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…”
Project Pascalis was an epic failure on the part of Aiken City officials. To quote Aiken resident Lisa Smith in a recent interview with WFXG-Fox News’ Lauren Young: “It went down in a flaming ball.”
Concerned Aiken citizens actually shot it down by packing public forums, writing letters to the editor, organizing a petition drive, posting anti-Pascalis yard signs across the city, and filing lawsuits and ethics complaints.
An anti-Project Pascalis protest sign, August 2022. . (Photo by Lisa Smith)
The failed Project Pascalis was also a hot topic at a recent Mayoral Forum where, according to the Aiken Standard, Mayor Osbon said the project “got too big.” During the discussion the Mayor distanced himself from any responsibility in the project, other than to say “it was good for the city to control something so important” as the Hotel Aiken. (32-34 minute mark).
As the Mayor’s race heats up down the stretch, the fate of several small businesses on the Pascalis properties remains uncertain, and the historic Hotel Aiken in that too-big $9.6 million investment continues to stand neglected, deteriorating, hollow, and vacant, Mayor Osbon’s leadership role in Project Pascalis warrants renewed scrutiny.
While Project Pascalis was presented to the public as the brainchild of the now-dissolved Aiken Municipal Development Commission (AMDC), public records show Mayor Rick Osbon was involved from inception to implosion, and the size of the project reflected his vision for downtown Aiken.
Timeline of Mayoral Involvement in Project Pascalis
March 17th, 2021:Project Pascalis was announced. (Among the details that would remain secret for more than eight months was that Aiken Attorney Ray Massey had helped negotiate and prepare contracts for what would become the Project Pascalis properties. Massey, who is one of Aiken City Attorney Gary Smith’s law partners, was working on behalf of WTC Investments, LLC.)
March 22nd, 2021: Aiken City Council unanimously approved Resolution 3222021B, which adopted the City of Aiken Master Economic Development Plan,also known as “The AECOM Plan.” The Plan authorized the AMDC to, in part, acquire property and execute contracts for clearance and preparation of land for resale. Mayor Osbon presided over the meeting.
March 29th, 2021: Mayor Osbon sent a letter to the Aiken Municipal Development Commission (AMDC), following through on Council’s March 22nd resolution. Mayor Osbon’s letter outlined an action plan that also described the just announced, though still secretive, very large Project Pascalis:
A conference center with a capacity for 500 people and “first class lodging” to accommodate that many attendees.
Government intervention to assist in redeveloping the Hotel Aiken property.
Consolidating “sufficient” private property to “create more urban-scale residential condo and apartment inventory within the downtown area.”
A parking garage, or “structured parking solution,” in support of the proposed redevelopment.
The entire letter can be viewed here. Note that the cost-sharing agreement between the AMDC and the developer was already signed some four days before the Mayor sent the letter.
April 13th, 2021: The AMDC held its monthly meeting. According to the meeting minutes, Commission Chairman Keith Wood cited the Mayor’s action items and the AECOM plan as AMDC guiding documents:
“Mr. Wood asked the Commission members to look at the five key areas that the Mayor noted. He pointed out that those five items are where the MDC’s efforts should be. He pointed out that funds from the $200,000 from the City (to the Commission) would be allocated for some of these five items. He pointed out that tying the Mayor’s letter with the five key areas in the letter and the document adopted as the Strategic Plan gives a clear vision as to where the MDC’s focus should be. He said he wanted to call this to the attention of the MDC members.”
Again, the AMDC had already signed the cost sharing agreement with GAC, LLC nineteen days earlier. Two weeks after the AMDC meeting, Weldon Wyatt backed out of the arrangement, and the first version of Project Pascalis collapsed.
May 3rd, 2021: According to an AMDC memo entitled “recent deal flow notes,” Mayor Osbon met with Weldon Wyatt, (who was associated with both GAC, LLC and WTC Investments, LLC) about the future of the project and the Pascalis properties that were under contract to WTC. (Three weeks later the Aiken Chamber of Commerce would take assignment of the properties in order to hold options for the AMDC to later purchase the properties, and the AMDC began to pursue a new developer.)
