Category Archives: Aiken Corporation

Aiken Corporation, City Government, Legal, November 2023, Pascalis 2023 - SRNL Lab

The Aiken Corporation-City of Aiken Relationship: Partners, Not Cousins.

7 Comments

by Don Moniak
November 6, 2023

The Aiken Corporation is presently moving forward as the City of Aiken’s preferred, sole-source, developer of a $20 million “Mixed-Use” downtown office complex being funded by State of South Carolina plutonium settlement funds.

Since the money is allocated for use in developing “offsite” infrastructure for the Department of Energy’s (DOE) Savannah River National Laboratory (SRNL), Aiken Corporation is seeking a long-term lease arrangement with the SRNL operating contractor, Battelle Savannah River Site (BSRA); but has yet to ink any agreement.

The project’s high profile has renewed discussion regarding the relationship of the City of Aiken to the Aiken Corporation.

A review of Aiken Corporation and City of Aiken records indicates the Aiken Corporation is not a subsidiary of the City of Aiken, was not created by Aiken City Council, and does not serve at the discretion of the City Council. Aiken Corporation is a stand-alone, private, not-for-profit organization with a long-standing partnership with City Council that was established by a resolution, but not by ordinance. The Aiken Corporation also is not a Community Development Corporation as defined by South Carolina Law.

Aiken City Council cannot dissolve the Aiken Corporation, but it can defund it. Only the Aiken Corporation’s Board of Directors can dissolve the organization itself. If that were to happen, its assets and properties would be transferred back to the City of Aiken.

The City and Aiken Corporation also have a Landlord-Tenant relationship. The City of Aiken has a 99-year ground lease arrangement with Aiken Corporation for the property upon which the Aiken Corporation’s “Amentum” office building is situated. The City of Aiken has the right to sell the property to a third party and, under certain conditions, can terminate the ground lease and take ownership of the facility.

The Existing Landlord-Tenant Relationship

The Aiken Corporation (ACorp) is best described as a not-for-profit organization whose primary contributor is the City of Aiken. Its major source of income derives from a quarter-million dollars per year of rental revenues (1) from its Newberry Street office building currently leased by the Amentum Company. The organization also has a Subchapter S company called L.E.D. Inc. which acts as its property management arm.

All income is designated for use to advance the Aiken Corporation’s mission “to diversify and expand the City’s economic base and improve the quality of life in Aiken.”

The most recent three-year lease between ACorp/LED and Amentum was signed on January 23, 2023. The current rent is $20,500 per month.

Now known as the “Amentum Building,” a more appropriate term would be “The Aiken Corporation Building,” when considering the three name changes that have occurred in two decades.

The Aiken Corporation Building sits on property owned by the City of Aiken. In December of 2000, the City signed a 99-year “ground lease” with the Aiken Corporation, giving them control of the property as well as an option to purchase it. While taxes are paid by ACorp on the building itself, the actual land is exempt from taxation due to its government ownership (Figure 1).

Figure 1: Aiken County Assessor’s Office property values for the Aiken Corporation (Amentum) building at 106 Newberry Street, SW. Land value and assessment is set at $0 due to City of Aiken ownership. Aiken Corporation owns the building, which was funded by City of Aiken loans, and has leased it to a series of Savannah River Site contractors since 2001. The City of Aiken owns the actual land and leases it to Aiken Corporation under the terms of a 99-year ground lease.


Aiken Corporation, and its subsidiary the Aiken Downtown Development Association (ADDA), is, and always has been, dependent upon city resources. Annual financial reports (2) consistently show the City of Aiken is its largest, and generally its only, contributor (Figure 2). The City’s purchase of the Newberry Street property was financed by twenty years of rental revenue from facility lease-holders (3). City staff assists the organization with its monthly books. Even the largest contribution in 2022, a 25-acre parcel of land off York Street, was originally intended as a donation to the City of Aiken. (4).

Figure 2: FY 2022 (July 1, 2021 to June 30, 2022) Aiken Corporation tax filing, showing the City of Aiken as the sole contributor. In FY 2021, the city’s contribution was $60,000. Other cash funds in FY 2022 were derived from fundraisers ($25,546) and ADDA membership dues ($18,000).


The 99-year ground lease includes a provision allowing the City to sell the property, at which time Aiken Corporation could exercise the right of first refusal and purchase the property. Another provision allows the City, as landlord, to terminate the lease under certain conditions, and take ownership of the building (5).

In a sense, the Aiken Corporation could be viewed more as a steward of City property than a landlord in its own right. It owns a building that can revert to city property, and does not own the property upon which the building sits.

Aiken Corporation Charts a New Future.

One year ago, the organization seemed to be almost a historical footnote, an increasingly obsolete entity that was almost entirely displaced in 2019 by the ordinance establishing the Aiken Municipal Development Commission (AMDC).  

As detailed in the three-part series The Amentum Model, the Aiken Corporation’s heyday was from the late 1990s to about 2010. The organization has been relatively dormant since that time. Today’s organization mostly deals in six-figure projects whose budgeting is, directly and indirectly, entirely dependent upon City of Aiken contributions, land transfers, loan forgiveness, and use of city assets.

In contrast to its usual six-figure projects, ACorp is currently pursuing an eight-figure project involving $20 million of the State of South Carolina’s plutonium settlement. The funds were legislatively allocated to Aiken County for, “Off-site Infrastructure Improvements for SRS/National Lab, including the Aiken Technology/Innovation Corridor.” The City of Aiken was awarded the funds after SRNL declared a preference for locating the facility within the city.

The project goal originally involved construction of a 45,000 square-foot office building on the downtown “Pascalis properties” for use by SRNL. The project has devolved into a 36,000 square-foot “Mixed-Use” facility, a colloquial term for a “Spec” building. On September 25th, ACorp’s Board adopted the recommendation of its subcontractor, McMillan Pazdan and Smith, to locate the facility on its newly acquired, one-acre Newberry Street, NW property; and not on property acquired by the city for the Pascalis project.

Despite the downsizing and movement to undeveloped vacant lots, the rough cost estimate of $20 million has not changed. Although unequivocally intended for use by SRNL, the future use has also devolved into mere speculation that SRNL will sign a long-term lease. Such an arrangement could net ACorp upwards of a half-million dollars in additional rental income; income that would be entirely dependent upon the budgetary whims of the federal government.

To sign a lease, SRNL’s operating contractor needs approval from the Department of Energy, as well as an annual allocation of upwards of a half-million dollars from the SRS annual budget. To date, this has not occurred. In July of this year DOE/SRNL distanced itself from the project.

The pursuit of this lucrative project in the downtown retail district began shortly after the cancellation of Project Pascalis. Following the AMDC vote to end that effort, the City of Aiken reinvigorated the Aiken Corporation by secretly enlisting it to pursue the $20 million SRNL project.

The Aiken Corp’s public prominence took a step up in March of this year, when it entered into a no-bid, $250,000 contract with the City in which it was cited as “The Developer.” The development role was contractually limited to “pre-development,” which included the pursuit of long-term leases with third parties—understood to mean the Savannah River National Laboratory.

