Second Judicial Circuit to hear City of Aiken argument seeking dismissal of the Project Pascalis lawsuit.
by Don Moniak
September 19, 2023
On July 5, 2022, a lawsuit was filed on behalf of nine plaintiffs seeking to stop the $100 million plus downtown demolition and redevelopment effort known as Project Pascalis. The ninety-six page filing alleged dozens of violations of State of South Carolina laws governing community development, local government comprehensive planning, ethics and conduct of public officials, and freedom of information; as well as the City of Aiken’s zoning ordinance.
The Blake et al vs. City of Aiken et al complaint named as defendants the Pascalis project developer, the City of Aiken attorney, and three City of Aiken institutions and its individual members: Aiken City Council, the Design Review Board (DRB), and the Aiken Municipal Development Commission (AMDC).
As reported in Cancelled, Stopped…., at one time there were fourteen lawyers from eight different firms representing twenty-eight different defendants. Eventually, attorneys from both sides agreed to remove individual city officials from the case, and move forward with only the City of Aiken, AMDC, DRB, and City Attorney as defendants.
After a year of filings, including defendants’ answers to the complaint, numerous motions to dismiss and shield officials from discovery, requests for more specificity, and two amended complaints by Plaintiffs, the City of Aiken filed a Motion for Summary Judgement on Mootness Grounds on July 21, 2023.
That motion will be heard today, September 19, 2023, by the Second Judicial Circuit Court of South Carolina. The hearing, to be held at 2 p.m. in the Aiken County Courthouse, Courtroom 5, is open for public viewing.
The City’s motion seeks to dismiss the Second Amended Complaint on the basis that “all of the issues raised by the Plaintiffs are now moot and that there is simply no longer a justiciable controversy for this Court to decide.” The city’s attorneys argue that since “Project Pascalis is no more,” and the AMDC was dissolved, no issues remain for the court to resolve; and it is not the court’s role to resolve “academic questions” submitted by the Plaintiffs.
As reported in A Continuation of Project Pascalis, on September 15th Plaintiff Luis Rinaldini submitted an affidavit arguing that two ongoing projects on the Pascalis properties now owned by the City of aiken “are simply a continuation of Project Pascalis.”
“If the sole object of this lawsuit were to stop Project Pascalis, there might be some merit to the Defendant’s argument. The relief sought by the Plaintiffs, however, is a declaration that the actions of the city were unlawful and wrong…Despite the failure of the project, the City has not conceded that it did anything wrong or violated any provision of state or local law…”
A letter to Aiken City Council regarding ongoing ethics issues
The following letter was sent today, April 12, 2023, by Don Moniak to Aiken City Council and City Manager Stuart Bedenbaugh.
“Dear (Aiken City) Council,
After Council cancelled the Second Reading to dissolve the AMDC on Monday night, April 10th, I submitted prepared, written comments regarding that agenda item during the non-agenda portion of the meeting. I will be providing these comments and other relevant documentation to the State Ethics Commission, and the comments are provided for your reading pleasure below this email. (1)
Mr. (Gary) Smith’s request for an informal opinion from the Ethics Commission was the stated reason for deferring the Second Reading to dissolve the AMDC. As of yesterday the Commission had yet to receive any request for an informal opinion from City Attorney Gary Smith regarding the conflict of interest issues involving City Council members, the Aiken Corporation, and the transfer of Aiken Municipal Development Commission (AMDC) properties and assets to the City of Aiken that will occur after the AMDC founding ordinance is repealed.
A path forward that better complies with promises made by Council on January 17th for a fresh start is clear: void the Aiken Corporation contract and thus eliminate the conflict of interest issue. The Aiken Corporation can then compete with other interested parties for an economic interest in the Pascalis properties.
A request for an informal opinion on ethics law means the spirit of this anti-corruption statute is, arguably, already under siege. The last informal opinion request to the State Ethics Commission by Mr. Smith was in February 2021. For anyone who has not seen that opinion, it is at this link.
In that request, Mr. Smith was very vague, referring only to the presence of a Council Member on the Board of a local bank that was building a new branch; and who was having work done on his home by the same builder. There is a vague reference to the “The builder is purchasing a property in the City and it is anticipated that he will have to bring this property before City Council for approval of a zoning change and/or other matters.”
The Ethics Commission was unequivocal in its assessment that “the Council Member should recuse himselffrom any matter in which the builder has an economic interest.”
Why Mr. Smith had to write in a hypothetical manner for a real issue would be up to him to explain. But since that was his approach, and the Ethics Commission was not provided any more concrete information, please correct me if I am wrong about stating the conflict of interest opinion involved Councilman Woltz. Here are the facts supporting that conclusion:
1. The only bank (constructing) a new branch at that time was Carolina Coastal Bank, at its new 322 Richland Avenue West location. Councilman Woltz is on its Board of Directors, identified as owner of Precision Tune of Aiken. (SRP was also reconstructing a branch, but no Council members are on that Board).
