Known Project Pascalis legal costs to-date range between $300,000 to $350,000. Approximately two-thirds of the costs were for general counsel, and one-third for litigation.

By Don Moniak
November 21, 2023

A review of City of Aiken legal department invoices (1) from January 2021 to August 2023 shows known costs to-date for legal counsel related to Project Pascalis to be approximately $349,110 (Table 1). If only half of the legal costs incurred by the Design Review Board are estimated to be indirectly related to the project, then known directly related costs still exceed $300,000.

The greatest legal costs were incurred through general counsel work unrelated to any litigation. In total, approximately $256,775 in general counsel and document preparation costs were incurred by the Aiken Municipal Development Commission (AMDC), the city’s Design Review Board (DRB), the City of Aiken (COA), and paid for with taxpayer funds.

Legal costs to defend City of Aiken parties in the Blake et al vs City of Aiken et al lawsuit have been lower. The lawsuit was filed on July 5 , 2022 in an effort to stop the project and hold the City of Aiken, AMDC, and DRB accountable for alleged violations of state and local laws. The City’s known costs to date are estimated at $91,883. Once all invoices are submitted, the costs are expected to exceed $100,000.

These figures are estimates, as not all invoices are available and the estimates are hindered by excessive redactions of basic, often innocuous, information under the pretense of “attorney-client privilege.” Only the City of Aiken can compile a precise and full accounting of legal costs.

Summary of Key Legal Moments During Project Pascalis

Project Pascalis originated as a $75-100 million public-private endeavor led by the Aiken Municipal Development Commission (AMDC), which proposed the demolition and redevelopment of half a block of downtown Aiken. The project designers originally envisioned a new five-story hotel, a five-story apartment complex, city-owned parking garage and conference center, and ground floor retail space. Funding was to be provided by a variety of sources, including hospitality taxes and upwards of $25 million of state of South Carolina plutonium settlement funds.

The project occurred in two parts. The initial phase, from March to May of 2021, involved two major steps. First, WTC Investments (Agent Ray Massey) procured the rights to purchase seven downtown properties from two property owners, the Shah family and the Anderson family for a total sum of $9.5 million. Those Purchase and Sale Agreements (PSA) were signed by WTC partner Weldon Wyatt.

Second, the AMDC signed a predevelopment Cost Sharing Agreement with GAC LLC (Agent Weldon Wyatt), and design work began. As described in Project Pascalis Includes the Alley, the original conceptual design was more ambitious, and actually included the construction of multi-story apartments sandwiching The Alley, in part on properties purchased in March 2021 by Aiken Alley Holdings (Agent Ray Massey).

Page five of the cost sharing agreement contained a provision allowing the AMDC to take assignment of any “property interest” owned or controlled by the developer if the developer “determined to cease development prior to May 17, 2021.”

This first project phase ended abruptly the first week in May of 2021, after GAC withdrew from the project. A series of meetings occurred between members of GAC/WTC and AMDC and City Council representatives to negotiate the future of the project and its properties. By May 3rd the conceptual plans were revised to reflect a less ambitious project involving only the Shah and Anderson properties. (Figure 1)

The final, hours-long (2) meeting held on May 6th is believed to be when the decision was made to move forward on exercising the assignment rights in the cost sharing agreement.

The second phase and most familiar phase of the project then began, with an AMDC, City of Aiken, and Aiken Chamber of Commerce collaborative effort to obtain the purchase rights to the properties held by WTC. On May 22nd, the Chamber of Commerce and the Shah family inked the Assignment contract; and on May 25th the two entities inked the PSA. On June 3rd, the assignment process was repeated for the Anderson family’s Newberry Hall property.

Prior to the signings, the AMDC began to solicit proposals from select developers to replace GAC, but without publishing a public Request for Proposals as required by South Carolina Community Development Law. By mid-June of 2021, the AMDC had selected an unidentified developer with whom to pursue further negotiations.

The assignments, purchase and sale agreements, and project reorganization were not publicly disclosed, and project planning continued in secrecy until November of 2021.

