Tag: TEE Center

Cutting Through the Spin Over ParkingGate

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Photo by Conor Luddy on Unsplash

Originally posted on CityStink
Friday July 20, 2012
Augusta, GA
By 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.

Despite how some government officials and members of the local media have been trying to spin the events from this past Tuesday’s Augusta Commission meeting, the citizen watchdogs who have been leading the charge for more transparency and accountability in the ParkingGate debacle won two significant victories.

Lori Davis went before the commission to appeal to the conscience of city leaders to “park” a very lop-sided management contract for the $12 million publicly financed Reynolds Street Parking deck with Augusta Riverfront, LLC. As we detailed in a previous report, the lop-sided contract, that was drawn up by ARLLCs own attorneys (not those hired by the city) was riddled with loop holes and amounted to a blank check. To put it in simple terms, it was a bad deal for the taxpayers.

Earlier in the day on Tuesday we got word that there was some political maneuvering by Commissioner Jerry Brigham and Augusta Riverfront, LLC President Paul S. Simon, to try and ram through the contract at the last minute. This followed a finance committee workshop the previous Friday where a majority of commissioners said they were not prepared to vote in favor of the contract as it stood and wanted a thorough comparison of the deal with ARLLC and others that had been rejected by city administrator Fred Russell. City hired outside counsel Jim Plunkett was tasked by commissioners to provide that analysis. Many commissioners expected the parking deck management contract to be removed from the agenda for the July 17th commission meeting.

But surprisingly, early on Tuesday, a comparison magically appeared just in time for the commission meeting that supposedly said the ARLLC deal was $14,000 cheaper than one Ampco Parking Systems had submitted in an earlier bid. The only problem is, this comparison was drawn up by Paul S. Simon and Augusta Riverfront, LLC… the same folks who have been trying to get the lucrative parking deck management contract… hardly an unbiased source. Why didn’t Augusta’s hired outside counsel Jim Plunkett put together the comparison as he was tasked to do by commissioners at the Finance Committee work session the previous Friday? Paul Simon and Jerry Brigham probably thought they could catch commissioners off-guard like they did on February 7th, when a tentative management agreement was passed with similar last-minute political maneuvering. George Eskola, senior government reporter for WJBF news, pointed out the obvious conflict of interest in Augusta Riverfront, LLC providing their own comparison in his 5 pm report on July 27th. “But this comparison is coming from Paul Simon of Augusta Riverfront, LLC, the company that owns the Marriott, not the city’s attorney who worked on the deal ”

But this time things would not go in Paul Simon’s favor. The contract was tabled for the second time in a month after Commissioner Jerry Brigham announced that he did not have the votes lined up to pass it. So now it will go back to the drawing board… where hopefully the taxpayers can finally get a more favorable deal, one with caps on what ARLLC can bill the city  and minus all of the loopholes that gave Paul Simon practically a blank check courtesy of the city of Augusta. This is what we have been asking for months… to halt this hideously bad contract from being approved, and to get a better deal for the taxpayers. The results from Tuesday’s commission meeting now provide that opportunity.

But to listen to some in the local media, particularly a struggling weekly print tabloid, the results from Tuesday were somehow a rebuke of Lori Davis and a defeat for the citizen watchdogs at Augusta Today and CityStink.net. We have to wonder… what meeting did they attend? As we said, Paul S. Simon and Augusta Riverfront, LLC were unsuccessful in their last minute efforts to ram through a lop-sided management contract for the parking deck. Lori Davis, the citizen watchdogs, and the taxpayers of Augusta won that day.

Some in the media wanted to focus all of their attention on the vote to halt progress on the forensic audit looking into the questionable deals associated with the parking deck. Though certainly the circumstances and the evidence uncovered thus far warrant a full forensic audit, it has hardly been the primary goal for the citizen watchdogs like Lori Davis who have been investigating this matter since October of last year. The main goal has always been to make sure that the taxpayers get a better deal and a better return for their $12 million investment in the deck. This also means assuring that the city gets control of the land free and clear of all bank liens. The results from Tuesday’s meeting were a step in that direction.

The story that some in the media have been completely missing over the forensic audit is the hypocrisy of its most vocal opponents on the commission who have been complaining it is just a waste of taxpayer money, all the while these same people are more than eager to sign over a blank check to Paul Simon and Augusta Riverfront, LLC in a series of bad deals that would pay for many forensic audits.

However, something rather stunning happened at Tuesday’s meeting that also seemed to go unnoticed by some in the Augusta media, particularly the folks at that struggling weekly print tabloid. In lieu of proceeding with the forensic audit, commissioner Joe Jackson made a substitute motion to forward this whole debacle over to the District Attorney and the GBI. That motion passed with an overwhelming majority. Wow. Whatever Jackson’s motivation, he is on to something here. We have been having to go through a cumbersome and expensive process of initiating numerous government open records requests to uncover the evidence in ParkingGate. Jackson’s move could now give government watchdogs and investigators unfettered access to the volumes of government documents that exist on these deals. Again, this is yet another win for the citizen watchdogs and taxpayers.