2. According to the city building permit, WTC of Aiken, LLC (Agent: Ray Massey) was the owner of the building, although it had sold the property to Coastal Carolina in April of 2020. Tom Wyatt signed the deed at closing on behalf of WTC of Aiken, and Mr. Smith’s partner Attorney Mary Guynn signed as closing attorney.
As you all know, “WTC” stands for Weldon (Wyatt), Tom (Wyatt), and Chip (Thomas Goforth), and is routinely used by the Wyatt family for individual investment and development LLCs. There are more than forty different WTCs associated with the Wyatts that are registered in South Carolina.
For example, WTC Laurens, LLC (agent Thomas Goforth) purchased the former City of Aiken municipal office building on Laurens Street in 2020. Weldon Wyatt himself signed the deed when WTC Laurens (re)sold the parking lot portion of that property to R&O LLC (Agent Rick Osbon) in May 2021. This is all amply documented in The Cleaners: How Aiken City Council Got Taken to the Cleaners by the Wyatt Family.
3. WTC Investments, LLC (Agent Ray Massey) was purchasing a property in the city at the time of Mr. Smith’s request for an ethics opinion: the “Anderson Property” (Newberry Hall) and “Shah Property,” (which actually consists of six properties) that are now officially owned by the AMDC. While WTC Investments never purchased those properties, it did assign the Purchase and Sale (PSA) agreements to the Aiken Chamber of Commerce, which in turn assigned the PSAs to the Aiken Municipal Development Commission.
WTC Investments business, in the form of the $10 million general obligation bond ordinance for “Parkway District” properties, did indirectly come before Council in August 2021. The bond money was used to pay for properties for which WTC Investments signed the original contracts. Council decided to pay off that bond on Monday night, the final step in a deal initiated by Weldon Wyatt’s WTC Investments in cooperation with the City’s Economic Development department and the AMDC.
So you can see the last request by Mr. Smith to the Ethics Commission for informal opinion has now opened up a new line of inquiry that keeps the dark grey skies over the Pascalis project, and the residual AMDC properties that Council is desperately trying to transfer to the City of Aiken.
Will this latest request by Mr. Smith illuminate this latest ethical quandary through specificity and clarity, or be phrased in a hypothetical manner that functions to obfuscate the situation?
From Ethics Commission letter relating an informal opinion to City of Aiken Attorney Gary Smith
(1) Comments regarding AMDC properties and assets submitted in writing to City Council during the Monday, April 10th Council Meeting
1. The language in SC Ethics Law is quite clear: “No public official, public member, or public employee may knowingly use his official office, membership, or employment to obtain an economic interest for himself, a family member, an individual with whom he is associated, or a business with which he is associated.” And, “No public official, public member, or public employee may make, participate in making, or in any way attempt to use his office, membership, or employment to influence a governmental decision in which he, a family member, an individual with whom he is associated, or a business with which he is associated has an economic interest. A public official, public member, or public employee who, in the discharge of his official responsibilities, is required to take an action or make a decision which affects an economic interest of himself, a family member, an individual with whom he is associated, or a business with which he is associated shall recuse themselves.”
SC 8-13-700 states The key word here is economic interest, which is defined as: “an interest distinct from that of the general public in a purchase, sale, lease, contract, option, or other transaction or arrangement involving property or services in which a public official, public member, or public employee may gain an economic benefit of fifty dollars or more.” Ethics Laws are anti-corruption laws, just like fire codes are fire prevention measures.
2. Members of this Aiken City Council have recused themselves for reasons as varied as
a. Working in a building next door. b. Owning property on the same street. c. Having a “friendly competitor”
d. Being the Council liason to a non profit group during disbursement of City funds to non profit groups. e. for belonging to the Kiwanis Club, although this appears to have been a joke. f. being related to somebody who had a conflict.
That is a short list.
City Attorney Gary Smith recused himself in October 2021 because a partner in his law firm was involved in the closing of a real estate deal on the property in question. This same recusal was made for the Rutland Avenue Aiken Village development in late 2022.
Councilmembers Lessie Price and Gail Diggs properly recused themselves from the Aiken Corporation contract vote on March 13 because they are on the board of the Aiken Corporation.
These are examples of good governance.
3. On both February 8 and March 8 of this year, the Aiken Corporation Executive Committee voted to pursue an economic interest in AMDC property that was paid for with city funds, and which will soon become city property. The contract between the Aiken Corporation and the City of Aiken creates a two-fold economic interest for the Aiken Corporation:
a. Up to $250,000 as the Developer in the Pre-Development stage of the proposed SRNL project.
b. As much as $500,000 to $600,000 a year in rental income from SRNL or other third parties on City property leased by the Aiken Corporation.
There can be no doubt these are economic interests.
Resignation from the Board of Directors of the Aiken Corporation does not erase the act of having voted for the contract, and having served on the Aiken Corporation until now.