Despite continued uncertainties and a lack of amendments to the March 13th contract, Aiken Corporation has moved forward with a Request for Qualifications (RFQ) to provide Architectural and Engineering services for the proposed “Mixed-Use” facility.

Figure 3: The Aiken Corporation website homepage features three men toasting with drafts of beer in front of the former Aiken Brew Pub, which is currently being renovated with private funds.

Mixed Messages About the Relationship.

Despite, its 27-year history and the emergence of the $20 million SRNL project as an Aiken Corporation endeavor, its actual relationship with the City remains murky.

This past April, City Attorney Gary Smith wrote to the South Carolina Ethics Commission that,

“The Aiken Corporation is a 501(c)(3) corporation that was formed by (Aiken) City Council in 1995 to promote economic development in the City of Aiken. Historically, two City Council members have served on the Board of Directors of Alken Corporation. The Bylaws of the Aiken Corporation provide that in the event of dissolution, the residual assets of the organization will be turned over to the City of Aiken to be used exclusively for public purposes.” 

The Ethics Commission then issued an informal opinion that referred to the Aiken Corporation as an example of “a board, foundation, agency, etc. which is an arm or child of the council, i.e. created by council and existing solely at the discretion of council.”

On September 25th of this year, four other descriptions emerged.

On the morning of the 25th, the ACorp Board of Directors approved a recommendation for siting the “Mixed-Use” office building it hopes to lease to SRNL. K.J. Jacobs, representing Aiken Corporation subcontractor McMcMillan Pazdan and Smith, described his firm’s client as a “subsidiary:”

“The City does not control (the Old Hospital) site. We looked at the four sites controlled by the City or its subsidiaries.” 

The context for that description was the elimination of the Old Hospital property from SRNL project consideration, and selection of its own property on Newberry Street NW; a process described in The Bomb Plant Reveal…Bombs.

Mr. Jacob’s assessment was not verified at Aiken City Council’s meeting that evening, where ACorp officers presented its recommendation to build the SRNL/“Mixed-Use” facility on its own property, which itself was acquired in an unusual fashion.

The discussion began at the fourteen-minute mark of the video-taped meeting. Board member Sam Erb cited the organization as a “Community Development Corporation,” which by legal definition is an independent organization; but did not describe the relationship.

Then, in response to a request by Aiken resident Lisa Smith for Council to explain the relationship between the two entities, Mayor Rick Osbon stated that the Aiken Corporation “seems almost like a cousin to the City.”  His assessment was followed by ACorp Chairman Buzz Rich’s description of the relationship as a “private-public partnership.” 

A review of the history and the terminology suggests that Buzz Rich had the only accurate description—that Aiken Corporation is a private organization that has maintained a long-term partnership with the City.

Is the Aiken Corporation a Community Development Corporation? 

Unless the City or Aiken Corporation can provide evidence to the contrary, the answer is no. The ACorp’s incorporation papers from 1995 identify the organization as a 501(c)(3) “formed exclusively for charitable purposes,” with the mission to “diversify and expand the city’s economic base and to improve the quality of life in Aiken.” Early efforts towards that mission are described in a 2009 USC-Aiken Economic Impact Study.

Neither its founding documents nor its by-laws specify that ACorp is a Community Development Corporation (CDC). The Aiken Corporation meets only two of the six legal criteria (6) for a CDC as defined by SC 34, Chapter 43.

The South Carolina Association of Community Economic Development (SCACED) describes CDCs as: 

“Non-profit community-based development organizations that are established to promote economic opportunities in low-wealth communities.” 

The SCACED lists 88 groups as certified CDCs in its membership directory. The Aiken Corporation is not on that list and thereby is not eligible for the SCADED’s foundation funding, Community Development tax credits, or state appropriations. Evidence of any CDC-type funds is absent from years of annual ACorp financial reports.

Downtown Aiken is a high-rent district, relative to Aiken County as a whole. On a per-capita and median income basis, the City of Aiken is one of the more affluent municipalities in South Carolina. 

While the Aiken Corporation did conduct work on the Toole Hill housing redevelopment project earlier in this century, its primary mission has been focused on downtown Aiken, not on the low-income areas of Aiken. Presently, there are no representatives from Aiken’s lower income Northside communities on its Board of Directors, nor are any required per its recently amended by-laws.

Simply put, the Aiken Corporation is not a South Carolina Community Development Corporation.

Is Aiken Corporation a subsidiary of the City of Aiken that serves at the discretion of City Council?

This question has a two-part answer. City Council could choose to both defund ACorp and terminate its 27 year-old partnership established by resolution. But Aiken City Council cannot dissolve the organization. City officials, including City Attorney Gary Smith, have declined to offer evidence to the contrary. 

Unlike the Aiken Municipal Development Commission (AMDC), the Aiken Corporation was not created by Aiken City Council. Whereas the AMDC was formed by a stand-alone ordinance, the Acorp was independently formed.

In fact, according to a June 5, 2002, memorandum from Aiken staff attorney Richard Pearce to Aiken City Council, “Aiken Corporation is not a division of the City of Aiken.” 

There is no reason today to doubt Mr. Pearce’s 21-year-old assessment. Whereas the now dissolved AMDC was created by, and served at the discretion of City Council, the Aiken Corporation’s relationship with the Aiken City Council only involves a vague partnership contract not much different than the City’s relationship with the Chamber of Commerce.

According to the March 13, 1995 Aiken City Council agenda, pages 20-57, the founding relationship between City Council and ACorp was only by resolution and by a contract defining the parameters of a partnership:

”The outline for the Aiken Corporation includes resolutions with the Aiken Corporation, the Chamber of Commerce, and the Aiken Economic Development Partnership. Each of these resolutions simply states that the city will continue to cooperate with each of the groups.”

During the same meeting, Council approved a contract with Aiken Corporation to:

“begin a cooperative economic development effort, led by The Aiken Corporation, and supported by the City of Aiken; to jointly undertake the planning activities required to identify the specific goals and resources necessary for success; and to develop agreements that clearly identify the roles and responsibilities of each party in this endeavor.”

As such, Aiken Corporation can be viewed as an independent party that is dependent upon City of Aiken funding, but not as a subsidiary controlled by the City of Aiken. 

Since it was not created by, and does not serve at the discretion of City Council, Council members Lessie Price and Gail Diggs clearly made the correct decision in late March of this year to resign from the Aiken Corporation Board of Directors in order to avoid any potential conflicts of interest. However, the absence of city officials as voting Board members leaves most decisions involving city funds in the hands of a self-appointed, unelected, private organization.

Summary

As a partner, the Aiken Corporation has been an erratic force in City politics and development. The peak of its influence was in the early 2000’s, followed by a slow waning. Its diminished power could be fully reversed with the infusion of a $20 million capital investment from the State of South Carolina via the City of Aiken.

If the “Mixed Use” office building ultimately houses SRNL, the Aiken Corporation stands to yield upwards of a half-million dollars in annual rental revenue. It can then use that revenue derived from government investment to influence downtown area development, but with little to no local government oversight.

