by Don Moniak
Originally published July 21, 2022
Updated April 13, and April 15, 2023
(Update 4/13/23: Mayor Rick Osbon did recuse himself from the proceedings of the sale of the City of Aiken’s Laurens Street Building. Not known at the time was that this recusal was recommended by the State Ethics Commission in response to a request for an information opinion from City Attorney Gary Smith. In the response, found here, the Ethics Commission wrote:
“Here, it is the opinion of Commission staff that the Council Member has an economic interest in the sale of the property because the value of his property would increase by more than fifty (50) dollars if the property is sold….Accordingly, it is staff’s opinion that the Council Member should recuse himself from voting on the sale of the property.”
Summary
In early 2020 the City of Aiken sold property located at 135 Laurens Street SW and 130 Pendleton Street SW to WTC Laurens, LLC,(agent: Thomas Goforth) for $1.3 million. WTC Laurens, LLC is a firm owned by local investor and developer Weldon Wyatt and managed by his son, Attorney Tom Wyatt. In April of 2020, WTC Laurens, LLC sold half of the property for $1.3 million to SRP Credit Union; and in May 2021 sold the remaining parcel to R and O LLC (Agent Rick Osbon) for $500,000.
This is the story of how the transaction proceeded, all but one city council member defied good advice from knowledgeable citizens, and Weldon Wyatt managed to turn a half million dollar profit at the city’s expense in just over a year’s time.
The Finance Building
In December, 2011 the City of Aiken purchased the former First Citizens Bank and Trust property for $735,000. The 0.63 acre property was composed of two parcels, the two story building at 135 Laurens Street and a parking lot with a drive through outbuilding at 130 Pendleton ST, SW. (see inset)
The City then spent just over $900,000 on renovations and improvements to the building, which had sat vacant for six years. By the time finance and administration offices were moved into the building in January, 2013, the total investment was more than $1.6 million. Other departments remained at the old municipal building at 214 Park Ave, West.
In 2017 the city embarked on the controversial “Downtown Renaissance” effort. A proposal to consolidate city offices into one location was in the works, although the specifics were not yet planned. According to a question and answer on the Renaissance, “The hope is to recoup much of the investment in 135 Laurens as possible through its sale to the private sector and to proceed with the original plan voters were briefed on prior to the 2010 vote.” The appraised value of the Finance Building at that time was $1.04 million. (1)
The Wyatt Offer
Although the “Downtown Renaissance” failed to proceed, the city moved forward with plans to consolidate, and continued to receive offers for the 135 Laurens St. complex. First a plan to expand the municipal building at 214 Park Avenue emerged, but was dismissed due to costs and lack of feasibility. That was followed by a final plan to purchase and renovate the former Henderson Hotel (most recently a Regions Bank Building) and consolidate into a new City Hall. (2)
In mid October, 2019 WTC Laurens, LLC, a Wyatt family firm, approached the City of Aiken with a $1.2 million offer on the property. At the time the Wyatt family’s WTC Investments, LLC (agent Ray Massey) was seeking final rezoning approval from city council to allow the demolition of the historic Aiken hospital at 828 Richland Ave, E; and convert the surrounding nine acre property to a complex of apartments, 100-room hotel, conference center, and parking garage. This plan was deemed by Tom Wyatt as a “home run for the city.” (3)
This was not the Wyatt’s first offer to buy 135 Laurens St property, and undisclosed offers from other parties had also been made. To prepare for a probable sale, the city had procured J. Marshall Vann of Vann Appraisal Services, Inc. of Augusta, GA in 2019 to conduct a new appraisal of the property. Vann had nearly forty years of real estate experience and been licensed by the State of South Carolina since 1993. He submitted his appraisal of the property on September 23, 2019, delivering a bottom line “fee simple ‘as is’” $1.3 million appraisal of the property. (4)
Vann described the building as “well maintained” and in good condition. His comparison to other sales included the Wells Fargo Building at 111 Laurens Street, which had sold for $750,000 in 2018 to another Wyatt family firm, WTC of Aiken, LLC (agent: Ray Massey). The Wells Fargo property was also divided into two properties and also occupied two-thirds of an acre. That property sold at a considerably lower per square foot value than six other area properties analyzed.