August 9th/ August 23 2021: The first and second readings for a bond ordinance was unanimously approved by City Council to obtain the $9.6M bond, which eventually enabled the AMDC to purchase the Pascalis Properties. Mayor Osbon presided over both hearings, voted to approve the bond, and signed the ordinance.
Sept 22, 2021: The Mayor attended an AMDC “Meeting” at Vic’s (Victors Restaurant, a fine dining establishment in Hotel Florence) in Florence, SC. Also in attendance were Attorney Ray Massey, (who, recall, had already cobbled together and had under contract the Pascalis properties for WTC Investments, LLC) and Raines Group members who would soon comprise, along with Massey, the RPM Development Partners group awarded the chosen developer for Project Pascalis on Dec 3rd, 2021.
November 3rd, 2021: The Mayor signed the paperwork to issue the $9.6 million bond for the Pascalis Properties to be purchased by the AMDC.
Dec 3rd, 2021: RPM Development Partners, LLC was announced as the chosen developer for Project Pascalis. This occurredbefore the required RFP (request for proposals) had even been put out. As later revealed in the Aiken Chronicles, the contract with this winning developer (represented by the City Attorney’s law Partner Ray Massey) was for nearly $ 5 Million less than city taxpayers paid for it a mere 24 days earlier when the AMDC via the city bond purchased the properties. (Nov 10th, 2021).
January 4th, 2022: Some of those very same “Vic’s” attendees, including Mayor Osbon, dined at Aiken’s swanky steak joint, Prime Steakhouse. Officials charged taxpayers the $620.49 cost for their top-shelf get-together. The dinner was the final touch to a day of private “influencer meetings.”
Feb 25th, 2022 An invoice from Capstone Services named Mayor Osbon as a Project Pascalis meeting attendee. The invoice also lists AMDC Executive Committee members as present, however, there is no mention of this meeting to be found among the minutes or agendas on the city’s website.
March 28th, 2022and May 9th, 2022: Mayor Osbon presided over both votes to give RPM Development Partners a portion of Newberry Street for Project Pascalis; and then signed the ordinance. (Later, in November 2022, and after much public backlash, City Council took back Newberry St from the would-be developer).
July 26, 2022: In a letter to Aiken Historic Foundation (HAF) president Linda Johnson, then-chair Keith Wood of the now-dissolved AMDC wrote, in part, that the commission first pursued the purchase of the Hotel Aiken, and those properties adjacent to it, at the behest of the Aiken City Council. (There is no documentation of this decision in City of Aiken records.)
Feb 13, 2023: Ordinance 02132023B was approved. Aiken City Council, including the Mayor, voted to take over the AMDC—which also made them the landlord of Warneke Cleaners. Below is a portion of that ordinance — the flaming ball portion.
May 8th, 2023: Mayor Osbon presided over the final vote to dissolve the embattled and now-failed AMDC, which made the City the landlord of the Project Pascalis properties, including the parcel on which Warneke Cleaners sits atop as a long-time tenant.
Summary
From inception to flaming freefall, Mayor Osbon was involved in Project Pascalis. While he sometimes recused or distanced himself — as occurred with fanfare during the January 2023 announcement of the proposed downtown Savannah River National Laboratory office building, the latest incarnation of Project Pascalis — the Mayor participated in the now-failed project at quite essential times.
Project Pascalis “grew large” “and got too big” because the AMDC followed Mayor Osbon’s guidance and vision. If the project had proceeded and succeeded, the Mayor would have embraced it as his legacy. One year after the project failure, Mayor Osbon has chosen to distance himself from any Project Pascalis leadership role.
The proposal to demolish the historic Warneke Cleaners building and move the business to another nearby location on Richland Avenue was announced at the January 23, 2023 State of the City Address by Mayor Pro Tem Ed Woltz. The viability of this proposal appears to lack validity under the City’s Zoning Ordinance, which prohibits light industrial uses such as dry cleaners in the downtown business district.
