Mayor Retreats from Locked and Loaded Commissioners on Tee Center

Originally published October 31, 2012 on the defunct CityStink.net site.
Wednesday, October 31, 2012
Augusta, GA
From CityStink.net Reports
Locketted and Loaded was Commissioner Bill Lockett when the Tee Center was removed from Monday’s Augusta Commission Committee meeting. See our exclusive video below:

Commissioners Should Call Paul Simon’s Bluff

Originally posted on CityStink
Monday, October 29, 2012
Augusta, GA
By The Outsider
Al M. Gray, President of Cost Recovery Works, Inc. contributed multidisciplinary review techniques in support of this article.
Well here we go again. Just a week has passed since the  contract with Augusta Riverfront LLC to manage  the TEE Center failed to get six commission votes for approval and once again commissioners will revisit the issue today at noon. During the waning hours of Friday, Mayor Deke Copenhaver called for the special meeting of the commission for today to approve the management contract like he did a week ago. This tactic is to keep critics of the contract from being able to get on the agenda to speak out against it. Bottom line is: Mayor Copenhaver is bound and determined to ram this thing through at all costs.
And the costs could be very high for the taxpayers if this contract is approved today. We found out a couple of weeks ago that operating losses for the TEE Center would be around $900,000 a year — and the city would be on the hook for all of it. Mind you, these are the numbers coming from Paul Simon of Augusta Riverfront LLC, and if history is any guide in regard to their numbers, you can probably double those figures. That means that the new convention center could be a drain on the city’s general fund. Compounding these losses are loopholes in the contract that allow Augusta Riverfront LLC to shift their personnel expenses over to the city and even give out generous bonuses to their staff and stick the city of Augusta with the bill.
So what has changed with this contract in the past week? Absolutely nothing. It’s the same bad deal for the taxpayers that commissioners rejected last Monday. The mayor is hoping that he can persuade at least one or two commissioners to give in and approve the same contract today. He sent out an email this past Friday imploring commissioners to approve the contract at today’s special meeting and warned of losses and stigmatization of the facility if conventions have to be cancelled. The mayor is either terribly naive or being purposefully disingenuous.  Let’s hope enough commissioners don’t buy the Mayor’s lame argument. As we understand it, the Mayor may have even lost two votes since last week. We shall see after the results come in from today’s meeting.
Manufactured Crisis
Paul Simon of Augusta Riverfront LLC has been threatening commissioners with the prospect of convention cancellations as a means to force them to approve this hideously lopsided contract. It’s all a ruse and it reminds us of another manufactured crisis from the Fall of 2009, when commissioners were being given a similar ultimatum to approve the TEE center or risk losing a new Hyatt Place hotel. Well here we are three years later and there are still no signs of that hotel. You can read more about that in our previous story: The Hotel that Never Was.
Now why did Augusta Riverfront LLC wait until the 11th hour to bring a management contract forth? Why was this not done months or even years ago? Why? Because by waiting until the last minute, Paul Simon can manufacture a crisis and get the contract he wants — not the contract that is best for the city. In fact, this current contract was drawn up nearly entirely by his attorneys at Hull Barrett.What kind of partnership is that? What were the attorneys hired by the city doing all of this time? You would think the attorneys for both parties would have gotten together in a room and drawn up a contract — with each side compromising on certain points, overall giving both sides a contract with which they were satisfied. But that did not happen. Here we have a contract drawn up by the attorneys for the other side being dropped in the laps of commissioners at the last minute with them being told they must approve it — or else.
Or else what? To hear Paul Simon and Mayor Copenhaver tell it, the new convention center would lose out on conventions scheduled in January if this stinking pile of crap they are calling a management contract is not approved today. It’s all a bluff. Let’s remind everyone that the city is already loosing $900,000 the first year even with these conventions.  Any profit that these conventions may generate will mostly go to Augusta Riverfront LLC. They get the profits from booked rooms in their hotel. They get all of the profits from food and beverage sales prepared in the $1.4 million kitchen that the taxpayers paid for. Does anyone with an ounce of common sense think Augusta Riverfront LLC is going to cancel these events for which they are the sole party making any profit? The city just covers all of the costs, so Paul Simon’s company can make all the profit.
But let’s ask another question. Since Augusta Riverfront LLC does not yet have the contract to operate the facility, what gave them the authority to book these events in the TEE Center in the first place? How do we not know that these first couple of conventions were not already booked for the existing conference center? Does it not seem rather odd that a  group like the Georgia Chiefs of Police Association would book their meeting in a facility without anyone officially in charge to manage it? These events are typically booked many months if not years in advance. We’ve heard two stories — that the Convention and Visitors Bureau was booking these conventions and that The Marriott was booking them directly. But even if the CVB was booking these events, doesn’t a reservation require a deposit? And wouldn’t that come with the assurance that a professional company would be managing the event? Why is all of this being done backwards? Who books conventions in a facility where there is no one to manage it?
