Category: Public Policy

Politics, public administration, law, regulation, banking, and property rights

The Ghost of David Fry

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The ghost of David Fry spotted near the new parking deck

Originally posted on CityStink
November 3, 2011
Augusta, GA
The Outsider

Al M. Gray, President of Cost Recovery Works, Inc. contributed multidisciplinary review techniques in support of this article. Cost Recovery Works is no longer in business, as of December 31, 2020.

Well, Halloween may be officially over, but the ghost of David Fry is still lurking the streets of downtown Augusta. No, not down at 5th and Broad streets by the Haunted Pillar, but instead his specter has been seen haunting another cursed Augusta landmark: the new TEE Center parking deck by 9th and Reynolds Streets.

It seems that the recent revelation that the city of Augusta doesn’t actually own the land where the new $12 million city owned deck sits, and an impending trial over the attempted bribery of two Augusta commissioners involving this same parking deck, has resurrected the restless spirit of David Fry.

Some of you may remember the name “David Fry” from two years ago. In August of 2009, the TEE Center and parking deck were in limbo because the commission had split along racial lines over whether to issue more revenue bonds because it was learned that the convention center was actually going to cost nearly double than the $20 million voters had  approved in a 2005 SPLOST referendum. Also, the addition of a parking deck across the street had some commissioners also crying foul, saying that the project had become too bloated and no longer resembled what voters approved and suggestions were floated to put in back on a ballot or redirect the SPLOST funds entirely. But that presented problems, because the TEE Center was inextricably tied to a $37 million redevelopment project for Laney-Walker/Bethlehem. So if the TEE Center didn’t get approved with the extra money needed to build it, some white commissioners were threatening to pull the plug on the $1 per night hotel/motel surcharge and pull the plug on redevelopment of Laney-Walker/Bethlehem. The situation was at a stalemate, and no one seemed eager to give up ground.

Now enter David Fry. He was an Augusta attorney and former nightclub owner. In late August 2009, commissioners Alvin Mason and Corey Johnson contact Augusta law enforcement that David Fry approached them with an offer of a bribe “if” they changed their votes on the TEE Center deal. Both Mason and Johnson had been voting consistently against increased funding for the TEE Center. The story didn’t hit the news until early September 2009. What was particularly interesting is what Fry was offering the commissioners. According to Mason and Johnson, Fry told them that he could land them lucrative concessions in the new parking deck that would be built along with the TEE Center (This is the same parking deck involved in the current “ParkingGate” saga).

WRDW’s Chris Thomas reported on the bribe scandal. (Editor’s note: article is no longer available online).

Chris Thomas also reports that Fry contacted commissioners Jerry Brigham and Don Grantham about a week after commissioners Mason and Johnson came forward to law enforcement about Fry’s attempted bribe. Don Grantham says that he remembers being contacted by Fry on August 31st, one day before a vote on the TEE Center. Both Grantham and Brigham said they didn’t report the incident because they thought the whole thing was “ridiculous.” And it would have been ridiculous to try and get Grantham  and Brigham to switch their votes. Grantham had been the biggest proponent of the TEE Center on the commission and  Brigham had voted in support of it as well. WJBF also covered the breaking story of the bribery attempt here: Attorney arrested for trying to bribe 2 Augusta commissioners. (Editor’s note: Augusta Chronicle coverage available here).

The fact that Fry was offering concessions in the parking deck was quite interesting. What authority did he have to make such a deal? And why the parking deck? It seemed very odd because in all of the TEE Center drama that was taking place, the parking deck was not mentioned very much.

A local afternoon radio talk-show personality tried to quickly explain it all away as much ado about nothing. He said that Fry was just an overly zealous lone gunman type who was extremely enthusiastic about the TEE Center and was upset with commissioners Mason and Johnson for holding it up. According to the talk-show host, Fry was particularly livid at Mason, whom he had donated money to in his campaign against Bernard Harper. According to this same talk-show host, many wealthy West Augusta types supported Mason in his first campaign, and that Fry felt “betrayed” by Mason. Don’t forget that Mason also received what he called a “threat” from a West Augusta “millionaire” over his votes on the TEE Center.

The radio talk-show host explains the bribe as a way for Fry to get back at Mason and Johnson. He would offer them something he knew he could not deliver, get them to change their votes, get the TEE Center passed, and then leave them high and dry when it came time to collect on the bribe. Well that’s the theory of the talk-show host.

The problem was that the bribery attempt backfired and nearly sank the TEE Center.

