Tag Archives: Aiken Municipal Development Commission

Alley Series, July 2022, Project Pascalis 2022

Project Pascalis Includes The Alley (A Four-Part Series): Part Three

1 Comment
The City, Wyatt, Ray and His Group, and Creative Ways

As previously reported, the $100 million plus downtown demolition and redevelopment project named Project Pascalis actually involves two project areas. The unpublicized  second project area is the popular commercial district and gathering spot known as The Alley, which has been a central and not peripheral part of the project. 

One way to think about this is to picture two adjacent construction zones.  

One zone is controlled by the City of Aiken’s Municipal Development Commission (AMDC) and its developers: first Weldon Wyatt’s GAC, LLC, which had contracts on seven properties, and now RPM Development Partners, LLC, which is seeking to purchase the seven properties at a discount from the city. It also involves a public-private partnership with a cost sharing agreement between the two. Because public funds and a public body are involved, the Freedom of Information Act (FOIA) allows for better access to information, and a stricter set of rules applies to obtaining project approvals from city boards and council. Specifically, South Carolina Community Development law applies in this case because the AMDC is governed by Chapter 10 of that law. 

The second zone is privately controlled by Aiken Alley Holdings, LLC (Agent: Ray Massey), whose investors have remained silent, and are hereafter referred to as “Ray and his group” or “Ray’s group.”  Aiken Alley Holdings owns four properties in the project area. Because these properties are not part of any public-private cost sharing agreement, their plans and communications are not subject to FOIA and South Carolina Community Development law. 

Between March 2, 2021 and May 20, 2021 the two zones were treated more as a whole. The conceptual designs by the Boudreaux Group (an architectural firm who had signed an agreement with GAC, LLC in March) and its consultants clearly illustrate a seamless development that involved the Shah and Newberry Hall properties (under a purchase contract to Weldon Wyatt’s WTC Investments, LLC in the city’s zone) and properties owned by, or being sought by, Ray and his group.

Between June and November, 2021, the two zones were in limbo after Wyatt withdrew from the public-private project and the AMDC pursued a new developer, with some coordination with Ray’s group. 

Since November, 2021, the AMDC and its developer, RPM Development Partners, have controlled discussion and plans of the public-private zone, while plans for the private zone remain the purview of Ray and his group and have been withheld from public view. 

However, RPM stands for Raines, Purser and (Ray) Massey. At the April 20, 2022 AMDC public meeting, moderator Tim O’Briant stated that each party owns 1/3 of RPM. Ray and his group are a part of the public-private zone, but the AMDC is not a part of the private zone controlled by Ray’s group. If this were a swimming pool, the AMDC is only allowed to swim in the deep end, while Ray’s group can use the whole pool, an arrangement that has serious financial implications for taxpayer liability. 

“Ray and His Group”

The existence of two projects is confirmed in a brief but illuminating June 4, 2021 email exchange between Aiken Economic Development Director Tim O’Briant and WTC Investments, LLC representative Chip Goforth involving the assignment of properties by the Chamber of Commerce, purchase contract earnest money, a cost-share agreement invoice, and the future of the project. 

The two were cleaning house on the remants of the first public-private zone, which had crumbled when Weldon Wyatt’s development company GAC, LLC withdrew from the project in mid May, 2021.  Subsequent to the latest Wyatt exit from a major city project, the Aiken Chamber of Commerce, in coordination with the AMDC, had negotiated the “assignment” of WTC Investments’ contracts for the Shah and Newberry Hall properties. 

This involved transferring the contracts to the Chamber which would hold them for the AMDC to purchase after it procured funds from City Council; and helping WTC Investments salvage $135,000 in nonrefundable earnest deposits for its contracts. Yes, the city devoted administrative labor to insuring Mr. Wyatt recovered his otherwise nonrefundable earnest money. 

The AMDC opted to keep this entire affair secret, as it did with its private efforts to recruit a new developer, an effort that also involved Aiken Alley Holdings, referred to at the time as “Ray and his group.” 

In addition to confirming the two project zones, the exchange also indicates an amiable relationship, in spite of the Wyatt camp’s recent withdrawal from the project, and that Mr. O’Briant provided sympathetic assistance to WTC Investment’s efforts to retrieve their $135,000 in non refundable earnest money. 

In his email, Goforth wrote: 

How was your meeting with Andy Cajka. Thanks for helping get both Contracts assigned, glad we did the way we did and not a creative way. Better to all be on the same page. Will the Invoice attached work for reimbursement of the costs we spent. Let me know if you need anything. Also, sounds like Rays group has a lot of interest in the apartment side of the development. (1) 

O’Briant responded fifteen minutes later: 

The invoice looks fine. I’ll get that processed for you next week. It’s been busy but things are looking pretty good. The meeting with Andy was excellent. I hope to have a half dozen proposals in hand by a deadline next week to compare. Also waiting to see what Ray and his group come up with whatever it is it should be good for downtown. Hopefully we can figure out soon whether there’s a good way to overlap the two projects or if they work best independently. 