Discussion and Advice: The First Hearing
Note: Text in bold print below is sourced from meeting minutes.
City Council held its first hearing on the proposed sale at its November 25, 2019 public meeting. City Attorney Gary Smith announced Mayor Rick Osbon was recusing himself from participating in any discussions or votes, because:
“Mayor Osbon’s family operates the business which is located adjacent to the building that is being considered for sale. He is recusing himself to avoid the appearance of any impropriety that may be involved in the transaction since he owns property adjacent to 135 Laurens Street SW,”
According to meeting agenda and minutes (5), the key issues included the possible future value of the property, selling below both the appraisal value and investment costs, the lack of additonal bids, and the possibility of paying rent if plans to move into a new, consolidated City Hall were delayed by more than two years. In regard to the prospect of paying future rent, the City Manager’s supporting memorandum read:
“Until that time or any time earlier when the City is ready to relocate to the Chesterfield Street building, the City will continue to own the building. Should the City not be ready to move into the new building rent would need to be paid beginning February 1, 2022 to WTC Laurens, LLC.”
During the meeting, Dr. Rocky Napier of Aiken asked about the city’s investment to date. City Manager Stuart Mr. Bedenbaugh responded that, between the 2011 purchase and subsequent improvements, the City “has $1,655,678 in the building,” and admitted the city “has put more money in the building than the appraised value.”
Dr. Napier raised concerns about the lack of specificity in the rental agreement, recommended the city not rely upon a single bid:
“Dr. Napier stated he would suggest since the Aiken City Council is stressed for funding to meet current obligations,that it put this property out for bid and see what the market will bear rather than taking at least a $100,000 loss on the front end of this agreement without getting any detailed due diligence as it relates to a transaction of this magnitude.”
Councilperson Kay Brohl, who was newly installed, spoke in favor of the sale after asking a series of questions about the Chesterfield Street building:
“Councilwoman Brohl stated she felt the proposal to sell the Laurens Street property is good because she feels the City owns too much real estate. She did not feel it is a healthy thing for a city to be in the real estate business, because the property is not on the tax rolls and not bringing in tax revenue for the city. She felt it is better not to have a huge inventory of real estate. She said she just wanted to be sure that we are doing the best for Aiken.”
Councilman Ed Girardeau also advocated for the sale on the basis of future uncertainty, stating he had “been a real estate appraiser for 35 years” and “was certified to review the appraisal.” However, he offered no insights on the appraisal other than “he did study” it; and proceeded to state:
“He said in his opinion we have already agreed we are going to buy another building and renovate it. He said theoffer to purchase the Laurens Street building is sort of a ‘bird in hand as to two in the bush.’ The risk we take is if we don’t agree to the sale of the Laurens Street building now, and we go forward who knows what will happen in two years. It may be worth more, or it may be worth less. It may not even be marketable.”
Councilman Ed Woltz provided the lone council dissent. He raised numerous issues associated with the prospect of future rent, accepting a sole bid, the uncertainties surrounding the proposed consolidation, and the lack of specifics in the purchase contract:
“He felt we are doing this too quickly. He pointed out that we are not paying rent now, so talking about not being charged rent is a ridiculous comment…. We would be entering into an agreement to sell something and then hope everything else works out well. We don’t know what our rent will be if we get stuck there.”
The “Two Year Plan:” Weldon Wyatt Makes His Case
The issue was important enough to discuss at a work session before holding the required second hearing and final vote. Council met for a work session prior to its December 9, 2019 meeting. Mayor Osbon recused himself from the discussions again.
Attending the work session was Weldon Wyatt. who described a two year plan for his proposed investment. According to the minutes (6) the “only comment he had” was an assertion of a two year plan for the property:
“They are looking at something two years out, and they do not know what will happen in two years, but they are willing to take that risk…He said he would not be looking at buying it if he didn’t think they could use it, but they do not know what they would use it for right now. He noted that he had bought the Wells Fargo property for$750,000, and does not have a use for it at this time. He said when looking at something two years out, it is difficult to figure out what you will do with it. He said he could not do anything with it for two years.”
