by Don Moniak
January 28, 2023
Updated February 19, 2023
According to the South Carolina Secretary of State’s office, the registration for the Aiken Corporation, which functions as a not-for-profit, charitable subsidiary of the City of Aiken, has been expired for two months; and the mandatory financial report for the previous fiscal year is more than two months late. The organization is now subject to fines of up to $2,000 and can be “enjoined from further solicitation of funds” in South Carolina if the Secretary of State’s office brings an action against the organization.
South Carolina state law requires non-exempt, charitable organizations to “file an annual report of its financial activities” within four and one-half months of the close of the organization’s fiscal year “ unless a written extension has been granted.” (1)
According to the South Carolina Secretary of State’s office:
“This organization is expired, (as of) 11/15/2022,
Every year all charities need to renew the registration for the current year and provide us a financial report for the previous fiscal year.
They need to renew the registration and file the financial report for fiscal year ending 06/30/2022.
We have the report for 06/30/2021.” (2)
The Aiken Corporation consists of its property management entity, LED Aiken, and the Aiken Downtown Development Association (ADDA), which has a separate Board of Directors and bylaws.
According to its bylaws, the Aiken Corporation is “organized exclusively for charitable purposes,” and its purpose is “to further economic development and job opportunities in the City of Aiken and the area served by the City of Aiken Utility Systems; to promote and assist in the growth and development of downtown Aiken; to promote and assist in the development of affordable housing in the City of Aiken; and toengage in those activities which are in furtherance of, or related to, these purposes.
The Project Pascalis Connection
The CEO of the Aiken Corporation, Arthur “Buzz” Rich, has also served as an ex-officio, non voting member of the nearly defunct Aiken Municipal Development Commission (AMDC) since May, 2021. During that time, he attended numerous closed-door, Executive Session meetings of the AMDC, the AMDC and City Council, and the December 12, 2022 City Council Executive Session. He was the only lawyer in the room during many AMDC meetings, but was not named as a defendant in Blake et al vs City of Aiken et al.
The Aiken Corporation owns a one-acre property, purchased July, 2022, $650,000, comprised of three undeveloped, vacant lots in the 100 block of NW Newberry Street. These lots were identified as part of the plan for the proposed Savannah River National Laboratory office complex and employee development center in downtown Aiken. That proposal was announced at the State of the City address on Monday night (3). A parking lot with ninety-five parking spaces is proposed for the now vacant lots.
Current Status of Registration and Filings
Upon request, the Secretary of State’s office provided a copy of the last 990 financial report, filed for the period of July 1, 2020 to June 30, 2021—the same fiscal year as the City of Aiken. Perhaps due to funding allocated to the AMDC, the Aiken Corporation’s revenues declined from $574,000 the previous fiscal year to $130,400 in FY 2021. The City of Aiken was its largest donor, having contributed exactly $60,000. Its largest source of revenue is from the rental of its 17,324 square foot office building at 106 Newberry Street to the Savannah River Site (SRS) contractor Amentum Corporation.
The Aiken Corporation’s last filing identified a Board of Directors consisting of sixteen members— although the bylaws call for a minimum of twenty. The members included City Council members Lessie Price and Gail Diggs, several members of the Aiken Chamber of Commerce (as called for in the by-laws), then USC-Aiken Chancellor Sandra Jordan, AMDC member Philip Merry, Planning Commissioners Sam Erb and Jason Rabun, and former City Councilman Pat Cunning.
UPDATE:
According to the SC Secretary of State’s Office, two days after this story was published, the Aiken Corporation re-registered and requested an extension on their 990 form submission:
“Our records indicate that the extension request was received on Monday (January 30th). Also, the organization submitted a registration online on that same day, and it just was processed this afternoon. I apologize for overlooking that we had received the online registration form when I responded to you earlier today. The organization is now actively registered.” (Shannon Wiley, SC Secretary of State General Counsel and Public Information Director).