Resignation from the Board only confirms that a conflict of interest was present during the first reading.
4. At the March 13th AMDC meeting, these conflicts of interest, which are real and not potential, caused this Council, as AMDC, to avoid voting on the resolution to transfer AMDC properties and assets to the City. City Attorney Smith offered the ordinance at issue today as an alternative and an end run around that vote. The purpose of this vote today is not just to dissolve the AMDC. The greater purpose is to transfer the properties.
5. City Attorney Smith is also in an ethical bind here, because his law firm was involved from the very beginning in obtaining properties that ultimately became AMDC properties:
a. Members of the firm were paid an unknown sum, at least $6000, to negotiate and prepare PSAs on behalf of Weldon Wyatt’s WTC Investments. Wyatt’s development firm GAC was the first Pascalis developer.
b. Attorney Ray Massey led an investment group that purchased properties in the Alley that were in the first Pascalis project, and property on Newbery Street that were a part of both projects.
c. SMBGM was the escrow agent for the WTC PSAs with the Shah and Andersons.
d. Attorney Mary Guynn was paid through the city’s contract with Mr Smith to conduct the title search, and worked with Mr Smith on the property assignment to the Chamber of Commerce.
e. Ray Massey and his “group,” as Tim O’Briant callled them, recruited developers for the second project, and Massey submitted a proposal on SMBGM Letterhead.
f. Gary Smith prepared the city ordinance authorizing the bond, and signed the legal opinion validating the bond issuance.
g. Ray Massey signed the PSA between RPM and the AMDC.
According to Tim O’Briant, this PSA is still exempt from FOIA disclosure because the city’s position is that until the deed is executed and the AMDC does not own the property, any release of information can provide a competitive advantage.
So once again, the only ethical path forward is to render the Aiken Corporation contract null and void, put forth a redevelopment plan, hold a real public hearing on the Pascalis properties, and start anew.
What do Aiken City Attorney Gary Smith, failed Project Pascalis, and the “appearance of a conflict” have in common? Answer: A Bond Opinionfor the $9.6 million City of Aiken debt.
by Kelly Cornelius April 8, 2023
The failure of Project Pascalis continues to plague concerned Aiken citizens as well as local officials, who are now proposing to pay the debt from the Pascalis property deals by using $9.6 million in state funds gained from the State of South Carolina’s plutonium settlement with the federal government.
The full proceedings of the general obligation bond issuance recently obtained via a Freedom of Information Act (FOIA) request (1) has revealed that embattled Aiken City Attorney Gary Smith was involved in the city’s efforts to obtain the $9.6M bond necessary for the Pascalis project property purchases. Specifically, Smith signed one of two “bond opinions” that assured the $9.6 million being borrowed under the auspices of the City of Aiken’s credit.
This involvement occurred weeks after he was reported to have recused himself via a phone call with AMDC attorney Gary Pope, Jr.; and contradicts statements made in court filings in the Blake et al vs City of Aiken et al lawsuit involving alleged illegalities during the Pascalis proceedings.
This is only the latest in a long line of appearances of conflicts for Smith associated with failed Project Pascalis, and the properties that make up the boondoggle, but it is the most troubling.
Summary of City Attorney Ethics Issues
To recap, City Attorney Smith has been the subject of lawsuits and ethics complaints regarding Project Pascalis since at least April of 2022. At the center of the controversy was the deep involvement of his law partner, Ray Massey, as a lead investor and legal agent for RPM Investment Partners, LLC; the winning developer chosen for Project Pascalis by the Aiken Municipal Development Commission (AMDC) in December of 2021.
The controversy only grew after it was discovered that RPM was selected before the public Request for Proposals was publicly advertised; that the Purchase and Sales agreement between the AMDC and RPM was for only $5 million dollars, almost half the price paid by the AMDC one month earlier; and that an invoice from Smith, Massey, Brodie, and Guynn and Mayes to WTC Investments, LLC shows the firm was involved in cobbling together the properties during the earliest phases of the project.
The “Early Juncture” and “Fall of 2021” Recusal Excuses
More than five months after announcing the first details of Project Pascalis, the AMDC finally held two public meetings on April 20, 2022. During the second meeting, I raised my concerns about the obvious conflict of interest:
“City Attorney Gary Smith sat with the City Council when they made their decision and on the 28th they made the decision to sell this property or give it away I should say. Convey it, they made that decision about Newberry street to RPM development. The only agent listed for RPM development is a Ray Massey and when you look on the website of Mr Smith’s private firm it’s Smith Massey Guynn whatever else. This is his business partner! There is no conflict of interest in this that anyone else sees but me?”