But let’s really think about this. If David Fry knew that he was throwing out a canard for the commissioners, then why not offer something more grandiose and more sexy than a parking deck contract? I mean why not offer a lucrative concession in the TEE Center itself or in one of the hotels? Why not throw in a condo in Palm Beach, Florida and lifetime badges to The Masters? I mean if he had no ability to deliver on any of this, then why not promise the moon? Why did he choose to offer a deal in this parking deck? And why was an attorney willing to commit a felony to get the TEE Center and parking deck passed if he had absolutely no connection to it or anything to gain from it? Many people didn’t buy the story that David Fry was just some lone-gunman type and questions still linger if  perhaps more were involved and whether Fry was just a fixer for much bigger fish.

After Matt Aitken defeated Bill Fennoy in a run-off election for the District 1 commission seat, the approval of the TEE Center was a forgone conclusion. His campaign had almost been entirely predicated on approving the TEE Center. So on December 7th, 2009, the commission quickly agreed to approve the TEE Center and parking deck along with the Laney-Walker/Bethlehem redevelopment. This also happens to be the same meeting when Fred Russell told commissioners that Augusta Riverfront, LLC (or its subsidiary) had AGREED to donate the land for the parking deck.

The David Fry story disappeared about as fast as a sitcom on The CW network. The parking deck is finished and open and the TEE Center is under construction. David Fry was indicted by a grand jury in June of 2010. An almost forgettable snippet of a story brought that news in the Augusta Chronicle: Fry indicted over bribe. And not much has been heard since then of David Fry. But now it is  being reported  that David Fry will now stand trial for the bribery attempt, more than a YEAR AFTER he was indicted. Apparently a plea-deal fell through at the last minute. Fry case to go to trial. We have to wonder if the same attorneys involved in the Fry case are also the ones involved in the chronically postponed Scott Dean child molestation trial. But with the new information swirling around ParkingGate, the timing of the trial of David Fry couldn’t be any better, or worse (if you are Augusta Riverfront, LLC).

So now it has become known that 933 Broad Investment Co, LLC (a shell company of Augusta Riverfront, LLC) has owned the land where the new parking deck sits since 2003. That means they essentially own the ground floor of the parking deck. Augusta Riverfront, LLC owns the Marriott hotel and will manage the new TEE Center. They want the management contract to run the new Reynolds Street Parking Deck for a fee of $25,000 a year and they want to lease hundreds of city owned spaces at another deck adjacent to the Marriott for $50,000, which could net Augusta Riverfront, LLC ten times what they would pay the city for the lease. But either way, since Augusta Riverfront, LLC owns the land where the new deck sits, they have control over those ground floor spaces… and the ground floor of any parking deck is the most lucrative.

All of this new information prompts more questions. Did David Fry know that Augusta Riverfront, LLC would have a lock on the ground floor of the new parking deck and was that the concession he was offering in his bribe? And is there a connection between David Fry and Augusta Riverfront, LLC or one of their subsidiaries such as 933 Broad Investment Co, LLC? Fry so far has has not been talking. Will he be willing to take the fall in exchange for something far more lucrative than a small “slice” of the parking deck? Or will Fry start to sing like a canary in his upcoming trial? And in light of the new turn of events and information learned over the past couple of weeks perhaps the FBI should take a second look at this case to see if Fry was merely an agent for someone else who could have delivered on the parking deck management contract concession. Would it be prudent to postpone Fry’s trial so that this case can be investigated further?

The TEE Center and parking deck has involved some of the most powerful players in Augusta, and the attempted bribery of two sitting commissioners of Georgia’s second largest city.  Perhaps the upcoming bribery trial will  finally put the ghost of David Fry to rest once and for all, or it might expose a whole lot more skeletons in Augusta’s closet.

Land Swaps, Bonds, and Air Rights: The Parking Deck Saga Continued

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The Parking Deck at 9th and Reynolds Streets

Originally published October 30, 2011 in the defunct CityStink blog
October 30, 2011
Augusta, GA
by Dustin Goads

Al M. Gray, President of Cost Recovery Works, Inc. contributed multidisciplinary review techniques in support of this article. Cost Recovery Works is no longer in business, as of December 31, 2020.

Since City Stink first ran the story this past Wednesday on the Reynolds Street Parking Deck saga, the proverbial fecal matter has hit the fan. Unfortunately, many people in the media are still missing the big story and some have chosen to divert attention away from the main issues and toward State Senator Bill Jackson, implying that City Stink was accusing him of wrongdoing and, “dragging his name through the mud.” Nothing could be further from the truth.

Sen. Jackson’s name only came up because public property records show he was involved in a land swap with the city so that a small 0.07 acre parcel that he had owned with a business associate for decades could be secured for the new parking deck at 9th and Reynolds Street. The real issue that is being ignored is the inflated price the city ended up paying for that 0.07 parcel and its implications for 933 Broad Investment Co, LLC (aka Augusta Riverfront, LLC), NOT that Senator Jackson walked away with any huge pay-off or was somehow tipped off by someone to hit it big in land speculation. If you go back and read the article you will find that City Stink never made any such accusations.

