In May 2021, Aiken attorney, real estate investor, and developer Ray Massey led an effort to obtain properties owned by the City of Aiken as part of a larger development that included a 100-room hotel and later Project Pascalis. This was an unknown public-private partnership effort that was negotiated in private; one that ultimately failed on its own, and before any public scrutiny emerged.

The object of Massey’s courtship with the City was a 0.21-acre, city-owned property—known alternatively as the Brinkley Property, the Bike Building, or the USC-Aiken Building (1), and herein, also referred to as the Alley Property—a parcel dominated by a 4,023 square-foot, one-story building at the corner of Newberry Street SW and the Alley (Figure 1a). At that time, the building was unoccupied and the property was destined to be declared surplus property.

Also at the time, Massey’s investment and development group, Aiken Alley Holdings, owned or had under contract 0.56 acres of property along Newberry Street, across the Alley from the City of Aiken’s “Brinkley Building” property (Figure 1c). Massey’s expressed intent was to construct a 100-room hotel on those 0.56 acres, preferably through a public-private partnership with the City of Aiken.

Aiken Alley Holdings’ first attempt to acquire the City of Aiken property was a proposal for a 99-year ground lease of the Brinkley Building, along with a 50-foot wide portion of Newberry Street itself, at a greatly discounted fixed rate of $12,000 per year. Their second attempt at acquisition was a proposed outright purchase of the building at the greatly discounted sale price of $750,000. Both efforts ultimately failed to move forward to the necessary public hearing stage—both proposals failed without any public interference.

The negotiations on Massey’s ground lease proposal were conducted on the city side of the table solely by City Manager Stuart Bedenbaugh. This private negotiation for city property occurred despite the fact that Massey is a partner within the City’s law firm, Smith Massey Brodie Guynn and Mayes (SMBGM). Massey consistently used SMGMB letterhead in his business correspondence with both Bedenbaugh and Economic Development Director Tim O’Briant.

Today, a “portion of the building” is under consideration to install a much-need public restroom in The Alley—a facility the City failed to provide when it renovated the popular commercial district nearly a decade ago. But the future of the entire surplus property still remains in limbo.

(All emails from Ray Massey to Aiken city officials that are cited or described in this article can be found in this file obtained via a Freedom of Information Act (FOIA) request. A glossary of terms, individuals, and groups can be found on this page).

by Don Moniak
August 26, 2024

Aiken resident Jacob Ellis is known for asking questions to, and inducing answers from, Aiken city officials during public meetings. On June 10, 2024, Mr. Ellis asked, “Why are there no public restrooms in The Alley?”

According to the meeting minutes, City Manager Stuart Bedenbaugh responded, “The City is getting pricing on converting a portion of the building at Newberry (Street) and The Alley to public restrooms.” He noted he did not know if that would be the location. He said that, internally, staff had talked about the location for public restrooms but that “we need to talk to Council about the matter and the next steps.”

Mr. Bedenbaugh did not address future possibilities for the remainder of that building and its surrounding property (Figure 1a); nor whether any alternatives were under consideration.

Three years ago, Bedenbaugh was involved in another effort to develop the property in question, which is now the City’s only remaining parcel of land in The Alley. It was a complicated and stealthy effort to pursue a separate downtown development that originated during the first rendition of Project Pascalis, and continued to overlap with the second version of the Pascalis project. As with Project Pascalis, a public-private partnership involving city property and a development agreement was envisioned.

The City of Aiken obtained the Brinkley property in 2008 for $930,351; for the purpose of expanding its 224 Park Avenue SW Municipal Building. That repurposing was never realized, as City Council opted instead to buy and repurpose the historic Henderson Hotel (former Regions Bank building) at 111 Chesterfield Street.

From late May 2021 to January 2022, Aiken attorney Ray Massey lobbied Bedenbaugh on behalf of his newly formed investment and development group, Aiken Alley Holdings LLC, to control the City’s Alley property. Aiken Alley Holdings LLC had already purchased three properties on the north side of The Alley in March 2021 (Figure 1c).

First, Massey proposed a 99-year ground lease of the property and its building, as well as a 50-foot wide stretch of Newberry Street containing most of its southbound lane (Figures 1b and 3). When that effort ultimately failed to gain traction, Massey’s investment group offered to purchase the City’s Brinkley Property, along with the city-owned parking lot across from the Hotel Aiken.

These negotiations occurred in the absence of the City commissioning any appraisals, seeking competitive bids, conducting a Request for Proposals (RFP) for the soon-to-be-surplus property, and/or holding a public hearing; an absence of due diligence that, sadly, continues to this day.