I’m really glad we were able to get the contract worked out so we can go ahead and get you the earnest money back and make it all clean. Thanks for your help on that end.

O’Briant-Goforth email
The O’Briant-Goforth email. Obtained via FOIA.

There were two project areas and two projects, one controlled by “Ray and his group” and one controlled by the AMDC and its private partner. In the beginning the private partner sought legal counsel and aid from Ray Massey’s law firm. In the existing stages, it is unknown what role the developers in RPM are playing in the plans of Ray and his group. 

The Wyatt Months: The Two Projects Merged

The issue of overlapping projects versus independent projects led to the creation of several design options in April, 2021; options that were scheduled to be presented to Aiken City Council on April 19th but never made it onto any public meeting agendas. 

In early April Boudreaux had late draft plans, but there was some disagreement over the future of Ray and his group’s recently purchased properties in The Alley. During the discussions, their retail and office buildings in The Alley are referred to as “The Laurens Center” and this designation also appears on some maps. 

In preparation for a meeting between AMDC Executive Director Tim O’Briant, Boudreaux, and Weldon Wyatt, Boudreaux group President Heather Mitchell wrote: 

Tim and Weldon spoke this morning. Weldon has clarified that he wanted to understand the impact of excluding the Laurens Center Alley buildings from the site, however he does want to proceed with developing the plan in accordance with the Option 2 version that includes rebuilding on the Alley (Laurens Center) retail site.

Three options focused mostly on The Alley portion were under discussion at that meeting: 

Option 2 involved retail space in The Alley extending deeper to the north and underneath the proposed parking deck. 

Option 2: “No Alley Building” involved leaving existing Alley retail buildings as is. This was looked at “per Weldon’s request,” and the issue that arose was that not modifying The Alley retail buildings would lead to a smaller hotel and less apartment space. 

Option 2A; “No Alley Building” involved a “reconsidered hotel location. Hotel is at corner of Richland and Laurens which gets it back to 100 rooms.”

In an email, O’Briant wrote that he preferred the second option: keeping the existing retail. 

There is also a set of plans, obtained via FOIA, (see below), that shows a smaller hotel behind the Alley retail, with the lobby of the hotel at the same ground floor as retail. These could be the plans that have been described by Art and Soul co-owner Stacy O’Sullivan in Part Two of this series, and plans to build residential and/or hotel above the existing Alley buildings may still be in the works. 

Ground Floor
Project Pascalis Option for The Alley, April 2021
2nd Floor
Project Pascalis Option for The Alley, April 2021
Floors 3 thru 4 and 5
Project Pascalis option for The Alley, April 2021. Images obtained via FOIA

The decision in the April 19, 2021 Conceptual Design Plans appeared to favor Option 2 .

The Two Projects Separate, But Ray’s Group Swims in Both Pools

Following the end of the AMDC/Wyatt partnership, the city secretly pursued a new developer. In the May 19, 2021 solicitation for Requests for Proposals (2), the AMDC only offered Option 2a, with a new hotel replacing the Hotel Aiken and no activity in The Alley. Apartments and a parking garage would replace the vacant historic Johnson Drug Store and adjacent existing businesses; a conference center would replace Newberry Hall. 

This is also the vision the AMDC and its chosen developer, RPM Development Partners, presented to the pubic between November 2021 and April 2022, when the AMDC unilaterally announced, without any public or even City Council input, a  conference center in the soon-to-be vacated City Hall at 214 Park Ave. W — an issue to be addressed in Part 4 of this series. 

Ray and his group retain control and ownership of the “Laurens Center” retail center in The Alley, as well as the former State Farm building (which it has offered as a “trade” with the City of Aiken in exchange for a portion of Newberry Street). Their plans are not publicly disclosed, but their property is now in the center of the larger Pascalis footprint. 

Ray and his group also sought to purchase part of the City’s municipal building complex in January, 2022. While that offer was tabled, the purchase agreement with the city remains in the files, and Part 4 of this series will discuss how Ray and his group tried to buy city property at a sizeable discount. 

Next: Part 4: Ray and His Group Angle for City Property

Part 5: The AMDC Pulls a Fast One: Old City Hall as a Conference Center. 

For Reference

(1) The invoice referred to the cost-sharing of the Boudreaux Group’s conceptual design. 

Andy Cajka is a member of the Clemson University Research Foundation. According to his bio on the foundations’s website, he is “the founder and president of Southern Hospitality Group, LLC, a hotel management and development company in Greenville, South Carolina. Prior to starting his own business, Mr. Cajka was a managing member of Hyatt Hotels Corporation from 1986 until 1998.” 

(2) The summary of that RFP is posted on the AMDC “transparency page.” Requests for the entire RFP continue to be denied by the city on the basis of a FOIA exemption. However, that exemption does not mandate nondisclosure, it is a choice. 