Commissioner Jackson also suggested that perhaps we should “open Pandora’s box” and look into the deals associated with the Laney-Walker redevelopment project. We could not agree more, and we have also been at the forefront of that investigation, initiating numerous open records requests that have revealed more waste of tax-payer dollars and possible fraud in that massive project.

These are all quite major revelations in this story, and a bit of a vindication for government watchdogs like Davis, but the narrative the folks over at that struggling weekly print tabloid have been attempting to pursue is one of ridiculing Davis over the childish behavior and disrespect shown by some government officials. In particular, the writer at the tabloid mentions an incident at the Finance Committee work session last Friday, where Paul S. Simon tried to belittle Lori Davis and us here at CityStink.net for our investigative reports into the parking deck debacle. Simon called us the “bad press.” Well, we will gladly wear that title as a badge of honor, coming from Simon.

We of course wouldn’t expect him to rave about our reporting, as we have pretty much thrown a wrench into his grand plans to get a lop-sided management contract for not just the parking deck but also the even more lucrative TEE Center. Mr Simon probably never expected anyone to question these deals, better yet dig deep into them with open records requests. They have become accustomed to a largely complacent local media, like the folks at the struggling weekly print tabloid, who find these matters just “too complex” to pursue. This has allowed Simon and the folks at Augusta Riverfront, LLC near free reign in Augusta to get pretty much whatever they want courtesy of the taxpayers. This lead to them becoming complacent and feeling emboldened, and always looking for more. They never saw us coming.

The folks over at that struggling weekly print tabloid thought it was funny that some Augusta commissioners snickered when Paul S. Simon admonished Lori Davis and us here at CityStink.net for an article we did a couple of weeks ago that showed how the management contract under consideration with Simon’s company was riddled with loopholes that had Augusta on the hook for maintenance and equipment costs for the entire 640 space parking deck, when Simon’s company would still own and control the entire ground floor. We rightly pointed out this did not appear to be a fair deal for the city. But Simon took to the podium last Friday to complain,
“You see all this stuff on these blogs that’s just wrong… they had me on a little street sweeper.” This prompted giggles from some commissioners in a scene that the weekly tabloid described as a “bunch of fraternity brothers” and according to the tabloid, this surely must have been embarrassing for that pesky Davis woman.

Notwithstanding the not-so-subtle undertones of sexism in all of this, the point that was also completely missed by the weekly tabloid is that amid all of these snickers from the good-ole-boys club, no statesman emerged to call Mr. Simon out, instead they fell over themselves to kiss his ring. Here was a man coming before them acting as though his company was doing Augusta a huge favor by allowing the city to use the Marriott brand on the $12 million parking deck the taxpayers had paid to build on his land. Simon’s company not only got a wonderful $12 million new parking deck courtesy of the taxpayers, but also a $38 million gift in a brand new convention center attached to his hotel, giving his company exclusive use of the facility. And we pay him hundreds of thousands of dollars a year for this honor. And now he was coming before the commissioners pretty much demanding that they sign off on a hideously lop-sided management contract that added more insult to injury. Talk about looking a gift horse in the mouth!

And Lori Davis should be made to feel humiliated in all of this? If anyone should feel humiliated, it’s the city leaders who have allowed themselves to be taken for such a ride. You build a $12 million parking deck on land you don’t even own, and even worse it has over $7 million worth of bank liens on it. You build a $38 million convention center without an executed CORE agreement and also on a parcel of land still owned by Paul Simon’s company. Maybe the snickers should have been directed at themselves. Surely, Paul Simon was probably saying “you suckers” under his breath.

But at the end of the week a majority of commissioners saw the bad deal for what it was and put a halt to it. Good for them. Commissioners Wayne Guilfoyle, Bill Lockett and Mayor pro-tem Joe Bowles have shown particularly outstanding leadership on this matter and should be applauded by the taxpayers. Sure, the buildings cannot be unbuilt now, but commissioners can now see to it that the taxpayers get the best return on their investment, and that has always been our primary goal from the beginning. People like Lori Davis should feel proud and the taxpayers of Augusta should thank her for her courage and perseverance in this ordeal.

And despite the ridicule from the folks at that struggling weekly print tabloid, there have been others in the local Augusta media who have provided commendable coverage of this story. Particular accolades go out to George Eskola of WJBF, Chris Thomas of WRDW, Renee DeMedicis and Doug at WNRR 1380 AM, Ben Hasan’s Urban Pro Weekly, The Metro Courier, Austin Rhodes and Scott Hudson at WGAC.

A free press is an integral part of any democracy, holding our government accountable to the people. The role of a free press is to cut past the spin and propaganda to get at the truth. This is a duty that some in the Augusta media obviously still believe in. Some though, like the folks at that struggling weekly print tabloid, seem to think it is more important to ridicule those of us who still believe in that principle. As they belittle the government watchdogs who have been breaking the big news stories over the past 8 months, perhaps it is out of frustration, as they see the writing on the wall and their role in Augusta’s media world slipping rapidly into irrelevancy. Oh and by the way, we can handle the ridicule. If we are making this many people angry in Augusta’s establishment, then we must be doing something right.***

OS

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Special Report: Heerily Missing

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Friday, July 6, 2012

Augusta, GA

By Lori Davis

The photo above shows the floor of the Harrison Building, the old brick building shell preserved as an entrance to the TEE Center. This picture was taken on June 7, 2012, during a TEE Center hardhat tour by Convention and Visitor’s Bureau chief Barry White and Heery International’s Jacques Ware.

