How Three Pages in a $250,000 No-Bid City of Aiken Agreement with the Aiken Corporation Were Missing from the Publicly Available Version.

by Don Moniak
May 13, 2023

On March 13, 2023, Aiken City Council approved a $250,000, no-bid professional services contract with the Aiken Corporation.

The contract authorized the architectural firm of McMillan Pazdan and Smith (MPS) to pursue predevelopment work, under the supervision of the Aiken Corporation, for a proposed downtown Savannah River National Laboratory (SRNL) “Workforce Development” office complex. The proposed complex involves four properties originally obtained in 2021 by the Aiken Municipal Development Commission (AMDC) as the core properties in the failed Pascalis project.

The March 13th agreement cited a separate December 9th contract agreement between MPS and Aiken Corporation. Section E of the March 13th contract specifies:

“The parties acknowledge that the City previously contacted the Developer with the goal of having the Developer engage various experts to perform certain services. Pursuant to that request, the Developer entered into an Engagement Agreement with McMillan Pazdan Smith ( hereafter ” MPS”) dated December 9, 2022, a copy of. which is attached hereto and made a part of this Agreement.”

The December 9th agreement also contained provisions not found in the first eleven pages of the March 13th contract, and not divulged during the only public meeting to date.  Specifically, the December 9th contract referenced scheduling a series of private meetings, and the Aiken Corporation both overseeing the construction phase and eventually owning the facility. (The December 9th contract is on pages 12-14 here.) 

This is the second significant document pertaining to the SRNL project that had to be obtained via a Freedom of Information Act (FOIA) request. (1) As reported in Project Labscalis Operating Costs, the city’s “Savannah River Litigation Settlement Fund Request” described an undisclosed, $250,000 annual maintenance and labor cost to be borne by the city. 

The Incomplete March 13th Professional Services Contract

On March 13, 2023, Aiken City Council approved a no-bid “Professional Services Agreement” (2) with the Aiken Corporation (3) worth up to $250,000.  In it, Aiken Corporation is defined as “the developer.”

The funding is for “pre-development work” by the architectural firm of McMillan, Pazdan, and Smith (MPS). The agreement specifies that a 45,000 square foot, three-story “Workforce Development Center” for the Savannah River National Laboratory (SRNL) will be built.

The planned location identified for the downtown lab project was identified as four properties that were formerly part of the failed Pascalis project (4), and purchased by the AMDC in November 2021. The AMDC was dissolved on May 8, 2023; with its assets and properties now defaulting to city ownership. 

The primary source of downtown lab project funding is a $20 million allocation from the State of South Carolina’s plutonium storage settlement with the federal government. As reported in “Offsite Infrastructure,” the facility had been in the discussion phase for more than two years. Intensive, secretive discussions began in January 2022 between SRNL, USC-Aiken, and the AMDC. 

The contract includes a provision for the Aiken Corporation to pursue negotiations to lease properties—still owned by the AMDC—to unidentified “third parties” such as SRNL. If Aiken Corporation owns or is a long-term leaseholder of the project buildings, it could collect more than $5 million in rental revenues  in the first ten years of facility operations. (5)

Missing from the March 13th agreement was a December 9, 2022 agreement between the Aiken Corporation and MPS that was referenced three times as part of the larger agreement.

The December 9th agreement turned out to be three pages at the end of a fourteen page contract. The publicly available meeting agenda packet only provided the first eleven pages, and the March 13th agreement was approved in spite of the missing three pages.

During public comment preceding the vote to approve the March 13th contract, the fact that provisions appeared to be missing was conveyed to Council, but no explanation for the absence was forthcoming.

The December 9th Contract Between Aiken Corporation and MPS

The December 9th agreement consists of a “Letter of Engagement” written by MPS “Principal” K.J. Jacobs on November 30, 2022, and signed by Aiken Corporation Board Chairman Arthur “Buzz” Rich on December 9, 2022.

The letter began with a project summary with specificity on size, shape, and location:

“Thank you for the opportunity to provide this proposal related to your proposed new, mixed-use building in downtown Aiken. We understand the proposed site is an +/- 0.55 acre, T-Shaped parcel bounded by Richland Avenue NW, Newberry Street NW, and Bee Lane. The project, which will be constructed and owned by the Aiken Corporation, is conceptualized as a mixed-use building containing 30,000 square feet of office space and a 10,000-15,000 square foot exhibition hall with associated meeting and support spaces.” 

The original agreement between MPS and Aiken Corporation contains provisions not found in the incomplete, March 13th version provided to Council and the public.