From: Donald Moniak Date: Tue, Apr 18, 2023 at 8:59 AM Subject: More questions. To: National Lab Aiken Project
“Mr. Jacobs,
Some more questions for your “feasibilty study.”
1. What is the status of the first report compared to the timeline provided on February 6th?
2. Why has there been no website established to solicit information, questions, and comments?
3. In regard to Warneke’s Cleaners, the initial report from COA was that it would be relocated to another nearby downtown location. How can a dry cleaner be relocated when dry cleaning is a prohibited use in the downtown district; and the two that exist now are allowed only as a nonconforming use?
1. City Councilman Ed Woltz is on the record as having said :
“The plan is to preserve the existing businesses on the Block leaving Newbury Hall untouched, relocate Warneke Cleaners to the buildings at front of Richland Avenue. These retail buildings on Richland Avenue will be renting and upgraded as part of the project and the Thai [Taj Aiken, which features Indian cuisine] restaurant would remain on Richland Avenue.”
2. However, the current zoning ordinance does not provide for dry cleaners as a permitted use in the downtown business district. Dry cleaners qualify as light industrial due to their status as a polluting entity. ”
Section 3.2.6(c)(2) of the COA Zoning Ordinance identifies dry cleaners as a light industrial use.
Light industrial use is prohibited in the downtown business district
Under Section 8.1.4, Nonconforming uses, the ordinance reads:
“Any use lawfully existing at the time of enactment of this Ordinance may be continued even though it does not conform with the provisions of this Ordinance for the District in which it is located. Similarly, whenever a text amendment or rezoning renders a use nonconforming, any existing lawful use may be continued. However, no building or structure or premises where a nonconforming use has ceased for more than 12 months, or has changed to a permitted or conforming use, shall again be used in a nonconforming manner.”
So how can Warneke’s be relocated within the downtown, as promised by City Council, when dry cleaners cannot be established downtown? Who was going to pay for this very expensive move even if it was allowed?
4. Are Warneke’s and Taj Restaurant being offered the opportunity to purchase their own buildings and property, much like Newberry Hall had that option in their previous lease?
How Three Pages in a $250,000 No-Bid City of Aiken Agreement with the Aiken Corporation Were Missing from the Publicly Available Version.
by Don Moniak May 13, 2023
On March 13, 2023, Aiken City Council approved a $250,000, no-bid professional services contract with the Aiken Corporation.
The contract authorized the architectural firm of McMillan Pazdan and Smith (MPS) to pursue predevelopment work, under the supervision of the Aiken Corporation, for a proposed downtown Savannah River National Laboratory (SRNL) “Workforce Development” office complex. The proposed complex involves four properties originally obtained in 2021 by the Aiken Municipal Development Commission (AMDC)as the core properties in the failed Pascalis project.
The March 13th agreement cited a separate December 9th contract agreement between MPS and Aiken Corporation. Section E of the March 13th contract specifies:
“The parties acknowledge that the City previously contacted the Developer with the goal of having the Developer engage various experts to perform certain services. Pursuant to that request, the Developer entered into an Engagement Agreement with McMillan Pazdan Smith ( hereafter ” MPS”) dated December 9, 2022, a copy of. which is attached hereto and made a part of this Agreement.”
The December 9th agreement also contained provisions not found in the first eleven pages of the March 13th contract, and not divulged during the only public meeting to date. Specifically, the December 9th contract referenced scheduling a series of private meetings, and the Aiken Corporation both overseeing the construction phase and eventually owning the facility. (The December 9th contract is on pages 12-14 here.)
This is the second significant document pertaining to the SRNL project that had to be obtained via a Freedom of Information Act (FOIA) request. (1) As reported in Project Labscalis Operating Costs, the city’s “Savannah River Litigation Settlement Fund Request” described an undisclosed, $250,000 annual maintenance and labor cost to be borne by the city.
The Incomplete March 13th Professional Services Contract
On March 13, 2023, Aiken City Council approved a no-bid “Professional Services Agreement” (2) with the Aiken Corporation (3) worth up to $250,000. In it, Aiken Corporation is defined as “the developer.”