Heery is the program manager for the City of Augusta’s hundreds of millions of dollars in sales tax funded building project and Jacques Ware is the Heery project manager over the TEE Center.

Below is a photo of the TEE Center Exhibition Hall, the enormous 38,000 square foot open room that is to house the trade shows and various TEE Center exhibitions.

At the time of the tour, the CVB folks excitedly made the point that the floor was going to be poured the next week. This was on June 7.

Interesting.

R.W. Allen LLC’s progress billing number 24, through March 29, 2012 (Page 4, Item 10) shows that two whole months earlier, an incredible 84% of the concrete walls and slabs

were complete!

How can this be? The main exhibit hall room is a staggeringly large percentage of the total concrete slabs on the project. How can 84% of the slabs and walls have been complete back in March when the main floor was still dirt?

Isn’t Augusta put at risk, when subcontractors are paid so far in advance of the work performed? Isn’t the previously noted issue of $1.4 million of kitchen equipment that was paid for a nonexistent kitchen proof that Heery is just rubber stamping contract payments?

Let me see now. The commission relies on Fred Russell, who relies on Heery, who apparently sees construction completed that just isn’t there.

Unreliable fits and this time, it will be set in concrete…….eventually.***

L.D.

Special Report: Why is the Parking Deck Contract this Rigged?

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Wednesday, June 27, 2012
Augusta, GA
By Al Gray

Rule Number One in contracting, whether you are the Owner or the Contractor is this: Never, ever sign a contract drafted by the other side, as is.

Why on Earth is the Augusta Commission poised this week to ratify the Reynolds Street Parking Deck Contract when in the upper, right hand corner we find this notation?

Hull Barrett 5/16/12

Version 14

I thought Andrew McKenzie was the City Attorney and Jim Plunkett was serving as Special Counsel for the parking deck and Tee Center deals. Hull Barrett is the attorney for the other side to the RSPD contract, Augusta Riverfront, LLC (I will abbreviate this as ARFLLC in the article). So why is Augusta going to execute their contract?
Being in the asset protection business, I asked Augusta Today and CityStink.net Contributor, Al Gray, a semi-retired Cost Recovery Accounting specialist, to compare Hull Barrett’s contract with the one that the City suggested in its Parking Deck Management RFP as Appendix F . This contract was the one that Ampco Parking Systems tentatively agreed to on its way to becoming the Augusta-recommended parking deck manager, before being jilted by Fred Russell in favor of ARFLLC. The draft contract borrowed a lot of its language from the contract between Augusta and Republic Parking, management firm for the existing Conference Center Parking Deck before the TEE Center.
In this article I am going to dispense with triviality and call the RFP contract “the Ampco contract” because Ampco accepted it without significant reservations.

I wanted to see if the deal Augusta got was as good as the Ampco one Fred rejected. My unpaid consultant balked, saying he had done enough free work and there were powers given to ARFLLC that on their face meant this deal was a “blank check.” Others in our group chimed in and twisted his arm into doing a matrix comparing these contracts. You can view that matrix below.

Deck Contract Matrix 2

The RSPD contract is indeed a blank check. Listen to this:
“Manager shall have discretion and control, free from interference, interruption or disturbance, in all matters relating to management and operation of the RSPD, including, without limitation… and, in general, all activities necessary for operation of the RSPD.”
I was shocked to learn that.

It gets worse. ARFLLC gets appointment as Augusta’s agent, with powers that the Ampco contract denied it. It gives the ARFLLC Manager the right to purchase capital equipment and make capital expenditures, creating risk that Augusta will have unrecorded assets.

The majority of costs under the Deck management agreement is labor and fringe benefits. ARFLLC sets salaries, can assign folks with heavy vested benefits, can assign its own agents as RSPD employees, bill “shared” employees, assign Officers of their company at will, and even pay bonuses for Augusta to fund. The Ampco contract allows almost none of this stuff.

Ampco could have done nothing beyond the limits of the Annual Plan. If it exceeded the costs in the Plan, it would be denied payment. Only the exact same sorts of costs could be billed as were identified in the Plan. The ARFLLC contract that Fred proposes says the Plan is only a goal and gives ARFLLC full authority to exceed the Plan and incur costs to be passed to Augusta not in the Plan.

Ampco was only going to get 2 months to reverse its prepaid operating expenses to Augusta. With ARFLLC, the requirement is 90 days, the balance has to be maintained, and Augusta funds it without limit. (Normally the Plan would be a limit.)

Accounting controls are pathetic, too. Ampco would have had to deposit parking fees by the next business day into Augusta’s account. ARFLLC has no such requirement, with the contract actually looking like it lets that manager hold back funds! If the balance in the RSPD operating account at the end of a quarter dictates Augusta’s need to replenish the account, can’t this defect allow the Manager to withhold revenues then, thereby making Augusta pay up more money? ARFLLC gets to set up an account in Augusta’s name that it controls! It can even directly transfer its fee out of the account. The parking management RFP contract did not allow that.