But nothing will be cancelled in January. Does anyone really expect the owners of The Marriott to start cancelling room reservations? Don’t bet your life on it. The excuse coming from the folks at Augusta Riverfront LLC is that they need time to train and hire staff to stage these conventions and they must have their contract approved before they can do that. That is utter baloney and they know it! Are we to believe that here in the last couple of days left in October of 2012 that they do not  have the adequate staff trained to handle these events that are scheduled at the convention center just a little more than two months away? Really? Is this who we really want managing this facility? Let’s be serious here. The folks at Augusta Riverfront LLC have been managing the city’s adjacent conference center for over 20 years now. The TEE Center is just a larger space. This is just an excuse to manufacture a false crisis.
Other Options Out There
But OK, let’s assume that Augusta Riverfront LLC is this woefully unprepared at the last minute. Why should  the city succumb to their demands because of their own incompetence? It’s not like there are not other options. According to city administrator Fred Russell, Augusta Riverfront LLC will not agree to  a 1 year interim management contract with the option to renew for 14 years. But perhaps another professional management company would. We have one right down the street that has a national reputation for managing large events. In just a few short years they have managed to turn a facility that had a maligned reputation that was struggling to attract events, into one that routinely brings big name acts to The Garden City.
That management company is called Global Spectrum. The way they have turned the James Brown Arena from a desolate embarrassment to an arena buzzing with activity with a renewed optimism is nothing short of miraculous. Officials at Global Spectrum have already indicated that they would have no problem hosting the first few conventions at the new TEE Center– so why not let them? At least Global Spectrum is not holding a gun to our heads demanding us sign a lopsided contract that gives them carte blanche to loot the taxpayers of Augusta. So, if the folks at the Marriott say they are unprepared at this stage to host these conventions, then lets go with the folks who are prepared over at Global Spectrum
. We just might find out that they could do a better job for less money. Their performance managing The James Brown Arena and Bell Auditorium has certainly been impressive
The Augusta Convention and Visitors Bureau should now be doing all they can to assure these groups who have conventions scheduled at the TEE Center that their event will go on and will be a smashing success and they look forward to  having them come back to the Garden City very soon.
The Next Step
So far, the only leverage Augusta Riverfront LLC has is issuing threats of convention cancellations. What that has done is create a diversion by manufacturing a crisis to take attention away from their awful contract that they are trying to strong arm commissioners into signing. So commissioners could neutralize that manufactured crisis today by making a motion to work with the Coliseum Authority and Global Spectrum to see to it that no conventions are cancelled. Then Augusta Riverfront LLC would no longer have something to hold over our heads and attention would be directed where it belongs — at the details of this contract.
If Augusta Riverfront LLC does not want to come back to the table as a partner, then I am sure the city can find any number of professional management companies, including Global Spectrum, who would be willing to come in and run this facility on terms much more favorable to the city. A lot of attention has been paid to the demands of Augusta Riverfront LLC — a company that has invested zero of their own dollars in this facility. They have essentially received a $50 million dollar gift from Augusta taxpayers — and that’s not good enough — they want more! So now its time for the commissioners to start paying attention to the interests of Augusta taxpayers — after all, we are the ones with all the money invested in this facility, not Augusta Riverfront LLC.
And if Mayor Copenhaver is really serious about getting a management contract approved, and if he really has the best interests of Augusta taxpayers at heart, he will stop pulling these stunts of calling these special meetings in hopes he can scrounge up 6 votes to pass this turkey of a contract. Frankly, it’s insulting to the commissioners and the people of Augusta to keep bringing this same contract back over and over. If the Mayor wants to do something constructive he would invite the critics of this current contract to the table and let’s go through it line by line and work together to get the best deal for the city.
So far, the mayor has seen fit to deny us an opportunity to be heard. But now is his chance to do the right thing. First of all chunk this lopsided contract. Then, bring all of the parties together, including the citizen activists who have done much of the work discovering the deficiencies in this current contract, and let’s go through it line by line and take out all of these loopholes and gotchas that will cost taxpayers $millions. That’s how this process should have been handled from the very beginning. It’s not too late to do it the right way now. ***