Three minutes later, meeting moderator Tim O’Briant asked Gary Pope, Jr to address the issue. Pope claimed that Gary Smith recused himself at “an early juncture” and “has been uninvolved in these matters.” Pope’s exact comments are as follows:
My name is Gary Pope. I’m with Pope Flynn. I work out of the Spartanburg and Columbia offices. I’ve typically served the city and capacity as bond counsel in connection with financings and also other special projects. At an early juncture in this project Gary Smith called me and said I believe that my partner may have, maybe proposing as part of a group for this so I’m going to recuse myself, and I need you to represent the city and the AMDC as we go through this process.
So Mr. Smith has been uninvolved in these matters and I’ve been handling them on behalf of the city so I wanted to make sure before his good name was besmirched and let the record sort of reflect that we have done things by the book the right way and didn’t want to let that pass right, didn’t want that angle, and also that the property was sold from the sellers to the AMDC which Mr. Smith I believe does not represent any capacity currently that’s that’s my role at present, so i wanted to also clarify that he’s recused himself.”
The video of his testimony can be seen here:
April 20th, 2022 AMDC evening meeting gives birth to Smith’s phone in recusal
In response to a FOIA request filed after that meeting, the city wrote the following about Smith’s purported recusal from the Pascalis proceedings:
“The City of Aiken has determined that Mr. Smith declared his recusal verbally in the Fall of 2021 when RPM, LLC’s development proposal came before the Aiken Municipal Development Commission. While no document was produced, or required, for Mr. Smith to recuse himself, an associated document responsive to your inquiry is the executed dual engagement agreement with Attorney Gary T. Pope, Jr. by and between himself, the City of Aiken and the AMDC.
“This engagement letter, dated October 14, 2021 and executed October 15, 2022 was in response to Mr. Smith’s recusal, the effect of which was replacing him as attorney of record for the City in any matter where there might be an appearance of conflict.”
The City’s FOIA response raised even more ethics issues for Mr. Smith, because:
According to South Carolina ethics laws a recusal cannot be delivered via phone, but must be written and then submitted into the public record. No record of a recusal, which would have a date stamp, was available.
Smith was on the attendance roster at a March 22, 2022, joint AMDC/ City Council closed-door, Executive Session meeting in which Project Pascalis was the only topic. Mr. Smith was there as City Attorney and billed the city 1.5 hours as part of his monthly legal work. (2)
This meeting occurred five months after Pope has his phone call with Smith and then signed his engagement letter, and five months after RPM was incorporated. Of interest, Gary Pope was also at the March 22nd meeting, held just one month before telling the April 20th audience that Smith had recused himself early on and “by the book.”
3. Smith was present and involved in (and it was broadcast) the March 28, 2022, Aiken City Council First reading to give away part of Newberry Street to RPM Development Partners. The transcript of that exchange is detailed in The Pascalis Attorneys.
Since those first vague recusal excuses were offered, more evidence has emerged:
As recently reported in In the Courts: Pascalis and the Regional Dump, Smith was paid for time advising the Design Review Board the day before their vote to demolish the historic Hotel Aiken at the request of RPM. And in The Pascalis Attorneys, Smith’s involvement in the city ordinance authorizing the $9.6 million bond is made clear.
“Ladies and Gentleman: We are Counsel….”
Now another piece of evidence has emerged: the Bond Opinion. According to the Government Finance Officer’s Association’s “Best Practices”page, bond counsel plays an essential role in ensuring the integrity of the process:
“An essential member of a government issuer’s bond financing team is bond counsel. Bond counsel not only prepares authorizing documents, disclosure documents and assists in compliance with IRS regulations, but also renders an opinion on the validity of the bond offering, the security for the offering, and whether and to what extent interest on the bonds is exempt from income and other taxation. The opinion of bond counsel provides assurance both to issuers and to investors who purchase the bonds that all legal and tax requirements relevant to the matters covered by the opinion are met.”
In response to a FOIA request for the Pope-Flynn bond opinion , the City of Aiken finally released the entire bond record, the 144-page Transcript of Proceedings; although it has still never publicly disclosed the full document.
The Pope-Flynn legal opinion for the $9,600,000 General Obligation Bond is on Page 135 of the transcript, and is signed “Pope-Flynn, LLC.” The entire law firm was behind the opinion, which begins with “Ladies and Gentleman, We have acted as Bond Counsel to the City of Aiken in connection with the above referenced bond.” (2)
On Page 132 of the transcript, Gary Smith’s legal opinion, on his firm’s letterhead, begins with “Ladies and Gentleman, We are counsel for the City of Aiken, South Carolina and have acted as such in connection with the issuance by the City of the above-referenced bond.” (below)
The letterhead, opening paragraphs, and signature from City Attorney’s Gary Smith’s General Obligation Bond Issuance legal opinion. (Click to enlarge)
Oct 25, 2021 is ten full days after Pope-Flynn signed its dual engagement letter; and it is nearly 4 months after Keith Wood, then Chair of the AMDC, raised conflict of interest concerns regarding Smith in a confidential June 10th, 2021 email. Then AMDC Executive Director Tim Obriant and City Manager Stuart Bedenbaugh were both copied on that June 2021 email.