Click to access Pascalis-summary.pdf

City Government, July 2022, Laws & Bylaws, Project Pascalis 2022

No Evidence of Intent: The City of Aiken’s Proposal to Change the Law to Fit the AMDC’s Bylaws. 

Leave a comment

The most prominent item on the Aiken City Council’s July 11, 2022 meeting, other than another closed-door executive session regarding Project Pascalis, is a proposed amendment to the ordinance defining and governing the Aiken Municipal Development Commission (AMDC). The AMDC is the governmental side of the braintrust behind the $100 million plus project to demolish a substantial portion of downtown Aiken and construct a new hotel, apartment complex, parking garage, retail space, and a conference center. 

The issues surrounding this amendment were first reported in “Reminder of the Day: The AMDC Cites the Law, Then Sets Its Own Rules,” with an updated version posted on July 1st. This account detailed the differences between City of Aiken law and AMDC bylaws, and the city’s contentions that the differences are the result of a “scrivener’s error,” and that City Council’s original intent was to allow membership. 

Reminder of the Day: The AMDC Cites the Law, Then Sets its Own Rules

A review of past city council agendas and minutes reveals no intent to change membership requirements to include non residents who have “vested business interests” in the city. 

The July 11th Hearing 

In Agenda Item #1 of new business for the July 11th meeting is the “First Reading of an Ordinance to Amend the City Code (Section 11-2) Regarding Membership of the Municipal Development Commission.” 

The supporting memo from the Aiken City Manager merely states: 

In reviewing our enabling ordinance for the Aiken Municipal Development Commission  [AMDC], we believe that the membership paragraph needs to be updated. The current language states that members will be citizens of the City of Aiken. We propose adding to that “or have vested residential and/or business interests within the Commission’s jurisdictional boundaries. (1) 

City code presently specifies that AMDC members be “citizens of Aiken.” The memorandum contains no discussion of the following facts: 

a. Nonresidents currently are serving on the AMDC and have voted on resolutions that have been forwarded to City Council. This is essentially an amendment to grandfather these members into compliance. 

b. The AMDC’s final bylaws, written and adopted by the AMDC in December 2020, defined membership criteria as “vested residential and/or business interests,” and 18 month has passed since that policy, which was contrary to City code when it was written, was adopted without Council approval. 

c. This is a matter currently identified in the lawsuit filed July 5th seeking an injunction against Project Pascalis 

d. The definition of “vested business interests.

The memo also omits any supporting evidence of past intent by City Council, most likely because none exists. Yet, the city is asserting publicly that a “scrivener’s error” is the source of the problem. If that is the case, it has to present clear and compelling evidence of the original intent. 

The city has not. The proposed amendment, simply put, involves the city changing the law to comply with bylaws that were written and adopted even though they did not comply with to city law. There is no evidence of prior intent, and therefore no evidence of a “scrivener’s error.”  The AMDC should be rewriting its bylaws to comply with the City Council approved ordinance, not vice-versa. 

AMDC Formation and Amendments: 2019-2020

The first reading of the ordinance establishing the AMDC was held on June 10, 2019, and it was the third item (2) of new business that day. In the supporting memorandum for creation of the AMDC, City Manager Stuart Bedenbaught wrote: 

Proposed bylaws are attached at the request of Council as a one page summary of the commission. AMDC, an arm of City Council, will be utilized to facilitate public and private investments which reduce physical and economic blight, foster new business startups and expansions, and increase the availability of decent and affordable housing in the identified area.

The proposed bylaws contained no mention of membership requirements. There was also no discussion of membership requirements during deliberations. Two citizens, Jane Vaughters and Reggie Ebner, raised numerous concerns about the new commission, and no citizens stepped forward in support. 

The ordinance passed its first reading by a vote of 5-1, with only Councilperson Dick Dewar dissenting (Councilperson Gregory was absent). According to the minutes for that meeting, he seconded Ms. Vaughters’ concerns: 

Many of the matters that Ms. Vaughters talked about are listed in Chapter 10, such as borrowing money, issuing bonds, adopting a seal, etc.  (Councilperson Dewar) felt this may be a body of government that he is not sure Aiken needs. He pointed out that the Aiken Corporation is empowered to do what he felt the Redevelopment Commission would do. He said he was confused as to what we would expect the Redevelopment Commission to do that we can’t get done with the Aiken Corporation and the city board structure that we have.”

On August 14 ,2019, the ordinance came up for its second and final reading. It again passed that day by a vote of 6-1. Councilperson Dewar being the sole dissenter, and his concerns were more numerous than at the first hearing, and, according to the minutes, included the following: 

He noted that the first sentence in the ordinance says ‘whereas the staff of the City of Aiken has advised City Council that a blighted area or conservation area exists.’ He said he did not know where the blighted areas is. He felt that was a very general comment to make and it should be specified. He said by adopting this ordinance we would be approving the charter without approving the rules of the charter.