The Parking Deck RFP that Augusta put out was adamant about having a policy and procedure manual. The ARFLLC  deal does not require any manual at all!

Insurance premiums were going to come out of Ampco’s fee. With this Hull Barrett contract liability insurance is billed to Augusta! Not only that, Ampco would have been required to furnish a $75,000 fidelity bond at its own costs that ARFLLC is allowed to welch on.

I thought the really terrible thing about audit rights and records kept is that most of the costs are in the RSPD payroll and there is a statement in there that the manager doesn’t have to make records available for its other operations – with the RSPD payroll looking to be part of those other operations. Get this – this Hull Barrett contract lets ARFLLC assign folks with high salaries to the RSPD and never show Augusta the actual payroll records!

ARFLLC even gets benefit of 23% of the costs, at nearly $45,000 a year, associated with its 150 parking spaces. The Hull Barrett contract says these are “incidental costs.”  Now this contract says that the “incidental” costs cannot be material to Augusta. I think $238,000 and 23% pretty material, don’t you?

The benefits of the Hull Barrett contract are more numerous than I can get to. ARFLLC can assign the contract without Augusta terminating it. Ampco couldn’t. It can set rates. Ampco couldn’t. ARFLLC can pay itself with Augusta supplying an unlimited funding stream. Ampco couldn’t.

I’ve got the picture. It is one of Augusta caught in a matrix of incompetence, no accounting controls, and powers given to folks outside of government with what looks to be an unlimited revenue stream courtesy of Augusta taxpayers. Thanks a lot, Fred.***

AG

* View the full Parking Deck Management Deal constructed by Hull Barrett below:

Reynolds Street Parking Deck Management Agreement (00412263-14) (2)

Special Report: Hotel Transportation Tax Heist?

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Monday, June 25, 2012
Augusta, GA
By Lori Davis
On May 18, 2012, Augusta Today member Dean Klopotic submitted a Georgia Open Records Act Request to the City of Augusta for an accounting of the $1 ‘bed tax’, or hotel transportation tax, which was enacted in 2008 to fund the capital and operating budgets for the TEE Center, plus to fund the Laney Walker Improvement project. The City Law Department responded with accounting reports showing the requested information.
The Tax was enacted via Ordinance Number 7034  on February 19, 2008. Collections began March 1, 2008. The existing hotel tax comes under the framework of  Ordinance 7209.
 
Subsequent to the enactment of this ordinance, on September 16, 2008 Ordinance 7083 was passed and executed. This ordinance added Code Section 2-2-33.7 which reads:
The effective date for this funding provision shall be the first calendar month following the latter of the execution of a contact for the construction of the TEE Center or the closing for the acquisition of the real property on which the TEE Center shall be constructed Until the effective date all Transportation Fees that were to be designated for TEE Center expenses including the Transportation fees collected prior to enactment of this subsection shall be allocated to fund Transportation services as provided in Paragraph 1.
Funds were collected and distributed to the Laney Walker Redevelopment Projects for the Fiscal Years 2008 through 2010, with the balance allocated to the Augusta Transportation Department. However, in Fiscal Year 2011, $350,000 was transferred to the TEE Center, Department 297061910, Account #5721110. Why? And who decided to blatantly go against the ordinance? If transportation suddenly stopped getting their allotment, did anyone in transportation question this? Did any of the money ever go for transportation?
The Ordinance does not allow the money to be transferred because the parcel that the Manager and TEE Center Partner, Augusta Riverfront, LLC owns under the TEE Center (parcel #037-3-047-00-0)  had not been deeded over to the city at the time that the funds were transferred for TEE Center use.
*see map aerial of parcel (yellow border) below*
In other words, the money should have continued to go to transportation even until this very day. This expenditure looks to me to have been a misappropriation of funds for a purpose other than allowed by Augusta’s governing ordinances.
Another issue is that  Ordinance Number 7034  allows the $350,000 to be spent on operation and maintenance costs for the Tee, while the tentative agreements with Augusta Riverfront, LLC, Manager of the TEE Center, say that $100,000 is to go to the TEE Center Capital Budget, while the remaining $250,000 goes to operations and maintenance.
Is our City government a renegade operation who ignores its own ordinances?
Summary
So let’s summarize what all happened here. In order to fund the Laney-Walker redevelopment project with the hotel-motel tax it had to be linked to promoting tourism. That was done by linking the $1 hotel bed tax to transit (which is considered a tourism related service). Between 2008 and 2010, Augusta Public Transit was receiving its $350,000 per year from the $1 per night hotel/motel tax. However, those payments ceased in 2011 and were diverted to the TEE Center. But under the guidelines of the ordinance that established the new hotel/motel tax, the TEE Center was not eligible to receive any of these funds in 2011 because Augusta Riverfront, LLC had not met key stipulations of the agreement, such as deeding over a parcel under the TEE center to the city. Augusta Public Transit should still be receiving that $350,000 per year from the $1 per night hotel bed tax that was diverted to TEE operations.
To make matters worse, we discovered that the $350,000 diverted from transit to the TEE Center all went towards marketing. The irony in all of this is that all of the other hotels in Richmond County are paying into this new hotel-motel tax which is essentially going to market a competitor hotel, the Augusta Riverfront, LLC owned Marriott, which has exclusive use of the TEE Center. The marketing program paid for by the Augusta CVB for the TEE Center with this $350,000 conspicuously mentions the convenience of the Marriott hotel being attached to the facility but gives short shrift to other Augusta hotels such as the Ramada Plaza, which is just a few blocks away. The fact of the matter is, none of this money should have gone to the TEE Center in 2011 nor currently, and Ordinance Number 7034 and the tentative agreements between the city and Augusta Riverfront, LLC conflict with one another.
Recently, I went on a tour of the TEE Center as provided by the Convention and Visitors Bureau. I asked the question,”How will convention attendees get here from other area hotels? Will there be a shuttle service provided?” The answer I received was a quick, “No. That simply is too costly.“
What if the money that should have been going to transportation all of this time had still been going to transportation as the ordinance had stipulated? Is any of this fair to the other hotel owners in Augusta who are being taxed to subsidize their competition? Why did the TEE Center receive $350,000 from the hotel/motel tax in 2011 when this was clearly a violation of the ordinance that established the tax? Who authorized this diversion of funds from the transit department?
Just imagine how much $350,000 could have helped improve the transit system. And shouldn’t some of it go towards providing transportation from the other area hotels to this new publicly funded convention center that they helped pay for via the hotel-motel tax? Why does everything go towards the benefit of Augusta Riverfront, LLC? These may be some questions other area hoteliers may want to start asking. Stay tuned for updates.**
LD