When asked about any future compliance issues, Ms. Wiley responded:
“Mr. Moniak:
Thank you for reaching out to our office. Under S.C. Code Section 33-56-60, a charitable organization is required to file an annual financial report within 4 ½ months of the end of its fiscal year. Charities can request a 6 month extension to file their annual financial reports. If a charity misses the deadline, our office will issue a notice of violation to the organization. Upon receipt of the notice of violation, it will have 15 days to file the late report. If it fails to do so, a fine of $10.00 per day begins to accrue, up to $2,000.00. Our records indicate that the Aiken Corporation of South Carolina requested an extension for its FYE 2022 annual financial report and the filing deadline is now May 15, 2023.
Our office has not opened a violation for delinquent registration (as provided under S.C. Code Section 33-56-30) because we cannot determine whether the organization is soliciting contributions at this time. If our office determines that a charity is soliciting while not registered, we will issue a notice of violation to the organization, and it will have 15 days to comply with the registration requirements following receipt of the violation. If it does not, it will be subject to a $2,000.00 fine.
Ms. Wiley added, in regard to a question about donations from government, including grants:
“Under the Solicitation of Charitable Funds Act, the definition of ‘contribution’ includes ‘the promise, grant, or pledge of money, credit, assistance, or property of any kind or value.’ Thus, grants would be considered a contribution. If a charitable organization is seeking grants from governmental entities, then that would be considered solicitation.
Footnotes.
(1) SECTION 33-56-60. Report of financial activities; filing requirements; contents; filing IRS Form 990, 990-EZ, or 990-PF as an alternative; exemption; penalty for failure to file.
A charitable organization that has filed a registration statement with the Secretary of State pursuant to Section 33-56-30, or that is soliciting contributions in this State, whether individually or collectively with other organizations, shall file in the office of the Secretary of State an annual report of its financial activities, on forms prescribed by the Secretary of State or on Internal Revenue Service Form 990, 990-EZ, or 990-PF, certified to be true by the organization’s chief executive officer and chief financial officer. The report must cover the preceding fiscal year and must be filed within four and one-half months of the close of the organization’s fiscal year unless a written extension has been granted by the Secretary of State. To receive an extension, the organization must file with the Secretary of State a written request for an extension or a copy of the extension request submitted to the Internal Revenue Service.”
In 33-56-60(E) defines penalties for noncompliance.
“An organization which fails to file a timely annual financial report required by this section may be enjoined from further solicitation of funds in this State in an action brought by the Secretary of State and is ineligible to renew its registration as a charitable organization until the required financial statements are filed with the Secretary of State. An organization which fails to file a timely annual financial report required by this section may be assessed by the Secretary of State administrative fines of ten dollars for each day of noncompliance for each delinquent report not to exceed two thousand dollars for each separate violation.”
(2) The information was provided in an email from Laura Balaban, Office of the Secretary of State, Charities Division, in response to a query regarding the charitable organization status of the Aiken Corporation.
During a search for the Aiken Corporation on the SC Secretary of State’s public database search, the organization was found to be “expired.”
(3) Following is a transcript of Councilman Ed Woltz’s description of the proposed facility, slightly edited for clarity from archived City of Aiken’s You Tube transcript. Mr. Woltz was incorrect in stating the alternative location was “outside the gate” of Savannah River Site. The $20 million dedicated to an SRNL facility was originally intended for a University of South Carolina at Aiken campus location.
“Councilman Ed Woltz: Thank you Mr Mayor. Well ladies and gentlemen this is the first time I’ve ever used these things so I’m going to do my best on it. We’re going to do this together ladies and gentlemen. Over the last several weeks I’ve been asked to take the lead for Council and exploring a plan that I think is a great one that will be one of those major win-wins the Mayor has mentioned.
As as you may know Governor Henry McMasters and our legislative delegation have committed to investing in a new Workforce Development Center for the Savannah River National Laboratory. This new building is to be located more centrally than the lab’s aging and remote facilities that’s at the Savannah River Site now. This is so important that the state has set aside 20 million in plutonium settlement funding to get it built. That’s 20 million dollars that’s in addition.