First, it describes Aiken Corporation as both the developer during the construction phase, and the owner of the lab project properties. Whether this ownership would be outright or in the form of a long-term “ground lease” was not clarified.(5)

Second, it contained reference to a series of closed-door planning sessions with select “key stakeholders” that are never identified, a pattern reminiscent of the Project Pascalis invitation-only “influencer meetings.” 

These meetings include:

• “An intensive charette with key stakeholders to identify goals (and) confirm the scope of work and project schedule. These sessions will be conducted on-site so that we can facilitate meetings with various stakeholders with minimal disruption.” 
  
• “A handful of more detailed programming interviews with small groups of key project stakeholders.” 
  
• “A brief wrap-up with the leadership team to summarize our findings.” 
  “Findings of the Programming Sessions…will be shared with the project leadership team for their review, comment, and approval.” 

The March 13th contract approval was preceded by a series of events (6) that included a well-attended February 6th public forum—announced on January 28th as a City of Aiken event.

The forum was moderated by Aiken Corporation contractor representative K.J. Jacobs, who later described it as a “listening session.”
The existence of the December 9th contract between MPS and Aiken Corp, and the scope of work described in it, was not disclosed during the meeting.

In fact, a slide showing a “Feasibility Study Milestone Schedule” omitted the timeline prior to the project announcement, and any private, closed-door meetings—although Mr. Jacobs did state the “report will be given to the City, the National Laboratory, and I suspect it’ll be made publicly available.” (19 minute mark of meeting)

During the forum, MPS created the impression that building size, shape, and location were yet to be determined:

• “We have not been retained to design a building. We’ve not yet designed a building. We’ve done almost nothing so far okay. What we’re here to do what we’ve been hired to do is to do what amounts to a feasibility study to understand all of the opportunities and constraints around the Savannah River National Labs desire to build a new building downtown.”
  
• “I’ve read a few things where it sounds like all the puzzle pieces have already (been decided),. This person’s moving here, this building’s getting torn down. Y’all none of that’s been decided, okay. Someone may have said that, but it’s really people just starting to talk and think about what what might happen. Nothing is going to be decided until we get to the end of this process and are able to put put these things together and find out what makes the most sense for the city of Aiken and  the citizens of Aiken,  the constituents, all the stakeholders, and the folks at the lab that are the reason we’re here in the first place .” (emphasis added)
  
• In regards to the size of the building, “speculation is completely premature.”
  
• “Only after (the) final report is issued does any real site planning whether it’s on this site or another site does any of that start. Then we’ll then we’ll have what is traditional site planning and blocking and stacking exercise where we start to understand how the program for the building might fit onto this site or another site. “
  
  During Aiken City Council’s May 8, 2023 public meeting (19:00 mark), the missing December 9th contract provision was submitted to Council. No council members commented about its existence or its absence from the publicly available March 13th agreement.

Summary

Aiken City Council approved a resolution on March 13th to accept a no-bid $250,000 agreement with the Aiken Corporation that defined the latter as the “The Developer.” The agreement also authorized Aiken Corporation to negotiate leases with third parties.

Missing from the publicly available March 13th agreement a three-page, December 9, 2022, agreement between Aiken Corp and MPS that was incorporated into the legal agreement. It described Aiken Corporation as the future owner of the SRNL facility. The three-page agreement withheld from citizen review and scrutiny was only disclosed via a FOIA request.

The December 9th agreement contains provisions for private meetings of “key stakeholders” that were not conveyed during a February 6th public forum. In addition, forum attendees were told several times that no decision had been made on the size, shape, and location of the facility.

Like Project Pascalis, deliberations for the SRNL project began in secrecy and continued in secrecy for more than a year, ultimately resulting in a decision to locate it on Pascalis project properties following the failure of that $100 million project—thus the hybrid moniker of “Project Labscalis.”

Like Project Pascalis, “key stakeholders” do not appear to include the general public. Like Project Pascalis, it appears that public input will be restricted to the aesthetics of the project, and not its location, size, or shape. One way of describing this now common scenario is that “key stakeholders” choose the menu for the planning table, while the general public only gets to select the salad dressing.

Footnotes

(Footnote 1). The fact that the missing December 9th document was cited in the March 13th contract means the city was legally obligated to provide it in the absence of a FOIA request. However, a FOIA request was necessary after officials declined to provide it, and then it took more than a month to obtain— the request was filed on March 22nd following a failed attempt to obtain it via a simple request. 

The request was not addressed April 5th—the statutory ten-day business day limit to respond. The first response was accompanied by a $593.99 bill (below) involving 11 hours of undefined “Economic Development” time at $48 per hour.