Aiken Corporation has attempted to portray its role as an investor, but in reality, the organization has not taken any real risks in its pursuit of developer status and ultimate ownership. Its role is one of a classic rentseeker.

Whether the process in place even complies with the legislative intent of the $20 million allocation for an SRNL facility is questionable. A letter sent in September of this year to State Senators Tom Young and Shane Massey, asking “How is this not a misappropriation of funds?” has yet to be answered.

Footnotes: 

(1) While the gross rental income hovers around $240,000 a year, the reported net income is closer to half of that. For example, in FY 2022, Aiken Corporation reported $240,000 in income and $112,000 in rental expenses.

(2) Annual financial reports can be viewed at Pro-Publica’s Non-Profit Explorer.

(3) The Ground Lease stated:

“It is agreed that the rental payments hereunder constitute payment to Landlord for the value of the land which is stated to be One Hundred Twenty Thousand and No/ IOOs ($ 120, 000.00) Dollars. The One Thousand Three and No/ IOOs ($ 1, 003. 00) Dollars per month payable by Lessee to Landlord is scheduled to amortize the sum of $ 120, 000. 00 in 240 equal, consecutive monthly payments at Eight (8%) percent interest per a n n u m . Therefore, for purposes of exercising the option described hereinbelow in Paragraph ” 3″, the land will be fully paid for by Lessee in 20 years after the first payment due hereunder. After such 20 year period, Lessee shall pay to Landlord only the sum of One ($ 1. 00) Dollar per year for rent hereunder.”

(4) From the November 11, 2021 Aiken Corporation Meeting Minutes:

“Potential Land Gift – Stuart Bedenbaugh reported that he was approached by Brad Brodie about donating some property on the northeast side of York St, across from the Vocational Rehab 
Center. Mr. Bedenbaugh stated that the City is not interested in obtaining the land but thought Aiken Corp would be. There are 25 acres of land where trees were removed, which is against the City’s Tree Ordinance. It will be August 2022 when the development restrictions will be lifted.”

(5) Section 14 of the Ground Lease states:

“Landlord reserves the right to terminate this Lease, and to re- enter and possess the whole of the Leased Premises without further notice or demand:

a) Upon any general assignment for the benefit of creditors of Tenant;
b) Upon the leveying oa a write of execution or attachment against the property of Tenant and the same not being dismissed within sixty (60) days;
c) Upon failure of Tenant to pay any installment of rent after sixty(60) days written notice that same is due;
d) Upon failure of Tenant to perform all and singular the terms of any mortgage executed by Tenant (and the Note required thereby) to which Landlord has subordinated its interest;
e) Upon failure of Tenant to perform any other covenant required to be performed by Tenant after thirty (30) days written notice from Landlord, or in the event more than thirty (30) days is required to perform such covenant, the failure of Tenant to c o m m e n c e the performance thereof within thirty ( 30) days and thereafter to diligently
pursue such performance to completion.

(6) South Carolina state law 34-43-20(2) states: 

“Community development corporation” means a nonprofit corporation which:

(a) is chartered pursuant to Chapter 31, Title 33. 

(b) is tax exempt pursuant to Section 501(c)(3) of the Internal Revenue Code of 1986, as amended;

(c) has a primary mission of developing and improving low-income communities and neighborhoods through economic and related development;

(d) has activities and decisions initiated, managed, and controlled by the constituents of those local communities;

(e) has a primary function of developing projects and activities designed to enhance the economic opportunities of the people in the community served, including efforts to enable them to become owners and managers of small businesses and producers of affordable housing and jobs in the community served;

(f) does not provide credit, capital, or other assistance from public funds in an amount greater than twenty-five thousand dollars at one time or in one transaction. The department may adjust that dollar amount in the manner provided in Section 37-1-109.” 

The Aiken Corporation only meets criteria (a) and (b): 

  • The organization’s primary mission is not targeted towards low-income communities, as most of its work involves development in the high-rent downtown Aiken retail district. 
  • Few of its activities are initiated by constituents, and most are initiated by its Board of Directors and City staff. 
  • Few if any efforts are made to assist people to become owners and managers of small businesses and producers of affordable housing. 
  • Most of the organization’s transactions exceed $25,000 and involve public funds or rental revenues derived from a very generous, 99-year lease on city-owned property. 

Related Articles, in descending order of publication:

The Aiken Corporation Building was published in conjunction with this article to illustrate the changes in corporate tenancy in the Aiken Corporation Building.

Aiken’s Cousin Problem… covers the recommendation of the Aiken Corporation’s Newberry Street, NW property for the SRNL/“Mixed-Use” project; and the history of the acquisition of that property.

The three-part series The Amentum Model… chronicles the history of the development of the Aiken Corporation’s Newberry Street office building and the Aiken Performing Arts Center.

The Devil is in the Details…addressed the selection process for the SRNL/“Mixed Use” facility.

Thoughts on the Aiken Corporation is an editorial and analysis exploring the need for the organization and past efforts at accountability.

Gathering on the Rooftop Terrace is an editorial and analysis of the McMillan Pazdan and Smith SRNL/“Mixed Use” project feasibility study.

The Bomb Plant Reveal…Bombs is an editorial and analysis of the feasibility study process.

Letter to Battelle is a letter of concern regarding the project process and status to the Battelle Company’s chief liaison for the DOE/SRNL operating contract.

Aiken Corporation Issued a Notice of Violation is a news release regarding the SC Secretary of State’s citation of Aiken Corporation for late filing of necessary tax forms.

45,000 Square Feet Without a Tenant provides information about the DOE/SRNL disassociation with the project and the details of the DOE/SRNL operating contract.

What is the Status of the Savannah River National Laboratory Building Downtown provides a full transcript and summary of the Aiken Corporation’s May 2023 Executive Committee meeting.

A Question on Security is an unanswered letter to ACorp contractor McMillan Pazdan and Smith regarding Department of Homeland Security guidelines and rules for threat assessments at federal facilities.

The Future of Warneke Cleaners is an unanswered letter to Aiken Corporation contractor McMillan Pazdan and Smith regarding the zoning status of downtown dry cleaner.

Three Missing Pages covers the Aiken Corporation contract with the City of Aiken and provides extensive footnotes about the project timeline through April 2023.

Who Bought this Property chronicles how an Aiken Corporation loan from the City of Aiken was forgiven in exchange for ACorp purchasing a small property that facilitated the annexation of the new Steeplechase property.

The Agenda Setting Aiken Corporation describes how decisions are often made at Aiken Corporation Board meetings before being presented to City Council.

Project Labscalis Annual Operating Costs covers the total estimated costs for demolition and site prep, construction, and annual maintenance costs for the proposed SRNL building. 

Structured Parking Solution for the Lab is about the connection between a proposed parking garage and the lab project. 

Off-Site Infrastructure provides the history of the lab project and the plutonium settlement disbursement process.

There’s a Joke in There Somewhere is about the State of the City Address where the lab announcement was made. 

Aiken Corporation Registration Expired is a review of the organization and details how its not-for-profit status temporarily expired in 2022.

