ParkingGate: Leave it to Fred!

Fred Russell: "What? Me worry? I Have it all taken care of"

Nov. 11, 2011
Dustin Goads
For now, awarding the management contract  of the new Reynolds street parking deck has been delayed. At a finance committee meeting this past Monday (Nov 7th), commissioners voted 4-0 to send it back to Fred Russell for renegotions with the interim operator, The Augusta Marriott, which is a subsidiary of Augusta Riverfront, LLC. That is the same group headed by Paul S. Simon who also heads up 933 Broad Investment Co LLC, which is the principal land owner where the new deck now sits, meaning they own the ground floor of the new deck and the 150 spaces that occupy the first level. You can read more about this  in The Augusta Chronicle: Augusta Chronicle: Russell to re-examine downtown parking deck deal

The act of sending this back to Russell, who is mostly to blame for the confusion in the first place is odd for many reasons, but mostly it shows a commission that has no idea how to proceed on how to solve the pickle the city finds itself in over ParkingGate. Remember it was Fred Russell who told commissioners back on Dec 9, 2009 when the TEE Center and Parking deck were approved, that Augusta Riverfront LLC (or their subsidiary) had AGREED to donate the land for the new deck. Russell reiterated this several times when commissioners asked repeatedly for clarification: see--> Dec. 9, 2009 Commission Meeting Minutes

But it turns out the land was never donated. Russell and general counsel says the deal was changed to allow for tax free bonds for construction of the deck. But Russell forgot to inform commissioners that the deal had changed and the land would not be donated. Russell also negotiated a very lopsided management contract with The Marriott over the deck. In the deal Russell negotiated, the city would pay the Marriott (owned by Augusta Riverfront LLC) a yearly fee of $25,000 to manage the new Reynolds street deck, and the Marriott would also get a sweet-heart lease deal where they would pay the city $50,000 a year for hundreds of city owned spaces in the deck adjacent to the Marriott. That would give the Marriott all revenue generated from those spaces.. which could be $400,000 a year. Not a bad deal for $50,000... well actually the Marriott would only pay the city a net fee of $25,000 once you factor in their contract to manage the Reynolds street deck, of which 933 Broad Investment Co LLC ( also a subsidiary of Augusta Riverfront LLC ) would own the ground level containing 150 parking spaces.

Russell says this was the best deal he could come up with. But another company, AMPCO System Parking submitted a lower bid with terms much more favorable to the city. But Russell ignored that bid in favor of the  Marriott because he assumed it was already agreed to award the contract to the Marriott. Russell also ignored findings from a 2009 parking study that showed that a surface parking lot option could accommodate the lost spaces from construction of the TEE center that would only cost $1 million instead of over $12 million the city spent on the new parking deck. Most commissioners have stated that they never saw the findings in that parking study. Russell says he knew about it but didn't think it was important because once again he just assumed commissioners had agreed to build a deck and award the management contract to the Marriott.

Fred Russell may not bear all of the responsibility for the parking deck fiasco (The city's general counsel and attorney Jim Plunkett were also heavily involved in the negotiations), but it's safe to say that Russell failed miserably in his duties to keep commissioners updated on the negotiations and that the deal over donation of the land had changed. That was a big change. Fred Russell also failed to make commissioners aware of cheaper alternatives. It all makes one wonder who's interest Fred Russell was looking out for. It sure doesn't seem to be that of the city.

So this all makes the observer wonder why commissioners would have confidence in Russell to come back with a better deal for the city? Remember it was just a few short months ago when Russell's head was on the chopping block over raises he gave out to department heads and other high level administrative employees when just about everyone else were getting pay cuts and furloughs, including sheriff's deputies. This was also during a period when Russell was telling commissioners that the city was over $7 million in the hole. Many commissioners, city employees, and taxpayers were outraged. Ultimately, Russell kept is job, not so much out of confidence, but because commissioners didn't feel they had a back-up plan to replace Russell.