From March of 2021 to September of 2021, the AMDC had no attorney under contract specifically for general counsel. It obtained advice as needed, primarily from Attorney Gary Pope Jr of the Pope-Flynn Law Group. Important, decisional AMDC meetings involving the $100 million project without any general counsel attorneys listed as attendees include the following:

• March 17, 2021, special-called meeting to discuss and improve a resolution authorizing the negotiation and execution of the GAC cost sharing agreement.
  
• June 8, 2021, regular meeting where AMDC Chair Keith Wood was authorized to enter into negotiations with a “potential Project Pascalis developer. “
  
• April 18, 2022, special-called meeting to discuss and approve
  a resolution in support of the “conveyance” of a portion of Newberry Street to Pascalis project developer RPM Development Partners. 

Not until early October of 2021, when the Pope-Flynn Law Group signed a Dual Engagement Letter, did the AMDC have its first official attorney.

In early November of 2021, the AMDC used $9.6 million in city funds to take assignment of, and purchase, the seven Pascalis properties. Pope-Flynn prepared the general obligation bond issuance that enabled the purchase.

One month later the AMDC announced the selection of RPM Development Partners as its “preferred developer;” and the signing of a $5 million Purchase and Sale Agreement (PSA) with RPM for the same Pascalis properties purchased one month earlier for $9.6 million.

Ten days after the PSA was signed, a Request for Proposals (RFP) seeking Pascalis project developers was belatedly published in the Aiken Standard. As reported in The Project Pascalis RFP, a proof of the RFP public notice was prepared by AMDC Attorney Gary Pope, Jr. in early November, but a revised proof was submitted by Mr. Pope on December 9, 2021, for publication on December 13th and 20th—well after RPM was chosen as the preferred developer.

Over the next six months, the AMDC and City of Aiken vigorously pursued the project, a pursuit supplemented by strong support from the DRB. But the further along the project progressed, the more citizen opposition widened and intensified. By early May numerous legal issues had been raised, a petition to change city code emerged from a movement called the Do It Right Alliance, and the threat of a lawsuit loomed.

By late April of 2022, the increased public scrutiny, ethics concerns related to the Aiken City Attorney, and the increases in project complexity prompted city officials to retain more outside legal counsel for the Design Review Board (DRB) and Aiken City Council—though not for the AMDC.

First, Attorney Jim Holly signed an agreement in late April of 2022 to represent the DRB during its regular deliberations and in any future litigation. Holly’s agreement included the stipulation that additional legal assistance would be provided in the case of any litigation.

Then, on May 12th Attorney Daniel Plyler of Smith-Robinson Law Firm signed a contract to act as “special counsel and/or City Attorney on an as-needed basis.”

In late June of 2022, the AMDC decided to reorganize the project by means of amending the obsolete redevelopment plan that provided part of the project basis, holding an overdue public hearing on that plan, and issuing a new Request for Proposals. A Draft Public Notice of the changes was prepared, but never released.

One week later, before the planned change in course could be publicly announced, the Blake et al vs City of Aiken lawsuit was filed. The Plaintiffs sought “declaratory relief” to determine City Council, the AMDC, and the DRB had violated various state and local laws, an injunction to halt the project, and a finding of FOIA violations.

Following the lawsuit, the number of legal firms actively representing city interests doubled. The Morrison Law Firm and Davidson, Wren, and Demasters Law Firm (3) were retained to defend AMDC-related issues; and the Lindemann Law Firm was chosen to join Attorney Jim Holley on the DRB’s defense team.

In mid-September of 2022, as the deadline for closing on the PSA loomed, RPM chose to terminate its involvement. Two weeks later, the AMDC followed suit at its September 29th meeting. In personal public statements made after the meeting, Chairman Keith Wood and Vice-Chairman Chris Verenes cited the belated publication of the Pascalis RFP in December 2021 as a key issue leading to the project cancellation.