Other related articles:  

Aiken Standard 3/16/23 by M. Christian, Aiken City Council Approves Aiken Corporation Agreement Moving New Downtown Project Forward

Aiken Standard; 5/29/23; by M. Christian.  Savannah River National Lab considered two other downtown Aiken sites for workforce center

The video of the February 6, 2023 Public Forum, or ‘listening session’ is available on the City’s You Tube channel. .

Aiken Corporation, City Government, December 2023

The Aiken Corporation’s Amentum Model: An Afterword

3 Comments

Twenty years have passed since the Aiken Corporation last took on a major project. If the City of Aiken is intent on awarding the Aiken Corporation a no-bid $20 million contract to develop the “mixed-use“ spec building, then City Council should, at the very least, hold discussions on the history of the Aiken Corporation’s Westinghouse/Washington/Amentum project from 1998-2002.

_____________

As documented in the October 2023  “Amentum Model”1 series, the “boondoggle” moniker has been attached to several Aiken Corporation projects over the past 20 years: the train depot, the Willow Run spec building, and the 2002 Westinghouse/Washington/Amentum building. This afterword, which includes updated information from recent FOIA (Freedom of Information Act) requests, focuses on the 2002 Westinghouse/Washington/Amentum building.

Sticker shock

According to a local newspaper headline in February 2002, the Aiken City Council reacted with “shock”2 upon learning that an additional $1.5 million was being requested to complete the Aiken Community Playhouse (Performing Arts Center) side of the building. The $1.5 million request brought this Aiken Corporation project — which had started at a modest $0.5 million in November 1998, then crept to $2.5 million in March 1999, then evolved to $6.0 million by August 2000 — to a new high of $7.7 million in February 2002.

Requests for the independent audit that never took place

In March-April 2002, the local newspaper editorial pages and City Council meetings featured numerous citizen requests for an independent, third-party audit to better understand the enormous escalations and costs to ensure this never happened again. As one citizen wrote, “There should be an independent third-party audit of the project to determine what went wrong and what went right, that would be a public document so that all citizens could have access to the report.”3

Two of the most vocal requests for an independent audit came from City Council members. According to the minutes of a March 25, 2002 second reading and public hearing on an ordinance to loan Aiken Corporation $3.5 million, Councilman Richard Smith said there should be “both a financial audit and a management audit of the relationship between the Aiken Corporation, and the city of Aiken.” He made a motion to amend the ordinance, as a term of the City’s loan to Aiken Corporation, for “an independent management audit,” and said that he “did not feel this could be done objectively in-house.”

Councilman Smith’s motion was seconded by Councilwoman Jane Vaughters. Discussion ensued over the cost of an independent audit. Controversy was added by the concern that an independent audit constituted an “investigation” and that the Council’s critical discussion of the project was “insinuating” things. (See screenshot, below from meeting minutes).


In this same screenshot is a statement that carries sage perspective for the present: “Councilman Smith stated this is not aimed at people, but is talking about the institutions in which we work. He said this is to find out if there’s a better way for these institutions to interact. He said he felt it was worth an audit of how the Aiken Corporation and the city do business.”

Herein, Councilman Smith addressed a dynamic that still exists and has surfaced in recent projects, including Project Pascalis and the SRNL Lab project, where personal insult is perceived, or individual umbrage is taken, over critical discussions on institutions. This should raise a healthy degree of concern over whether the individuals involved have developed such a personal or psychological investment in the project or their relationships with their colleagues that they are blinded to seeing the institutions with objectivity.

At the end of the City Council’s March 25, 2002 discussion on the audit, Mayor Cavanaugh stated that he was “not ready to vote on an amendment on an evaluation at this point.” He wanted counsel to have a chance to review the proposed amendment in writing before making a decision. He stated the matter could be placed on the next work session for discussion, Councilman Smith withdrew his motion for the amendment for an independent, third-party audit, to which Councilwoman Vaughters agreed.

During the subsequent April 8, 2002 work session, an agreement was reached to conduct an in-house management audit. City Manager Roger LeDuc stated that, once the audit was completed, a work session would be scheduled to discuss the audit. In the meantime, a financial audit of the playhouse was to be completed.

This financial audit was not completed. With the independent, third-party audit now off the table, an in-house management audit was to be conducted by City Attorney, Richard Pearce. Integral to the audit was a list of points and questions that Councilman Smith had provided to Council and to all parties in the project. According to a May 1, 2002 newspaper article, “Smith said the questionnaire has the specific questions that he gave to council and wanted to use as the project assignment for an independent management audit.”4

According to this same newspaper article, “Pearce stated he will schedule a meeting to discuss the audit after all the questionnaires have been returned to his office.”4

The Pearce audit was completed on June 5, 2002. On June 10, City Manager, Roger LeDuc was quoted in the local newspaper stating that the Pearce audit revealed “no irregularities in the construction of the Washington government complex on Newberry Street” and that “communications breakdowns were responsible for much of the confusion in the project’s execution.” Mr. LeDuc said that a discussion on the audit would take place in that evening’s City Council meeting. 5

Requests for a discussion that never took place

The Pearce audit was not discussed in the June 10 City Council meeting, nor in the June 24 City Council meeting, despite several prior requests by Councilman Smith to have this discussion. The Pearce audit and a future financial audit were mentioned in brief, however, during a 7:00 a.m. City Council work session on June 18, 2002, as shown in the screenshot of the meeting minutes, below.

Requests for a financial audit that never took place

A FOIA filed on October 3, 2023 requested four items — the Pearce management audit, the financial audit(s), the list of questions that Councilman Smith submitted to Richard Pearce, and any records of Council discussions on the completed audits. The City responded on October 4 with one result — the PDF6 of the Pearce management audit:

Subsequent examination of the Pearce audit revealed a missing expert document, which prompted a second FOIA request on October 5.7 A response was received from the City on October 19, 2023:

“The City of Aiken has determined that it does not have a copy of ‘the statement opinion by Phillip H. Porter, Jr. regarding project management systems.’ The City also does not have any documents responsive to this request.”

Follow-up requests8 were made to the City on October 20 and November 1, 2023 for the other three items in the October 3 FOIA request. Responses from the City confirmed that the City is not “in possession” of the other three items. Two additional PDFs were provided, however, and were attached to the City’s October 19 Porter response.9 These PDFs contained two consolidated financial statements and accompanying information for 2001-2003 for the Aiken Corporation, and its newly-created, for-profit arm, LED of Aiken, Inc. Neither PDF contained a financial audit of the Washington Group (Amentum) project.

Requests for records


Twenty-one years down the road, the Pearce audit should have been posted online in the City of Aiken document repository, so that all citizens could have access to the report, but it was not. The filing of a FOIA (Freedom of Information Act) request was necessary to access the Pearce audit.

The situation today

Twenty years have passed since the Aiken Corporation last took on a major project. The Aiken Corporation is presently pursuing the $20 million spec building for SRNL. The Aiken Corporation board members have predicted a successful outcome for this project based on their expertise with the “Amentum Model,” as they have dubbed it. 