The requested information was: 

“Pertaining to the Professional Services Agreement with the Aiken Corporation approved by City Council on 3/13/23, as found in cityofaikensc.gov/cca : 

a. Copies of the request or requests from the City of Aiken to Aiken Corporation, as reported in this statement in Section E of the agreement: “The parties acknowledge that the City previously contacted the Developer with the goal of having the Developer engage various experts to perform certain services.” This would include any emails to the Aiken Corporation’s Arthur “Buzz” Rich from any account from cityofsc.govduring the period September 29, 2022 to December 10, 2022. 

b. The copy of the 12/9/22 agreement between Aiken Corporation and MPS referenced in that same paragraph. 

c. A copy of the MPS document dated 2/27/23 referenced in the same paragraph. 

d. A copy of the MPS engagement letter of 11/30/22 referenced in Exhibit A Part iv. 

e. A copy of any draft lease agreement between City of Aiken and Aiken Corporation for properties cited in the agreement.” 

Following receipt of the $599.93 bill, the request was modified to remove item (a). That left only items 2-5, suggesting the bill was primarily related to Item (a.)

On April 28th, the three-page, December 9th Aiken Corporation/MPS contract was provided, without any costs, by City Solicitor and FOIA officer Laura Jordan; with this accompanying statement: 

“The attached agreement has all documents that you are looking for. The last three pages are on MPS letterhead and that is the Execution Agreement mentioned dated 12/9/22.  The other document on MPS letterhead dated 3/8/2023 is actually the February 27, 2023 document.  The wrong dates (were) used in the agreement.” 

The $593 bill was for a several documents. After One was provided at no cost and one did not yet exist (lease agreement); meaning the $593 bill was for what is likely only a few records pertaining to the City’s initial contact with the Aiken Corporation.

Footnote (2) The “Professional Services Contract” provided to City Council on March 13th only included the first eleven pages in the document provided here. Three pages were missing. The city’s 250,000, no-bid contract with the Aiken Corporation includes frequent references to the Aiken Corporation as the “The Developer.” As already stated, the December 9, 2022 Aiken Corporation agreement with MPS was incorporated into the contract. 

According to Pages 6-7, $75,000 is initially dedicated to paying MPS, via Aiken Corporation, to conduct public relations work. Among the provisions in the March 13th contract are requirements for MPS to: 

• Develop a strategic communications plan to identify a guiding strategy for the project. 
• Provide guidance to Aiken Corporation on website revisions. 
• Assist Aiken Corporation in the execution of communications plans.
• Monitor project-specific email account to assist Aiken Corporation in accepting feedback, and providing appropriate comments back to members of the public
• Graphic design services to help develop a project brand. 

Footnote (3). The Aiken Corporation is a nonprofit organization created by, and serving at the discretion of, Aiken City Council; but acts in an independent manner. Its primary donor is the City of Aiken. Such an arrangement is known as “quasi-governmental.” All publicly available information can be found here in the City of Aiken’s document repository.

Footnote (4) The proposed location for the facility involves four to five properties on 0.55 acres of land. The properties were purchased by the Aiken Municipal Development Commission (AMDC) in November 2021 as part of a larger $9.5 million real estate deal that formed the demolition and redevelopment zone for the failed, $100 million plus Pascalis project, the latter of which also involved the Aiken Chamber of Commerce and developer and property-broker Weldon Wyatt. 

The AMDC was dissolved by City Council on May 8th, meaning the properties will soon be conveyed by default to the city.

Specifically, the properties involved are: 

• The Holley House Motel, adjacent to the Hotel Aiken, which is inhabited only by a City of Aiken Public Safety fire cadet acting as a part-time monitor of vacant Pascalis project properties
• The popular Taj Aiken restaurant that serves an authentic Indian cuisine. 
• The McGhee Building, consisting of the historic CC Johnson Drug Store, which as been vacant since 2018, and was previously occupied by the 21st Century by two popular venues—Pat’s Restaurant followed by Playoffs Bar and Grille. The building is currently only inhabited by Security Finance, as two other businesses—a Nationwide Insurance agent and On-Board Realty. The latter obtained a sole-source, no-bid property management contract from the AMDC in December 2021. 
• Warneke Cleaners, the oldest active business in downtown Aiken occupying a building constructed in 1935. 