But commissioners may have to come up with a back-up plan for Russell soon. News is that Russell is a finalist for a county administrator position in Sarasota, FL: Augusta Chronicle: Russell named Finalist for Sarasota, FL Position. What's odd about this news is that it broke nearly a week BEFORE the finance committee voted on Nov 7th to task Russell with going back and renegotiating a better parking deal with Paul S Simon. Will the parking deal really be on Russell's priority list if he is in line for another job in The Sunshine State? In fact, Russell will be in Sarasota on Tuesday interviewing for the prospective job when a budget plan is presented to commissioners on how to plug a projected $6.3 million budget deficit. Deputy administrator Tameka Allen will present the proposal in lieu of Russell: Augusta Chronicle: Cuts eyed for $6.3 million budget hole.  Just when will Russell have the time to revisit the parking deck deal?

Fred Russell's golden parachute by "The Shadow"

                                                      ^^Click image above to enlarge^^
And let's also not forget that the commission tasked Fred Russell back in July of this year  to have negotiations with Ripken Baseball on developing a "creative financing" package for a new baseball stadium. So it seems like the commission has put a lot on the plate of this city administrator who has given them plenty of reasons to lack confidence in his abilities to deliver. And with Russell perhaps heading for the warm sandy beaches of Sarasota, FL, he probably has even less incentive now to deliver on a better parking deal. Plus, Paul S. Simon, with his company owning the ground floor, holds the leverage. And Simon has hinted that he doesn't intend to budge.

But what happened to the tough talk from commissioners  just a couple of weeks ago? When the news first broke in the media that the city didn't own the land where the deck now sits, mayor pro-tem Joe Bowles even used the "C" word when interviewed by WJBF's George Eskola. Bowles said then that the city needed to own that land and would not rule out "condemnation" proceedings if it got to that. But it seems as though Bowles has backed off that threat. Now the commission is sounding more like a puppy dog with its tail between its legs going back to Paul S Simon begging for a better deal. But what if Simon doesn't want to match the terms of AMPCO Parking Systems? Bowles had previously stated that as an ultimatum. But will Bowles and the other commissioners back that up... with, say, the threat of "condemnation"? At this point that seems to be the only card the city holds to negotiate a better deal. But as we first told, the possible inflation of the land values  by the city where the deck now sits could throw a wrench in that option.

This doesn't seem to be ending soon, and instead of issuing a tough ultimatum to Paul S Simon, commissioners are now sounding more mealy-mouthed and more tepid in their resolve. It seems as though the "C" word has completely disappeared from the rhetoric over the parking deck. And punting the problem back to Fred Russell, who was largely responsible for creating it in the first place, makes the commission look even more like a deer caught in the headlights over this. It seems that they have no game plan. What will they do if Fred Russell gets that job in Florida? The commissioners better be coming up with a back-up plan fast.

Related articles:   

•  Land Swaps, Bonds and Air Rights: The parking Deck Saga Continued, 
•  The Parking Deck of Wonders, 
•  The Ghost of David Fry
• Brad Owens: A Rebuttal to Austin Rhodes Over ParkingGate
• Where's Deke on ParkingGate?

***Do you have a story idea, a tip, or would you like to write for City Stink? Then please contact us at: CityStink@gmail.com ***

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Where's Deke on ParkingGate?

The Boy King by City Stink's cartoonist "The Shadow"

CityStink.net Commentary
Dustin Goads


Well, once again when it comes to controversy, Augusta's mayor is missing in action. It's no secret that The Boy King loves to avoid controversy at all costs... so when news hit that the city of Augusta had just built a $12 million parking deck on land it doesn't even own, it was no big surprise that you didn't see or hear much from the mayor in the local media.

Not that Deke is camera shy. I mean if the news had been that Augusta was ranked in the top 25 places to have a gall stone removed by some obscure online publication, The Boy King would have convened a news conference to hype the news and to somehow take the credit because of his charisma, charm and his ability to "bring people together" had obviously contributed to Augusta making the rankings.  But the city spends $12 million dollars to build a downtown parking deck on land owned by the same people who want to be paid to run it and Deke doesn't seem to think it is a big deal. But remember this is a pattern for Augusta's mayor.

When there was a near riot at The Cherry Tree Crossing housing project a few years back, the media couldn't even reach Deke for comment. Instead, then mayor pro-tem Al Mason stepped forward and called for calm and spoke on behalf of the city to the local media. Something you would expect the mayor to do. But then no one could get a comment from Deke for days.