If the City of Aiken is intent on awarding the Aiken Corporation a no-bid $20 million contract to develop the “mixed-use“ spec building, then City Council should, at the very least, hold discussions on the history of the Washington/Amentum project from 1998-2002 with particular focus on whatever audits were and were not conducted, so that the errors of the past are not repeated on an even grander scale. 

From here — rather than asking the citizens of Aiken to take any individual’s word for it that the Amentum Model has ultimately been a success — show us, in dollars and cents over the past 25 years, how this is so. To paraphrase Councilman Smith’s words from 2002, this is not aimed at people, but at the institutions in which we work. 

Concerning the Aiken Corporation, local citizens have a right to a clear understanding of how, or even why, the Aiken Corporation and the City do business together. It’s 2023, and the members of both of these institutions are still struggling decades later to explain the relationship. Officials on the Monday-night City Council dais are confusing colleagues and business partners with family. We, of course, expect family members to side with one another through thick and thin, but is this a way to run a city?

___________________

FOOTNOTES

  1. The Aiken Corporation’s Amentum Model: From Corporate Coup to Loosey Goosey
    Part One: The Playhouse Considers a Move
    Part Two: A Corporate Coup
    Part Three: Loosey Goosey
  2. Daily, Karen, “Council has stage fright – Community Playhouse seeks $1.5 million to finish theater,” Aiken Standard, February 9, 2002.
  3. Wessinger, Tommy B., “Playhouse project needs independent audit,” Aiken Standard, April 5, 2002.
  4. Daily, Karen, “”Construction process at Washington Complex under review,” Aiken Standard, May 1, 2002.
  5. “City Council to Discuss Audit on Downtown Complex,” Aiken Standard, June 10, 2002.
CLICK TO EXPAND FOOTNOTES

  1. June 2002 PDF of the Richard Pearce Management Audit and other documents obtained via FOIA request #328-2023 on October 3, 2023
FOIA-June-2002-Management-Audit-and-other-documentsView
  1. FOIA Request 334-2028, filed on October 5, 2023 and the City’s response, sent October 19, 2023. (Click image to view full size)

The City’s October 19, 2023 response to FOIA #334-2023 (Click image to view full size).

  1. Follow-up correspondence from October 20, 2023-November 7, 2023 regarding FOIA requests 328-2023 and 334-2023. (Click images to view full size).

  1. During the course of the November correspondence, above, the City’s October 19 response to FOIA request #334-2023 was amended to add two PDFs to “the two financial audits of the Aiken Corporation” that were referenced in City Solicitor Laura Jordan’s letter of November 7, 2023..

    The amended response to FOIA Request #334-2023. (Click image to view full size).

These two audits contain consolidated financial statements and accompanying information (see attachments below) for the numerous 2001-2003 Aiken Corporation-LED projects, including the Washington-Playhouse (Amentum) project, however, there is no dedicated audit of the Washington-Playhouse (Amentum) project.

2002-06-30-Aiken-Corporation-AuditView
2003-06-30-Aiken-Corporation-Audit-1View

FOR MORE READING:

The Agenda-Setting Aiken Corporation
Aiken’s Cousin Problem – The Aiken Corporation Targets Newberry Street for SRNL Spec Project
The Aiken Corporation’s Amentum Model: From Corporate Coup to Loosey Goosey
Aiken Corporation, October 2023, Pascalis 2023 - SRNL Lab

Aiken’s Cousin Problem – The Aiken Corporation Targets Newberry Street for SRNL Spec Project

16 Comments

by Kelly Cornelius
October 31, 2023

On September 25, 2023, the not-for-profit Aiken Corporation voted to recommend to the Aiken City Council their own recently purchased property for the site of the $20M Savannah River National Lab (SRNL) “mixed-use“ office building. The 1.01 acre parcel was acquired in July of 2022 for $650K by its for-profit arm called LED of Aiken. The parcel sits adjacent to Aiken Corp President Buzz Rich’s law office, it sits outside of the defined area of the contracted study and the seller was represented by Aiken City Councilman/real estate broker Ed Girardeau. In a town where recent events have revealed a very blurred line between public service and self-service, the path of how this winning parcel came to be put forth is certainly worth a look.

A Brief History

On Jan 23rd, 2023, four months after Project Pascalis failed, the City of Aiken announced their partnership with SRNL to build a $20M “Workforce Development Center” on three or more of those same ill-begotten Pascalis properties. The properties were still owned at the time, by the Aiken Municipal Development Commission (AMDC), who lacked a quorum. The announcement did not include the fact that the Aiken Corporation had been secretly involved in the project for two months at this point.

On March 13th of 2023, despite the fact that the city still had no signed contract with SRNL, Aiken City Council voted 4-0 to award a no-bid, $250,000 pre-development contract to the Aiken Corporation, which was recently described as a “cousin” of the City by Mayor Rick Osbon. The contract was specific, right down to the tax identification numbers on the properties to be included in the feasibility study, yet the parcel the Aiken Corp ended up recommending to City Council for the $20M “Mixed-Use” project did not even meet this very specific condition of the study – the location.

In addition to straying from the scope of the location, the feasibility study results curiously lacked the actual lab. The “workforce center“ had somehow morphed into being called a “Mixed-use project” by the overdue and long awaited study reveal. By this time, DOE/SRNL went from promoting it as the “Face of the Lab” in January of 2023 to “an expression of leasing office space should it become available” in July of 2023, in response to a story that Lauren Young of WXFG-FOX News aired featuring citizens questioning the project.

 

The would-be SRNL project still lacks a signed contract showing any commitment from SRNL, making it merely a speculative project at this point. The recent release of the feasibility study conducted by Aiken Corporation’s subcontractor McMillan Pazdan Smith (MPS) was five months past its due date and did not get a warm welcome from the citizenry. Considering the dismal track record of the Aiken Corporation’s other spec building, taxpayers should pay close attention to what their $250K has yielded thus far.  

Specifics on the parcel

The winning Aiken Corporation parcel is actually three smaller parcels that combined occupy a total of 1.01 acres.

One parcel housed a two-story home (shown below) that had already been approved by the Design Review Board in Jan of 2021 to be relocated to another part of Aiken’s Parkway District. According to Design Review Board (DRB) minutes, that move would later be nixed due to the number of trees that would have to be removed to allow for this relocation. The picture below was found in the 2021 agenda packet (1).

Pave Paradise to put up a Parking Lot Mixed-Use Project?

May 3, 2022. Demolition Request

At that meeting, Aiken Corporation President Buzz Rich lobbied the DRB for approval to demolish the Newberry Street structure to make way for a parking lot. He mentioned that Councilman Ed Girardeau—who was the real estate agent representing the seller for the property sale—was in attendance that evening. Mr. Rich also noted the subject property is adjacent to property he owns. Aiken Corp meeting minutes (2) will show that the Aiken Corporation has the property under contract at this time but they would not close on it until July of 2022.

The home on the property was portrayed as unsafe by the applicant and the photos would have made one believe it was an eyesore, which at the time was true.