At neither of the hearings was the issue of membership criteria that included only a “vested business interest” ever raised. The only statement about membership at the second and final reading was: 

The proposed commission would consist of nine members,three of whom will be City Council members and six commissioners appointed by City Council to help with economic development. The City Manager would serve as an ex-officio member of the Commission. Bylaws would be drafted by the new commission.

The September 2020 Amendment

The Commission did not meet until May of 2020. During that summer a few council members, most notably Ed Woltz, recused themselves from any commission votes that may come before City Council. This led to an amendment regarding membership that passed a second reading on September 14, 2020. 

This amendment only pertained to the number of voting AMDC members, which was increased to nine, while three City Council memberships were converted to non-voting “ex-officio” status. There was no discussion of residency requirements in the City Manager’s supporting memorandum, and the detailed meeting minutes do not cite any discussion about citizens with “vested business interests’ serving on the commission. 

During the first reading at their August 24, 2020 meeting, council expressed support “to remove the present three Councilmembers from ex officio members, ask the Commission to recommend three members to replace the three Councilmembers, and empower the Commission to be able to amend the bylaws as they see fit.” But no language was added that allowed for a bylaw amendment to automatically trigger an amendment to the ordinance. 

The September 14, 2020 meeting minutes pertaining to amendment reads: 

“(City Manager) Mr. Bedenbaugh stated Council created the Municipal Development Commission in August 2019. The commission has been actively meeting and has made a recommendation to Council to amend its enabling ordinance to allow for a more efficient operation by the board. Specifically,the Commission recommended that its voting membership stay at nine. The current three City Council members would gain ex officio status, which would necessitate three additional appointments to be made.” 

If there is any evidence of past intent, the City of Aiken has yet to locate and present it. 

The “Scrivener’s Error”

The language of the September 14, 2020 amendment is clear in the packet agenda: 

Nine commissioners shall be citizens of the City of Aiken…

The City of Aiken contends a “scrivener’s error” is the cause of the ordinance not reading “vested residential and/or business interests,” but has yet to offer any evidence of council intent. 

The 1996 edition of Barron’s Law Dictionary defined a “scrivener” as “a term, infrequently used in the United States, signifying a writer or scribe, particularly one who draws legal documents.”  The City of Aiken does not have a “scrivener.” The City Attorney is responsible for a range of duties that can be considered analogous to a scrivener, including:

“the city attorney shall prepare and revise ordinances when so requested by any member of the city council.”

Although the term scrivener remains obscure, the “Scrivener’s Error Doctrine” is still a term more widely in use in the legal community.  According to the website lawyer.zone, “Scrivener’s Error doctrine is one that states that when there is a typographical error or a minor mistake, the court can correct the mistake when it’s absolutely clear.”

In a 2016 paper challenging the strictness of this doctrine, Harry Bigelow of the Chicago School of Law wrote, “it is widely accepted that courts may correct legislative drafting mistakes, i.e., so-called scrivener’s errors, if and only if such mistakes are ‘absolutely clear.’” (3) Any reasonable examination of this paper indicates this is a complex issue  that could ultimately be decided by the courts. 

City Council is not a court, and there is no clear mistake that was made during the drafting of the AMDC’s ordinance, or the only amendment to it. The AMDC’s by-laws were finalized three months after the September 2020 membership amendment. While Council did express its support for the AMDC to draft its own by-laws, it did not allow a change in by-laws to trigger a change in the law; and doing so would undermine the entire system of city government and leave the law in the hands of unelected officials. 

References


(1) City of Aiken agenda and meeting minutes can be found at
https://www.cityofaikensc.gov/government/city-council/

(2) The AMDC is currently composed of eight men and one woman. In spite of frequent discussion at its meetings about “what millenials want,” most members are not millennials, and no age criteria was discussed in the context of commission membership requirements. In fact, there were no requirements for membership in the initial proposed ordinance. 

Coincidentally, the second item on the September 14, 2020 council agenda was the “First Reading of an Ordinance to Rezone Property at 828 Richland Avenue W and 159 Morgan Street NW from Office (O) to Planned Commercial (PC) and Approve a Concept Plan.” This is the “old hospital” property and site of the former county administrative complex. 

That plan involved local developer Weldon Wyatt’s proposal to destroy the existing buildings and construct a new hotel, apartment complex, garage, and conference center in its place. That story is discussed in “Reminder of the Day: Project Pascalis and The Wyatt Factor.” https://aikenchronicles.com/2022/06/21/project-pascalis-and-the-wyatt-factor/

The agenda packet that day included an eighteen page submission from Mandy Drumming, a millenial who made the case for restoration of the old hospital instead of demolition. (Pages 270-285) Part of that submission was a copy of the Spring 2019 edition of The Rambler, a publication of the Georgia Historic Trust, titled “Millenials and Preservation.” 
https://www.georgiatrust.org/the-rambler-publication/spring-2019/

(3) https://chicagounbound.uchicago.edu/cgi/viewcontent.cgi?article=12504&context=journal_articles

July 2022, Project Pascalis 2022

Project Pascalis and the Plutonium Settlement

Leave a comment

Plutonium Settlement Funds are Not Earmarked for Project Pascalis 

By Don Moniak

Summary: Twenty five million dollars from State of South Carolina Plutonium Settlement funds legislatively allocated to the City of Aiken do not include any reference to Project Pascalis, and are not project specific. Citizens of the City of Aiken have the opportunity to participate in future deliberations regarding final allocation of these funds for redevelopment and investments in “downtown and Northside Aiken.” 