The funding is for “pre-development work” by the architectural firm of McMillan, Pazdan, and Smith (MPS). The agreement specifies that a 45,000 square foot, three-story “Workforce Development Center” for the Savannah River National Laboratory (SRNL) will be built.
The planned location identified for the downtown lab project was identified as four properties that were formerly part of the failed Pascalis project (4), and purchased by the AMDC in November 2021. The AMDC was dissolved on May 8, 2023; with its assets and properties now defaulting to city ownership.
The contract includes a provision for the Aiken Corporation to pursue negotiations to lease properties—still owned by the AMDC—to unidentified “third parties” such as SRNL. If Aiken Corporation owns or is a long-term leaseholder of the project buildings, it could collect more than $5 million in rental revenues in the first ten years of facility operations. (5)
Missing from the March 13th agreement was a December 9, 2022 agreement between the Aiken Corporation and MPS that was referenced three times as part of the larger agreement.
The December 9th agreement turned out to be three pages at the end of a fourteen page contract. The publicly available meeting agenda packet only provided the first eleven pages, and the March 13th agreement was approved in spite of the missing three pages.
During public comment preceding the vote to approve the March 13th contract, the fact that provisions appeared to be missing was conveyed to Council, but no explanation for the absence was forthcoming.
The December 9th Contract Between Aiken Corporation and MPS
The December 9th agreement consists of a “Letter of Engagement” written by MPS “Principal” K.J. Jacobs on November 30, 2022, and signed by Aiken Corporation Board Chairman Arthur “Buzz” Rich on December 9, 2022.
The letter began with a project summary with specificity on size, shape, and location:
“Thank you for the opportunity to provide this proposal related to your proposed new, mixed-use building in downtown Aiken. We understand the proposed site is an +/- 0.55 acre, T-Shaped parcel bounded by Richland Avenue NW, Newberry Street NW, and Bee Lane. The project, which will be constructed and owned by the Aiken Corporation, is conceptualized as a mixed-use building containing 30,000 square feet of office space and a 10,000-15,000 square foot exhibition hall with associated meeting and support spaces.”
The original agreement between MPS and Aiken Corporation contains provisions not found in the incomplete, March 13th version provided to Council and the public.
First, it describes Aiken Corporation as both the developer during the construction phase, and the owner of the lab project properties. Whether this ownership would be outright or in the form of a long-term “ground lease” was not clarified.(5)
Second, it contained reference to a series of closed-door planning sessions with select “key stakeholders” that are never identified, a pattern reminiscent of the Project Pascalis invitation-only “influencer meetings.”
These meetings include:
“An intensive charette with key stakeholders to identify goals (and) confirm the scope of work and project schedule. These sessions will be conducted on-site so that we can facilitate meetings with various stakeholders with minimal disruption.”
“A handful of more detailed programming interviews with small groups of key project stakeholders.”
“A brief wrap-up with the leadership team to summarize our findings.” “Findings of the Programming Sessions…will be shared with the project leadership team for their review, comment, and approval.”
The March 13th contract approval was preceded by a series of events (6) that included a well-attended February 6th public forum—announced on January 28th as a City of Aiken event.
The forum was moderated by Aiken Corporation contractor representative K.J. Jacobs, who later described it as a “listening session.” The existence of the December 9th contract between MPS and Aiken Corp, and the scope of work described in it, was not disclosed during the meeting.
In fact, a slide showing a “Feasibility Study Milestone Schedule” omitted the timeline prior to the project announcement, and any private, closed-door meetings—although Mr. Jacobs did state the “report will be given to the City, the National Laboratory, and I suspect it’ll be made publicly available.” (19 minute mark of meeting)
Feasibility Study schedule presented on February 6, 2023. Unless it has not been made public, the preliminary study is now a month overdue. The final report and second public input session is now two weeks overdue.
During the forum, MPS created the impression that building size, shape, and location were yet to be determined:
“We have not been retained to design a building. We’ve not yet designed a building. We’ve done almost nothing so far okay. What we’re here to do what we’ve been hired to do is to do what amounts to a feasibility study to understand all of the opportunities and constraints around the Savannah River National Labs desire to build a new building downtown.”