As it turns out, the building was only in a state of disassembly which was revealed in the meeting agenda packet as it had been donated to Mr. McGhee for relocation on Williamsburg St. The photo of the building sharply contrasts the photo one year prior when the relocation was approved. The move, however, would never happen because of the number of trees that would require removal. Instead, demolition was approved by the DRB at their May 3rd, 2022 meeting.

FOIA Request To the City on 9/26/2023

On September 26th, 2023, a Freedom of Information Act request was submitted for the purchase and sale agreement and settlement statements for this property recommended for a $20 million city project. The City responded on September 28th that:

The City of Aiken has determined that LED of Aiken, Inc. is a separate entity from the City of Aiken and that the City is not in possession of any of the requested documents.

A second FOIA attempt was made on Sept 28th, 2023 this time via the contact form on the Aiken Corporation’s website. Results from that FOIA revealed that ReMax Tattersall, where Ed Girardeau is listed as an owner/broker, received over $42,000 in commission from the sale; and that Security Federal Bank was the lender for the purchase. These are good cousins to have.

June 8, 2022. Aiken Corp Meeting – Financing

The meeting minutes for June 8, 2022, show that Aiken Corporation Executive Committee members Tim Simmons and Joe Lewis were present during a unanimous vote to approve the Security Federal project financing, a $650,000 loan with interest-only payments for six months and minimal closing costs. Mr. Simmons is listed here as Chairman of the Security Federal Board and Mr. Lewis is listed here as Vice President of Financial Services.
_.

Between the July closing and the January 2023 SRNL project announcement, the old home was demolished. No mention was made of the Aiken Corporation during that January announcement, even though the organization was deeply involved at that point.

The involvement of the Aiken Corporation was not revealed until February 6th, and its Newberry Street property was never identified or considered as part of the SRNL project feasibility study until that study was revealed on September 14th, 2023.

Sept 11, 2023. Closed-Door Executive Session

On September 11th, 2023 prior to the regular meeting, City Council held a closed-door Executive Session to discuss two items, one of which was “The proposed purchase, sale and /or leasing of property for the Savannah River National Laboratory.”

The closed-door meeting was attended by five Aiken Corporation Board members and McMillan Pazdan Smith representatives. City Council cited exemption#2 for excluding citizens from what is otherwise allowable at a public meeting: “Section 30-4-70 (a)(2) of the South Carolina Code to discuss negotiations incident to proposed contractual arrangements and proposed sale or purchase of property.” Yet, the Aiken Corporation’s lawyer responsible for helping to negotiate a lease is conspicuously missing from the attendee list.

No summary or announcement of what was discussed was presented to the audience and there was still no signed contract with SRNL announced at the next meeting on Sept 25th, 2023.

Once again, City Council met in secrecy, repeating the same conduct displayed during Project Pascalis.

September 25th, 2023. Aiken Corp Meeting – 10 AM

On September 25, 2023, the Aiken Corporation Executive Committee voted 10-0 to approve the recommendation made by subcontractor MPS to locate what was by then the “Mixed-Use” office building on the Aiken Corporation property

Aiken Corp President Buzz Rich abstained from voting on the recommendation since his law office was adjacent to it, an abstention that contrasts with his negotiations to purchase the building and the signing of the purchase contract. Aiken County property records show Rich owns four commercial properties on that block. (3)

Aiken Corp Board Member Joe Lewis also abstained due to his company holding the Newberry St property mortgage, although according to the minutes he voted to approve the financing in June 2022.

Neither abstainee left the meeting which can be seen here, (see minute 33:40), and Chairman Rich continued to speak during the discussion. The Newberry St property was ultimately voted on to be recommended to City Council for the would-be SRNL spec project. Rich would present the recommendation to Council later that same evening.

Sept 25, 2023. City Council Meeting – 7 pm

Aiken Corp President Buzz Rich presented the Aiken Corp Executive Committee recommendation to the Aiken City Council even though he abstained from the recommendation vote. During his presentation, Rich never mentioned any of the public comments taken since Feb 6th.

Rich did describe to City Council all the extra hours that Aiken Corp members have put in on this project and the fact that they are volunteers. However, their monthly meetings are typically held at 10 am during banking hours, and there were no meetings in the two months preceding the release of the study and the Board’s discussion to vote to locate a $20 Million dollar project on their property.

Location Location Location

How did a site not within the prescribed scope of the study get included in the study? As documented in The Devil is in the Details, four out of the five sites in the bombed feasibility study release were actually outside the contracted scope of the project. In the May 10th, 2023 Aiken Corporation meeting there was an update on the project with no mention on the record about additional sites, however, when the Feasibility Study was finally released, presto change-o we magically had five sites.

Could it be that shoe-horning a 36,000 square foot building, reduced from the original 45,000 square foot building, over top of historic downtown was not only unpopular with taxpayers, it just wasn’t feasible? Somewhere along the way (and outside of the sunshine) they added four additional sites without divulging this to taxpayers until after the fact who are footing the bill for the study. Information obtained through FOIA requests show that $148K has been spent to date of the $250K approved.

One of those four additional sites was the old hospital site, which seemed to many the first sign of common sense displayed regarding this project so even Pascalis weary citizens were hopeful. The nine-plus acre site has plenty of room including parking and nearby lunch options. In addition, it would save a beautiful historic building without changing the very soul of downtown. That common sense option was quickly eliminated by K.J. Jacobs of MPS but not before forgetting to tell the Aiken Corporation Members about it before their big Q and A with citizens. So as stealthy as it was added, it was also eliminated in favor of the just over one acre property on a tree-lined portion of Newberry St.

Ironically, after Mr. McGhee was denied the relocation of the home on the subject property to Williamsburg St because of trees, City Officials had eleven trees destroyed on Williamsburg St in the Parkway including directly in front of the homes that Mr. McGhee had restored.

A FOIA request has been submitted to the Aiken Corp for the Tree Survey on the Newberry St. property referred to by Mr. Rich as “about a 50 page report” regarding the 23 trees on the property at the Oct 11th Aiken Corp meeting, which, thanks to citizen footage, we now know included a Monkey in the Room. (Update: The FOIA request was fulfilled and the tree survey can be found in the DRB’s May 2, 2024 agenda packet; along with the rest of the application for the lab building design).

The Aiken City Council listened to the presentation from the Aiken Corporation on the evening of September 25th, 2023 but to date has not put the item back on the agenda for a public hearing.

Footnotes:

  1. Jan 2021 Design Review Board Agenda Packet https://edoc.cityofaikensc.gov/WebLink/DocView.aspx?id=540853&dbid=0&repo=City-of-Aiken-LF
  2. April 14th, 2022 Aiken Corp minutes confirm that Rich signed a contract to purchase the property as the Aiken Corp.

3. Map showing the commercial property Rich owns (in teal) on the same block according to Aiken County records with the subject property outlined in red.

Aiken Corporation, Editorials, October 2023, Pascalis 2023 - SRNL Lab

The Monkey in the Room

13 Comments
The Chatter at a Recent Aiken Corporation Meeting:

SPEAKER 3: We’ve only got one or two more meetings ‘til you have change.
OTHERS: Yep. Yes.
SPEAKER 4: That’s the monkey in the room.
SPEAKER 5: What’s that?
SPEAKER 4: When the change of the mayor leadership happens.