The formerly AMDC owned Pascalis properties omitted from the lab facility plan are: 

• The Beckman Building at 106 Laurens St, SW, which consists of Ginger Bee clothing store, Vampire Penguin dessert destination, and   Cosmetics (formerly Beyond Bijou). 
• The Hotel Aiken, which as been vacant since 2018. A Request for Proposals is reportedly being prepared that will determine its future. 
• Newberry Hall
  
  Footnote (5) The Aiken Corporation presently has a 99-year “Ground Lease”with the City of Aiken for the 20,000 square foot Amentum office building on Newberry Street. Because of the length of the lease, Aiken Corporation appears as the “owner” in county records and pays property taxes on the building—$29,805 for 2022–but not on the actual property.
  
  The monthly rent paid to Aiken Corp by Amentum is $20,500, or $1 per square foot, and $246,000 per year. 
  
  If the same rate were charged for the 45,000 square foot SRNL building, the monthly rent would be $45,000, and annual rental income would be $540,000.
  
  The ground lease for the Newberry Street office building required twenty years of rent paid by Aiken Corp to the City of Aiken to pay off a $3.5 million loan from the city to build the facility.
  
  While the loan also helped finance construction of the adjacent, City-owned adjacent Performing Arts Center, most of that cost was covered by a major fundraising effort by the Aiken Community Theatre.
  
  In the lab scenario, Aiken Corp may not have rental payments to the city. The SRNL property will be owned by the City of Aiken due to the $20 million in plutonium settlement funding, so no loans will be involved unless the project goes over budget. In the absence of the latter event, all rental revenues for the nonprofit Aiken Corp will be profits. 
  
  In addition, the City of Aiken has committed to $250,000 in annual maintenance and staffing contests for the SRNL facility, further cutting costs for Aiken Corporation.

Footnote (6) The full timeline of known events since the cancellation of Project Pascalis on September 29, 2022 is as follows: 

December 9, 2022. AMDC Chairman Keith Wood and Chris Verenes resigned in protest due to the failure of City Council to meet with them regarding the causes of the Project Pascalis failure.  

December 12, 2022. Aiken City Council met in closed-door Executive Session to discuss: 

• “Potential purchase of real property located in downtown Aiken.”
• “A proposed contractual arrangement to lease property in downtown Aiken.  

In regard to the latter topic, City Council was discussing, and probably negotiating for, rental of property owned by the AMDC and not the city. 

Mayor Rick Osbon recused himself because the “discussion might involve one of his direct competitors.” (Warneke Cleaners is the competitor, and the property it leases is part of the SNRL project). 

Attendees included Chamber of Commerce President and AMDC commissioner David Jameson, attorneys Daniel Plyler and Gary Smith, Tim O’Briant, Buzz Rich, SRNL Director Dr. Vahid Majidi, and SRNL Assistant Director Sharon Marra.

December 14, 2022. David Jameson resigned  from the AMDC, citing South Carolina’s simple Community Development Law as the root cause of the Pascalis project failure. 

January 9, 2023: City Council held another closed-door Executive Session involving the same property purchase and lease arrangements at the December 12, 2022, Executive Session. Absent from list of attendees is SRNL’s leadership and Buzz Rich. 

The same day, at the regular City Council meeting, Council “continued” a motion to establish itself as the governing body of the AMDC. 

January 17, 2023. Despite the expressed wishes of all but two citizens to dissolve the AMDC, City Council unanimously voted to appoint itself as governing body of the AMDC; in order to transfer AMDC properties and assets to the City of Aiken. 

January 25, 2023: The SRNL lab project is announced at the “State of the City” jamboree. With Mayor Osbon continuing to recuse himself, Mayor Pro-Tem Ed Woltz described the project in identical terms as the December 9th Aiken Corporation/MPS agreement, and stated: “This is not a done deal.” (Cou

SRNL Director Majidi also addressed the crowd and assured them that no chemical or radiological operations would take place; but also described the facility as a “nonproliferation training center.” According to the SRNL website, this aspect of its mission involves U.S. intelligence agencies. (His transcribed comments are in footnote 2 here.)

January 28, 2023:  The City of Aiken announced it would hold a public forum. No mention of the Aiken Corporation was in the announcement. 

February 6, 2023:  The “City of Aiken Public Input Session” was held at the African American center. Aiken Corporation CEO Buzz Rich opened the session and described it as “focus meeting.”  MPS “Principal” K.J. Jacobs moderated the meeting, which he later described as a “listening session.” No mention was made of the existing agreement between Aiken Corporation and MPS. 

Present in the audience, but not taking part in the discussion or answering questions, was the SRNL leadership. SRNL has yet to engage with concerned citizens in a public forum, and has been absent from discussions involving the parking garage proposed as a key part of the lab project. 