“I’ve read a few things where it sounds like all the puzzle pieces have already (been decided),. This person’s moving here, this building’s getting torn down. Y’all none of that’s been decided, okay. Someone may have said that, but it’s really people just starting to talk and think about what what might happen. Nothing is going to be decided until we get to the end of this process and are able to put put these things together and find out what makes the most sense for the city of Aiken and the citizens of Aiken, the constituents, all the stakeholders, and the folks at the lab that are the reason we’re here in the first place .” (emphasis added)
In regards to the size of the building, “speculation is completely premature.”
“Only after (the) final report is issued does any real site planning whether it’s on this site or another site does any of that start. Then we’ll then we’ll have what is traditional site planning and blocking and stacking exercise where we start to understand how the program for the building might fit onto this site or another site. “
During Aiken City Council’s May 8, 2023 public meeting (19:00 mark), the missing December 9th contract provision was submitted to Council. No council members commented about its existence or its absence from the publicly available March 13th agreement.
Summary
Aiken City Council approved a resolution on March 13th to accept a no-bid $250,000 agreement with the Aiken Corporation that defined the latter as the “The Developer.” The agreement also authorized Aiken Corporation to negotiate leases with third parties.
Missing from the publicly available March 13th agreement a three-page, December 9, 2022, agreement between Aiken Corp and MPS that was incorporated into the legal agreement. It described Aiken Corporation as the future owner of the SRNL facility. The three-page agreement withheld from citizen review and scrutiny was only disclosed via a FOIA request.
The December 9th agreement contains provisions for private meetings of “key stakeholders” that were not conveyed during a February 6th public forum. In addition, forum attendees were told several times that no decision had been made on the size, shape, and location of the facility.
Like Project Pascalis, deliberations for the SRNL project began in secrecy and continued in secrecy for more than a year, ultimately resulting in a decision to locate it on Pascalis project properties following the failure of that $100 million project—thus the hybrid moniker of “Project Labscalis.”
Like Project Pascalis, “key stakeholders” do not appear to include the general public. Like Project Pascalis, it appears that public input will be restricted to the aesthetics of the project, and not its location, size, or shape. One way of describing this now common scenario is that “key stakeholders” choose the menu for the planning table, while the general public only gets to select the salad dressing.
Footnotes
(Footnote 1). The fact that the missing December 9th document was cited in the March 13th contract means the city was legally obligated to provide it in the absence of a FOIA request. However, a FOIA request was necessary after officials declined to provide it, and then it took more than a month to obtain— the request was filed on March 22nd following a failed attempt to obtain it via a simple request.
The request was not addressed April 5th—the statutory ten-day business day limit to respond. The first response was accompanied by a $593.99 bill (below) involving 11 hours of undefined “Economic Development” time at $48 per hour.
Initial $593.99 bill for a FOIA request involving fewer than ten short documents. After the only searchable item was removed the three page, December 9th contract was provided at no cost—-as mandated under FOIA for any records that are cited in any public meeting or meeting agenda packet for the previous six months.
The requested information was:
“Pertaining to the Professional Services Agreement with the Aiken Corporation approved by City Council on 3/13/23, as found in cityofaikensc.gov/cca :
a. Copies of the request or requests from the City of Aiken to Aiken Corporation, as reported in this statement in Section E of the agreement: “The parties acknowledge that the City previously contacted the Developer with the goal of having the Developer engage various experts to perform certain services.” This would include any emails to the Aiken Corporation’s Arthur “Buzz” Rich from any account from cityofsc.govduring the period September 29, 2022 to December 10, 2022.
b. The copy of the 12/9/22 agreement between Aiken Corporation and MPS referenced in that same paragraph.
c. A copy of the MPS document dated 2/27/23 referenced in the same paragraph.
d. A copy of the MPS engagement letter of 11/30/22 referenced in Exhibit A Part iv.
e. A copy of any draft lease agreement between City of Aiken and Aiken Corporation for properties cited in the agreement.”