Explaining the Land Swap Transaction

State Senator Bill Jackson and a long time business associate, who is now deceased, had owned a 0.07 acre parcel at the corner of 9th and Reynold’s Street since 1969. It just so happens it was right where the city of Augusta needed to build a new parking deck. Instead of an outright sale of the property to the city, an arrangement was set up called a 1031 Exchange. When you hear the term “Land Swap”, this is what they are referring to. These are quite common in the business world, though not quite as common for municipal governments to be a party to. But it made good business sense for Senator Jackson to want to avoid paying capital gains on the outright sale of the property, since he says he was not particularly interested in selling. No one faults Senator Jackson for making a sound business decision. The 1031 allowed him to defer any capital gains. It also allowed for more purchasing power for the two parcels he wanted in the exchange, since capital gains would have gobbled up 15% of the profit from the sale.

However, the city didn’t just swap out land with Senator Jackson that it already owned. The State Senator was interested in two small parcels at the corner of 13th Street and Reynolds Street adjacent to his Tile Center business. Those parcels were owned by K&W Investment Co. You can view the property records here: (perform a Quick Search on 1311 Reynolds St parcel and 35 13th St parcel). But the thing is, to acquire these two parcels, the city paid out $119,000. And that is the main point. Senator Jackson just got the land… no money. The $119,000 was held in escrow by a 3rd party intermediary while the transactions were being finalized. Even though Senator Jackson didn’t walk away with a big fat check in the deal, he did get a larger parcel that was of considerably more value to his business than the tiny 0.07 acre orphaned parcel he transferred to the city at 9th and Reynolds Streets.

Now a particular talk radio personality was making it sound like the land swap was at the very best a “wash” for Jackson or that he may have even lost money on the deal. Not quite. Acquiring the crucial corner parcel at 13th St and Reynolds St gave Jackson increased visibility and access for his Tile Center business and thus increased the value of all of his land there. So Jackson made quite a good deal for himself, not faulting him with that, any good businessman would do the same thing. The question here is, in all of this, did the taxpayers make a good deal?

How Augusta Riverfront, LLC is the MAIN Beneficiary of the Land Swap

As we have said before the main player in the parking deck, aside from the city of Augusta, is Augusta Riverfront, LLC. This is  the company who will manage not only the new parking deck, but the new TEE Center. They also own the Marriott hotel adjacent to the new TEE Center. As we first told you, the land where the TEE Center parking deck now sits is owned by a company called 933 Broad Investment Co, LLC, which we found is a shell company of Augusta Riverfront, LLC. This means that the company who wants to manage the parking deck (at a yearly fee of $25,000) actually owns the land where the deck sits, EXCEPT for that one 0.07 acre parcel involved in the land swap with State Senator Bill Jackson.

As we just told you, the city paid out $119,000 in that exchange. What that did was essentially inflate the land values where the parking deck sits, establishing a price point of $1.7 million per acre! And who owns most of that land? 933 Broad Investment Co, LLC (aka Augusta Riverfront, LLC). So that puts them in a pretty sweet position over this deck. They already own the ground floor of the deck, which means they get the revenue generated from the spaces on the first level, and now they want a $25,000 contract to manage the rest of the deck. Many city leaders are crying foul and saying they were mislead and want ALL of the land where the deck sits under city ownership. But not so fast. Augusta Riverfront, LLC can now assert that their land is worth $1.7 million per acre if the city wants to buy them out. That could also be used as powerful leverage in negotiating a sweet heart management contract for managing the new Reynolds Street deck and the one adjacent to the Marriott.

What Exactly Were Commissioners Told?

When several commissioners were told that the city did not own the land where they just built a $12 million parking deck, they were dumbfounded. It seems as though just about everyone on the commission was of the belief that Augusta Riverfront, LLC or its subsidiary had already donated their parcels of land for the deck. But that never happened. Commission meeting minutes from 2009 clearly show that city administrator Fred Russell told commissioners on multiple occasions that Augusta Riverfront, LLC or its subsidiary had AGREED to donate the land to make way for the parking deck. You can view those commission meeting minutes on the City of Augusta website.

It makes sense that Augusta Riverfront, LLC would agree to donate the land for parking deck. They were getting a sweetheart deal on the TEE Center and the management contract to operate it with no risk to them. In fact they were getting a $350,000 per year subsidy from taxpayers to run the facility. And the hotels owned by Augusta Riverfront, LLC are adjacent to the TEE Center and thus will get exclusive access to the facility. And don’t forget that the city forgave Augusta Riverfront, LLC of a $7.5 million UDAG loan that the city had acquired on their behalf back in the early 1990s for construction of the Radisson, now Marriott. So it is very plausible that commissioners would expect that Augusta Riverfront, LLC would “do the right thing” and donate the land for the parking deck.