Video: TEE Center Management Contract is Riddled with Land Mines

Originall posted by CityStink
Sunday, October 28, 2012
Augusta, GA
From CityStink.net Reports

On the eve of Mayor Deke Copenhaver forcing yet another Tee Center vote on balking commissioners, Augusta Today contributor Al Gray challenges cost controls after being silenced by Copenhaver a week earlier. See our video report below.

 

 

Video: Bowles Bows to TEE Bonuses

Originally posted on Citystink
Wednesday, October 24, 2012
Augusta, GA
From CityStink.net Reports
Augusta Commissioner Joe Bowles takes a stab at Tee Center Management Bonuses, but falls to Simon Says and ends up voting for them anyway. Watch Simon say the taxpayer is going to lose and his managers will be paid in the video below.

Augusta Held Hostage: Day 24

A Little White Lie?

Originally posted on CityStink
Tuesday, October 16, 2012
Augusta, GA
By Kurt Huttar
Here we go. It is now official. As my Augusta Today colleagues and fellow CityStink.net contributors, Lori Davis, Brad Owens and Al Gray have been saying for months, the Augusta Tee/Convention/Conference/Whatever-it-is- called-next-week is a TEETOTAL DISASTER. Yesterday the projected LOSSES came out for this already-extinct dinosaur –$911,000 plus in losses! 
Since only $250,000 is going to be available from the dedicated funding source of the hotel transportation tax, Augusta Administrator Fred Russell has had to admit that the balance of the funding for this enormous albatross on city taxpayers will have to come out of the General Fund. One supposes that fire and police protection will take another hit.
Of course, accompanying the news of this debacle the Augusta Chronicle, who shares ownership with erstwhile TEE manager Augusta Riverfront LLC, trotted out the usual wildly optimistic tourism revenue growth propaganda. “As (Augusta Riverfront’s Paul S.) Simon and Augusta Conven­tion and Visitors Bureau officials have said, the benefits to the city don’t come from revenue from the center but from visitor spending. Simon’s report includes a CVB (Convention and Visitors Bureau) chart estimating $8.7 million in visitor spending in the first year from 13 conventions.”
This statement rang a bell from a July 8, 2007 propaganda piece that Barry White, Director of the CVB, had published in the Chronicle. White wrote at the time: “Not only does Augusta Riverfront LLC bring proven expertise, it has offered to donate to the city downtown real estate valued at an estimated $1 million. The LLC also will pay annual center operating expenses over $250,000 and capital improvements over $100,000 a year.
Wow!
How much more wrong can a bureaucrat be? The deal went from the LLC funding $350,000 a year being reported in Mr. Simon’s former newspaper to Augusta’s losses being capped at $350,000 annually a month later – an amazing $700,000 swing against Augusta taxpayers in one month! This looks like the first bait-and-switch. Now we have the second. Now the losses to Augusta are nearly $1 million!!
Who can believe anything coming out of CVB now? The free land had $7 millions in liens on it and now the city will lose millions instead of getting millions in contributions from its “partners.”
The 2007 Barry White piece in the Chronicle also reminds one of another little white lie that TEE Center supporters hawk – that the voters of Augusta approved the TEE Center in 2005. What they never bring up is that the voters approved this boondoggle after being told it would cost ‘only’ $20 million. Now the cost is over $50 million ($tens of millions more taking into account the existing Conference Center) and it looks like the operating losses for the first decade will easily exceed $20 million. Bear in mind that none of the projected losses include depreciation or debt service!
Little white lies got one huge white elephant constructed on Reynolds Street.
Reality trumps slanted projections and you can’t use “White Out”, either.

 

Augusta Held Hostage: Day 18

Originally published on the defunct Citystink.net site on October 11, 2012.