Then a couple of years ago, when Augusta was about to hold its first Gay Pride Parade and Festival, the "Unity Mayor" punted the request for a permit to the city's legal department instead of signing off on it himself. It was an obvious ploy by Deke to ride the fence on that issue. There was no legal grounds to deny the permit and Deke knew it, but he wanted to absolve himself of the responsibility for granting the permit.

 It would have been a great opportunity for Deke to show some leadership and do the right thing because it was the right thing to do, regardless if it was the politically popular thing to do. But it has become obvious, that Deke is more concerned about popularity than in showing leadership and doing the right thing. And based on his showings in his last two elections, that strategy unfortunately seems to work.

And then how could you forget the recent brouhaha involving Fred Russell and  decision to hand out big raises to select employees while most others where getting furloughs and pay cuts. Deke was mostly silent on that issue, when just about every commissioner seemed to have something to say. Deke was more upset that it made the city look bad, not at the situation itself. Deke also had little to say over the recent controversies at the fire department that ended up with the upper echelon, including chief Willis taking early retirement. Unless it's a photo opp at a ribbon cutting or a news conference to announce that Augusta has made some ranking in yet another obscure top 10 list.. well then you just don't hear or see a lot of The Dekester.

When Deke was on The Means Report (WJBF) recently, Brad Means asked the mayor about the parking deck and whether he would ask Augusta Riverfront LLC to donate the land, as commissioners had been told by Fred Russell that they had agreed to do. Deke's answer and his mannerisms were very revealing. First he was obviously perturbed that the question had even been asked in the first place. And he answered it by saying: "Why do some people always want to look back at matters? We should be looking ahead." This seems to be Deke's canned response to any controversial situation that he wished would just go away.

 But the question is valid, and of course Deke did not answer it. Commissioners were told right before they voted to approve the deal to build the TEE Center and the parking deck that Augusta Riverfront LLC (or their subsidiary.. in this case 933 Broad Investment Co, LLC) had AGREED to donate the land. But that never happened and commissioners were never told that the terms had changed. Does Deke not have a problem with that? He should. And Deke kept reminding us in his first campaign about his experience in negotiating real-eastate deals and how that could be beneficial to the city. Well Deke, now is a perfect time to put those negotiating skills to good use.

Or was the mayor aware that the deal had changed? If so, then why didn't he inform the commissioners that the land was not going to be donated? The mayor's visible defensiveness on this issue leads even the casual observer to believe that maybe he knew more about what was going on then the commissioners knew. Is that why he wants all of this to just go away? 

But once again we have another controversy in city government and absolutely NO leadership from the mayor. You have commissioners bickering back and forth. One wants a full-scale forensic audit. Others deride that as a "witch-hunt".  But where's the mayor? Where's the leadership? Where's Deke's charisma and charm when you need it to "bring people together"? 

We would hope that the mayor would take this more seriously, because we are talking about millions in tax dollars and possibly commissioners being purposefully mislead. That's a big deal. And it should be a big deal to Deke. The Boy King may want to just "keep moving forward".. but as the maxim goes " those who do not learn from the mistakes of the past are doomed to repeat them." Well that may explain why Augusta seems to be making the same mistakes over and over and continually getting suckered into these bad deals.

Related articles:   

•  Land Swaps, Bonds and Air Rights: The parking Deck Saga Continued, 
•  The Parking Deck of Wonders, 
•  The Ghost of David Fry
• Brad Owens: A Rebuttal to Austin Rhodes Over ParkingGate

***Do you have a story idea, a tip, or would you like to write for City Stink? Then please contact us at: CityStink@gmail.com ***

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Busted: MD Mayor "Admonished" for Augusta Trip with Ripken Baseball

Mayor Bennett (left) and challenger  McGrady (right)

City Stink first told you back on October 11th about Aberdeen, MD mayor Michael Bennett's trip to Augusta, GA with Ripken Baseball officials: The Truth is a Funny Thing in Aberdeen, MD When it Comes to Publicly Financed Ballparks.