The $600 Million Settlement 

On August 31, 2020, South Carolina Attorney General Alan Wilson announced the largest settlement ever with the federal government. After four years of litigation pertaining to the storage of approximately 9.5 metric tons of surplus military plutonium transferred to the Savannah River Site (SRS) since 2002, a $600 million dollar settlement with the U.S. Department of Energy was reached.(1) 

The settlement was enabled by a minor amendment sponsored by then Representative Lindsey Graham to the 2003 Defense Authorization Act. The amendment mandated the federal government to remove at least one ton of plutonium per year from the Savannah River Site beginning in 2016, or pay fines of up to $160 million per year to the state of South Carolina. 

Neither the amendment nor the settlement addressed the approximately two tons of military plutonium left in storage at SRS after more than three decades of plutonium production work officially ceased in 1990. 

The funds are described as “economic and assistance payments,” but the settlement does not specify any detailed criteria for spending the money. Of the $600 million dollars, lawyers for the state were awarded $75 million by the Attorney General’s office (a controversial decision currently being litigated), leaving $525 million for the South Carolina General Assembly to distribute. In June 2022 the South Carolina General Assembly finalized the distribution of funds within its fiscal year 2023 budget. 

The only line item that pertains to redevelopment in the City of Aiken is $25 million for “downtown and Northside redevelopment,” and Project Pascalis is not specifically identified. This is true in each version of both Senate and House bills during the recent legislative session. The distribution of the funds is now at the discretion of Aiken City Council.  The city’s budget is a matter of public record and its approval involves two public hearings, so citizens will have a say in how the money is spent. 

City officials have implied that $20 million of this money is dedicated to Project Pascalis. For example, the Aiken Municipal Development Commission’s (AMDC) May 2022 paper “Just the Facts: Why Pascalis, how do we pay for it?” In it, the AMDC wrote: 

$525 Million Plutonium Settlement provides once in a lifetime opportunity to invest in concrete project that creates generational prosperity for the City of Aiken. (2) 

The opening statement is misleading, since the next sentence describes a request for:

$20 million in Plutonium funds to directly support Pascalis. That request is being considered by the General Assembly and passage could come as early as June of 2022.

The AMDC Lobbying Efforts: No Requests for Pascalis 

Not only are plutonium settlement funds not specifically dedicated to Project Pascalis in the state budget, there is no evidence the city specified the project in its lobbying efforts to state legislators. 

The Aiken Municipal Development Commission began discussing the settlement funds almost immediately, and the money stayed on the agenda for months. (3) 

Two Freedom of Information Act (FOIA) requests to the City of Aiken regarding letters pertaining to plutonium settlement fund requests from the city have yielded no documents specifying Project Pascalis as a desired beneficiary of the funds. (4) 

The first letter to county and state officials was mailed only seventeen days later. The September 17th lobbying letter established a theme asserting ownership of the funds by the three counties adjoining SRS while blaming the federal government for violating the public trust: 

The settlement is a result of the failure of the U.S. government to fulfill its obligations to our communities in return for a good faith effort to accept plutonium from across the country.

This statement and others like it were to be repeated until it became accepted as fact, it was not true. Part three of this series will discuss the stand-alone decision in 1997 to store surplus military plutonium at SRS for up to fifty years, and the debate leading up to the settlement. 

The September 17th letter did not identify any funding needs, and in fact stated that “allocation of funds should be objective, not project specific.” 

More specific requests from the AMDC were sent on December 16, 2020 to Aiken Mayor Rick Osbon. Of $95.4 million in requests for various projects, $15 million was requested for downtown and Northside redevelopment and investment. AMDC Chair Keith Wood wrote: 

The AMDC, and others should work to fund and coordinate the acquisition and assembly of land and/ or derelict properties at sufficient scale to be repackaged as available sites for medium-density housing/ mixed-use, mixed-income residential and marketed to the development community for either private sector projects or public-private partnerships where appropriate. These funds would also be available to provide incentives for projects that face a funding delta based on the increased cost of property in the central business district through public participation in the projects to include parking solutions, public utility infrastructure, green space uses such a trails, squares and pocket parks, etc. that can reduce the overall project costs while providing a public benefit. Areas of interest include downtown Aiken ( Hotel Aiken project),Aiken’s Northside (former Say-A-Lot site for grocery), East Aiken (East Richland Avenue) and strengthen connection along Route 1 to 1- 20. Identify potential sites along Route 1 for development. 15 million.