 

Originally posted on CityStink
Thursday, October 11, 2012
Augusta, GA
By Al Gray
The author, Al M. Gray is President of Cost Recovery Works, Inc., a provider of Cost Avoidance and Cost Recovery for America’s leading companies, businesses and governments desiring Superior Returns.
Yesterday, yet another Tee Center work session was scheduled by Augusta Commissioner Jerry Brigham. This meeting came on the heels of an amazing series of revelations, contradictions, and absurdities emanating from the fiasco of the first Tee Center work session last week.
On hand to present for Tee Center partner and soon-to-be manager were Mr. Paul Simon of Augusta Riverfront LLC and Mr. Bob Kuhar. Present to answer questions and representing the city was attorney Jim Plunkett.
A comparison of the minutes from that work session, the unsigned, undated 2007 Partnership Term Sheet, and the December 2009 special called meeting of the Augusta Commission bring forth a plethora of questions:
  • Who is Augusta Convention Center Management LLC, who is named the TEE Center Manager? Where  is an assessment of this entity’s financial viability? Who are its principals? Don’t we need to know who they are to be sure that they are not paid as the contract dictates?
  • In the last work session Mr. Simon called for us to look at the Commission’s December 7, 2009 vote authorize the mayor to execute the Tee Center CORE agreement, but this document does not now exist, does it? Doesn’t this invalidate the motion that passed the Commission in December 2009?
  • The Tee Center Catering Agreement references that certain Conference Center Management Agreement dated as of __________, 2012 by and between Caterer and City. Where is this document? If it does exist, why were we not provided with it?
  • Let us see if we understand this correctly from the last work session: Mr. Simon said“So what I’m saying to the city in this (August 2007) term sheet we’ll give you land. Now what are we getting back for our land? We’re getting the kitchen. The term sheet says “The LLC and Augusta will allow the necessary modifications to the Convention Center to provide for the combined use of the kitchen, laundry, and back of the house areas.” The Term sheet also says that “AUGUSTA AND LLC AGREE TO THE FOLLOWING TERMS TO OWN, BUILD, AND OPERATE THE TRADE CENTER” Doesn’t this mean that the LLC agreed to bear costs in the term sheet for which it is responsible?
  • Doesn’t the 2007 Term Sheet say that “Augusta’s Capital Funds shall specifically not be used for items related to Kitchen Equipment, Laundry Equipment, or any Convention Center and Convention Center and/or Hotel capital cost.” When did the Commission assume its LLC partner’s cost of Kitchen Equipment?
  • Mr. Simon cites that the Tee Center cost estimates included $700,000 for kitchen equipment (later increased to $1.4 million without any change in the estimate) but why isn’t this a LLC cost to “own, build, and operate?” when the Term Sheet says it is an LLC cost?
  • The invoice for the Kitchen Equipment shows refurbishment of existing kitchen equipment. Whose equipment was this? Whose equipment will it become?
  • The RW Allen Contract caps the overhead and profit on a subcontract but the kitchen equipment invoice for roughly $1.4 million and data in Augusta’s possession is insufficient to determine whether this limit has been breached? Why don’t we insist on getting the information required to assure this limit has been met?
  • In the work session of last week, Mr. Simon and Mr. Plunkett said that the decision to build the Tee Center had to come before an operating plan was completed. They said that these contracts have to be signed before there is a plan. Doesn’t these contracts make the plan only a guide with no authority at the same time it gives the Manager and Caterer absolute authority to assign personnel? Isn’t there a Convention Center website listing very highly compensated General Manager, Catering Manager, Security Director, Finance Manager, and about 6 or 7 more overhead staff? Are these the same 11 full time, permanent employees Mr. Simon mentioned last week?
  • At last week’s work session Mr. Plunkett, the city’s attorney said this The expense of the kitchen is an expense of the TEE Center. The maintenance of that facility, this equipment, is being shared basically between the Conference Center, the TEE Center and the hotels proportionate based on plates.If this is true, why do these agreements set it up so that all of the capital and maintenance costs of the Kitchen, which is now being referred to as the “Conference Center Annex” are born by the city? There is a separate fund for this in the Catering Agreement.
These agreements are so convoluted at this juncture, it is becoming apparent that no one understands them, including the attorneys. The commission would be wise to obtain the proposed plan, budget and procedure manual before agreement should be reached.
Update
: Augusta Today and CityStink.net contributor Brad Owens was invited to speak at the October 10, 2012 and was forceful in his presentation of many of the foregoing issues. A key point made was that the land given up by the Augusta Riverfront LLC could not be conceivably worth the $65 million that Augusta has spent constructing buildings that primarily benefit the LLC’s two Marriott hotels.
MORE TO COME!
AG