Following receipt of the $599.93 bill, the request was modified to remove item (a). That left only items 2-5, suggesting the bill was primarily related to Item (a.)
On April 28th, the three-page, December 9th Aiken Corporation/MPS contract was provided, without any costs, by City Solicitor and FOIA officer Laura Jordan; with this accompanying statement:
“The attached agreement has all documents that you are looking for. The last three pages are on MPS letterhead and that is the Execution Agreement mentioned dated 12/9/22. The other document on MPS letterhead dated 3/8/2023 is actually the February 27, 2023 document. The wrong dates (were) used in the agreement.”
The $593 bill was for a several documents. After One was provided at no cost and one did not yet exist (lease agreement); meaning the $593 bill was for what is likely only a few records pertaining to the City’s initial contact with the Aiken Corporation.
Footnote (2) The “Professional Services Contract” provided to City Council on March 13th only included the first eleven pages in the document provided here. Three pages were missing. The city’s 250,000, no-bid contract with the Aiken Corporation includes frequent references to the Aiken Corporation as the “The Developer.” As already stated, the December 9, 2022 Aiken Corporation agreement with MPS was incorporated into the contract.
According to Pages 6-7, $75,000 is initially dedicated to paying MPS, via Aiken Corporation, to conduct public relations work. Among the provisions in the March 13th contract are requirements for MPS to:
Develop a strategic communications plan to identify a guiding strategy for the project.
Provide guidance to Aiken Corporation on website revisions.
Assist Aiken Corporation in the execution of communications plans.
Monitor project-specific email account to assist Aiken Corporation in accepting feedback, and providing appropriate comments back to members of the public
Graphic design services to help develop a project brand.
Footnote (3). The Aiken Corporation is a nonprofit organization created by, and serving at the discretion of, Aiken City Council; but acts in an independent manner. Its primary donor is the City of Aiken. Such an arrangement is known as “quasi-governmental.” All publicly available information can be found here in the City of Aiken’s document repository.
Footnote (4) The proposed location for the facility involves four to five properties on 0.55 acres of land. The properties were purchased by the Aiken Municipal Development Commission (AMDC) in November 2021 as part of a larger $9.5 million real estate deal that formed the demolition and redevelopment zone for the failed, $100 million plus Pascalis project, the latter of which also involved the Aiken Chamber of Commerce and developer and property-broker Weldon Wyatt.
The AMDC was dissolved by City Council on May 8th, meaning the properties will soon be conveyed by default to the city.
Specifically, the properties involved are:
The Holley House Motel, adjacent to the Hotel Aiken, which is inhabited only by a City of Aiken Public Safety fire cadet acting as a part-time monitor of vacant Pascalis project properties
The popular Taj Aiken restaurant that serves an authentic Indian cuisine.
The McGhee Building, consisting of the historic CC Johnson Drug Store, which as been vacant since 2018, and was previously occupied by the 21st Century by two popular venues—Pat’s Restaurant followed by Playoffs Bar and Grille. The building is currently only inhabited by Security Finance, as two other businesses—a Nationwide Insurance agent and On-Board Realty. The latter obtained a sole-source, no-bid property management contract from the AMDC in December 2021.
Warneke Cleaners, the oldest active business in downtown Aiken occupying a building constructed in 1935.
The formerly AMDC owned Pascalis properties omitted from the lab facility plan are:
The Beckman Building at 106 Laurens St, SW, which consists of Ginger Bee clothing store, Vampire Penguin dessert destination, and Cosmetics (formerly Beyond Bijou).
The Hotel Aiken, which as been vacant since 2018. A Request for Proposals is reportedly being prepared that will determine its future.
Newberry Hall
Footnote (5) The Aiken Corporation presently has a 99-year “Ground Lease”with the City of Aiken for the 20,000 square foot Amentum office building on Newberry Street. Because of the length of the lease, Aiken Corporation appears as the “owner” in county records and pays property taxes on the building—$29,805 for 2022–but not on the actual property.
The monthly rent paid to Aiken Corp by Amentum is $20,500, or $1 per square foot, and $246,000 per year.