Below are the public documents cited in this article:

Hotel Tranport Tax GORAOrd 7034 Excise Tax Hotel Motel Amend City Code (1)

Ord 7209 Amend Arc Code Section 2-32 to Provuide for the Use of the Hotel m

Ord 7083 to Amend the Arc Code by Adding Subparagraph (a) to Paragraph 111 (1)

Tee Land Acquisition

Special Report: A TEE Total Mess!

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Making a Hash over $1.3 Million Kitchen Equipment

Originally posted on CityStink
Thursday, June 21, 2012
Augusta, GA
By Al Gray

The author, Al M. Gray, was 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.

In the waning weeks of Winter 2012, Augusta Today contributor Lori Davis submitted an exploratory, wide ranging Georgia Open Records Act Request.

for the City of Augusta’s payments under major contracts. The documents response was massive. Deep in the supporting subcontractor billings to the R.W. Allen, LLC contract for the TEE Center was a most intriguing invoice from Norvell Fixture and Equipment Company showing that $199,656.00 of kitchen equipment as work completed and an additional $76,289.25 worth was stored, for a total billed and paid of $275,845.32! (less 10% retainage). The contract total for kitchen equipment is a surprising $1,329,418.00.

Why was this invoice noteworthy? There was no detailed partnership agreement executed between the City and its TEE Center Partner and Manager, Augusta Riverfront, LLC going into the contracts for construction, leaving the last word on the partnership being the unsigned, undated August 2007 Term Sheet. Repeated references to kitchen equipment are pretty clear that such equipment are the responsibility of the LLC, including this: “Augusta’s Capital Funds shall specifically not be used for items related to Kitchen Equipment, Laundry Equipment, and any Convention Center or Hotel Capital Cost.” Similar language making the LLC responsible for Kitchen Equipment remain within the executed 1999 Core Agreement of record in the Offices of the Clerk of Augusta Richmond County Superior Court.

No Augusta Funds are to be used to procure kitchen equipment, when $1.3 million of it is under contract?

During negotiations that have not yet produced a signed partnership agreement there was certainly a commitment for Augusta to construct new kitchen space within the TEE Center and relocate the combined kitchen from the existing Convention Center. That had no impact upon equipment ownership. Real property improvements and tangible personal property, such as equipment, are different.

In order to advance the investigation, Augusta Today member Dean Klopotic submitted a follow-up GORA request seeking the most recent R.W. Allen LLC billings under the Tee Center Contract. The City responded with Progress Billing Number 24, covering costs through March 24, 2012, including Kitchen Equipment Invoice Number 6, through March 20, 2012.

The details show $792,984.52 equipment work completed, materials stored of $162,544.34 and a total billed of $955,528.86, less 10% retainage. The R.W. Allen monthly invoice shows no additional kitchen equipment stored. Both Construction Manager and Subcontractor show most of the kitchen equipment as work completed.

At 11:00 AM on Thursday, June 7, Barry White of the Convention and Visitors Bureau conducted a TEE Center tour, which was attended by Ms. Davis and this writer. Project Manager Jacques Ware of Program Management firm Heery International would not permit the use of a video camera, suggesting that we come back for the Media Tour to be held Thursday June 14.