The Deal was Changed but Someone Forgot to Tell the Commissioners

December 7, 2009 was when the crucial vote was taken that approved the deal over the TEE Center and parking deck. The meeting minutes show that once again commissioners were told by Fred Russell that Augusta Riverfront, LLC had agreed to donate the land and that the city would only need to acquire two other parcels, one from a “private individual” (that was State Senator Bill Jackson) and WAGT (though none of the actual parking deck sits on the former WAGT parcel). Commissioners voted to approve the deal based on this information. But somewhere along the way things changed, but commissioners were never told. It also was revealed that a much cheaper option for surface parking instead of a costly deck was rejected by Fred Russell without the knowledge of commissioners. Commissioners were not even aware of a parking study that proposed the cheaper surface lot option. Chris Thomas of WDRW reported on it.

So somewhere along the line the deal was changed  to where the city only acquired air rights above the ground floor of  the $12 million parking deck. But apparently commissioners were never told that the deal had changed. And was the parking deck even necessary in the first place? There is now a push among at least one Augusta Commissioner to clamp down on downtown parking to hopefully steer people to the new deck. So why was this deck needed? And who told the city it was absolutely necessary to build this deck?

Follow the Bonds, Follow the Money and Connect the Dots

The reason given now by city attorneys as to why the land was not donated by Augusta Riverfront, LLC is so that tax free bonds could be used for construction. But that begs the question: Why did the city need to purchase the 0.07 acre corner parcel from Senator Bill Jackson for the deck? If keeping the land under the control of Augusta Riverfront, LLC allowed for tax free bonds to be used for construction, then shouldn’t they have purchased that land from Senator Jackson instead of the city to consolidate ownership? But as we previously told you, the lopsided land swap with the city valued that parcel at $119,000, which then inflated the surrounding land values (owned by Augusta Riverfront, LLC) to $1.7 million per acre. How convenient.

The other question that begs to be asked is why the DDA (Downtown Development Authority) was taken out of the process over the issuance of the bonds for the parking deck? The DDA is a governmental authority whose original purpose was issuing and servicing bonds for downtown parking decks.. but NOT this particular downtown parking deck. Why?

Brad Owens, the founder of Augusta Today and a former member of the DDA and a frequent critic brings up the following points regarding the bonds:

“FOLLOW THE MONEY!”

The key here has been said a few times but folks have missed it. Let me put the two together here for everyone:

1.) City lawyers say the deal was changed so tax-free bonds could be used for construction.

2.) His (Mayor Copenhaver) comment was the bond attorneys would have never let matters stand if there were something wrong with the deal.

Now, here are a few bones that need to be dug up on this based on the excuse that has been given;

  1.  WHO issued the bonds?
  2. WHO is servicing the bonds?
  3. WHICH attorney is handling this and what are the fees being charged?
  4.  ARE these “double barrel” bonds?
  5. WHICH bank is holding the money for these deals?
  6. WHAT interest rate/fee/surcharge is being charged by the bank?

Incompetence or Collusion?

It appears that many mistakes were made in this process involving the parking deck by the city and each one of those mistakes were to the great benefit of Augusta Riverfront, LLC. So that begs yet another question: Was this just yet another case of incompetence by city officials, or was this collusion among some key people on the city payroll and Augusta Riverfront, LLC to orchestrate a very lop-sided deal that now leaves the taxpayers with a $12 million parking deck on land they don’t even own? Also, was someone at the city involved with the inflation of the value of the land where the deck now sits to benefit Augusta Riverfront, LLC and to the detriment of the taxpayers? Why were commissioners told by Fred Russell on multiple occasions, that Augusta Riverfront, LLC had agreed to donate the land only for that to change without the commissioners being made aware of the change?

Why didn’t the DDA issue the bonds, especially when financing parking decks is the original reason it was created by the state in the first place? Was this done in an effort to remove scrutiny and oversight from the bonds?

And why isn’t Mayor Copenhaver more outraged over this whole sordid affair? He seems to be more mad at the messengers for exposing the meeting minutes that show that commissioners were mislead over ownership of the parking deck land. The mayor had this to say, “Why do some people always want to look back at matters? We should be looking ahead.”

We could not disagree more with mayor Copenhaver. Public officials should be outraged over this. The mayor may want all of this to just go away but we will most certainly not just look the other way on this when millions of dollars in public money are involved and especially not when it appears the process may have been rigged from the very beginning. We would hope that Mayor Copenhaver would share the concerns of the public over this.

You can be assured there is more to come on this parking deck scandal… so stay tuned.

**Update** The connection between 933 Broad Investment Co, LLC and Augusta Riverfront, LLC:
933 Broad Investment Co, LLC
Augusta Riverfront, LLC
IDENTICAL!

* Al Gray and Kurt Huttar contributed to the Reynolds Street Parking Deck series by searching land titles through the Augusta, Georgia GIS map site.