For 58 days — ever since local businesswoman Teddy Milner won the Republican mayoral primary runoff against incumbent Rick Osbon on August 22 — there was talk. Not everyone talked, but some did. Not everyone listened, but some did. After all, one doesn’t expect something akin to a coup in the small-town South.

This all changed on October 18, when a credible rumor broke in the form of a leaked email. According to this email, a group of local elites was raising $25,000 to engage a “well-known, well-respected political consultant” to run a stealth write-in campaign on behalf of Mayor Rick Osbon, the losing candidate in the primary runoff. The language in the email was amateurish enough to invite skepticism, but its authenticity was later vouched-for by a firsthand source to the leaker.

While all three of last summer’s mayoral candidates signed an oath upon entering the contest to “abide by the results of the primary” and to “not offer or campaign as a write-in candidate for this office or any other office for which the party has a nominee,” and to even accept legal repercussions, should they violate this pledge, there’s been nothing stopping other persons from conspiring, on behalf of a losing candidate, to violate the spirit of the pledge by running their stealth campaign.

Apparently, people on both sides knew for 58 days that this could happen. The possibility was a topic in some circles. On any one of those days, Mayor Osbon could have cleared this up by saying, “Please don’t write in my name. I lost the primary contest to Teddy Milner. I respect the democratic process. I play by the rules. I signed a pledge when I entered the primary contest to abide by the results of the primary, and I intend to honor that pledge.” 

But he didn’t say any of that. Even after the rumor broke, he held his silence. Finally, however, when asked outright by the local newspaper, he spoke. His semantics were pitch-perfect: “I have no intention of running a write-in campaign.” 

It is no secret that Mayor Osbon is widely supported by realtors, developers, and others who have appreciated the current administration’s rubber-stamping of urban sprawl, deforestation, and high-density housing. It is no secret that this administration has not been averse to adding just one more car wash, one more strip mall, one more four-story motel, one more parcel of overdeveloped land on the flood-lands of Doughtery; just one more tree, one more historic place demolished; just one more bit of over-development to perpetuate the Whiskey Road insanity as far as the eye can see — our lovely landscapes being reduced, plot by plot, to deforested sprawl in every direction.

It is only natural that realtors and developers might feel a certain panic at the prospect of a new mayor — one who has promised a more deliberate approach to growth and development.

We don’t need a crystal ball to see the future envisioned by these developers. Behold the $37 million Powderhouse Road Connector project and its bait-and-switch promise to relieve congestion on Whiskey Road by opening 400 acres of woodlands and fields to create yet more high-density housing and sprawl along the Whiskey Road corridor. The Powderhouse Connector project is, in turn, dwarfed by the many tens of millions that are in the process of being spent to expand the City to the interstate and beyond, opening the woodlands between to yet more deforestation, more car washes, more dollar stores, more sprawl. Add to this the looming SRNL office complex that the Aiken Corporation is lobbying to build in the historic downtown using funds from the $20 million plutonium settlement pot.

So it came as no surprise to hear talk turn to Mayor-Elect Teddy Milner at the October 11, 2023 Aiken Corporation/LED of Aiken, Inc meeting during discussion of the City Council’s delay in approving a piece of Aiken Corporation-owned property to site the $20 million Savannah River National Lab office:

SPEAKER 1: I was a little shocked when Council just was going to hear our thing and not say, good, we like that. But so we, I feel the ball is in the City’s court right now. Let us know so we can get this MOU. I mean, you know, I think Tim [Simmons] is right, but they’re going to say, well where is the location; we’ll tell them the City hasn’t  approved it yet.

SPEAKER 2: I don’t think they’ll say that.

SPEAKER 1: You don’t? 

SPEAKER 2: No. 

SPEAKER 3: I may be over-reacting. We’ve only got one or two more meetings ‘til you have change. 

SPEAKER 4: That’s my question. 

OTHERS: Yep. Yes. 

SPEAKER 4: That’s the monkey in the room.

SPEAKER 5: What’s that? 

SPEAKER 4: When the change of the mayor leadership happens…

SPEAKER 5: That’s another…

SPEAKER 4: They throw another wrinkle into…

SPEAKER 1: Our mayor-elect who never comes to our Council  meetings now, hmm?

SPEAKER 6: Now, now…. We all sang Kumbaya. 

SPEAKER 3: I mean, at some level, she needs to — I mean, respectfully, we should be including her in these conversations.

SPEAKER 6: [speaking to the City Manager]: So you don’t anticipate any drastic change in course? 

CITY MANAGER: At this point in time, I have no reason to believe that. I guess, so, yes, to answer, no. 

Loud laughter and unintelligible chatter. 

Although Aiken is no banana republic, there may be those in the development industry who have convinced themselves that they would be justified in usurping democratic processes to retain control of the levers of power. 

Fortunately, Aiken residents have the power of their voices and their votes to advocate for the common good and to push back against a plot that, if true, may not be illegal, but it would certainly raise important questions of ethics. 

_______________

Early voting for the office of Mayor and City Council Seats 1 and 3 continues today and next week through Friday, November 3rd. Election Day is Tuesday, November 7th. Click here for information on voting. 

Cast Your Votes for Aiken Mayor and City Council Seats: What You Need to Know
Aiken Corporation, City Government, Pascalis 2023 - SRNL Lab

$148,000 for What? And Other Pascalis Properties Management Cost Findings

Leave a comment

$148,000 for What: The Aiken Corporation’s Empty Invoice.
No confirmation of contract accountability.
McMillan Pazdan and Smith’s no-bid contracts.
No final payments to RPM Development Partners

By Don Moniak
October 23, 2023

As of mid-September, the City of Aiken has spent an additional $204,449 for predevelopment work on commercial properties acquired for Project Pascalis and still owned by the city. Most of the work completed to date, such as building assessments and related laser scans, has not been publicly disclosed. In the case of the Aiken Corporation’s $250,000 no-bid contract with the city, there is little documentation that contractual tasks have been completed.

$148,000 for What? 

On March 13, 2023, Aiken City Council approved a $250,000 no-bid, professional services contract with the Aiken Corporation. The purpose of the contract was for “pre-development” services for the proposed $20 million downtown Savannah River National Laboratory (SRNL) “Workforce Development “ office complex.

The facility was planned at the time for three or more of the “Pascalis properties,” part of the set of seven downtown properties purchased in November, 2021 for $9.5 million by the Aiken Municipal Development Commission (AMDC). The funds for the purchase derived from a $9.6 million general obligation municipal bond issuance paid off in April 2023 with plutonium settlement funds.

The architectural firm of McMillan, Pazdan, and Smith (MPS) was identified as the Aiken Corporation’s only subcontractor to perform the predevelopment work. As reported in Three Missing Pages, MPS had previously signed a City-approved contract with the Aiken Corporation in December of 2022, in support of the latter’s secret agreement to pursue control of the SRNL project on behalf of the City.

