the multi-million dollar renovation that disrupted local businesses for more than a year.
For example, at the Aiken Municipal Development Commission’s (AMDC) April 20, 2022 public “design review” meeting, the following submitted question was read aloud by the meeting’s Zoom moderator:
How much more will the Project Pascalis footprint grow? In 2020 downtown redevelopment only included properties fronting Richland and the new municipal building. The most recent online map includes Newberry. Now with the addition of the (old) Municipal building the project (area) has grown threefold and an (private) ownership island occupies the middle. Are there any plans for this existing private property?
The answer from AMDC executive director and meeting moderator Tim O’Briant was: “there are none.” (1)
One of the earliest Project Pascalis documents is the Wyatt-Boudreaux Group letter of agreement, recently obtained from the City of Aiken via a Freedom of Information Act request.
On March 12, 2021 Boudreaux Group of Columbia President Heather Mitchell signed an agreement to complete “Downtown Development Project Conceptual Design Services” on behalf of Wyatt Development (GAC, LLC) (2) for an unnamed project involving a 100 room hotel, 125 unit apartment complex, conference center with a 450 seat capacity, upscale retail space, and a parking garage large enough to complement the development.
The Wyatt-Boudreaux agreement was finalized ten days after Weldon’s WTC Investments, LLC had signed a contract to purchase three downtown properties—collectively referred to later as the “Shah Property”—for $7.5 million. (3) WTC’s involvement came only one year after it backed out of a similar project at the “old hospital” and Aiken County office complex at 828 Richland Ave E. (4) Its “agent” in both the downtown Aiken deal and the failed old hospital venture was Aiken Attorney Ray Massey, whose law partner Gary Smith has served as Aiken City Attorney for more than twenty years.
The Wyatt-Boudreaux agreement described the project as encompassing everything from The Antique Mall on Laurens to the Hotel Aiken, wrapping east around Richland Avenue to Newberry Street, south to The Alley, and north up Bee Lane. The description clearly includes buildings in The Alley as well as the eastern portion of the Aiken Municipal Building on The Alley’s south side.
Aiken Antique Mall, Candidate for Demolition in March 2021
Three days after the agreement was signed by Boudreaux and sent to Wyatt for his signature and Tim O’Briant for his records, Ray Massey’s “Aiken Alley Holdings, LLC” moved forward on procuring a key portion of The Alley for the project. On March 15th his investment firm—registered with the SC Secretary of State only a month prior—closed on a $2.025 million deal for 200 The Alley and 214 The Alley, parcels housing TakoSushi, Aiken Taproom, and several other businesses. The deal also included a parking area behind 214 The Alley on Bee Lane.
Three days after the closing, the AMDC publicly announced Project Pascalis. Few details were announced beyond the news of a commission resolution allowing AMDC Chair Keith Wood and O’Briant to pursue an agreement with an “experienced and well-capitalized” private developer the commission had “recruited and identified.”
In a subsequent interview, Tim O’Briant told the Aiken Standard “transparency is key” and promised additional pubic information within a few months. The Boudreaux/Wyatt agreement specified a timeline of April 12, 2021 for a presentation to City Council and “invited stakeholders.” The terms “public meeting” and “public hearing” are absent from the agreement.
That schedule was never met. No public meetings or presentations to council were held in April, 2021. However, the AMDC did meet behind closed doors in Executive Session on April 13th; a habit the commission would undertake during more than sixty percent of its meetings in the next six months. (5)
(1) April 20, 2021 AMDC “Design Workshop,” 5:30 meeting to 7:00 pm meeting that extended into a scheduled City Council work session. Listen to question/answer at 2:56:07 in the video below.
(2) Weldon Wyatt signed the agreement on March 23. The words “Wyatt Development Company” are crossed out below the letterhead and on the signature page, and “GAC, LLC” is handwritten in their place. This typo may have foreshadowed Wyatt’s early exit from the project; as well as the general lack of attention to detail that has plagued the project. The last version of Wyatt Development, LLC was actually dissolved in April, 2013.