“With respect to the allegations set forth in Paragraph 108 of the Complaint this Defendant did not provide legal counseling to the AMDC after June 2020 and does not have sufficient information or knowledge to admit or deny the allegations set forth in said Paragraph.”
Perhaps Gary Smith’s lawyer does not consider a legal opinion necessary for the AMDC to purchase the Pascalis properties as providing legal counseling to the AMDC, or perhaps Smith did not inform his counsel of this contradictory piece of evidence.
The Ethics Issue Today.
City Council was made aware of this latest conflict of interest concern during my public comment on the evening of Feb 13th, 2023, and Council responded with what has become a tradition of cricket song and deer-in-headlight stares.
Combined on that dais are the Mayor, the City attorney, and six Council Members for a total of eight at the helm of the failed Project Pascalis and the proposed Project Labscalis. Five of the eight have recused themselves for real or potential conflicts of interests at some point in time during both processes.
The only elected official to ever directly address the public’s concerns regarding Attorney Smith was Mayor Osbon, who accused Aiken area resident and businessman Drew Johnson of libel on May 9, 2022, after Mr. Johnson raised ethics concerns (see video below). Ninety minutes later, the Mayor and five council members voted to give away part of Newberry St to RPM Development Partners.
From the origins of this bond to the proposed bailout of the bond, Project Pascalis has been littered with conflicts of interest, dogged with deceit, wrapped in secrecy, and stained with the loss of public trust. The one thing City Council and the Mayor have made transparent is their disregard for citizen’s input and concerns.
Meanwhile, the historic Hotel Aiken continues to suffer from neglect , the taxpayer-funded Pascalis properties on Newberry St sit in the crosshairs of a proposed federal contractor office complex, and a “structured parking solution,” better known as a parking garage, is proposed in support of the federal contractor office complex being designed for use by the Savannah River National Laboratory.
The question yet to be answered is this: in the battle between the City’s conflicts of interest and public opinion, who will prevail in determining the fate of Aiken’s beloved downtown and the small, privately-owned downtown businesses in the crosshairs of the wrecking ball?
Footnotes:
(1) The FOIA request from Kelly Cornelius was for: “a copy of the legal opinion from Pope-Flynn as referred to on page 61 of the ordinance 8232021D 10,000,000 Parkway Bond you can find that here and the opinion I request is again referred to on page 61 in this link. https://edoc.cityofaikensc.gov/WebLink/DocView.aspx?id=1005864&dbid=0&repo=City-of-Aiken-LF Thank You.”
This document provided is 144 pages long, whereas the version released by the AMDC included only 64 pages long, and did not contain the legal opinions and several other certifications and required documents. SC FOIA law does not require public bodies to create new records, so the entire document was provided.
(2) City of Aiken legal department invoices obtained via FOIA by Don Moniak of The Aiken Chronicles show that Gary Smith billed the city 1.5 hours for the March 22, 2022 meeting on Project Pascalis. (below)
Gary Pope, Jr. billed the AMDC 5.5 hours to attend the March 22, 2022, meeting, and have a phone conversation with Tim O’Briant. The hours discrepancy is due to travel time, since Pope-Flynn’s home offices are in Spartanburg and Columbia.
MDA refers to Master Development Agreement. James Wilson was an attorney for RPM Development Partners. All told, the AMDC paid Pope ~$2500 for travel hours in March 2022.
Two dissimilar cases with one lawyer in common are in the courts this month (1). The first involves actions by the City of Aiken during the Pascalis Project; and the culpability of the city attorney. The second involves a City of Aiken sanitation truck driver—although the city is not named as a party. The information in the court record on the latter case is very limited.
As detailed in The Pascalis Attorneys, Smith’s role in the Project Pascalis saga relates to his failure to recuse himself from the project proceedings due to conflicts of interest; as his legal partner Ray Massey was deeply involved with the $100 million plus downtown demolition and redevelopment project from its earliest stages through its cancellation in late September, 2022.
In the the Plaintiff’s April Memorandum in Opposition to dismissing Smith, they argue that Smith is a “proper, if not necessary party,” because:
“In this case, the City and its boards have been alleged to have failed in properly recording a conflict of interest involving its City Attorney, Gary Smith. The duty to disclose is certainly the City’s, but Gary Smith is the subject of that alleged conflict of interest and so is affected by the declaration and should be joined, under the provisions of the Declaratory Judgment Act. In fact, if he was not named, one would think he would seek to intervene under Rule 24(a), SCRCP, so that he could protect his interests in this adjudication involving his alleged conflict of interest.”
Among the claims made in both answers, Smith denied involvement in the City of Aiken’s Design Review Board (DRB) process that led to the Board’s March 1, 2022, decision to permit the demolition of the Beckman Buiding at 106 Laurens Street, home to three existing businesses, and the vacant Hotel Aiken. Mr. Smith’s law partner Ray Massey was an investor in, and represented, the applicant, RPM Development Parters, LLC, for that demolition request. Both properties were owned by the Aiken Municipal Development Commission (AMDC).