The initial cost estimate of the parking garage, euphemistically referred to by city officials as a “structured parking solution,” is estimated to be $7 million. Two identified sources of funding are hospitality tax funds and plutonium settlement funds from the city’s $25 million share of the plutonium settlement allocated for “Downtown and Northside Redevelopment.”

The garage was not a part of the February 6th discussion. 

In addition to the statements mentioned in the body of this article, Mr. Jacobs also provided an email address for comments and promised to establish a website to chronicle “appropriate” comments. The latter is also a requirement in the March 13th contract. The email addressed failed to work for five days, and the website has yet to appear.

February 8, 2023: The Aiken Corporation approved two items: 

a. As reported in The Agenda Setting Aiken Corporation, signed an agreement with the City of Aiken to share in the cost of hiring McMillan, Pazdan & Smith Architecture.” 

b. The hiring of attorney Tracy Green at a fee of $400 per hour to “look at the current by-laws, Freedom of Information Act issues, and other legal matters.” Other legal matters includes negotiating leases with “third parties” such as SNRL. (The by-laws were updated and approved in May 2023).

City Council members Lessie Price and Gail Diggs were listed as present in the attendee list, acting as “ex-officio” voting members of the Aiken Corporation. 

March 7, 2023: The Design Review Board (DRB) held a public “work session” to discuss the design of a ~$7 million parking garage, termed a “structured parking solution,” proposed to accommodate the influx of lab employees. During the pre-decisional meeting citizen comments were prohibited—reducing them to spectators while developers and city officials were participants.

March 8, 2023: The Aiken Corporation approved a motion to “to accept the proposed Professional Services Agreement with the City of Aiken.” City Councilwoman Lessie Price was listed as an attendee. 

March 13, 2023. Aiken City Council convened as the governing body of the AMDC. After the issue arose of potential conflicts of interest due to the status of the two Council members on the Aiken Corporation Executive Committee, Council as AMDC tabled the motion to transfer AMDC properties and assets to the City of Aiken. A decision was made instead for a Council public hearing to dissolve the AMDC as a means to transfer the properties and assets—-since dissolution would automatically trigger the transfer. 

Later, during its regular meeting, Aiken City Council approved the $250,000, no-bid professional services agreement with the Aiken Corporation; which was deemed “The Developer” in the contract. As already stated, the December 9, 2022 Aiken Corporation agreement with MPS was incorporated into the contract. 

Aiken City Council approved a contract for pre-development work on property the City of Aiken did not own, and which only controlled via its dual-role existence on the AMDC. 

March 27, 2023. Aiken City Council approved, on First Reading, the dissolution of the AMDC. Both Councilman Ed Woltz and Mayor Rick Osbon recused themselves from the discussion—due to Woltz’s ownership of land adjacent to AMDC properties, and Osbon’s “friendly competitor” Warneke Cleaners occupying part of the lab project property. 

After the issue of a potential conflict of interest involving that status of the two Council members on the Board of the Aiken Corporation, the two committed to resigning from the Board. Subsequently the motion passed unanimously on the First Reading. 

March 28, 2023: Councilmembers Lessie Price and Gail Diggs resigned from the Board of the Aiken Corporation.

April 10, 2023. Aiken City Council deferred the Second Reading of the vote to dissolve the AMDC, with City Attorney Gary Smith stating he would request an informal opinion on the ethics issues regarding the 

April 13, 2023. Smith submitted his request, and added a request pertaining to Ed Woltz and Rick Osbon. 

April 27, 2023. The staff of the Ethics Commission issued its informal opinion, stating that no member of Council had to recuse themselves from the vote to dissolve the AMDC. 

In regard to the Council members of Aiken Corporation’s board, the informal opinion cited formal opinions of the Commission from 2000 and 2001 that exempted elected officials from conflict of interest laws if they serve as members of Boards of organizations which were created by, and exist at the discretion of, the elected officials’ governing body. In the absence of this exemption, the March 28th resignations would apply to any future votes.

In regard to Mayor Osbon and Councilman Woltz, the staff’s informal opinion cited the lack of financial gain from dissolving the AMDC because vote to dissolve was not a direct vote to transfer AMDC properties and assets. 

Meanwhile, little discussion of the lab project has occurred. It might be held up by the failure of Council to transfer the properties to city control, and/or the identified closed-door meetings with “key stakeholders” is ongoing.  

Meanwhile, the date for the draft “feasibility study” schedule is now two weeks overdue. No website is up and running to share citizen comments.