Special Report: Augusta Catered to Death

TEE Center under construction August 2012

Originally posted on CityStink
Thursday, October 4, 2012
Augusta, GA
By Bradley Owens
Al M. Gray, President of Cost Recovery Works, Inc. contributed multidisciplinary review techniques in support of this article.
* Editor’s note: Please click on blue text to view documents referenced in this article*
Houston, we have a problem. Rather the City of Augusta’s special counsel Jim Plunkett and his predecessors who created the TeeCenteragreements have a host of problems. Most of them center around “ Conference Center” versus “Convention Center” but the Tee Center Catering Agreement is the lynchpin. Our Augusta Today and CityStink.net investigative team now seems prescient in our dogged pursuit of the elusive kitchen equipment.
The entire TeeCenter fiasco began with an unsigned, undated “Term Sheet” that became the only partnership agreement with Augusta Riverfront LLC that was approved by the Augustacity commission. This agreement refers repeatedly to the “ Conference Center” as being subject to the preexisting agreement between the partners. It says that Augusta and Riverfront agree to “ modify their agreement for the operation of the Convention Center to include the Trade Center. ” Trouble was, there was no agreement to operate any “Convention Center”, only the 1999 agreement for the operation of the “Conference Center.”
Since then there has been considerable publicity given that the entire Tee Center, Parking Decks, and existing Conference/Convention Center are now the “Convention Center,” which furthers the misconception that there ever was a “Convention Center” before, but all the while the lawyers reverted to labeling the existing facility as the “ Conference Center.” Was it deceit or wanton incompetence? Read on and you decide.
On September 24, 2012 Augusta Riverfront LLC’s Paul S. Simon appeared before the Augusta Commission with an ultimatum – Execute a plethora of contracts, assignments, releases, modifications and other legal documents within 22 days or face cancellation of Tee/Trade Center events.Augusta then knew it was being held hostage to the lawyer’s handiwork, efforts that Administrator Fred Russell promised were nearly complete 3 years ago.
Included was the catering agreement. This document spells out that the new kitchen built in the TeeCenter, but legally carved out as the “ Conference CenterAnnex”, is to serve both Marriott hotels and the existing Conference Center. Why is the term “ Conference Center” so important? Why, it is because if the existing Conference Center agreement was intended to continue – which it was – it means that the $1.4 million of kitchen equipment that Augusta bought under a controversial change order to the Tee Center Contract will mostly be used to generate revenues for the Marriotts and not Augusta. This is because the existing Conference Centeragreement pays Augusta 5% of the rental space revenues and nothing else, including catering.
TEE Center abuts The Marriott Hotel
Unless Riverfront has quietly reimbursed the city, Augusta paid $1.4 million for kitchen equipment that it will get almost NO USE OF, because the Trade Centerspace will be used primarily for exhibits, with attendees adjourning to meeting rooms in the freely-catered Conference Center for meals. So far, our Georgia Open Records request responses fromAugusta have not shown that the Commission ever agreed to relieve Riverfront of the LLC’s responsibilities for kitchen equipment.
Under the circumstances, it would be wildly irresponsible for Augusta’s Commissioners to agree to pay for any of the kitchen equipment, particularly since some of the charges on the vendor’s invoices was to repair Riverfront LLC equipment! (Under prior agreements Riverfront owned the equipment) Where is our $1.4 million? Is there any prohibition whatsoever barring Riverfront from running a commercial catering operation citywide out of the Conference Center portion of the Convention Center, using the $1.4 million ofAugustakitchen equipment?
Worst of all the catering agreement mentions in several places that services to the hotels, to the restaurants, and to the existing Conference Center will be provided by the kitchen. There is no operational procedure manual to set out controls over food and beverage procurement, use or inventory for theTeeCenter versus these other operations. Without controls and in the midst of all of these operations that consume food and beverage, how willAugustaavoid being looted from various parties on and off the premises? Will there be household with freezers of steaks, courtesy ofAugusta taxpayers?
How many of the Marriott’s existing catering staff will be assigned to theTeeCenter contract? Since the vast majority of the catering seems to be outside of theTeeCenter, why should management level employees be charged to theTeeCentercatering agreement?
In life, timing is everything. With the unsigned, undated Term sheet that began the Tee Center project in 2007, the seed was planted in the minds of the public and the commission that there was going to be a new  Convention Center agreement. After that the branding was changed to emphasize the  Convention Center labeling, including announcements at the opening of the Reynolds Street Parking Deck and at last month’s  meeting. Behind the scenes the legal wording, finally disclosed at the September 24 meeting, narrowly focused on the Conference Center and preserved the sparse 5% payout to the city for the existing center, with no provision for catering revenues. The wording of the catering agreement is that catering only applies to the Tee/Trade Center.
Meanwhile, the Amendment to the Core Agreement extends these agreements out 50 years. Never mind a reported reduction to 15 years.
Throughout these agreements, one thing is repeatedly clear. The hotels and these agreements, which in the hands of others not as civic in their mindset as Paul Simon and Billy Morris provide an UNLIMITED CONDUIT to taxpayer funds, can be SOLD! In the hands of money hungry financiers of Wall Street, these agreements are loaded guns aimed directly at the finances of we Augustans.
How much more can Mr.’s Morris and Simon get for their two Marriott Hotels with $70 million of dedicated Augusta buildings permanently and legally bound to them with an UNLIMITED conduit into the general revenues of Augusta Richmond County?
There you have it, reader. Augustans already find themselves facing a property tax increase. How many more tax increases will be coming to feed the Tee/Trade/Conference/Convention monster?
When the finances of Augusta crater it will be in no small part because of Catering.***
BO
**Cost Recovery Analyst Al GrayPresident of Cost Recovery Works, Inc. contributed to this report.