The predevelopment contract also mandated that Aiken Corporation “hire an attorney to provide legal services to Developer regarding this project. Such services may include, but not necessarily be limited to, drafting a lease between Developer and third parties as applicable relating to the property described herein.”

According to meeting minutes, Aiken Corporation hired Aiken Attorney Kevin Pethick one month after City Council approved the contract, to “represent the Aiken Corporation as legal representative regarding a proposed agreement with the Savannah River National Laboratory.”

In mid-July the Department of Energy and Savannah River National Laboratory jointly issued a statement disavowing any role in the project; other than acknowledging SRNL’s interest in leasing office space “should it become available.”

In response to a Freedom of Information Act (FOIA) Request for Aiken Corporation invoices submitted to the City of Aiken, the City provided a single invoice for $148,096.00 (Figure 1). As of September 13, 2023, MPS had billed Aiken Corporation $140,966.50; while Austin & Pethick Law Firm had billed $7,129.50 (1).

Figure 1: “Descriptive” portion of Aiken Corporation invoice. Details of the actual work completed are absent.


This one-page invoice is composed only of a series of invoice numbers from the two subcontractors and contains no details of the work completed using taxpayer funds. Compare this submission to previous invoices submitted to the City, such as that by McMillan Pazdan and Smith (Figure 2) and Cranston Engineering (Figure 3).

What is known of the work that was completed for $148,000? 

FIrst, very little of what was defined in the scope of work has been publicly disclosed, if it was even completed. The contractually obligated work that has yet to be publicly disclosed, reported, or provided should include:

  • A website documenting proceedings of public meetings and “stakeholder” meetings.
  • Assessments of Richland Avenue buildings (Taj Aiken, Holley House, and McGhee Building/CC Johnson Drug Store) and Warneke Cleaners. 
  • Public comments submitted via Nationallabprojectaiken@mcmillanpazdansmith.com

Second, much of what was provided to date is either not within the contract’s scope of work, or is primarily public relations work. The Aiken Corporation’s webpage devoted to the project only contains: 

  • Two “guest columns” by contractor representatives Arthur “Buzz” Rich and Jason Rabun. 
  • A “guest column” by project advocate Mayor Rick Osbon
  • A “Frequently Asked Questions” page with one-sentence answers to ten questions. 
  • As reported in 45,000 Square Feet Without a Tenant, a “feasibility study,” dominated by graphics, devoid of data, and plagued with inconsistencies.
  • One page of “detailed project information,” half of which is talking points in favor of the project. 
  • Handwritten public comments submitted at a September 14, 2023 meeting, but not the comments submitted via Nationallabprojectaiken@mcmillanpazdansmith.com.

No Documentation of Contract Administration

The FOIA request for Aiken Corporation invoices also included requests for two sets of documents related to the no-bid contract:

  • “Copies of all administrative contract inspections, audits, or other similar processes designed to ensure contract compliance. “
  • “Any amendments to the contract, including but not limited to the expanded scope of work identified by Aiken Corp President Buzz Rich to review more than one site. These amendments could include memos to and from Aiken Corporation to City of Aiken.”

The City of Aiken’s response to these two requests was that no responsive documents exist. They could provide no evidence of contract administration and monitoring, and no change orders; even though one substantive alteration is known to have occurred that was not approved by the Aiken Corporation’s Executive Committee nor its client the City of Aiken.

The McMillan Pazdan and Smith No-Bid Agreements

Two weeks after Aiken City Council authorized the $250,000 no-bid contract with Aiken Corporation,  MPS Principal David Moore signed three separate professional service agreements (3) with the City of Aiken worth a collective $60,454. The city’s procurement webpage, which shows all recent bid packages such as the Proactive Tree Work Request for Qualifications, does not contain information for the following work in the city’s agreements with MPS:

  • $12,097 for Laser Scan and Architectural Services for Hotel Aiken. 
  • $24,980 for Architectural Services for Hotel Aiken. 
  • $23,377 for Laser Scan and Architectural Services for Richland Avenue Buildings (Taj Aiken and McGhee Building, which overlaps with the Aiken Corporation contract).

The laser scans themselves cost $12,464 and were conducted by the firm Quantum Reality Capture,

The details of these agreements and the invoices to date can be viewed via the response to FOIA request 306-2023.

As of September 30th, $55,353 has been paid to MPS for their work (see Figure 2 for example) but no reports or data from this taxpayer-funded project have been publicly disclosed. 

Figure 2: Portion of one of MPS Invoices

No More Reimbursements for RPM Development Partners to Date

The Aiken Corporation-City of Aiken SRNL project partnership is one successor to the failed Pascalis project. Project Pascalis was funded by the City of Aiken but run by the City’s Municipal Development Commission (AMDC).  The AMDC’s “preferred developer” was a consortium of companies collectivvely formed into RPM Development Partners, LLC.  

The December 4, 2021, Purchase and Sale Agreement (PSA) between the AMDC and RPM included a clause for RPM to be reimbursed half of its design and predevelopment costs, up to $150,000. This indicated a predevelopment cost of $300,000; a mere $50,000 more for a project up to five times larger than the SRNL/Mixed Use project.

On September 14, 2022 RPM terminated its role in the PSA, and two weeks later the AMDC followed suit. After a search for “RPM” and “Raines” in the city’s financial records archive yielded no results, a FOIA request was submitted for any RPM invoices after September 30, 2022.

The City’s response was a singular Cranston Engineering invoice from August 2022 for $2,863 for Pascalis design work (Figure 3), completed under the terms of the City’s contract with Cranston (3).

This was one of seven Cranston invoices submitted for Pascalis design and predevelopment work, titled “Project Pascalis Conceptual Support” in “support of Raines-led development.” In total, Cranston’s subcontracting work for Raines Corporation, and thus RPM, netted Cranston an additional $41,579.00.

The lack of additional payments to RPM indicates that the two experienced developers in the project, Raines Company and Lat Purser Company, have yet to seek additional reimbursement of up to $105,000 for their costs.

Figure 3: Portion of August 2022 Cranston Engineering invoice, full version available here. The remaining invoices for Cranston design work conducted for RPM is in the AMDC Financial Binder.

Footnotes:

(1) In response to a FOIA request from Kelly Cornelius for MPS invoices to Aiken Corporation, the City provided the same Aiken Corporation invoice. No MPS invoices have been disclosed.

(2) It should be noted here that the City of Aiken’s procurement ordinance allows for professional service contracts of under $25,000 without any bidding process or approval by City Council:

“Except for agreements for less than $25,000.00 and that are provided for in the annual operating budget of a department, agreements for professional services shall state the terms and conditions and shall be approved by city council.“

The question that arises is, if the MPS agreements had been consolidated as a single contract, would a request for bids have been necessary?

(3) It should be noted here that, in contrast to Aiken Corporation and MPS’ no-bid contracts, Cranston Engineering was awarded its three-year contract through a normal, more rigorous procurement process that involved three competing bidders. The Cranston professional services agreement was awarded in 2021. A “Staff Augmentation” agreement from March 2023 allows Cranston to supplement the city’s engineering staff with Cranston employees.