Fred Russell is Running Out of Excuses

Originally posted by CityStink
Friday, Jan. 27, 2012
Augusta, GA
By The Outsider

Contributions were made to this article by Al M. Gray, 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. Cost Recovery Works is no longer in business, as of December 31, 2020.

Just how many more major screw-ups from Fred Russell will Augusta Commissioners tolerate?  Well it doesn’t get much bigger than the total clustermuck over the TEE Center Parking Deck. As we told you with our breaking news story yesterday: TEE Center Parking Deck Air Rights Gone With The Wind!, not only does the city not own the land under the deck, but that land has liens on it held by Wells Fargo Bank (formerly Wachovia) for use as collateral on a loan for over $ 7 million to Augusta Riverfront, LLC, the same entity seeking the management contract for the deck and the TEE Center. That not only puts the city at a huge disadvantage in the negotiations over the management contract, but it also appears to leave taxpayers at risk of losing their $12 million asset if Augusta Riverfront, LLC defaults on their loan. That’s a position the city should have never been put in.

But that’s exactly where we are. And what’s Fred’s response? Well this is what he told George Eskola of WJBF yesterday:

“We’ve got lawyers, we got bond attorneys, we’ve got everybody who’s charted around, thinking this is safely where we need to be. At the end of the day and people on the sidelines are having issues.”

Oh really? I suppose the, “people on the sidelines” Russell is referring to are the citizen activists like Lori Davis, members of Augusta Today and City Stink who exposed this new bombshell. And we have to wonder if this news would have ever come out if not for the tenacity of  these citizen activists. It appears that commissioners were completely surprised by these revelations. Mayor Pro-tem Joe Bowles said in George Eskola’s report:

“We didn’t know that, of course, and that’s something we just got information on. I’m waiting for clarification from our attorneys. If we built a building on property that, you know, secured debt for somebody, I do have a serious issue with that.”

We are glad that the Mayor Pro-tem is taking this issue seriously, but he and other commissioners and the Mayor should be more than just concerned, they should be downright outraged. It seems that the more layers of the TEE Center/Parking Deck onion you peel away the more rotten it gets. And it appears that commissioners have been left in the dark through the entire process. And who’s job is it to keep commissioners in the loop? City administrator Fred Russell.

Russell knew about the liens, but neglected to tell commissioners. But Russell also told commissioners the land would be donated for the deck, but neglected to inform them again when that changed to only “air rights.” How can commissioners continue to have confidence in a city administrator who consistently leaves them in the dark on some of the most important and expensive issues facing the city?

And it’s not like this is the first time. Russell cost the taxpayers hundreds of thousands more than it should have cost to terminate incompetent employees because he did not keep accurate records of their true job performance and then he negotiated their very generous golden parachutes. When commissioners gave Russell more authority over personnel matters, he took that as an opportunity to award generous raises to over 40 select employees, when commissioners were looking for more cuts to balance the budget. We could take up an entire column on previous Russell screw-ups, but we will leave that for another time.

Now Russell is saying that the issue of the bank liens on the property where the $12 million parking deck sits is just a matter of some “loose ends” that need to be tied up by “the lawyers.” Oh really? Well shouldn’t all of these “loose ends” had been taken care of before the city built a $12 million parking deck with taxpayer’s money on land it doesn’t even own that has liens against it? Who would build a house on someone else’s property that had bank liens against it? You don’t need a degree in finance to understand the stupidity of these actions. And Russell’s excuses just aren’t adding up.

And what about those lawyers? Russell is not the only one to blame here. Commissioners should also have some serious questions for attorney Jim Plunkett, who handled most of the legal transactions and bond financing for the city over the TEE Center, the parking deck, and the Laney-Walker/Bethlehem Redevelopment. Surely Plunkett knew about the liens, so why did he not take care of clearing up those “loose endsbefore the city started up the bulldozers on the construction of the $12 million parking deck? Why were the bonds issued before the liens and other ownership issues were taken care of? And should we expect any similar surprises over the transactions involving the Laney-Walker/Bethlehem redevelopment with its bond financing inextricably tied to the TEE Center/parking deck?

Plunkett has a long relationship with the city in handling legal matters involving these public-private partnership real-estate ventures. Records show that the city paid the Sherman, Plunkett and Hamilton firm $577,538 for outside legal work last year. Susan McCord documented the particulars in a series of articles. She wrote, “Jim Plunkett specializes in economic development legal work, such as the public-private partnerships between Augusta and operators of the Trade, Exhibit and Event Center and the Laney-Walker and Bethlehem redevelopment project.” (Editor’s Note: January 8, 2012 article by Susan McCord no longer available online.)

But in this case it appears it was the private interests being protected and the public’s interest was being put at great financial risk. We have to wonder if this is the first time something like this has happened regarding one of these Public-Private Partnership real-estate developments, or is it just the first time it has been exposed? Perhaps that’s something for investigative journalists to look into.

But now the ball is in the commissioners’ court. How will they proceed  over the management agreement with Augusta Riverfront, LLC with these revelations? And how will they deal with this latest Fred Russell screw-up? And what about that forensic audit that commissioners approved back in December to look into irregularities over the land deals involved in the TEE Center Parking Deck? Should that not be expanded to included the entire TEE Center and the Laney-Walker redevelopment? And why would commissioners trust Fred Russell to help choose the auditing firm to essentially investigate him? And can commissioners now truly trust Russell to negotiate a deal over a proposed downtown ballpark with Ripken Baseball in the best interest of the taxpayers? Maybe it’s time for commissioners to rescind that vote on tasking Fred Russell to develop a creative financing package for that ballpark. Can they really trust Russell with handling another multi-million dollar development after this?

Ok, commissioners, it’s up to you now. It’s time to stop dragging your feet on the forensic audit. And it’s time for you to honestly reevaluate the confidence you have placed in city administrator Fred Russell. Oh, and we’re still waiting to see some leadership from Mayor Deke Copenhaver on this issue. Time is running out and the public is watching.***

Stay Tuned. More is to come on this issue.

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