Even after the cancellation, the Pascalis lawsuit continued in the courts for another year, marked by a long series of Motions for Summary Judgement, Protection from Discovery, and More Definitive Statements.
On September 19th, a hearing was held on the Defense Motion for Summary Judgement to render the case moot due to the project cancellation, repeal of the Newberry Street partial privatization ordinance, and dissolution of the AMDC between September 2022 and May of 2023.

This past week, two of the three Plaintiff causes of action were dismissed in a brief decisional notification that stated:

“On September 19, 2023, Defendant’s motion for summary judgement came before the Court. After carefully considering the memoranda submitted by counsel, case law, and other relevant filings, the Court GRANTS Defendant’s motion for summary judgement with respect to Plaintiffs’ first and second causes of action–declaratory judgement and permanent injunction (as well as other equitable relief sought)–but the Court DENIES Defendant’s motion for summary judgement with regard to Plaintiffs’ third cause of action for violations of S.C. Freedom of Information Act.”

The Judge’s order justifying the decision has yet to be released. The case remains open, but only the merits of alleged FOIA violations will be heard.

(More complete timelines for the Pascalis project can be found at A Project Pascalis Timeline (2019 to June 2022), and Project Pascalis Timeline Update: June 2022 to August 2022. The progression of various project designs can be viewed at The Changing Views of Project Pascalis.)

Informational Limitations on Legal Costs

Total costs remain unknown for four reasons:

1. The data is incomplete, with the last available invoice from August 2023. There is a complete absence of invoices for all or parts of 2023 from the Lindemann and Morrison Law Firms. City records do show a December 2022 payments to Lindemann Law Firm, and Davidson and Wren; and to Davidson and Wren in September 2022. As the payment totals are similar to those paid to the other Pascalis lawsuit defense firms, and are used in these estimates.

2. The invoices from Attorney Jim Holly for his counsel to the Design Review Board (DRB) mix both litigation costs and costs related to the normal operations of the DRB.

3. Invoices contain extensive redactions made by the City of Aiken under a Freedom of Information Act (FOIA) exemption for records that qualify under the broad category of attorney client-privilege. Many of these redactions for non-litigation services have been shown to involve innocuous information. However, there is generally enough information available, such as the names defendants and Plaintiff attorneys, to easily determine which invoices are project related (Figure 2)

4. It is unknown whether the city’s insurance and risk provider has, or will, reimburse any legal costs. On July 5, 2022, the city submitted a claim to its insurance provider, the South Carolina Municipal Insurance and Risk Fund (SCMIRF). As of January 2022, that claim remained open. (Table 2).

Law Firms and Total Costs

The legal services to date can be delineated into two broad categories: general counsel unassociated with the Pascalis lawsuit, and actual litigation. A third category is indirect costs of DRB outside counsel—representation deemed as unnecessary prior to Pascalis. A two-to-one ratio of general counsel (Table 3) to litigation costs (Table 4) is estimated; and indirect costs are estimated to be less than $50,000.

Legal costs have been lower than expected for the Pascalis lawsuit litigation due the relatively low hourly billing of City of Aiken and AMDC defense attorneys—which are close to half the hourly rate charged by the Pope-Flynn Law Group. Another cost reduction factor was the mutual decision in February of 2023 to remove individuals from the list of defendants.

In total, thirteen attorneys from nine law firms have provided various Pascalis project-related legal services to the City of Aiken, the AMDC, and the DRB. This list consists of:

• Landrum-based Jim Holly has represented the Design Review Board (DRB) during its public hearing process, and in the lawsuit. He signed a Letter of Engagement on April 25, 2022. In the absence of the project, his services would likely have been unnecessary.
  
• Aiken-based Hull-Barrett of Aiken represented Newberry Hall in negotiations with the AMDC regarding its lease with the AMDC and future management and ownership of the Pascalis project’s proposed conference center. As described in Project Pascalis Conference Center Costs, the AMDC reimbursed Hull Barrett this past January for Newberry Hall’s legal costs associated with those negotiations. 
  