He further made his case by stating “They have been around Aiken a long time; Council knows what he does and what he has done,” that “it is hard to imagine what the building will be worth in two years. It could be more or less. He said what he was agreeing to pay is something they are putting their faith in Aiken that it will be worth the $1.2 million two years from now.”
A few councilmembers sounded very deferential to Mr. Wyatt, with Mayor Pro Tem Lessie Price stating “Mr. Wyatt has been very considerate,” and that “Council appreciates the patience of WTC Laurens, LLC.” Council person Kay Brohl stated that “she knows WTC does good work,” while claiming “Council has not had a good track record with property.”
No record of any challenge or questions regarding Mr. Wyatt’s offer were recorded.
The City Sells Its Finance Building
On Sunday, January 12, 2020, The Wyatt family abruptly, and without a stated reason, exited its contract with Aiken County to purchase the old hospital, and the Wyatt’s “home run” proposal to reinvigorate the West entrance to the historic district ended.
The next day Aiken City Council proceeded with its second hearing to sell 135 Laurens Street to a family that had the day before cancelled a major project that had consumed hundreds of hours of county and city time. The meeting minutes provide no indication of knowledge or concern for this development.
The January 13th meeting was dominated by an annexation and apartment complex proposal on Owens Street off Daugherty Road. Another hearing with high interest involved the million dollar subsidy to the Steeplechase Foundation to purchase a new property. By the time the Finance Building reading arrived, only two citizens rose to speak.
The sale price was now at $1.3 million, matching the appraisal value. The same key issues raised during the first hearing lingered into this second reading. Mayor Osbon again recused himself from the discussion and vote.
Dr. Rocky Napier reappeared and repeated his numerous concerns and questions. The answer to his first question, was WTC Laurens, LLC registered with the state of South Carolina, was a sure sign that City Council was underprepared to handle all the sale issues. The answer from City Attorney Gary Smith was uninspiring:
“Mr. Gary Smith, City Attorney, stated he could not answer that question at this time. Before any transaction is made with him,the closing attorney would confirm their existence before closing takes place.”
(Update, 4/15/22: WTC Laurens, LLC incorporation date is shown as March 9, 2020 on the SC Secretary of State’s website, so it was not yet registered with the State of SC. The closing attorney for the sale was Mary O. Guynn, Mr. Smith’s law partner).
Napier went on for another eight minutes with questions and concerns, most of which the city could not fully answer. Among the issues was the presence of a concept plan for future use of the property. WTC’s representative stated there was no concept plan yet, this was “just a year end investment opportunity.”
Adding to Dr. Napier’s concerns was Dr. Taylor Garnett, a long time downtown landlord and investor. According to the meeting minutes, he touched on every key issue:
“Mr. Garnett said he did not feel that it was done in a very business-like manner. It should have been presented to the public and advertised for sale. He said he did not like taking the first buyer coming down the pipe. He said he did not think there was a solid plan for the Chesterfield Street building….there should not be a big rush to sell the Laurens Street building and worry about rent, late payment clauses, upkeep and maintenance, etc. It needs to be presented to the public. There could be a buyer out there who would pay more than$1.3 million for it. He said he understands the city has between$1.7 and $1.8 million in the Laurens Street building. If we take $1.2 million, we leave $500,000 on the table. He said he felt we need to back up. It needs to be done in a business-like manner.” (7)
Once again, Ed Woltz offered the only objections from Council, stating he “was opposed to the sale because it is a bad time and not in the best interest of the City.”
Councilperson Brohl admitted to a lesson learned, “that everything we do should go out for bids,” and then offered a motion to approve and voted with the 5-1 majority to approve the sale.
According to county records the sale to the Wyatts was finalized on March 26, 2020. Five days later Weldon Wyatt’s “two year plan” for the property ended. (Updated 4/15/23 to change “less than one month later to “Five days later” and March 9, 2020 to March 26, 2020)
Acccording to Aiken County records, on April 1st, 2020, WTC Laurens, LLC sold 135 Laurens St., SW to SRP Credit Union for $1.3 million, but retained the parking lot at 130 Pendleton St, SW. (Update 4/15/23: The closing attorney for the sale was City Attorney Law Partner Mary Guynn).
