Catering May Crater Augusta Finances

TEE Catering Delivers Sweets To Whom?

Thursday, November 8, 2012
Augusta, GA
By Al Gray

Part 2 of Reviewing Augusta’s Tee Center Contracts

When Augusta’s Trade, Exhibition, and Event (TEE) Center was officially presented as a concept for approval in August 2007, what stood as the partnership agreement was an unsigned, undated document entitled  "Term Sheet." between the city and Marriott Hotel Franchisee Augusta Riverfront LLC. Under that agreement, Augusta was not in the catering business and was not slated to furnish $1.4 million in kitchen equipment, or if it was, that detail was not spelled out for the Augusta City Commission.

Much has been written on this blog about the saga of the Tee Center Kitchen Equipment and that tale is not one to be retold now.

What is now germane is  that the Augusta Commission has been presented with a raft of contract and legal documents to be approved and executed that clearly should have been in place by late 2009, having been repeatedly promised as being “finalized” by City Administrator Fred Russell in the last half of that year. Now the Commission is being asked to whisk these complicated deals through in an expedited fashion lest Tee Center events face cancellation.

After the Management Agreement, the Tee Center Catering Agreement has the greatest impact upon TEE Center operations, as Augusta Riverfront LLC is already the Manager of Augusta’s Conference Center and Caterer for events there. Augusta is paid no share of catering from its Conference Center under previous deals.

The following represents a summary of the primary Catering Agreement issues compiled from a review of the contract documents. This list has been provided to Commissioners and has become the basis of discussion and attempts toward a speedy resolution of major issues. The approach was to review the agreements in PDF form,  write comments, apply sticky notes that Adobe Acrobat provides to annotate documents, and then to provide a summary from the compiled sticky notes.

Solutions were designed to be the product of meeting participants and were not suggested in the summary.

The author is not a licensed attorney, auditor, or public accountant. This analysis was provided from a multidisciplinary perspective in the manner that accountants, attorneys, administrators, owners, policy makers, and media might find useful in trying to decipher the pitfalls and dangers in the agreements.

 Primary Issues

1. Since most of the language in the Catering Agreement mirrors the language of the previously-reviewed and annotated Management Agreement, this document will only be annotated with comments and questions unique to this agreement.
2. Phantom legal documents (see “ Conference Center Management Agreement dated____, 2012”) should not be referenced.
3. ARLLC (Augusta Riverfront LLC) is both Conference Center operator and Caterer with a captive LLC (TEE Center Manager Augusta Convention Center Management LLC) between them. Isn’t this just a fiction to eliminate a conflict of interest as alluded to in the Catering Agreement?
4. Controls over inventories of food and beverage (to prevent co-mingling of Augusta, Hotel and Conference Center purchases) being in place before contract execution should be mandatory.
5. If Kitchen doesn’t serve Hotels (as has been publicly stated by the Marriott General Manager), can’t that reference be taken out? 
6. Cross over events into the Conference Center will deprive the Tee Center of catering revenues, while the agreements relieve the Conference Center of costs.

As with the Management Agreement, time will tell how many of the above issues are addressed, handled, and rectified.

 -AG

The author, Al M. Gray is 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. He is a frequent contributor to CityStink.net.