 

Tee Catering Definitions From 9-2012 Agreement1999 Core Agreement Conference Center – Revenues

Special Report: Is it TEE Total Extortion?

Originally posted on the defunct CityStink.net site October 3, 2012

Wednesday, October 3rd, 2012
Augusta, GA
By Al Gray
The author, Al M. Gray is President of Cost Recovery Works, Inc., a provider of Cost Avoidance and Cost Recovery for America’s leading companies, businesses and governments desiring Superior Returns.
 
*Editor’s Note: Click on highlighted text links to view documents referenced in this report*
In the five-year twisting tale of Augusta’s TEE Center project, we who have observed the events and decisions as they happened, learned to expect the unexpected. This didn’t keep reporter Susan McCord’s tweetfrom the September 24, 2012  Augusta Commission meeting from astounding me.
 
“Paul Simon: If documents aren’t approved by Oct. 15, (we) will have to cancel January police chiefs convention at TEE center,” she typed. My jaw dropped at the audacity of the city’s Tee Center partner suddenly resorting to what looks like a shakedown to get a management deal approved.
Simon’s Augusta Riverfront LLC is getting a $2 million a year subsidy courtesy of an unsigned, undated proposal from 2007 and that isn’t enough for him and his partners at Augusta Riverfront LLC?  Augusta has been held hostage since then. What is worse is that the City Administrator, legal counsel, and Augusta Convention and Visitors Bureau might be the source of this clumsy, heavy handed way of extorting an agreement out of a suddenly reluctant Commission.

Augusta Held Hostage

It is impossible for me to accept this assault by Management Agreement on the city’s finances in silence.
·         Augusta built at least $50 million in new buildings across multiple parcels owned by this Riverfront organization and probably $20 million of existing buildings, yet now is held hostage to liens on some of them?
·         There will be hundreds of pages of recorded easements, cross easements, assignments, and agreements on these lands, meaning that Augusta has all of the costs of land ownership, but few of the packages of rights that come with land ownership. Can’t we at least get a fee in lieu of taxes?
·         The unsigned, undated partnership agreement from 2007 says throughout that Riverfront is responsible for kitchen equipment while saying that Augusta is responsible for the kitchen space. Augusta has not been able to show where its City Commission has ever voted to change the partnership agreement, only that Augusta approved the change order to add $1.4 million of equipment to a project that Riverfront agreed to participate in as a builder and operator. Where is Augusta’s money?
·         The September 24 meeting was the first the Commission as a body had seen of the catering or management agreements and they were presented with an ultimatum that the documents have to be approved within 22 days! Five years of dithering and now the people of Augusta are presented with a manufactured emergency? Why? Keep reading!
·         Can we say there might be C-O-N-S-P-I-R-A-C-Y within Augusta government? Darryl Leach was the General Manager of the Augusta Marriott.On September 24, Paul Simon announced the Tee Center is now the AUGUSTA CONVENTION CENTER.The agreements that Augusta has been commanded to execute are now with an entity called the Augusta Convention Center Management LLC. This is where things get really get good. Darryl Leach is now the General Manager of the Augusta Convention Center. In fact, it seems nearly all of the former Marriott Augusta Staff, Don Fuller, Janet Pierce , Greg DeSandy  and  Sharon Koon, are now on the Augusta Convention Center Team!