When the entourage reached the second floor of the TEE Center, the empty space was pointed out where the kitchen is to be located. At that juncture, an inquiry was made about the kitchen equipment invoiced back in December. Mr. Ware said that he didn’t authorize payment for a kitchen equipment invoice, asking what kind of equipment was on it. This writer responded, “A number of tilting kettles and ranges,” then pondering out loud if they might be stored. Mr. Ware said the only kitchen equipment there would have to have been, “for the Marriott.” (The Marriott is owned and operated by Augusta Riverfront, LLC.)

An email request to Mr. Barry White to be included in the Media Tour on the 14th received no response. Other attempts were made to get a separate tour along with one or a group of commissioners to investigate the matter. Commissioner Joe Jackson had just returned from vacation and could not schedule a tour in the next week. Commissioner Bill Lockett managed to get the Heery project liaison to get permission to join another June 14 tour, only to see it canceled after several hours.

Commissioner Wayne Guilfoyle was provided with a copy of Kitchen Equipment Invoice on the morning of June 20, whereupon he sought explanation of where the kitchen equipment is from Program Manager Heery International, receiving assurance that the materials were, “either stored or installed.”

It is fairly common practice to bill stored materials. There is clear language on billing documents that they are, “Materials Stored on Job Site (Invoices if Required).”

Where does the situation stand? What are the issues?

Issues and Questions

  • Where is the equipment that Augusta paid for?

  • Has Augusta Riverfront, LLC been relieved of its responsibility for the purchase of kitchen equipment? If so, where? If not, is Augusta being reimbursed for the $1.3 million cost?

  • If the Kitchen Equipment was delivered and used in Conference Center operations and events ($955,528.86 having been delivered, installed or stored prior to the Masters upswing in events) where is the accounting for the revenues?

  • Without an Effective Date having been established for the successor catering agreement, where does accountability lie, especially since Augusta Riverfront, LLC’s Paul Simon having declared the TEE and Conference Center merged months ago?

  • Why do both the R.W. Allen and Norvell Fixture and Equipment Company invoicing show the equipment as “Work Completed” if the equipment is “Stored?”

  • Should Augusta have paid for nearly a $million of equipment months before it is installed in the new kitchen?

  • Why does the invoicing include future charges for repairing Augusta Riverfront, LLC equipment? Whose equipment will it be after Augusta repairs it?

———–

Commissioners Joe Bowles, Joe Jackson, Wayne Guilfoyle, and Bill Lockett have provided Augusta Today and CityStink.net with substantial cooperation in this investigation and report. The public can feel confident that these gentlemen will pursue this matter to a conclusion.

Several of them need to participate in a tour and inspection of the paid-for kitchen equipment. Perhaps the city’s internal auditor can vouch for the accountability of the equipment, including verification of delivery documents to a storage facility before the dates that the invoicing was submitted.

It is hoped that all will aggressively protect the interests of the citizens of Augusta and seek wise counsel as they deal with the aftermath of the total mess that the TEE Center currently represents.*** Stay tuned, more to come.

A.G.

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

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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 CityStink.net 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.***
OS

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

TEE Center Special Report: No Way to Treat a “Partner”

  By , ,
“Howdy, partner! Can you spare a few $million?”

Thursday, June 7, 2012
Augusta, GA
By Lori Davis

Our Augusta Today and CityStink.net group had limited representation at the January 30, 2012 meeting of the City of Augusta’s Finance Committee when several commissioners roasted the City’s outside lawyer, Jim Plunkett over the TEE Center parking deck agreements with manager Augusta Riverfront, LLC. However, one comment reported by WJBF’s George Eskola struck home. “We’re supposed to be in a partnership but I’ve never seen partners treated as we’ve been treated in these issues accusing people of doing things wrong we don’t operate like that,” said Paul Simon, whose company Augusta Riverfront, LLC owns the Marriott.

The comment sent me looking for the partnership agreement for the TEE Center that Mr. Simon was talking about.

Here is what was found. Better said, here is what I didn’t find.

The Augusta Commission has only approved one document that might be seen as a “partnership agreement” for the TEE Center in the form of the Management Agreement Term Sheet. It is UNSIGNED AND UNDATED, but was included in the package of documents when the TEE Center was approved by the Commission on August 21, 2007.

After the August 2007 meeting, the only later action was at the called meeting of the Board of Commissioners in early December 2009 where the Commissioners authorized the Mayor to execute the TEE Center Construction Operating and Reciprocal Easement (CORE) Agreement in anticipation of beginning construction.

Seeing that as being the partnership agreement I submitted a Georgia Open Records Request to the Augusta Law Department for the executed agreement. They didn’t have it.

Deke Copenhaver NEVER signed a CORE agreement. It doesn’t exist.

Yes, you read that correctly. The partnership for the $50 million TEE Center and Parking Deck complex does not exist! What does exist has some really shocking provisions that I think should have Augusta demanding big money from Mr. Simon’s LLC!

What does exist is the CORE agreement on the existing Conference Center dated June 21, 1999 recorded in the records of the Clerk of the Augusta Richmond County Superior Court in Deed Book 648 on page 45.

The existing CORE agreement was not canceled or superseded by a more recent partnership deal as far as we can tell. What does this signed and executed agreement say? Page 13 has a whole bunch of wording that makes Augusta Riverfront, LLC responsible for all manner of construction and maintenance cost throughout the term of the agreement.

