Breaking: Parking Deck Contract Approved with Conditions Added

Originally posted on CityStink
Monday, August 27, 2012
Augusta, GA
From Reports
Al M. Gray, President of Cost Recovery Works, Inc. contributed multidisciplinary review techniques in support of this article.

We have just received word that the management agreement between the city of Augusta and Augusta Riverfront LLC for the Reynolds Street Parking Deck has been approved in a 6-2 vote in a special called meeting of the Augusta commission just minutes ago. The parking contract has been stalled for months after revelations came to light that the city did not own the land under the deck and that it had liens on it for more than $7 million held by Wells Fargo bank. In addition to this, there were serious questions about the city being on the hook for paying the overhead expenses for Augusta Riverfront LLC, that could amount to a blank check.
During a special called meeting last Tuesday, Commissioner Joe Bowles proposed a 70-30% split of deck proceeds with ARLLC and adding a pedestrian skywalk from the second floor of the deck to the TEE Center. Bowles says that cost savings from construction of the deck would pay for the skywalk. The skywalk is important for two reasons: 1. It will enhance public safety for people attending events at the TEE Center and 2. It will encourage deck patrons to park on the upper level spaces owned by the city instead of the ground floor spaces owned by Augusta Riverfront LLC.
Commissioner Wayne Guilfoyle added the condition of the skywalk to the motion to approve the contract at today’s meeting. Voting in favor were Guilfoyle, Bowles, Johnson, Jackson, Brigham, and Aitken. Commissioners Hatney and Lockett voted against. Commissioners Smith and Mason were absent.
As we understand it, some key provisions that we suggested earlier have been included in the contract that was approved today, in particular the Rights to Audit and language that specifically says that the city will not be liable for the overhead costs of Augusta Riverfront LLC. This was crucial for passage. As we understand it, the following amendment to the agreement was included in the contract:
Section 10.14 Plain Language Clarification of Certain Agreements. 
For the avoidance of any doubt, Manager’s only compensation under this Agreement shall be the Management Fee under Section  3.1, and Manager shall not “mark-up” or add any profit, administrative charges, or overhead to any expenses charged to Owner under this Agreement (i.e., costs and expenses to operate the RSPD charged to Owner will not exceed the actual out-of-pocket payments of Manager). Furthermore, Owner shall have the right to audit all books and records of Manager as are necessary to determine Manager’s compliance with this Agreement, including the previous sentence.
If indeed the above amendment was added to the contract, it puts the city in a much better position.Though far from a perfect agreement it is much better than what commissioners were presented with just a week ago. The Rights to Audit will give the city a powerful tool to make sure that ARLLC is in compliance with the contract. It also closes the biggest loopholes that could have amounted to a blank check for ARLLC by being able to bill the city for unlimited overhead expenses.
We will have an update as more information becomes available.***


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