In paragraph 56 of his latest answer, Mr. Smith’s counsel wrote:
“This Defendant affirmatively states that he has not provided legal counseling to the DRB as part of its consideration of any aspect of the Project, and is without sufficient information or knowledge to admit or deny the specific allegations regarding any actions taken by the DRB with respect to the Project.”
However, Mr. Smith’s billing invoice (below) to the City for work in February 2022 shows that on February 28, 2022, the day before the DRB approved demolition request for the Hotel Aiken “and associated shops,” Mr. Smith likely advised DRB Chair McDonald Law and then City Planner and DRB staff liason, Mary Tilton on the demolition request.
As reported in Why is the City of Aiken Toying with 113 Downtown Jobs, Mr. Law exchanged numerous ex-parte, back-channel communications with AMDC director Tim O’Briant regarding Project Pascalis, including one in which Chairman Law thanked Mr. O’Briant for guiding the process along. Ms. Tilton was cc’ed on most of those emails, none of which entered the “quasi-judicial” DRB public record.
Although redacted, the timing of the meeting strongly suggests research into the legality of the demolition request.
Billing invoice from Smith, Massey, Guynn, Brodie, and Mayes for Gary Smith’s work in his capacity as Aiken City Attorney in February 2022. The estimate of the redacted content for Feburary 28, 2022 is in the red box. The redactions were made by city officials AFTER a Freedom of Information Act (FOIA) request (from myself, Donald Moniak) for legal invoices was completed, which delayed the FOIA response, arguably in violation of state FOIA law, by more than two weeks. Many, if not most, of the redacted content can be inferred through other public records. For example, at the time the City of Aiken was involved in litigation with Jane and Mark Thompson that challenged the City’s road maintenance fee. Attorney Andrew Lindemannn represented the City in that case, and Eric Shytle is a Municipal Association of South Carolina (MASC) lawyer.
“Board Member Knowles expressed her concern that the application for demolition should come before the DRB along with an application for the final plan for replacing the structure to be in compliance with the Old Aiken Design Guidelines.
Planner Mary Tilton informed the Board that 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.’”
That legal interpretation was not introduced during the actual demolition hearing. This is typical protocol for City of Aiken “work sessions,” where important matters are often discussed without introducing the discussion into the formal, public, on-air record.
City Attorney Gary Smith was absent from both the work session and the meeting; and did not provide the Board any backup, conflict-free, legal counsel. Instead, Ms. Tilton presented the legal case; contrary to standard Planning Department practices of deferring legal questions to the legal department.
For example, on June 27, 2022, Planning Director Marya Moultrie expressed a need for a legal opinion during Aiken City Council’s public hearing on a rezoning request. Council then entered Executive Session to accept advice from City Attorney Smith. That discussion that led into Executive Session is at 1:19 :00 of the meeting video. During that discussion, Planning Director Moultrie stated:
“I think we’re getting possibly a question for a legal question right yeah and I don’t want to get into that.”
The Regional Dump Case
On the jury roster for the week of April 17-21 is a case involving a plaintiff who suffered an injury while driving a City of Aiken garbage truck, the regional solid waste authority that serves Aiken County and its municipalities, and the law firm that routinely represents local government entities.
In Harris and Harris vs Three Rivers Solid Waste Authority, the plaintiffs alleged in their summons and complaint that “on or about February 19, 2020,” Plaintiff Michelle Harris had driven a City of Aiken sanitation truck to the regional Three Rivers Solid Waste Authority landfill within the Department of Energy’s Savannah River Site (SRS).
The 1400-acre dump has been operating since 1998, and accepts disposal of municipal solid waste, commercial waste, and industrial waste from nine member counties and SRS.
On the day in question, the plaintiffs allege that an unidentified driver of a large waste truck owned by the Defendant Three Rivers knocked the city’s truck on its side while it was the landfill, stating the landfill’s operator:
“ Without consent, directed and instructed Plaintiff Michelle Harris to keep her vehicle stopped as he unreasonably attempted to remove waste products from (her) vehicle causing her vehicle to capsize or tilt over on its side by striking her vehicle in the process and caused a collision that resulted in personal injuries.”
No exhibits such as an accident report are in the available court records.
The defense for Three Rivers, represented by professional government- defense lawyer David Morrison of Columbia (who also represents the AMDC in the Pascalis lawsuit) denied all allegations, but implicitly acknowledged harm by putting forth the standard argument that the plaintiff was more at fault than the defendant.