The unexpected sale to SRP Credit Union also cost the city at least $15,000 in moving costs when the finance department and city manager’s office temporarily relocated back to 214 Park Avenue, West in June of 2020. SRP Credit Union opened its new branch on November 20, 2020.
Dr. Napier’s and Dr. Garnett’s assessment that a higher value for the property was likely and imminent proved to be accurate. WTC Laurens, LLC would, in essence, realize a profit of $500,000 on the 130 Pendleton Street parking lot adjacent to Osbon Dry Cleaners.
Just over a year later WTC Laurens, LLC sold the 130 Pendleton St parking lot property.
On May 27, 2021 R and O, LLC (agent/owner: Rick Osbon) purchased for $500,000 the 0.37 acre property adjacent to Osbon Dry Cleaners. The closing signature is Weldon Wyatt, who had departed from another major development earlier that month, the nascent Project Pascalis, after signing contracts to purchase more than two acres of downtown property for $9.5 million.
(Update 4/15/23: Earlier in the month, on March 3, 2021, Mayor Rick Osbon had met with Weldon Wyatt and a hotel developer on another matter: the future of the Project Pascalis properties for which Mr. Wyatt had two contracts to purchase involving $135,000 in earnest money held in an escrow account by the law firm of Smith, Massey, Brodie, Guynn, and Mayes. The meeting was documented in a May 4, 2021 memo by Aiken Economic Development Director Tim O’Briant (excerpt below)
Conclusion
This story provides another example of Aiken city government officials making major financial decisions, involving large sums of taxpayer money, without a competitive bidding system. City Council disregarded the advice of knowledgable citizens looking out for the common good by insisting the city adhere to accepted and proven policies and procedures.
Yet, a year later the city embarked down an even more expensive road called Project Pascalis, even teaming up with the same developer who had burned them on the old hospital redevelopment and took them to the cleaners on the Finance Building.
_____________________
(1) https://www.cityofaikensc.gov/aiken-revitalization-project/
(2) Between land and improvements, the City of Aiken eventually spent $11.1 million on the Chesterfield St property; officially purchasing it from the Aiken Public Facilities Corporation on December 12, 2021. The move was completed in June of 2022.
(3) https://aikenchronicles.com/2022/06/21/project-pascalis-and-the-wyatt-factor/
(4) “AN APPRAISAL REPORT of a Municipal Building Located at135 Laurens Street SW & 130 Pendleton Street SW Aiken County
Aiken, South Carolina 29801.” September 13, 2021.
J.Marshall Vann, MAI, SRA
Vann Appraisal Services, Inc.
(5) November 25, 2019 Meeting Agenda: Pages 62-67
https://edoc.cityofaikensc.gov/WebLink/DocView.aspx?id=479198&dbid=0&repo=City-of-Aiken-LF
November 25, 2019 Meeting Minutes.
https://edoc.cityofaikensc.gov/WebLink/DocView.aspx?id=481204&dbid=0&repo=City-of-Aiken-LF
(6) December 9, 2019 Work Session Minutes:
https://edoc.cityofaikensc.gov/WebLink/DocView.aspx?id=483154&dbid=0&repo=City-of-Aiken-LF
(7) City Council meeting minutes for 1/13/20
https://edoc.cityofaikensc.gov/WebLink/DocView.aspx?id=487473&dbid=0&repo=City-of-Aiken-LF
Inset:
The Finance Building
135 Laurens Street SW
County ID 105-28-030-012
0.26 Acres
Two story, 8,149 square foot building with 4, 197 square feet of “partially finished basement area”
The Parking Lot
130 Pendleton Street SW
0.37 acres
County ID 105-28-030-013
25 space parking area with a drive through
130 Pendleton Street SW
0.37 acres
County ID 105- 28- 03- 013
25 space parking area with a drive through