Page 16 says this: “Developer (Augusta Riverfront, LLC) in operating the air conditioning and heating system for the Hotels and the Expanded Conference Center shall operate such systems in a manner which will not unduly drain heat, ventilation or air conditioning from the Improvements of any other party.”

Nowhere in the unsigned, undated Term Sheet is there change in duties as they relate to HVAC or the existing Conference Center. The Term Sheet even says, “Augusta’s capital funds shall specifically not be used for items related to any Convention Center and/or Hotel capital cost.”

The Augusta Chronicle reported about a controversial change order for an expensive HVAC (heating, ventilation, and air conditioning) upgrade requested by Augusta Riverfront, LLC, owners of the Marriott, writing, “The changes being requested include $399,083 for upgrades to the smoke exhaust system, increasing the number of air changes at the convention center from the Georgia minimum standard of about 2.5 per hour to eight per hour, as requested by Marriott.”

Questions

If the signed and executed CORE agreement for the Convention Center puts responsibility for HVAC operations within the hotel upon the hotel owners, and the 2007 Term Sheet does the same for Hotel capital costs, why hasn’t the Commission, Mayor and Fred Russell demanded that Augusta’s partners pay these costs? Where is our $399,083?

Where is the partnership agreement? Does Fred Russell mean to tell us that they built a $50 million complex using public funds with no partnership agreement?

How can it be legal to build a publicly funded project like this on unsigned, undated documents?

Shouldn’t all Augusta be channeling Mr. Simon’s objection -“I’ve never seen partners treated as we’ve been treated ” -right back at him?***

-Lori Davis


(*Below are pdfs of some of the public documents cited in this article)
2009 CORE GORA Request – Lori Davis
1999 Core – Radisson Hotel Conference Center (1)
1999 CORE – Radisson P. 13
1999 CORE – Radisson P. 16

Can Augusta Media Mimic Copperfield and Make Parking Deck Vanish?

  By , ,

Friday, June 1, 2012

Augusta, GA
By Al Gray
Augusta’s $715,000 “Incidental” Gift1

David Copperfield’s illusion of making the Statue of Liberty disappear is listed by the Guinness Book of World Records as, “the largest disappearance ever performed by a magician.” In the closed-loop, incestuous world of Augusta media, similar miracles have been performed over the years, mostly by using the tactic of blowing up small incidents of monetary losses, – be they by graft, fraud, or plain stupidity – to divert attention from the elephants in the room. Grandma used to call this, “Straining gnats while swallowing camels.” The Reynolds Street Parking Deck doesn’t have tusks or a hump, but some folks who know better have camel hair on their bibs.

The bit players in the Augusta illusion are officials like Tax Commissioner Stephen Kendrick, who was still being hounded by the Augusta Chronicle a year later over a missing $25,000, and former city commissioner Betty  Beard’s $20,000 supposed misappropriation of funds.

What Fred Russell made go away looked like this:

What Fred reappeared wasn’t an elephant, it was much larger:

 

If you are Augusta Riverfront, LLC, Fred relieved you of an ugly, unattended surface lot. What he came back with appears to be an enclosed, lighted, secure, landscaped, and operated lot at no capital or operating cost.

Sweet. It must be nice to be a principal partner of Augusta Riverfront, LLC and the publisher of the only daily newspaper in the city, The Augusta Chronicle, where you can use your  influence in the media to create illusions through the art of distraction, just like David Copperfield.

Everyone should be so lucky as to negotiate a deal with Fred Russell like this.***

A.G.

1 Based upon the RSPD agreement submitted to the Board of Commissioners 1/30/2012

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TEE Parking Deck Exclusive: Augusta’s $714,357 “Incidental” Cost?

  By , ,


May 31, 2012
Augusta, GA
By Al Gray

  

The story Fred Wrestles, Augusta Gets Decked?, published on Tuesday, May 29, 2012, offered a detailed and documented exploration of a story of rejected parking management bids, a questionable management firm selection, and a detailed comparison of Augusta’s bid contract with the administrations proposed contract. The questions and issues documented required a lengthy recitation to convey the magnitude of the subject. It was an epistle for those liking details.

Today’s key word is “incidental.” What is “incidental” within the Reynolds Street Parking Deck (RSPD) agreement? Can “incidental” be measured? Is “incidental” subject to debate?

What brought this subject to the fore was how the RSPD agreement deals with costs relating to the ground floor of the parking deck structure owned by designated manager Augusta Riverfront, LLC, specifically Article 3, Section 3.1 which includes this:

“The parties acknowledge that certain property and services paid for by Owner (Augusta) (editor’s unitalicized text) and required for the operation of the RSPD will also benefit Manager’s (LLC’s) (editor’s unitalicized text) ground level parking facilities located underneath and adjacent to the RSPD. Such property and services include, but are not limited to (editor’s emphasis), traffic control gates and related equipment, lighting, and services of a toll booth operator (the “Incidental Services”). The Incidental Services would be required for the operation of the RSPD whether or not the Manager owned the ground level parking facilities, and allowing Manager to benefit from these Incidental Services does not materially increase the costs to Owner. Accordingly, in further consideration of granting air rights and easements to Owner for the construction and operation of the RSPD, Manager shall have the right to utilize the Incidental Services for Manager’s ground level parking facilities located underneath and adjacent to the RSPD, so long as such use does not materially increase the cost to Owner.”