Massey’s lobbying efforts began the day before the AMDC and City of Aiken, via the contract assignment to the Aiken Chamber of Commerce described in Part 1 of this story, gained control of the six properties in the Pascalis project footprint (collectively known as the “Shah Property”). The assignment was the culmination of a failed, two-month-long effort to pursue a larger version of Project Pascalis (1).

As reported in the three-part series Project Pascalis Includes the Alley, Ray Massey had been heavily involved in the first, failed rendition of Project Pascalis, thus obtaining considerable inside information on the inner workings of the project.

The Ground Lease Proposal

On May 24, 2021, Ray Massey sent a Letter of Interest (LOI) to City Manager Stuart Bedenbaugh. In the LOI, Massey relayed the desire of his investment and development group, Aiken Alley Holdings LLC, to build a 100-room hotel on the “Harrison Property” just north of the intersection of The Alley and Newberry Street.

To accomplish this goal, Massey proposed a 99-year ground lease for The Alley property owned by the City, and a 50-foot wide, 4,000-square-foot part of Newberry Street in front of the property. (Figure 3). He also sought a development agreement with the City to develop the immediate area.

Massey’s first offer to Bedenbaugh was submitted with the letterhead of his, and the City’s, law firm of Smith Massey Brodie Guynn and Mayes (SMBGM). The deal would be $10,000 per-year fixed rental rate to lease the City’s Alley property and 4,000 square feet of Newberry Street. A day later, Massey upped the offer to $12,000 per year; a meager $1,000 per month for 99 years (Figure 4).

The Letter of Interest stated that, “We believe this LOI can be consummated on or before December 31, 2021 (the ‘Target Closing Date’).” (emphasis original).

Figure 4. Portions of the Letter of Intent from Aiken Alley Holdings LLC, via SMBGM, to Stuart Bedenbaugh. (click to enlarge).

Neither the Aiken Municipal Development Commission (AMDC) nor Economic Development Director Tim O’Briant were listed as recipients of the ground lease proposal.

O’Briant had also emailed Massey on the 24th, attaching a prospectus for potential Project Pascalis developers, with the message:

“Last week we sent out a packet to a number of interested developers as we try to develop proposals rooted in a common set of objectives. To date, we have had expressions of interest that are all over the map. The preference is for one developer to deliver all components of any eventual project and then sell back the portions that will be owned and operated by the public sector. (the conference center and garage primarily).  I know that your group’s vision is different than what is contained in this thumbprint, but I wanted you to have the same benefit as the others who will submit master developer proposals in the event that you decide to weigh in on that umbrella role.”

The next day, May 25th, in reference to the O’Briant email, Massey wrote to Bedenbaugh; but not O’Briant:

“We can discuss this also after we discuss the LOI. I would prefer if just you and I are on the call.”

Shortly after that email, Massey sent Bedenbaugh a nearly 20-year old supporting document for his ground lease offer (Figure 5); an email that referenced a Letter of Interest for the Hotel Aiken from an unidentified party that included a $1 million offer price.

Over the next few months, Massey kept in contact with both Bedenbaugh and O’Briant, sometimes together, sometimes separately, literally working both sides of the street—or, in this case the Alley.

The Massey group’s overtures to Bedenbaugh began to further overlap with the updated Project Pascalis. In a June 4th, 2021 email to Chip Goforth, O’Briant described “awaiting whatever it is that Ray and his group come up with. Whatever it is it should be good for downtown.”

On June 7th, the deadline date for the new Pascalis project proposals, the group submitted a two-paragraph Letter of Intent—again on SMBGM letterhead. Massey reiterated his group’s desire to build a 100-room hotel at the corner of Newberry and The Alley, and also revealed, without actually identifying them by name, the background of partner firms Raines Corporation and Lat Purser & Associates (Figure 6).

The AMDC met on June 8th to discuss the selection of a Pascalis project developer. After meeting in a closed-door Executive Session, the Commission voted to authorize Chairman Keith Wood to enter into negotiations with a potential developer related to Project Pascalis.

Prior to the meeting, Massey had written to Bedenbaugh, regarding the ground lease proposal:

“What is the date the City will consider my LOI on the Bike Property? I believe you said June 15. Is that correct? Also, after I meet with my development team on the 15th, I would like to have a meeting with the City Council (work session) to discuss our proposal. Much like Mr. Wyatt did earlier this year. Is that possible, and can we schedule?”