The phrase “Project Pascalis” was never mentioned because the project did not yet exist. The request only identified “areas of interest.” 

Two days later, Mayor Osbon sent a letter to Aiken County Council Chairman Gary Bunker outlining the City of Aiken’s priority wishlist for plutonium funds disbursement. Whereas Osbon expanded the overall list and increased the desired amount to $223 million (6), the request for redevelopment and investment in downtown and the Northside remained at $15 million. Osbon forwarded the exact language of the AMDC for that request. 

No other request letters from the Mayor, City Council, or the AMDC have been identified. As will be discussed in Part 4 of this series, the line item that could involve Project Pascalis has always been more generalist and not project specific. If Project Pascalis is cancelled, that money still remains available for “downtown and northside redevelopment.” 

For information on how the Chamber of Commerce and Nuclear Contractor Executives publicly acknowledged plutonium dangers, see Offsite Insights 2022-2 and Plutonium is not for Amateurs, Part II.

The two articles also form an introduction to “From Plutonium Economy to Plutonium Dump: A History of the Plutonium Settlement,” which is in progress.

In progress: The Plutonium Settlement disbursement debate and final results.

For Reference

(1) The announcement of the settlement is at: 

https://www.scag.gov/about-the-office/news/attorney-general-wilson-announces-largest-single-legal-settlement-in-south-carolina-history/

The seven page settlement is at: 

Click to access South-Carolina-Settlement-Agreement-Final-signed-8-28-20.pdf

(2) https://aikenmdc.org/2022/05/16/just-the-facts-why-pascalis-how-do-we-pay-for-it/

(3) Meeting minutes from AMDC public meetings held from September 2020 to _____, 2021 describe discussions on the matter. (add more here) 

(4) A June 10, 2022 FOIA request asked for 

“All official correspondence between the AMDC and or City of Aiken regarding the plutonium settlement funds. Specifically, and at a mininum, I am requesting the letter from the AMDC “sent to the Governor, the delegation, and other elected officials” referenced in October and November, 2020 AMDC meeting minutes.” 

Twenty one documents were retrieved, of which twenty were duplicates of the September 17, 2020 letter. The city charged $24 for this request, and claimed 1.75 hours of retrieval time was required to locate three letters involving requests for $95 to $223 million dollars from the State of South Carolina. A subsequent appeal to the city manager yielded a fee wavier 

An additional request on June 23 specifically asked for “documentation supporting the following assertions: a. City has requested $20 million in Plutonium funds to directly support Pascalis. That request is being considered by the General Assembly and passage could come as early as June of 2022.” 

This request yielded the same three letters as the previous request, with no new lobbying letters since December 2020. The cost this time was $16 for 1.25 hours of search time, for documentation forming the basis of a one month old AMDC published “fact sheet.” 

(5) )  The remaining $80 million in requests involved $30.4 million for Whiskey Road Corridor, and $50 million for “four strategic and and interrelated steps to ignite an innovation ecosystem in Aiken” in the USC-Aiken vicinity. This included additional funding for two projects already in the planning process, one new vaguely defined initiative, and roadwork: 

$10 million for the “Department of Energy’s Advanced Manufacturing Collaborative (AMC). 

$15 million for the South Carolina National Guard Cyber Security Dreamport;

$20 million for a new Aiken Innovation and Impact District to work with the AMC and Dreamport

$5 million for widening of University Parkway

(6) Mayor Osbon’s exorbitant request for $223 million of the available $525 million included the “innovation ecosystem” and downtown and northside development requests, but added $124 million for additional portions of the Whiskey Road project. 

July 2022, Project Pascalis 2022

Is TIF Still an Option for Project Pascalis?

1 Comment

Tax Increment Financing is a complex system that allows local governments to finance development projects with the revenue generated by the development. It is a part of South Carolina Community Development Law because the legislature found that: 

Incentives must be provided for redevelopment in areas which are, or threaten to become, predominantly slum or blighted. (1) 

The process is highly controversial because the revenues generated by TIF come at the expense of future tax revenues, the system has led to a lowering of criteria for determining blight and its precursors,  it generally functions as a taxpayer subsidy for developers, and the program is open to abuse and subject to corruption. (2). 

In Aiken County, TIF has earned a bad reputation from two instances. More than a decade ago there was a failed effort to convince County Council to use TIF for residential developments on undeveloped land.  The City of North Augusta has used TIF to fund its Riverfront Park (originally “Project Jackson”) development after the Aiken School Board approved it, which provoked litigation against the city that ultimately was decided in the South Carolina Supreme Court. 

So TIF is a touchy subject, and city officials like to defend Project Pascalis plans by speaking negatively about TIF. For example, during the May 9, 2022 Aiken City Council public hearing regarding privatization of Newberry Street, council member Kay Brohl emphatically declared: 

 We are not North Augusta, we are not doing TIF.

