Commissioners Should Call Paul Simon’s Bluff
Originally posted on CityStink
Monday, October 29, 2012
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.
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. ***