 

Whoa!

 

This caused a scurry to do some math on the RSPD 2012 Budget dated 8/29/2011  (see last page of linked documents). The budget totals $206,370. The deck structure (ground floor and floors above) has 650 spaces, of which 150 are property of the LLC, for 23% of the total spaces in the deck structure. The LLC percentage of the total deck structure, 23% times the total budget, is $714,358!!!! This is “incidental?” Is it not material?

To be clear, the legalese also essentially defines the “RSPD” as the ground floor parcels that Augusta bought, plus the structure above the ground floor. We laymen think the entire building structure from the foundations up as the “parking deck.” However, the annual budget didn’t restrict the numbers to the Augusta-owned portion,did it? Doesn’t the language of the agreement allow the LLC to bill Augusta for its fee and costs of the entire structure, including the ground floor it owns? The language allows the LLC to bill Augusta for the toll booth operator, while labor costs are the bulk of the budget. Shouldn’t there be language clearly prorating the costs instead of provisions that costs “are not limited to” those cited, which seems to open Augusta up to a cornucopia of costs?

 

With labor costs that are the vast majority of the agreement, the probable allocation of shared employee costs from the LLC’s hotel operations, further allocations between the RSPD and Conference Center deck, and, finally, the need to further allocate labor costs between levels of the RSPD, and only an annual audit allowed to verify the costs, aren’t the phrases “incidental,” “not limited to,” and “materially increase” plain dangerous to the taxpayer? Did the length of the agreement get reduced to five years, as indicated to the Augusta Commission in February?

It is a $714,358 question and then some. “Incidental” can be costly.***

 

— Al Gray

 

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In Defense of Jim Plunkett

  By , ,
Augusta Attorney Jim Plunkett

May, 30, 2012

Augusta, GA

By Al Gray

Veteran Augusta attorney Jim Plunkett has found himself at the epicenter of the controversy over the City of Augusta’s TEE Center and Parking Deck contracts since January. Commissioners blasted him with suggestions that he be fired, questions about his ability and even hints that suspect his work. How did such a mild-mannered lawyer find himself in this mess? Does he deserve to be under fire? What caused the uproar?

There were so many questions the answers for which are not in the public domain and empathy from reading the morass of legal documents that existed before Mr. Plunkett was brought on board by Augusta as its outside counsel, that this writer decided to meet with him to explore these questions. Commissioner Wayne Guilfoyle graciously facilitated the meeting in mid-March, which occurred in the offices of the Shepard, Plunkett, Hamilton & Boudreaux, LLP firm to negotiate, draft, and have executed the documents for the new Trade Center and the associated parking decks.

The primary objective was to see where the City stands with regard to the unexecuted TEE Construction, Operating and Reciprocal Easement (CORE) agreement that the Augusta Commission authorized and directed Mayor Deke Copenhaver to execute in December 2009. The CORE agreement is a critical piece of the legal work, as it sets forth the basic terms of the partnership agreement between the City and TEE Center Manager, Augusta Riverfront, LLC. This CORE agreement is in the process of being finalized as the City elected to have as-built surveys done once construction is complete, rather than chance changes as the project was prosecuted. Mr. Plunkett explained that set-backs between the various parcels underlying the TEE center were a complication that he and the City sought to either avoid or handle in the final CORE agreement.

We discussed the challenges of having a smaller firm like Shepard Plunkett tasked with having to revise hundreds of pages of legalese on the various tracts under the TEE Center, parking deck, and particularly, the existing Conference Center. These legal agreements first arose with the initial conference center agreement in 1989 and were revised in 1998, with the expansion of the conference center at that time.

Whatever one’s position on the wisdom and viability of building the TEE Center, they should understand that Jim Plunkett was tasked with the unenviable tasks of cobbling together enforceable and defensible legal agreements in conformity with the myriad ownership arrangements, funding sources, and negotiations agreed to by the City Administrator. City counsel has little or no exposure to how existing agreements and construction contracts are being directed and coordinated while this legal work is being completed. Those things are the duties of the City Administrator and the city’s program manager, Heery International.

We activists at Augusta Today and CityStink.net appreciate the difficulty and complexity of the legal tasks. Too many harsh words and hinted accusations were made during the Reynolds Street Parking Deck controversy. There are plenty of valid criticisms of that project, but we hope to keep them focused on policy not personalities going forward.

Jim Plunkett has expressed the intention to work with the commissioners to draft as good of a document as possible for the City. As the TEE Center CORE, management, catering, and room block agreements move closer to commission consideration, we trust that getting access to the draft agreements with sufficient time to evaluate them will go far toward alleviating misunderstandings. Going forward it is our desire at Augusta Today and CityStink.net to provide helpful input into having effective operating controls implemented.

Thank you, Jim, for taking the time to meet and review many of the complications with the TEE Center project.***

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TEE Parking Deck Exclusive: Fred Wrestles, Augusta Gets Decked?