Two days after he was authorized by AMDC to negotiate with potential Project Pascalis developers, Chairman Wood expressed concern over a potential “real or perceived conflict of interest” involving Aiken Alley Holdings Letter of Intent, writing to Bedenbaugh:

“Stuart, 

Indirectly related, I have concerns relative to a conflict of interest the City Attorney may have in our process. I noted that Ray Massey submitted the Alley proposal on letterhead that included Gary Smith’s name. In addition, I am concerned that Gary’s attendance in future meetings with developers may compromise our process based on his relationship with Ray Massey (i.e. same legal firm). I recommend we ensure the proper firewall exists to alleviate any real or perceived conflict of interest.” 

Bedenbaugh dismissed the concerns, seeming to confuse ethics law with the issue of attorney-client privilege, and writing that “we have had similar issues in the past and have not had any problems.”

No “firewall” between City Attorney Smith—who still represented the AMDC at that point—and Aiken Alley Holdings was contemplated, and Massey continued to use SMBGM letterhead in business correspondence with city officials.

On June 24th, Massey continued lobbying for his 99-year ground lease, writing to Bedenbaugh,

“Hi Stuart,

Now that we have met, and we are submitting this week the addendum, there is probably no need to meet yet with the City Council on the 28th of June. Do you agree?”

Bedenbaugh agreed, and no such meeting ever occurred. The addendum (not yet disclosed) to the Letter of Intent was sent to O’Briant and Bedenbaugh on June 24th.

On July 2, 2021, the overlap with version two of Project Pascalis continued to increase when Massey emailed both Bedenbaugh and O’Briant, again on SMBGM letterhead (Figure 7). This time he identified some of the investment group’s members—including PGA golfer and Aiken resident Kevin Kisner. Again, no member of the AMDC was cc’ed in the letter.

The July 14th Cocktail Hour

On July 13, 2022, Massey emailed Bedenbaugh and O’Briant to inquire about the status of the Project Pascalis procurement process, again without cc’ing AMDC officials, writing:

“ I am following up regarding the pending project to see if you know when a decision will be made regarding selecting a developer. I believe it was said in our last meeting that a decision would be made to eventually dance with one partner.”

It was Bedenbaugh who replied that “We are at least several weeks from determining;” an indication that, at that point in time, he had taken a lead role in selecting a developer—rather than project leader Tim O’Briant or the authorized negotiator Keith Wood, and despite the fact that Bedenbaugh was only a non-voting ex-officio AMDC member.

The next day, Bedenbaugh and Massey exchanged emails (3), sans O’Briant and Wood, to set up a meeting, one that resulted in an agreement to meet for a drink instead of at Bedenbaugh’s office. The exchange read, in part:

8:14 a.m. Massey: Can you meet with me today at 5? We can meet for a drink or we can meet at your office, whatever you prefer, if you are available. I just want to give you a quick update, and provide you with some good news.

8:41 a.m. Bedenbaugh: We can meet at 5 for a drink. Name the place.

8:45 a.m. Massey: How about the Whitney at 5?

The outcome of that meeting is unknown.

The series of Pascalis project-related events that followed (4) included Bedenbaugh and O’Briant shepherding the approval of a $10 million bond issuance in August 2021; the October 2021 $9.6 million general obligation bond issuance; the AMDC’s $9.5 million purchase of Pascalis and public disclosure of the project status; and the subsequent $5 million Purchase and Sales Agreement for those same properties between the AMDC and the Massey-led RPM Development Partners LLC.

While Pascalis moved forward, Massey and his local investment group continued their attempts to gain control of The Alley property—this time by an outright purchase.

Another Bid for the City’s Alley Property.

On December 27, 2021, just three weeks after signing the Pascalis PSA (Purchase and Sale Agreement) on behalf of RPM Development Partners, Massey signed a PSA on behalf of another investment group, CTR, LLC, for both the City’s Alley property and for a city-owned parking lot behind the Security Federal building on Richland Avenue. The total purchase price was $750,000. (CTR stands for Craig (Heath), Todd (Gaul), Ray (Massey).

On January 24, 2022, the following item appeared on City Council’s meeting agenda:

“(6) Reading and Public Hearing of an Ordinance Approving the Sale of Two Parcels of Property to CTR, LLC.”

Stuart Bedenbaugh’s supporting memorandum (Figure 8) for the Ordinance included no reference to competing bids nor any kind of appraisals, and justified the discounted sale prices on the basis of lost tax revenue in the previous thirteen years. In essence, Bedenbaugh argued that the city should accept the financial loss because it already had foregone tax revenues due to City Council approving purchase of the building in 2008; he included no references to increased downtown property values since that time.

The public hearing never happened. After a closed-door Executive Session attended by Massey, his investment and development partner Todd Gaul, and City Attorney Gary Smith, City Council took the proposal off the agenda, but did not table it.

