Joe Bowles Plays Hardball with Augusta Riverfront, LLC Over Parking Deck

Commissioner Joe Bowles is talking tough over the parking deck

Wednesday, June 20, 2012
Augusta, GA
By The Outsider

Mayor pro tem Joe Bowles has some tough talk for the operators of the new TEE Center parking deck on Reynolds Street: either abide by the terms of the management agreement approved back in February or the deal is off!

The agreement that was hatched at the last minute on February 7th stipulated that  the $7 million liens on the property under the deck must be removed and the property must be transferred from 933 Broad Investment, LLC (a subsidiary of Augusta Riverfront, LLC) to the city’s land bank.

However, we here at discovered that these conditions have still not been satisfied. As of today, the liens have still not been removed and the property has still not been deeded over to the land bank. You can read our full report here–> Exclusive: Fred Wrestles, Augusta Gets Decked.

For commissioners who voted for the management agreement with Augusta Riverfront, LLC, including Mayor pro tem Joe Bowles, this must seem like yet another in a long succession of broken promises, and it has to seem as though the last minute fix to approve the management agreement was little more than a stalling tactic to bide more time for ARLLC. And Joe Bowles seems none too pleased with this latest revelation. In a report by Chris Thomas of WRDW News 12 yesterday, the Mayor pro tem said, “The city is basically operating under an agreement with them that is not in effect,” and that, “It’s not good business practice. That is for sure.” 

Indeed. Since the basic stipulations of the management agreement have not been satisfied by Augusta Riverfront, LLC (who are also the owners of the Marriott Hotel), then the city is paying a $25,000 a year fee to deck operators based on a contract that is made of thin air, much like the city’s air rights for the $12 million parking deck.

And Joe Bowles’ patience seems to be wearing thin with Augusta Riverfront, LLC, saying, “If they don’t go ahead and get this straightened out, I say it’s time to go ahead and bid the parking deck back out. If we don’t hurry up and get that property donated to the land bank, I would say it’s time to scrap the deal and start over.

When queried by Chris Thomas on this issue, city administrator Fred Russell could only say, “This is a long, complicated process.” 

Joe Bowles is on the right track. It is time to re-bid this parking management contract and get a better deal for the city. In our May 29th investigative report, we discovered that there were bids from other companies on the table that were much more favorable to the city. The agreement that Fred Russell negotiated with Augusta Riverfront, LLC essentially amounts to a blank check, where the city assumes all of the expenses and risks, and ARLLC gets all of the benefits and most of the profits.

In fact, Richard Acree Jr, the Assistant Director of Augusta Facilities Management Division, recommended that the parking deck management contract be awarded to Ampco Parking Systems out of Houston, TX and not to Augusta Riverfront, LLC. However, it appears that city administrator Fred Russell simply ignored the better deal and instead favored a much more inferior management agreement with ARLLC… one that involves more expense, more risk and substantially less benefits for the city. Just why would Fred Russell do this if he is supposedly working for the city?

But it gets worse. In our May 31st investigative report, Augusta’s $714,357 ‘Incidental’ Cost,  we discovered that under Fred’s deal with Augusta Riverfront, LLC, the city was assuming ALL of the operating and maintenance costs for the deck even when 150 ground floor spaces would still be under the ownership and control of ARLLC. And that’s on top of the $25,000 management fee the city would be paying them. In fact, under Fred’s deal the city would even be on the hook for paying for the toll booth operator, when Ampco had agreed to assume those costs under their bid. So, just what benefit is the city getting out of this deal? Not much. In fact, over the course of the agreement, the city would end up paying $714,357 for these additional expenses that should be  the responsibility of Augusta Riverfront, LLC. Fred Russell called these expenses “incidental.”

So Joe Bowles has every reason to be upset, as should all Augusta taxpayers. We believe that the Mayor pro tem was probably giving Fred Russell and Augusta Riverfront, LLC the benefit of the doubt… that they would make good on their promise to transfer the land and that would provide an easy solution to what has become a complicated mess. But unfortunately, there are rarely easy fixes for fiascoes such as this, especially when you have a city administrator repeatedly withholding vital information from commissioners and a series of broken promises from Augusta Riverfront, LLC.

This is precisely why Al Gray and Lori Davis urged commissioners to hold off on approving a parking management agreement with Augusta Riverfront, LLC on February 7th. Al Gray and Lori Davis urged commissioners to put brakes on parking agreement.

But since then more has come out that shows just what a bad deal it was and, to be fair, commissioners were not aware of these new revelations when they voted for it. They probably thought, in good faith, that all the loose ends would be tied up with the land being transferred, but  investing more good faith now in the same people who have continually mislead you would be an act of folly even greater than the horribly bad parking management deal negotiated by Fred Russell.

We hope Mayor pro tem Joe Bowles stands firm in his resolve, and we would suggest for the commission to STOP any parking management agreement being executed between the city and Augusta Riverfront, LLC. We also suggest revisiting the bids from other companies like Ampco that were apparently ignored by Fred Russell that would yield more favorable terms and less expense for the city.

But we will have even more coming out within the next few weeks on the much larger TEE Center management deal between the city and Augusta Riverfront, LLC that will make ParkingGate look pale by comparison. We told you in our Special Report: No Way to Treat a Partner, that a CORE agreement does not exist between the city and Augusta Riverfront, LLC for the management of the much more expensive TEE Center that was built adjacent to the ARLLC owned Marriott hotel. That’s right, the city built a $38 million facility without an executed agreement… and once again, on parcels of land still owned by Augusta Riverfront, LLC. And under the provisions of the original 1999 CORE agreement for the existing conference center, the only agreement that seems to exist that would currently govern the TEE Center operations, Augusta Riverfront, LLC should have been responsible for the nearly $400,000 change order for a more expensive HVAC system they demanded the city pay because of more stringent Marriott corporate standards.

The pattern here seems to be quite clear. Under all of these deals between the city and Augusta Riverfront, LLC, the taxpayers get stuck paying all of the bills and ARLLC reaps all of the rewards.. including having a $38 million new convention center built adjacent to their hotel giving them not only exclusive use of the facility but also substantially raising the value of their property.  Please stay tuned to our upcoming investigative reports into more waste and bad deals in regard to the TEE Center.

So, commissioners may also want to hold off on finalizing any agreements with Augusta Riverfront, LLC over the TEE Center as well… especially after our upcoming reports. As we’ve mentioned, no CORE agreement seems to exist, and like the parking deck, perhaps the city can negotiate a much better deal by putting this out to bid as well.

Also, it should be obvious now that Fred Russell cannot be trusted to look after the city’s interests in negotiating these deals. In every aspect of the TEE Center and parking deck deals, Russell has consistently favored Augusta Riverfront, LLC over the city for which he works. And not only that, Russell has withheld important information from commissioners that could have affected key votes over these arrangements. Can Augusta afford any more of Fred? Perhaps it’s also time to heed Lori Davis’ advice from that February 7th commission meeting and relieve Fred Russell of his duties as city administrator before he costs the taxpayers any more money, because at this rate, keeping him is becoming far more expensive than firing him. Stay tuned, more to come.***

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Maybe it’s time to call the whole thing off!

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