If the same rate were charged for the 45,000 square foot SRNL building, the monthly rent would be $45,000, and annual rental income would be $540,000.
The ground lease for the Newberry Street office building required twenty years of rent paid by Aiken Corp to the City of Aiken to pay off a $3.5 million loan from the city to build the facility.
While the loan also helped finance construction of the adjacent, City-owned adjacent Performing Arts Center, most of that cost was covered by a major fundraising effort by the Aiken Community Theatre.
In the lab scenario, Aiken Corp may not have rental payments to the city. The SRNL property will be owned by the City of Aiken due to the $20 million in plutonium settlement funding, so no loans will be involved unless the project goes over budget. In the absence of the latter event, all rental revenues for the nonprofit Aiken Corp will be profits.
In addition, the City of Aiken has committed to $250,000 in annual maintenance and staffing contests for the SRNL facility, further cutting costs for Aiken Corporation.
December 9, 2022. AMDC Chairman Keith Wood and Chris Verenes resigned in protest due to the failure of City Council to meet with them regarding the causes of the Project Pascalis failure.
“Potential purchase of real property located in downtown Aiken.”
“A proposed contractual arrangement to lease property in downtown Aiken.
In regard to the latter topic, City Council was discussing, and probably negotiating for, rental of property owned by the AMDC and not the city.
Mayor Rick Osbon recused himself because the “discussion might involve one of his direct competitors.” (Warneke Cleaners is the competitor, and the property it leases is part of the SNRL project).
Attendees included Chamber of Commerce President and AMDC commissioner David Jameson, attorneys Daniel Plyler and Gary Smith, Tim O’Briant, Buzz Rich, SRNL Director Dr. Vahid Majidi, and SRNL Assistant Director Sharon Marra.
December 14, 2022. David Jameson resigned from the AMDC, citing South Carolina’s simple Community Development Law as the root cause of the Pascalis project failure.
January 9, 2023: City Council held another closed-door Executive Session involving the same property purchase and lease arrangements at the December 12, 2022, Executive Session. Absent from list of attendees is SRNL’s leadership and Buzz Rich.
The same day, at the regular City Council meeting, Council “continued” a motion to establish itself as the governing body of the AMDC.
January 17, 2023. Despite the expressed wishes of all but two citizens to dissolve the AMDC, City Council unanimously voted to appoint itself as governing body of the AMDC; in order to transfer AMDC properties and assets to the City of Aiken.
January 25, 2023: The SRNL lab project is announced at the “State of the City” jamboree. With Mayor Osbon continuing to recuse himself, Mayor Pro-Tem Ed Woltz described the project in identical terms as the December 9th Aiken Corporation/MPS agreement, and stated: “This is not a done deal.” (Cou
SRNL Director Majidi also addressed the crowd and assured them that no chemical or radiological operations would take place; but also described the facility as a “nonproliferation training center.” According to the SRNL website, this aspect of its mission involves U.S. intelligence agencies. (His transcribed comments are in footnote 2 here.)
January 28, 2023: The City of Aiken announced it would hold a public forum. No mention of the Aiken Corporation was in the announcement.
February 6, 2023: The “City of Aiken Public Input Session” was held at the African American center. Aiken Corporation CEO Buzz Rich opened the session and described it as “focus meeting.” MPS “Principal” K.J. Jacobs moderated the meeting, which he later described as a “listening session.” No mention was made of the existing agreement between Aiken Corporation and MPS.
Present in the audience, but not taking part in the discussion or answering questions, was the SRNL leadership. SRNL has yet to engage with concerned citizens in a public forum, and has been absent from discussions involving the parking garage proposed as a key part of the lab project.
The initial cost estimate of the parking garage, euphemistically referred to by city officials as a “structured parking solution,” is estimated to be $7 million. Two identified sources of funding are hospitality tax funds and plutonium settlement funds from the city’s $25 million share of the plutonium settlement allocated for “Downtown and Northside Redevelopment.”
The garage was not a part of the February 6th discussion.