• Columbia-based Lindemann Law Firm has represented the Design Review Board (DRB) in the Pascalis litigation. Its invoices have yet to be provided by the City of Aiken. 
  
• Aiken-based McCants and Nance represented the City of Aiken and Attorney Gary Smith in two smaller, earlier lawsuits, both of which dismissed over a jurisdictional issue. McCants also represents City Attorney Gary Smith in the Pascalis lawsuit—but since Smith is an independent contractor and McCants did not submit an invoice for that defense in 2022, it is assumed here that the city is not funding Mr. Smith’s defense.
  
• Columbia-based Morrison Law Firm provided the AMDC with its legal defense in the Pascalis lawsuit, while Attorney Michael Wren of Columbia-based Davidson and Wren represented the AMDC’s Executive Director. 
  
• Columbia and Spartanburg-based Pope-Flynn provided intermittent legal services to the AMDC between February and October of 2021, before signing the agreement to officially represent the commission.
  
• Attorney Daniel Plyler of Columbia-based Smith-Robinson was retained by the City of Aiken in mid-May of 2022 for “General Counsel and acting City Attorney” in Pascalis-related matters. Smith-Robinson then represented Aiken City Council in the lawsuit.
  
• Smith, Massey, Brodie, Guynn, and Mayes (SMBGM) provided intermittent and limited services.  Most notable were $3,150 worth of billings in May of 2021 for “Title Searches of the Hotel Aiken and Anderson Properties,” and document preparation believed to be the Pascalis properties assignments.

Law Firms

Pope-Flynn Law Group

At $300-350 per hour, the Columbia and Spartanburg-based Pope-Flynn Law Group was the highest-priced of the project’s legal advisors. In total, Pope-Flynn earned $146,960 (Table 5), the most among all project law firms, of which approximately $5,145 was litigation related.

Pope-Flynn’s involvement in began in Feburary 2021, at the onset of the first project phase; previously it was retained as a bond counsel. Attorney Gary Pope, Jr. drafted the GAC/AMDC Predevelopment Cost-Sharing Agreement, and was working on an incentive agreeement for GAC before the project collapsed.

According to its May 2021 invoice, Pope-Flynn was noticeably absent after Mr. Pope attended the May 6th meeting to chart the project’s future. The firm was uninvolved in the property assignments and recruitment of potential developers that revived the project.

Pope-Flynn resumed intermittent legal services in June of 2021, and in early October signed its agreement to officially represent the commission.

 The firm immediately assisted in unsuccessful negotiations with RPM to reach project Master Development and Purchase and Sale agreements; and with Newberry Hall towards an agreement on the future operations of the proposed conference center.

Other notable aspects of the Pope-Flynn representation included: 

• A marked rise in billable hours after citizen challenges and objections mounted. After billing an average of only 4 hours per month from December 2021 to February 2022, Pope-Flynn’s billings averaged 34 hours a month through June of 2022. The firm’s legal advice included responding to “overly broad FOIA requests” in March of 2022, and ethics concerns in May of 2022.
  
• An alleged lack of advice regarding SC Community Development law. (4) According to former AMDC Chairman Keith Wood’s September 29, 2022, public statement, the commission was “first informed of the detailed requirements of the Community Development Act by the staff and the AMDC attorney on June 23, 2022; the same day that “staff and the AMDC attorney recommended the AMDC start the process over.”
  
• Responsibility for preparing and publishing the Pascalis project Request for Proposals. Gary Pope, Jr. sent the RFP announcement to the Aiken Standard on December 9, 2021 for publication on December 13th and 20th—more than a week after the AMDC had selected RPM Development Partners, LLC as its “preferred developer,” and signed the $5.0 million PSA.
  