The Augusta Convention Center
Who gets to decide if all, any or part of these employees – whose salaries and fringe benefits likely exceed a million dollars – who used to be Marriott costs become Augusta costs? The Management Agreement says the  Augusta Convention Center Management LLC “… shall have discretion and control, free from interference, interruption or disturbance, in all matters relating to management and operation of the TEE Center” and “Manager shall select, employ, promote, terminate where appropriate, supervise, direct, train, and assign the duties of all personnel which Manager reasonably determines to be necessary or appropriate for the operation of the TEE Center” This Management agreement and the catering agreement provide capability for 100% of former Marriott employees to shift onto the Augusta payroll! It sure looks like Augusta will have no rights to contest this cost shift once this agreement is executed
(*article continues below)
The Augusta Convention Center

·         Consultation with the Georgia Secretary of State Corporations Division does not show Augusta Convention Center Management LLC as being registered to do business in Georgia. Augusta is being demanded to execute an agreement with an entity that does not yet exist?
·         Augusta is forced to deposit $250,000 at the beginning of the year into the operating account, but if the balance in that account falls below the amount to fund that account for the next 90 days, Augusta is required to contribute from GENERAL REVENUES enough funding to meet those expenses without regard to how soon the next $250,000 funds injection is required!!!!! The original partnership agreement limits Augusta funding requirements to $250,000 for operations and $100,000 for capital, yet this management agreement calls for an unlimited pipeline of funding from Augusta? Who authorized or negotiated that?
·         The unlimited ability of this  Augusta Convention Center Management LLC to establish what costs are is not limited by the Annual Plan that the Augusta Commission approves, because “the Annual Plan will be only a planning tool.” Also, shouldn’t references to any Annual Plan limits be clearly defined not just as the types of costs to be included, but the amounts as well?
·         The management agreement provides for annual audits only, with no real-time or even monthly reporting. How can Augusta monitor these cost reimbursable agreements without continuous reporting and the strongest of audit rights? Shouldn’t these agreements be made subject to open records requests? Maybe the Augusta Chronicle can help us! No?
·         The management agreement called for the CVB to begin marketing for the Convention Center with execution of the construction contract to the tune of $350,000. However, the use of these funds by the CVB to market the Center before it opens was against the city’s own ordinance.
Summary
The Tee Center management agreement looks to have morphed into an agreement that allows most of the administrative staff of the Augusta Marriott to be shifted to Augusta’s Conference Center expense. There are unexpected liens on some of the property under the Center and a parcel that was not liened never was conveyed prior to construction. The Augusta Administrator promised the agreement was nearly complete over 3 years ago and now has provided the city commission with just 22 days to review and approve the contracts. The entity that Augusta is contracting with may not exist yet. The operating expenses, capped by the 2007 partnership agreement, are now unlimited conduits to the general funds of the city. The contracts fail to provide real-time program management and accounting.
***************
The Augusta Commission should walk away from these agreements and put the management and catering agreements out for bid. Otherwise outside counsel from far outside of Augusta needs to be brought in to renegotiate the management agreement to conform to model contracts from other cities.
Beyond this, it looks to me that Commissioner Bill Lockett’s idea of a forensic audit or a county-funded investigation of these transactions needs to be revisited. The project was funded by sales taxes, there are ample unused sales tax revenues in the coffers of Augusta, and legal costs are legitimate uses of sales tax money.
Can all of these issues and the progression toward the renaming of the TEE Center as the Augusta Conference Center be just incompetence?
Can Augusta afford an unlimited pipeline to its general revenues?
I don’t think so.***
AG