Morrison also argued that the City of Aiken employee was violating unspecified landfill rules:
“The Defendant was not negligent, not vicariously liable, and has no institutional liability because the Plaintiff’s wrongful actions in driving her truck improperly on the landfill created an emergency situation where she required emergency care from the Defendant’s employees at the landfill and the Plaintiff’s claim arises out of the emergency care the agents of the Defendant administered. As such the Defendant is protected from suit under the Good Samaritan defense pursuant to S.C. Code Ann. § 15-1-310.”
The case is on the Jury Roster for Judge Clyburn’s docket the week of April 17-21, 2021.
Tag-Team Legal Research and the Do It Right! Alliance Petition
by Don Moniak Updated February 25, 2023.
According to legal department invoices (1), in May of 2022 the City of Aiken spent at least $4,147.50 on legal fees to address the threat of a citizen-led petition aimed at defeating key elements of Project Pascalis. Two outside, contract lawyers from Columbia and the Upstate billed the city 16.5 hours to conduct research into the legal issues surrounding the Do It Right! Alliance petition drive that began on May 11, 2022. When the attorneys were conferencing and comparing notes, the City of Aiken paid more than $500 per hour collectively on legal fees.
Table 1: Attorney Fees to “Research SC Initiative and Referendum Laws on Pending Petition
Attorney
Hours Billed
Rate/Hour
Billing
Daniel Plyler
6.2
$250
$1550.00
Melissa Seagar (Paralegal)
1.5
$100
$150.00
James Holley
8.9
$275
$2447.50
Exerting “Political Clout”: The Petition Begins
On May 9, 2022, Aiken City Council voted 6-1 to approve privatizing a portion of publicly-owned Newberry Street. The recipient of Council’s largesse was the consortium known as RPM Development Partners, which at the time was the private half of the public-private partnership known as Project Pascalis. The official public half was the Aiken Municipal Development Commmission (AMDC).
The vote was a tipping point for the increasingly controversial downtown demolition and redevelopment effort. Two days later more than one hundred people gathered on the lawn of a private home in Aiken to attend the first organizing meeting of a grassroots group called the Do It Right! Alliance. “Charm, Not Chaos,” was announced that day as a slogan that would eventually find its way onto hundreds of protest signs around town.
The meeting was spread by word of mouth, but was open to all citizens and local media. A seven-page handout was openly available that succinctly presented the case that Project Pascalis was both the wrong approach for downtown Aiken, and was unlawful. In regard to the law, among the key points in support of litigation, and reiterated by Aiken resident and organizer Luis Rinaldini were that:
RPM was not selected properly as a developer.
City Ordinance required the Design Review Board to deny the demolition request for the vacant Hotel Aiken and the occupied Beckman Building at 106 Laurens Street.
The AMDC was not acting according to an approved plan.
Numerous conflicts of interest had not been addressed
While litigation was one goal, Rinaldini presented the newfound group’s three-prong strategy for defeating Project Pascalis. At the top of the list was a citizen petition, followed by “create good alternatives,” and litigation. A petition offering ordinances to “Overturn or Undo what the City is doing” was presented as the means to project “Political Clout.”
From the Do It Right Alliance May 11th handout. Notes that day indicate the orginal goal of the petition was 2500 signatures, which in retrospect was an underestimate of the city’s electorate.
The Do It Right petition, complete and ready for signatures, was introduced and volunteer petitioners were sought. The basis for the petition was a seldom used state law titled “Initiative and Referendum.”
Section 5-17-10 of South Carolina State law permits the proposal of ordinances via petition of at least fifteen percent of the registered voters of any municipality:
“The electors of a municipality may propose any ordinance, except an ordinance appropriating money or authorizing the levy of taxes. Any initiated ordinance may be submitted to the council by a petition signed by qualified electors of the municipality equal in number to at least fifteen percent of the registered voters at the last regular municipal election and certified by the municipal election commission as being in accordance with the provisions of this section.”
If a City Council fails to act on a petition, or institutes an ordinance “substantially different from that set forth in the petition,” then Section 5-17-30 mandated a referendum within one year.
The Do It Right! Alliance petition (3) proposed not one ordinance, but four:
1. Prohibit the closing of any part of Newberry Street and any intrusion into Newberry Street/Parkways. 2. Require the city and its commissions and boards to “follow the requirements of the City’s Old Aiken Master Plan and the Old Aiken Design Guidelines. 3. Require the city to “take all necessary steps to grant landmark status to the Johnson Pharmacy, the Hotel Aiken, and the historic 19th century orginal street grid of the city.” 4. Abolish the AMDC and transfer its real property and any other assets to the City of Aiken.
In the next four months, volunteer petitioners would gather an estimated 3,000 signatures of City of Aiken registered voters; working through the heat of a typically hot, humid, sweltering South Carolina summer. The petitioners set up booths at events, outside of supporting businesses, and canvassed door-to-door.
Do It Right! Alliance Volunteers at a Highlands Music Festival event in Summer 2022.
The City’s Response: Hire More Lawyers
The “political clout” message was prescient. Although conducted in secret at the time, the immediate unofficial response to the petition was to assign two contract lawyers to the case, Daniel Plyler and James Holly.