• A. $34,500 service fee for processing the $9.6 million municipal bond issuance that allowed the AMDC to purchase the Pascalis properties in November, 2021. More detailed information on that bond issuance is 
  available in Keeping Up Appearances…
  
• Representation of the AMDC at its April 20, 2022, public forums. Pope-Flynn billed the commission 11.4 hours and $3,990 for Mr. Pope’s presence at these events; which included the round trip drive from Columbia to Aiken, lunch at the Brew Pub, and $124.02 for mileage.  The total cost for the two meetings, during which Mr. Pope only spoke once, was $4150.72
  
• Mr. Pope billed the city two hours and $700 after being asked to redact billing invoices that were already in the public domain in the commission’s “Financial Binder.” (Figure 3)

Holly Law Firm.

Attorney Jim Holly, who operates a sole-proprietorship law practice, has been the second largest recipient of project-related legal fees. Mr. Holly was retained to advise the DRB after City Attorney Gary Smith ended all involvement in the project sometime in April 2022. Mr. Holly’s fee is $275 per hour.

Mr. Holly has deep and broad experience with local government legal issues. He counseled the City of Aiken from 1985-1995, when he was the last in-house City Attorney; and served as Aiken County Attorney for a total of 8 years (2007-2009 and 2014-2020). In the past two years, Mr. Holly has also guided the City Council redistricting process and other matters.

Much, but not all, of his general counsel work on behalf of the DRB was directly related to the Pascalis project. That work included the DRB’s preparation to hear the second round of proposed demolitions, the request to declare a state of “Demolition by Neglect,” of the Hotel Aiken and other Pascalis properties, and the litigation itself.

Indirect fees are considered here for the simple reason that the the DRB routinely operated without outside counsel prior to Pascalis. Most of its work involves the more mundane issues of replacing gutters, windows, stone walls, fences, mailboxes, roofs, etc on historic district structures; and not reviewing major projects.

Morrison Law Firm

The Morrison Law Firm, which has defended the AMDC in the Pascalis lawsuit, has earned $24,440 and been reimbursed for $595 in costs as of March 2022. (Tables 7 and 8)

One of Morrison’s most notable tasks involved preparation, along with City of Aiken defense counsel Daniel Plyler, with a Joint Defense Agreement (JDA) between the AMDC and City Council. In his December 9, 2022, resignation letter, Chairman Keith Wood wrote that the JDA “reads as a non-disclosure statement which restricts information to the public.” The JDA was also described in a November 21, 2022, email from Wood and Vice-Chair Chris Verenes to City Council as an impediment to “open, frank, and complete information,” and thus a disservice of to the Citizens of Aiken. (Figure 4)

Smith-Robinson Law Firm,.

Attorney Daniel Plyler of the The Smith-Robinson Law firm worked on a variety of tasks, earning $30,923 as of September 1, 2023 (Table 10). In May of 2022 he reviewed of the law governing the Do It Right Alliance petition to amend or add four City of Aiken ordinances. The results of that review, conducted in tandem with AttorneyJim Holly, are unknown.

Mr. Plyler also served as City Attorney at City Council Executive Sessions and Meetings in June and July 2022 where Pascalis issues were on the agenda. Beginning in July 2022 his primary role was as the City of Aiken and Aiken City Council defense attorney.

Smith Massey Brodie Guynn and Mayes.

Due to redactions in the firm’s invoices and the myriad of monthly issues addressed by City Attorney Gary Smith, the costs associated with his law firm are the most difficult to determine.

The largest fees involved “Title Searches for Hotel Aiken and Anderson property” and “document review,” which totaled $3,840 (Figure 6). Between May 15th and May 25th of 2021, City Attorney Smith billed for nearly two hours of work involving “document review” at the same time another member of his firm prepared an unidentified document and conducted the title searches and document preparation.

Since no other law firm billed for services between May 12 and June 1, 2021; the period when the property assignments were completed, SMBGM is believed to be the firm that completed the assignment and purchase and sale contracts. In response to two emails, City Manager Stuart Bedenbaugh has neither denied nor confirmed this assessement.