The vote to remove it from the agenda was 6-1, with Councilwoman Andrea Gregory voting to keep it on the agenda and hold a public hearing.

Another Bid for Newberry Street.

While CTR’s effort to acquire the city-owned Alley property lay dormant, a second effort to acquire a part of Newberry Street prominently emerged in March of 2022.

The proposed privatization of a portion of the City’s Newberry Street—one similar to the Massey group’s 2021 ground-lease proposal—would ultimately direct more public scrutiny and outrage towards Project Pascalis than any other aspect of the project.

The proposal involved the conveyance of a portion of the city-owned street to the AMDC’s Pascalis project “preferred developer,” RPM Development Partners (a company formed in October 2021; whose acronym stands for Raines, Purser, and Massey; and whose Registered Agent is Ray Massey). In exchange, RPM would transfer the Harrison Property to the City—although the fate of the final ownership of that parcel if Project Pascalis succeeded was uncertain.

On March 28, 2022, the first Public Hearing on the privatization Ordinance was held. Twenty speakers walked to the podium to object to the Ordinance; no parties rose in support. Neither Massey nor any other member of the development team, if any were present, were asked to present their case.

City Attorney Gary Smith did not recuse himself at that meeting, and continued to serve as the City Council’s Parliamentarian and attorney; both at a prior closed-door Executive Session pertaining to Project Pascalis and during the Public Hearing. At one point, Smith provided a favorable interpretation of the deal that benefitted his partner’s investment and development group—but overall deferred to Bedenbaugh and O’Briant.

Early in the session, Bedenbaugh (Figure 9) praised the “piecemeal” nature of the process, stating:

“One of the things that makes this project unique is that it is not being put together by a developer for a multi-layer plan that has multiple elements being presented to the public at one time. He pointed out that this plan is being done in a piecemeal fashion so there are elements that are easy to review and have public engagement.”

Stuart Bedenbaugh’s statement to Keith Wood in June 2021 about a lack of “problems” involving City Attorney Gary Smith proved to be no longer true; as Smiths’ presence at a public hearing that involved the acquisition of city-owned property by an investment and development group headed up by his partner Ray Massey galvanized enough community outrage to compel Smith to distance himself from the project.

At the second Public Hearing on the Newberry Street privatization Ordinance, AMDC Attorney Gary Pope Jr. sat in the City Attorney’s chair; the late Jim Holley was also retained to represent the Design Review Board and guide it through the Pascalis project review process; and after May 9, 2022 Attorney Daniel Plyler began to represent the City Council during any meetings where closed-door Executive Sessions pertaining to the Pascalis project were also held.

Even though the Newberry Street privatization Ordinance was approved on May 9, 2022, the lack of recusal by Smith during the first hearing, coupled with the effort to privatize part of Newberry Street were two contributing factors in the eventual demise of Project Pascalis.

Today, the City’s Alley Property remains vacant, and an informal proposal to convert part of the building to a public restroom facility is pending; the fate of the entire property is yet to be determined. Aiken Alley Holdings continues its ownership and leasing of the Harrison Property (Figure 10) and the adjacent properties in The Alley. It is unknown whether any redevelopment plans are under consideration.

Summary.

For nearly one year, Aiken property investor Ray Massey lobbied City Manager Stuart Bedenbaugh to control the City’s remaining property in The Alley; first via a 99-year lease and then through an outright purchase—all at deeply discounted prices, one of which Bedenbaugh favorably presented to City Council.

While the plans fizzled, the facts remain that Massey conducted business using the letterhead of the City’s Law Firm of Smith, Massey, Brodie, Guynn, and Mayes; and that Stuart Bedenbaugh, even when prompted by AMDC Chairman Keith Wood, did not view these circumstances as potentially suspect, if not locally explosive.

Instead, Bedenbaugh continued to meet with a member of the City’s law firm to discuss the sale and/or lease of a city property and the status of Project Pascalis negotiations. In January 2022, their negotiations culminated in an agreement to sell city properties at greatly discounted prices—an offer that City Council wisely chose to avoid even discussing in public.

At the same time, the Aiken Municipal Development Commission, and to a lesser extent Economic Development Director Tim O’Briant, was kept uninformed about the Bedenbaugh-Massey negotiations and discussions. The project concept was not only discussed outside of public view, the high level of stealthiness even excluded the very organization, the AMDC, charged with redevelopment efforts in the downtown area and Parkway District.

In spite of the Massey group’s intense interest in the building, the City has never pursued an RFP for the building, obtained an appraisal, sought competitive bids, or, until now, officially considered repurposing it for the public good such as for well-needed restroom facilities and a cooling station.