The Aiken Municipal Development Commission (AMDC) and City of Aiken insist that TIF is unnecessary for Project Pascalis, mostly due to the existence of $25 million in South Carolina Plutonium Settlement funds allocated to “Downtown and Northside Development.” 

As it turns out, the City of Aiken is not as different from North Augusta as Ms. Brohl asserted. On April 27, 2021 AMDC Executive Director Tim O’Briant wrote the following message to Weldon Wyatt and Chip Goforth: 

Here is the proposal for a full market study related to Project Pascalis from AECOM. Such as report would be required by law if the County considers a TIF for the project. I’d like to get these guys, or another firm if you have suggestions, started so we can be ready for the TIF debate ASAP. Let’s discuss.(2) 

At no time have AMDC officials acknowledged that TIF was even an option, but clearly it was enough of an option to provoke a call for a legally required study. While City officials vehemently deny that TIF is an option for Project Pascalis, this email reveals the AMDC was considering it as a backup plan and preparing to use it. 

With rising costs facing the development, will the City attempt to backtrack and return to a TIF scheme? 

For Reference

(1.) Tax Increment Financing for Redevelopment, which the city could attempt apply to the “conservation area” in the Project Pascalis project area, is at: 
https://www.scstatehouse.gov/code/t31c006.php

(2) For more information regarding TIF, these sites provide a variety of perspectives:  
Sterling CRE Advisors
Wikipedia – Tax Increment Financing
ERIS Blog: Tax Increment Financing – Pros. Cons and Examples

(3) April 27, 2021 email obtained via South Carolina Freedom of Information Act request. 

Alley Series, July 2022, Project Pascalis 2022

Project Pascalis Includes The Alley (A Four Part Series): Part Two

Leave a comment
Option 2 Included a Radical Vision for The Alley

by Don Moniak

July 6, 2022

Until now, the AMDC has only revealed Option 2A (1) from its early 2021 deliberations. Option 2A was forwarded to select developers, along with a project “summary” (2) in a private solicitation for a request for proposals for an area only encompassing the “Shah Property” and Newberry Hall — but not The Alley. This solicitation represented a change in the direction of the project management, but not in the overall project vision detailed in the never released Option 2, a vision involving a radical redevelopment of The Alley. 

The Early Days of Project Pascalis: Option 2 Emerges

One week after the Aiken Municipal Development Commission (AMDC) announced a major, vaguely defined redevelopment effort named Project Pascalis, commission Chairman Keith Wood and Executive Director Tim O’Briant signed a cost sharing agreement with Weldon Wyatt’s GAC, LLC. (3) As with the Wyatt-Boudreaux agreement, references to “historic preservation” are absent. Demolition was the only consideration, and renovations were not options. 

Boudreaux Group architecture and its two subconsultants moved forward with an aggressive schedule of site visits, workshops, research, and preliminary design. While the Boudreaux Group was working on behalf of GAC, LLC, it was also designing for the Alley property recently obtained by Ray Massey’s Aiken Alley Holdings, and city owned property across from it, although no agreement detailing this arrangement is publicly available yet. 

The week of April 12 passed without the scheduled “presentation to city council and invited stakeholders,” and the AMDC only discussed the project in closed executive session on April 13th. 

On April 15th, Weldon Wyatt and Newberry Hall’s Myrtle Anderson signed a purchase and sale agreement for $2 million and options for the business’ operators to negotiate to repurchase a new building, operate the new conference center, and even be compensated for lost income during construction. 

Four days later the “Project Pascalis Conceptual Plans” were complete and ready for review.  The plan’s aerial view continued to match the description in the Boudreaux-Wyatt agreement, with the Aiken Antique Mall and the east half of The Alley remaining in the project footprint.

(Note: click on images, below, to enlarge views).

Option 2: First-floor view of Project Pascalis footprint

The conceptual plans, obtained on July 2, 2022, via a Freedom of Information Act request, featured “Option 2,” with the Hotel Aiken and Laurens properties replaced by ground floor retail below a three story apartment complex, a “Boutique Hotel” at the corner of Richland and Newberry, a conference center/apartments/garage complex replacing Newberry Hall, and street pattern changes on Richland and Newberry Street. 

Option 2: Five-story “Boutique Hotel” at the corner of Richland and Newberry. To the left is the 5-story conference center/parking garage/apartments complex at the corner of Newberry and The Alley.

Most dramatically, the plan envisioned retail space topped by four stories of apartments on the north side of The Alley; three stories across from it on city owned property, and a three story, elevated, enclosed walkway above the east entrance connecting apartments and providing a pathway to the parking garage. 