City Attorney Smith had very limited involvement with Project Pascalis, with an estimated total of only about ten hours. However, his invoices and attendance at project-related City Council meetingindicate involvement at several key junctures, including:

• The March 22, 2022 Joint Executive Session with the AMDC to discuss Project Pascalis. 
• Reviewing and signing the $9.6 million general obligation bond issuance for the purchase of the Pascalis properties. 
• Participating in the March 28, 2022 Newberry Street privatization ordinance public hearing; and same-day review of a letter from Attorney Dione Carroll—which she presented and read that evening.  
• Research into issues on behalf of DRB Chairman McDonald Law and DRB staff liaison Mary Tilton on the eve of the DRB’s Hotel Aiken/Beckman Building demolition hearing. (Figure 5). During the work session preceding the hearing,  Ms. Tilton reportedly “Informed  the Board the Old Aiken Design Guidelines only require a plan to be presented. She read the Section on Demolition from Page 42 of the Old Aiken Design Guidelines: ‘Any application for a demolition shall include plans for the re-development of the site after demolition.’” (DRB Meeting Minutes, 3/1/22)

Commentary

Whether the total to-date is $300K or $350K, the Pascalis project legal costs have been very high and absorbed funds that were obviously better suited for more meaningful city operations and projects.

As a point of reference, on September 11, 2023, Aiken City Council debated whether to devote part of a budget surplus to giving Aiken Public Safety fire engine operators a four-percent or eight-percent raise, ultimately settling on the eight-percent. The eight-percent raise cost $64,000.

The true Pascalis project costs, legal and otherwise, are still unknown; in large part because throughout the project the city has been transparently opaque. A full and open accounting would be more possible by eliminating the excessive redactions of legal invoices, releasing all AMDC books and records, and placing all the information in the public domain.

Claiming FOIA exemptions for information that can be released is the surest path towards avoiding any lessons learned.

Or, as Aiken resident Rose Hayes wrote in a March 27, 2023 letter to the editor:

“Questions also remain about the tax and private interest dollars that have already been sunk into the failed Pascalis project. In order to have a clear understanding of the city’s $9.6 million debt for that cancelled plan, and why it was necessary, an audit should be conducted by an outside firm. Trying to follow the twists and turns the Pascalis planning took is like trying to chase a snake through brush. An audit would be in keeping with the mayor’s commitment to transparency and helpful in future planning as ‘lessons learned.’”

Footnotes

(1). A majority of the Invoices used in this article can be found at:

Invoices submitted since January 1, 2023 for Holly, Morrison, Smith-Robinson, Smith Massey Brodie Guynn and Mayes (SMBGM), and Pope-Flynn law firms.

2021 Invoices for SMBGM
2022 Invoices for SMBGM

Most of the 2021-2022 Invoices for Pope-Flynn begin on Page 154 in the AMDC Financial Binder.

Morrison Law firm invoice for 2022.

All invoices were obtained through several FOIA requests.

(2) Attorney Gary Pope, Jr. of the Pope-Flynn Law Group billed the AMDC 7.2 hours for the meeting. The billing included the 214 mile round from Spartanburg to Aiken, which is approximately 3.5 to 4.0 hours.

(3) Davidson, Wren, and DeMasters is one of two law firms credited with assisting SC Attorney General Alan Wilson with reaching the $600 million plutonium settlement. The other firm is Willoughby and Hoefer. AG Wilson awarded the two firms a combined $75 million in legal fees. The award met with an immediate objection from Governor Henry McMaster.

A lawsuit was filed by Attorney Jim Griffin on behalf of the S.C. Public Interest Foundation and John Crangle. On October 23, 2023, State judge Daniel Coble dismissed the suit, claiming that as an Executive Officer of the state, AG Wilson is entitled to issue such awards. Coble had been assigned the case by the State Supreme Court, where an appeal is again likely.

(4) On October 28, 2021, Pope-Flynn associate CD Rhodes billed the AMDC two hours to “Review Community Development Act. Review records related to AMDC re the same. Exchange emails and confer with G. Pope re the same.” There is no record of the firm briefing the AMDC on SC Community Development Law.