[Applause]
That’s in addition to 25 million the Mayor just mentioned. That’s 45 million dollars of investment. It’s important to mention at this point that I may be up here leading this charge, but the credit is not mine the idea belongs to others. Former Aiken Municipal Development Corporation members chairman Keith Wood, Vice chairman Christopher Verenes, and Chamber of Commerce president David Jamerson really identified this as an opportunity more than one year ago. Thank you David.
They have worked tirelessly to get the funds for it and to have it located here in Aiken, my hat’s off to them for teeing this up when it was needed. Even when the the funds seemed like a done deal last year, the question is where would it be built stayed up in the air. Could it be downtown Aiken or would it be just outside the Gated SRS. What a night I am pleased to say that downtown Aiken has been selected as SRS’s overwhelming preference
[Applause]
It doesn’t hurt that while all this was taking place at about the same time it became clear that’s a very nice downtown properties that he owns right across the street just might be available for a new and better idea. Sometimes a better plan comes along just when you least expect it. First, let me be clear none of this is finalized and city council has just hadinitial discussions about it and so we’re not close to finalizing.
In fact I’m asking tonight the city staff within schedule a public forum within the next two weeks to gather input thoughts and concerns as we begin looking at the possibilities that as a city and Council so look for that in two weeks. Let me share with you some of the thoughts Council has had about initial discussions and we’ll begin exploring fully over the next few months.
We have a picture I hope yes of the building the proposed building. {points to screen behind him with photo of downtown area in question] I can’t see it you can. So this will provide for a 40 to 45 000 square foot office and exhibition space requested by SRNL between Bee Lane, Newbury Street and Richland Avenue. The building will house approximately 100 or more paid SRNL workers with a rotating group of faculty and students from SRNL’s University collaborative. That group of universities includes the University of South Carolina, Clemson University, South Carolina State University, University of Georgia andGeorgia Tech. The building would also have a dedicated space for USC Aiken and provideeducation and Outreach downtown.
49:01
[Applause]
The plan is to preserve the existing businesses on the Block leaving Newbury Hall untouched, relocated relocate Warneke Cleaners to the buildings at front of Richland Avenue. These retail buildings on Richland Avenue will be renting and upgradedas part of the project and the Thai [Taj Aiken, which features Indian cuisine] restaurant would remain on Richland Avenue.
The Proposal allows for the Johnson drugstore here on the corner of Richmond Newbury to undergo historic renovation and preserve it and return the exterior to more of its original look. So now the only anticipated demolition would be the dry cleaning building, the motel strip along B Lane that was built in 1981, and perhaps the old gun shop/finance company on Richland Avenue.
The next big question what about parking? We need to plan ahead for parking the demand created by this project. We do that through creating a surface parking lot across from St John’s Church on Newberry and that would provide dedicated workday parking for SRNL employees, and that would be available to the public and the church goers nights and weekends. We’d also be looking for the possibility of more parking behind the room we’re in right now which would be a structured facility that would be a lot next to the new Municipal Building providing between the two spaces somewhere between 250 and 300 parking spaces.
Now, I’ve just outlined it but I want to bring someone up here who knows a lot more about this than any of us, Dr. the director of the National Laboratory.”
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More notes on Aiken Corporation
Since the ACorp’s number one donor is the City of Aiken, these minutes are available in the City’s document repository. Go this site, click document repository, and then click home.
Non profit tax filings are public via the Secretary of State’s website, or better yet the Pro Publica non profit Explorer website, which goes back further.
Following are more stories published subsequent to the story above:
Three Missing Pages covers the Aiken Corporation contract with the City of Aiken
Project Labscalis Annual Operating Costs covers the total estimated costs for demolition and site prep, construction, and annual maintenance costs for the proposed SRNL building.
Off-Site Infrastructure provides the history of the lab project.
There’s a Joke in There Somewhere is about the State of the City Address where the lab announcement was made.
Structured Parking Solution for the Lab is about the connection between a proposed parking garage and the lab project.