These plans were never shared as promised in mid-March by AMDC officials. The plans were shown to some of Massey’s newly acquired tenants. One of them is Stacy O’Sullivan, co-owner of “Art and Soul” gallery in The Alley. In 2019, “Aiken Blend” wrote of her and business partner Kim Rising’s presence in The Alley in an “entrepreneur of the week” profile: 

Art and Soul of Aiken isn’t exactly what you would call a “traditional” gallery. It is a place where local Aiken area artists can display their work in a free spirited and supportive space. Stacy O’Sullivan and Kim Rising established this co-op style business three years ago in a hidden store front on Richland Avenue. Two years ago, the business moved into the Alley. Since then, the two have had nothing but success. (4)

Their success must not have impressed her new landlords. O’Sullivan has described a visit from Massey and investment partner Todd Gaul, during which they revealed conceptual plans for their building, stating “We know this will take permits and such, but The City loves projects like this and it will not be a problem.”

O’Sullivan also describes an effort by Massey and Gaul to “illegally evict” them from their four-year old business home, and their intent to triple the rent, all while paying lip service to serious maintenance issues such as flooding in the recently renovated alley following heavy rains 

 Happy Days End 

While Massey and Gaul might not have anticipated a problem with the city, they should have anticipated one with Weldon Wyatt, especially considering his abrupt and unexplained withdrawal in January, 2020 from a purchase contract with Aiken County for the “old hospital” property at 828 Richland Ave E. 

Between April 19th and May 14th, two things happened. First, the preliminary cost estimates were completed on schedule. The estimates include a total budget of $118,372,104 and ninety eight cents; and total costs for “demolition and abatement” of the “Hotel Aiken, 108 Laurens Street, Holley House Motel, and Retail/Office Richland, Newberry, and The Alley” of $712,248. (5) 

Second, the man described by the AMDC a month previously as an “experienced and well-capitalized” private developer bailed on yet another major development on Mayor Rick Osbon’s wish list. Similar to the unexplained cancellation of the “old hospital” deal, the reason for the Project Pascalis exit remains a mystery. 

Instead of reassessing the project, AMDC officials scrambled to salvage the effort to demolish and reconstruct a major portion of historic downtown Aiken. As previously reported in A Project Pascalis Timeline, on May 14th “The Chamber of Commerce takes ‘assignment’ of the Shah property contracts, while the AMDC seeks funding to purchase them on behalf of the city. This all occurs behind closed doors.” (. ) Not until June 2 would the Chamber also arrange for “assignment” of the Newberry Hall property. 

The absence of a contract continuation with Newberry Hall’s owners did not deter the AMDC from immediately seeking a new developer for both the Shah and Newberry properties. On May 19th the AMDC sent its private solicitations for Requests for Proposals to continue the project—minus the Aiken Alley Holdings property and the Aiken Antique Mall.

There is no known formal agreement between the AMDC and Aiken Alley Holdings, but some form of unwritten agreement must have remained. Six days after the Chamber of Commerce took one for the team by taking assignment of the Newberry Hall property, Aiken Alley Holdings, LLC closed on the purchase of longtime State Farm agent Joseph Harrison’s 121 Newberry Street for $675,000, adding to the holdings in the original Pascalis footprint. 

Just over three months later, Massey was present at a “public meeting” at Victor’s Restaurant in Florence, SC hosted by the Raines Company. Two months later he was the agent for the newly formed RPM Development Partners, LLC; a consortium of Massey and other local, unnamed investors, the developers Rainesco and Lat Purser. In early December, 2021 RPM was named the Pascalis developer, pending a master agreement, although the legal advertisement for RFPs was not submitted until mid December. 

Next up: Project Pascalis Includes The Alley (A Four-Part Series): Part 3: The City, Wyatt, Ray and His Group, and Creative Ways.

For Reference

(1) The AMDC placed “Option 2A” on its “transparency page, but not Option 2; probably because a FOIA or other official request only asked for information pertaining to the AMDC’s private RFP solicitation in May 2021. This is known in some circles as willful nondisclosure. 

Option 2: Project Pascalis Conceptual Plans Presentation 04.19

(2) https://aikenmdc.org/wp-content/uploads/2022/03/Pascalis-summary.pdf

In the solicitation, the AMDC offers to privatize a part of Newberry Street. The entire solicitation remains secret to this day, withheld under a FOIA exemption by the City of Aiken, despite fact that FOIA clearly states the city “may” release the documents. The AMDC does not deny the solicitation is only for demolition, not renovation of Hotel Aiken and surrounding properties. 

(3) https://aikenmdc.org/wp-content/uploads/2022/05/Pre-development-cost-sharing-GAC-LLC-pascalis.pdf 

(Released by the AMDC in response to an unidentified FOIA request or other official request)

(4) https://aikenblend.com/2019/04/10/entrepreneur-of-the-week-stacy-osullivan-kim-rising/

(5) Draft Preliminary Order of Magnitude Cost Estimate Analysis. Project Pascalis. Obtained via the SC Freedom of Information Act from the City of Aiken, July 2, 2022.