Special Report: Augusta Catered to Death

TEE Center under construction August 2012

Thursday, October 4, 2012

Augusta, GA

By Bradley Owens

* Editor's note: Please click on blue text to view documents referenced in this article*

Houston, we have a problem. Rather the City of Augusta's special counsel Jim Plunkett and his predecessors who created the Tee Center agreements have a host of problems. Most of them center around “Conference Center” versus “Convention Center” but the Tee Center Catering Agreement is the lynchpin. Our Augusta Today and CityStink.net investigative team now seems prescient in our dogged pursuit of the elusive kitchen equipment.

The entire Tee Center fiasco began with an unsigned, undated "Term Sheet" that became the only partnership agreement with Augusta Riverfront LLC that was approved by the Augusta city commission. This agreement refers repeatedly to the “Conference Center” as being subject to the preexisting agreement between the partners. It says that Augusta and Riverfront agree to “ modify their agreement for the operation of the Convention Center to include the Trade Center. ” Trouble was, there was no agreement to operate any “Convention Center”, only the 1999 agreement for the operation of the "Conference Center."

Since then there has been considerable publicity given that the entire Tee Center, Parking Decks, and existing Conference/Convention Center are now the “Convention Center,” which furthers the misconception that there ever was a “Convention Center” before, but all the while the lawyers reverted to labeling the existing facility as the “Conference Center.” Was it deceit or wanton incompetence? Read on and you decide.

On September 24, 2012 Augusta Riverfront LLC's Paul S. Simon appeared before the Augusta Commission with an ultimatum – Execute a plethora of contracts, assignments, releases, modifications and other legal documents within 22 days or face cancellation of Tee/Trade Center events. Augusta then knew it was being held hostage to the lawyer's handiwork, efforts that Administrator Fred Russell promised were nearly complete 3 years ago.

Included was the catering agreement. This document spells out that the new kitchen built in the Tee Center, but legally carved out as the “Conference Center Annex”, is to serve both Marriott hotels and the existing Conference Center. Why is the term “Conference Center” so important? Why, it is because if the existing Conference Center agreement was intended to continue – which it was – it means that the $1.4 million of kitchen equipment that Augusta bought under a controversial change order to the Tee Center Contract will mostly be used to generate revenues for the Marriotts and not Augusta. This is because the existing Conference Center agreement pays Augusta 5% of the rental space revenues and nothing else, including catering.

TEE Center abuts The Marriott Hotel

Unless Riverfront has quietly reimbursed the city, Augusta paid $1.4 million for kitchen equipment that it will get almost NO USE OF, because the Trade Center space will be used primarily for exhibits, with attendees adjourning to meeting rooms in the freely-catered Conference Center for meals. So far, our Georgia Open Records request responses from Augusta have not shown that the Commission ever agreed to relieve Riverfront of the LLC's responsibilities for kitchen equipment.

Under the circumstances, it would be wildly irresponsible for Augusta's Commissioners to agree to pay for any of the kitchen equipment, particularly since some of the charges on the vendor's invoices was to repair Riverfront LLC equipment! (Under prior agreements Riverfront owned the equipment) Where is our $1.4 million? Is there any prohibition whatsoever barring Riverfront from running a commercial catering operation citywide out of the Conference Center portion of the Convention Center, using the $1.4 million of Augusta kitchen equipment?

Worst of all the catering agreement mentions in several places that services to the hotels, to the restaurants, and to the existing Conference Center will be provided by the kitchen. There is no operational procedure manual to set out controls over food and beverage procurement, use or inventory for the Tee Center versus these other operations. Without controls and in the midst of all of these operations that consume food and beverage, how will Augusta avoid being looted from various parties on and off the premises? Will there be household with freezers of steaks, courtesy of Augusta taxpayers?

How many of the Marriott's existing catering staff will be assigned to the Tee Center contract? Since the vast majority of the catering seems to be outside of the Tee Center, why should management level employees be charged to the Tee Center catering agreement?

In life, timing is everything. With the unsigned, undated Term sheet that began the Tee Center project in 2007, the seed was planted in the minds of the public and the commission that there was going to be a new  Convention Center agreement. After that the branding was changed to emphasize the  Convention Center labeling, including announcements at the opening of the Reynolds Street Parking Deck and at last month's  meeting. Behind the scenes the legal wording, finally disclosed at the September 24 meeting, narrowly focused on the Conference Center and preserved the sparse 5% payout to the city for the existing center, with no provision for catering revenues. The wording of the catering agreement is that catering only applies to the Tee/Trade Center.

Meanwhile, the Amendment to the Core Agreement extends these agreements out 50 years. Never mind a reported reduction to 15 years.

Throughout these agreements, one thing is repeatedly clear. The hotels and these agreements, which in the hands of others not as civic in their mindset as Paul Simon and Billy Morris provide an UNLIMITED CONDUIT to taxpayer funds, can be SOLD! In the hands of money hungry financiers of Wall Street, these agreements are loaded guns aimed directly at the finances of we Augustans.

How much more can Mr.'s Morris and Simon get for their two Marriott Hotels with $70 million of dedicated Augusta buildings permanently and legally bound to them with an UNLIMITED conduit into the general revenues of Augusta Richmond County?

There you have it, reader. Augustans already find themselves facing a property tax increase.How many more tax increases will be coming to feed the Tee/Trade/Conference/Convention monster?

When the finances of Augusta crater it will be in no small part because of Catering.***
BO
**Cost Recovery Analyst Al Gray, President of Cost Recovery Works, Inc. contributed to this report. 
Tee Catering Definitions From 9-2012 Agreement 1999 Core Agreement Conference Center - Revenues