Coincidental with the May 11th Do It Right! meeting, the City of Aiken retained Columbia, SC based law firm Smith Robinson Holler DuBose and Morgan, LLC as a “Special Counsel,” with attorney Daniel Plyler named as the “primary” legal representation. Although the Smith Robinson et al agreement (1) did not specify Project Pascalis as Plyler’s primary role, the belated removal of City Attorney Gary Smith from all involvement in the project was obviously the key motivating factor for obtaining additional outside counsel.
James Holly, a former Aiken City Attorney who is now based in Landrum, had already been retained on April 27, 2022, to represent the city’s Design Review Board; a move also made in large part due to conflicts of interest held by City Attorney Smith. Holly’s agreement with the city also included other tasks as requested.
Smith Robinson et al and Holly collectively devoted 16.5 hours to the research effort, reviewing court decisions, attorney general opinions, and other relevant material. After a week of separate research, attorneys Plyler and Holly conferenced, compared notes, and eventually prepared their findings for City Manager Stuart Bedenbaugh.
A portion of Attorney James Holly’s May 2022 invoice for Project Pascalis related work.
The findings of the two attorneys have not been disclosed. But various opinions from the Attorney General’s office regarding the law have been issued in response to nervous municipal leaders since the late 1970’s. In general, the AG’s office has opined that the petition and referendum law cannot be used to override zoning ordinances, but other ordinances are fair game. For example, a 1978 opinion informed then City of Lancaster Councilwoman Sarah Rivelin that petitions are not “merely advisory.”
If the attorneys were scanning current and past events, they also would have learned the petition and referendum tactic is popular in Folly Beach, SC. For example a petition in 2006 residents petitioned to change the height ordinance, an effort that led to an AG opinion that such an action conflicted with state zoning laws. Most recently, a petition to cap short-term rental licenses achieved a 25 percent signature rate; and following a denial by Folly Beach City Council it will head to a referendum.
1978 Attorney General’s office opinion regarding SC 5-17-10 and 5-17-30.
The Status of the Petition
According to petition organizers, the true number of necessary signatures for any petition is currently close to 4,000, signifcantly greater than the original 2500-3000 estimates. Even though the original goals were achieved but the count remained short, political clout was realized and strengthened after litigation was pursued nearly two months after the petition was launched and volunteers had laid foundational supports. The petition drive functioned as the alliance’s primary educational tool, and the lawsuit followed as another legal tool.
The effort to gain more signatures waned as the city began to cede ground. First, Project Pascalis was cancelled by the developers and the AMDC in September 2022, although some confusion over the real project status lingered. Then, Aiken City Council repealed the Newberry Street privatization ordinance in November 2022. In mid-January 2023, Council expressed its intent to transfer AMDC properties to the city and probably dissolve the commission. Finally, during the January 2023 “State of the City” address, Mayor Rick Osbon announced that an open, legal Request for Proposals for renovation or replacement of the Hotel Aiken would be forthcoming.
Since petition item number two is essentially an ordinance to require the city to obey its own ordinances, the only remaining proposed ordinance involves the landmark status for the historic grid, the CC Johnson Drug Store, and the Hotel Aiken. Whether the “political clout” achieved by the petition will compel city leaders to move forward on those demands remains an open question.
There is no plan to submit the petition to the city’s election commission. The Do It Right! Alliance, which was never formalized as an organization on paper, perserveres as an idea and a vision, with its most concrete representation being an open Facebook Group.
How Much is $4147.50?
During the summer of 2022, the city’s Smith-Hazel Park swimming pool suffered numerous shut downs to the lack of lifeguards. At the time, the city was paying its lifeguards $9.50 per hour, while other pools were paying their lifeguards $2 to $4 more per hour. If lifeguards were paid $15/hr, the minimum wage for city workers advocated by City Councilwoman Lessie Price, the legal fees could have covered seven weeks of a lifeguard’s wages, or nearly 280 hours.
The money spent left the Aiken area, and benefitted the economies of Columbia and Landrum, SC.
(Disclosure: Don Moniak is a frequent contributor to the Do It Right FB page and supported the informal group’s goals that helped contribute to the demise of Project Pascalis, Part II. ) “ (Updated February 25th to identify the home base of the contract attorneys and to credit local businesses with hosting petitions).
Footnotes
(1) Legal invoices were obtained via a September 2022, Freedom of Information Act request for all City of Aiken legal department invoices submitted in Calendary Years 2021 and 20222.
The invoices were redacted under a claim of “attorney-client” privilege. The fallacy of the city’s claim is exposed in The AMDC’s Most Inane Legal Bill?
Jim Holly’s invoice can be seen here Smith Morrison et al’s invoice can be seen here.
(2) The Daniel Plyler and James Holly agreements with the City of Aiken were obtained by Aiken area resident Kelly Cornelius via FOIA requests.