(3) From: “Resolution Authorizing Acceptance of Assignments
Adopted November 9, 2021” Aiken Municipal Development Commission:
“In anticipation of the Commission’s efforts to consolidate ownership of real property in connection with Project Pascalis, the Greater Aiken County Chamber of Commerce (the “Chamber of Commerce”) has entered into the following purchase and sale agreeme for the acquisition of such real property: (i) a Purchase and Sale Agreement by and between Myrtle H. Anderson, seller, and WTC Investments, LLC, as purchaser, dated April 15, 2021 (the “Anderson Agreement”), for the purchase ofreal property identified as TMS# 121-21-08-004(the “Anderson Property”) for the purchase price of $2,000,000; and (ii) a Purchase and Sale Agreement by and among Historic Hospitality, LLC, S&N Hospitality, LLC, Shah Enterprises, LLC, and Paresh Shah, LLC, collectively as sellers, and WTC Investments, LLC, as purchaser, dated March 2, 2021 (the “Shah Agreement” and together with the Anderson Agreement, the “Agreements”), for the purchase of real property identified as TMS# 121-21-09-002, 121-21-08- 001, 121-21-08-002, 121-21-08-003, 121-21-08-009, and 121-21-09-001 (the “Shah Property” and collectively with the Anderson Property, the “Properties”), for the purchase price of $7,500,000. (5) Pursuant to a bond ordinance of City Council enacted August 23, 2021, the City issued its $9,600,000 General Obligation Bond, Taxable Series 2021.”
The City of Aiken’s Project Pascalis was announced to the general public on March 17, 2021 when the Aiken Municipal Development Commission (AMDC) authorized “its chairman and the city’s development director to negotiate and execute, when the time comes, a cost-sharing agreement for ‘Project Pascalis,’ a potentially massive commercial-development venture.” (1)
In its announcement, the AMDC wrote it had “identified and recruited a well-capitalized and successful real estate investor interested in partnering and exploring one or more potential commercial development projects.” (2) AMDC officials told the Aiken Standard “a Project Pascalis plan for the public to review and critique is expected within months, after the cost-sharing agreement is finalized and the ball gets rolling;” and AMDC Director Tim O’Briant told the paper, “Transparency is key.”
Between March 16, 2021 and May 10, 2022, the AMDC held seventeen scheduled meetings during which they entered into private, Executive Session sixteen times. In total, the Commission spent just over fifty percent of its time in secret deliberations. Between March 16, 2021 and December 3, 2021, just before the first announcement of a developer, the Commission spent close to two-thirds of its meetings in secret deliberations. Prior to this, the percentage of time spent in Executive Session was just under forty.
While some meetings were held where parts of the project were discussed and debated, public input was not sought until April of this year; with the first meetings involving the entirety of the proposal being held on April 20th. At both meetings, the project presentation lasted for all but fifteen minutes of the scheduled two hours. Public input was abruptly cut off an hour later during the first meeting because of “prior engagements” of the primary developer.
The AMDC and City of Aiken never publicly announced its “well capitalized and successful investor” of 2021. We now know the investor was Weldon Wyatt, whose WTC Investments, LLC (agent: Attorney Ray Massey) had abruptly withdrawn, following months of great fanfare, from a similarly size project at the old Aiken hospital. Not surprisingly, Wyatt and his fellow investors in GAC, LLC and WTC Investments, LLC abruptly dropped out of Project Pascalis two short months later, and the cost sharing agreement was cancelled.(3)
Instead of announcing Wyatt’s second withdrawal in two years from an anticipated public-private partnership with the City of Aiken, the AMDC secretly solicited other developers, without any public notice as required by law. The Aiken Chamber of Commerce, whose President is an AMDC Commissioner, secretly took “assignment” of the seven downtown properties proposed for the project, and for which WTC Investments, LLC had a purchase and sale agreement with the property owners.
Three months later, Aiken City Council approved a $9.6 million bond issuance to finance AMDC property purchases. In early November, 2021, the AMDC finalized those purchases; and the Chamber of Commerce was reimbursed $135,000 of nonrefundable earnest deposits, just as it had reimbursed WTC’s earnest money in May when it took “assignment” of the properties.
Throughout most of 2021, the AMDC and the City of Aiken never publicly disclosed that:
Weldon Wyatt and his fellow investors were involved in Project Pascalis and were planning to demolish the Hotel Aiken and adjacent properties;
the AMDC was involved with negotiations with a second developer
the Chamber of Commerce held nearly $10 million in property while the AMDC sought funding for the properties.
That is how much “Transparency is Key” to the City of Aiken as it pertains to Project Pascalis.