Two years after Project Pascalis failed, there has still been no activity or official proposals for the City’s Alley Property—proving that local government is very capable of internally fumbling management of its own properties. If not for a question posed by an Aiken citizen, the future possibilities for the property would be unknown.

Footnotes:

(1) The “Brinkley Property” is referred to as “The Alley” property for the purpose of this article, to simplify the situation and avoid confusion with the larger, private Brinkley Property on the adjacent parcel to the south.

The property has, over the years, had several occupants. From about 1954 to 1984 the bright yellow Birdsey Grocery building occupied the site. According to Laura Lance, “it was within walking distance to downtown homes, and was also a venue for poor people and black people, who often didn’t shop some of the other grocery stores during most of these years.”

Overall, Birdsey’s was a downtown institution for 50 years, as it was formerly called Birdsey Flour and Seed, an establishment that would grind wheat and other grains for farmers.

After Birdsey’s, the building became a restaurant, then a gift shop. From 1994 to 2004 it was the Cyclesport bicycle shop, thus earning it the nickname of “The Bike Shop.”

After the City obtained it in 2008, USC-Aiken occupied it for several years.

(2) The original PSA for the Harrison Property was signed on March 3, 2021 by WTC Investments, LLC partner Weldon Wyatt. At some point after April 30, 2021, the day that Wyatt offered to sell it to the City/AMDC, the PSA was assigned to Aiken Alley Holdings LLC; which bought the. the property on June 7, 2021, for $675,000.

(3) Prior to May 24, 2021, the following Project Pascalis events had transpired.

March 2, 2021: WTC Investments signed a PSA with the Shah family for six of the eventual Pascalis project properties; the package was referred to as “the Shah Property.”

March 3, 2021: WTC signed the PSA for the Harrison Property.

March 15, 2021: Aiken Alley Holdings purchased the “Laurens Building,” at 200 and 210 The Alley for $2 million. The properties would become part of the original Pascalis concept plan.

March 16, 2021: The existence of Project Pascalis was announced.

March 23, 2021: WTC’s development arm, GAC LLC, signed a Cost Sharing Agreement with the AMDC.

April 30 to May 6, 2021. A series of meetings between city officials and WTC/GAC management culminated in the end of the first Pascalis project. (Just prior to the collapse, Weldon Wyatt offered to sell the Harrison Property and the Aiken Alley Holdings properties to the AMDC. Although the offer was declined, it illustrated the strong connection and overlap between WTC and Aiken Alley Holdings.)

May 17, 2021. O’Briant began to recruit developers for a second, smaller-scale Project Pascalis effort.

May 25, 2021. The City of Aiken and the AMDC “gained control” of the Shah property via an assignment of the WTC PSA to the Chamber of Commerce. The same process involving the Anderson property occurred on June 3, 2021.

(3) The July 14, 2021, Massey to Bedenaugh email exchange:

(4) Pascalis related events from August 2021 to December 2021.

August 13, 2021: Tim O’Briant informed Massey that the AMDC had selected him to negotiate with potential Pascalis developers. (However, the meeting minutes for the August 10, 2021 AMDC meeting show no such decision was officially made or conveyed following an Executive Session.)

August 24, 2021; The City Council approved the $10 million bond issuance for the AMDC to potentially obtain properties in the “Parkway district”—even though city officials knew the properties in question were the seven Pascalis parcels in the downtown.

The day after the decision, Massey asked O’Briant in an email, “how did it go last night?”

October 6, 2021: Attorney Gary Pope of the law firm Pope and Flynn is retained by the COA and AMDC to act as the AMDC’s attorney.

October 17, 2021: Massey registers RPM (Raines, Purser, and Massey) Development Partners as a South Carolina LLC.

November 9, 2021: After more than a month of failed negotiations to reach a Master Development Agreement and purchase arrangement for the Pascalis Properties with RPM, or an equivalent consortium, the AMDC bought the properties at the $9.5 million price tag; and reimbursed the Chamber its $135,000 in earnest monies.

December 5, 2021: Massey signed, on behalf of RPM the PSA for the Pascalis Properties, at a greatly discounted price of $5 million.

Additional References:

The Pascalis Attorneys also provide details of the Newberry Street Ordinance and the Ordinance to approve $10 million of general obligation Municipal Bonds for purchasing properties in “The Parkway District.”

The AECOM Plan provides more details of the events leading up to the failure of the first version of Project Pascalis, where the A memorandum from Tim O’Briant to AMDC members Jameson, Chris Verenes, and Chairman Keith Wood  was first published.