In addition to the statements mentioned in the body of this article, Mr. Jacobs also provided an email address for comments and promised to establish a website to chronicle “appropriate” comments. The latter is also a requirement in the March 13th contract. The email addressed failed to work for five days, and the website has yet to appear.
February 8, 2023: The Aiken Corporation approved two items:
a. As reported in The Agenda Setting Aiken Corporation, signed an agreement with the City of Aiken to share in the cost of hiring McMillan, Pazdan & Smith Architecture.”
b. The hiring of attorney Tracy Green at a fee of $400 per hour to “look at the current by-laws, Freedom of Information Act issues, and other legal matters.” Other legal matters includes negotiating leases with “third parties” such as SNRL. (The by-laws were updated and approved in May 2023).
City Council members Lessie Price and Gail Diggs were listed as present in the attendee list, acting as “ex-officio” voting members of the Aiken Corporation.
March 7, 2023: The Design Review Board (DRB) held a public “work session” to discuss the design of a ~$7 million parking garage, termed a “structured parking solution,” proposed to accommodate the influx of lab employees. During the pre-decisional meeting citizen comments were prohibited—reducing them to spectators while developers and city officials were participants.
March 8, 2023: The Aiken Corporation approved a motion to “to accept the proposed Professional Services Agreement with the City of Aiken.” City Councilwoman Lessie Price was listed as an attendee.
March 13, 2023. Aiken City Council convened as the governing body of the AMDC. After the issue arose of potential conflicts of interest due to the status of the two Council members on the Aiken Corporation Executive Committee, Council as AMDC tabled the motion to transfer AMDC properties and assets to the City of Aiken. A decision was made instead for a Council public hearing to dissolve the AMDC as a means to transfer the properties and assets—-since dissolution would automatically trigger the transfer.
Later, during its regular meeting, Aiken City Council approved the $250,000, no-bid professional services agreement with the Aiken Corporation; which was deemed “The Developer” in the contract. As already stated, the December 9, 2022 Aiken Corporation agreement with MPS was incorporated into the contract.
Aiken City Council approved a contract for pre-development work on property the City of Aiken did not own, and which only controlled via its dual-role existence on the AMDC.
March 27, 2023. Aiken City Council approved, on First Reading, the dissolution of the AMDC. Both Councilman Ed Woltz and Mayor Rick Osbon recused themselves from the discussion—due to Woltz’s ownership of land adjacent to AMDC properties, and Osbon’s “friendly competitor” Warneke Cleaners occupying part of the lab project property.
After the issue of a potential conflict of interest involving that status of the two Council members on the Board of the Aiken Corporation, the two committed to resigning from the Board. Subsequently the motion passed unanimously on the First Reading.
March 28, 2023: Councilmembers Lessie Price and Gail Diggs resigned from the Board of the Aiken Corporation.
April 10, 2023. Aiken City Council deferred the Second Reading of the vote to dissolve the AMDC, with City Attorney Gary Smith stating he would request an informal opinion on the ethics issues regarding the
April 13, 2023. Smith submitted his request, and added a request pertaining to Ed Woltz and Rick Osbon.
April 27, 2023. The staff of the Ethics Commission issued its informal opinion, stating that no member of Council had to recuse themselves from the vote to dissolve the AMDC.
In regard to the Council members of Aiken Corporation’s board, the informal opinion cited formal opinions of the Commission from 2000 and 2001 that exempted elected officials from conflict of interest laws if they serve as members of Boards of organizations which were created by, and exist at the discretion of, the elected officials’ governing body. In the absence of this exemption, the March 28th resignations would apply to any future votes.
In regard to Mayor Osbon and Councilman Woltz, the staff’s informal opinion cited the lack of financial gain from dissolving the AMDC because vote to dissolve was not a direct vote to transfer AMDC properties and assets.
Meanwhile, little discussion of the lab project has occurred. It might be held up by the failure of Council to transfer the properties to city control, and/or the identified closed-door meetings with “key stakeholders” is ongoing.
Meanwhile, the date for the draft “feasibility study” schedule is now two weeks overdue. No website is up and running to share citizen comments.
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.