Mayor Bennett had a very different story for the audience in Augusta regarding his city's financial history with the publicly financed Ripken Stadium from what the people back home are familiar with. Bennett supposedly wanted to "dispel rumors" from a 2007 Baltimore Sun  article that said the small city of Aberdeen, MD was losing hundreds of thousands of dollars annually on their stadium and a very lop-sided financial arrangement with Ripken Baseball made it next to impossible for the city to even break even. Plus, much of the promised real-estate development the city was hoping would occur adjacent to the ballpark never materialized. Of course City Stink got a hold of the budget reports for the city of Aberdeen and found that the city was still losing hundreds of thousands of dollars annually on Ripken Stadium and still having to dip into its general fund to service the bonds.

But Bennett made it sound like everything was just hunky-dory back in The Old-Line state. But people back home knew better. It seems for years, a series of mayors, including Bennett, tried unsuccessfully to renegotiate a better deal with Ripken Baseball to stop the financial hemorrhaging for Aberdeen taxpayers. Each time, the company refused. So why did mayor Michael Bennett come down and tell an audience in Augusta a completely opposite tale and sing the praises of Ripken Baseball?

As many of you know, Ripken Baseball and Augusta mayor Deke Copenhaver have been lobbying hard for a new stadium here in Augusta. But the public has been cool on the idea of committing public funds for the project. So when the news broke back in July that Cal Ripken's home town of Aberdeen was suffering with a financial burden with Ripken Stadium, it seemed to reinforce what stadium critics here have been saying all along.

So on October 3rd, Ripken Baseball brought Aberdeen mayor Michael Bennett (at company expense) to Augusta to engage in some damage control and some truth bending. I mean if the mayor of Aberdeen, MD says all of this is a bunch of baloney about them losing money on their stadium then it must be true right? And of course Augusta reporters won't ask any questions or dig deeper, right?

When the folks back up in Maryland caught wind of mayor Bennett's trip to Augusta, there were naturally a lot of questions. Such as why was mayor Bennett down in Georgia on a lobbying junket for a company his city has a financial relationship with? And, why did the mayor neglect to give the crowd in Augusta the whole story?

Patrick McGrady, who is challenging Bennett in the upcoming Nov 8th election for mayor, filed an ethics complaint over the trip.

Well on Nov 1st, just a week before the election, the Aberdeen, MD Ethics Panel (many of whom were appointed by mayor Bennett) rendered a decision on the ethics complaint against Bennett, and it found the mayor IN VIOLATION of the city's ethics ordinance: Baltimore Sun: Ethics Panel Admonishes Mayor Bennett.

You can view the official decision by the ethics panel below:

ethicsreport (1)

Even though the panel did not believe the mayor "willfully" violated the ethics ordinance, they did believe the potential for a conflict of interest did exist and that mayor Bennett should have disclosed this to the city council BEFORE making the trip. He notified the council more than a week AFTER when it had already hit the blogs and newspapers. The panel also concluded that the mayor, acting in an official capacity, was in effect lobbying on behalf of a private company that could result in that company receiving a  financial benefit (Ripken Baseball is trying to get Augusta to build them a stadium here). The panel did not consider the plane ticket a "gift", nor has it been proven that mayor Bennett received some other direct financial benefit from Ripken Baseball for making the trip, but with it being election season, there are certainly many people asking questions about mayor Bennett's motives for coming to Augusta to lobby on Ripken Baseball's behalf and twist the facts about the financial burden of the stadium. Though there is no penalty for the ethics violation, the panel did "admonish" mayor Bennett for a "series of imprudent actions."

How will this impact the election up there? Well we will find out after next Tuesday if this trip to Augusta cost Michael Bennett his job as mayor. The timing of this certainly could not be worse for Bennett. However things turn out in the election, many stadium critics in Augusta feel vindicated by this decision from the ethics panel in Maryland. The truth about the financial burdens of these stadiums are well documented, and for mayor Bennett and Ripken Baseball officials to come to Augusta and say that stadium critics here were spreading "rumors and misinformation" was not only disingenuous, but offensive. If they want to point the finger at who is spreading "rumors and misinformation" about the stadium, they may want to try finding a mirror.
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Other media sources covering the ethics violation story:

• The Dagger Press (Harford County, MD)
• The Augusta Chronicle (Augusta, GA)

Related City Stink Articles:

• The Truth is a Funny Thing in Aberdeen, MD When it Comes to Publicly Financed Ballparks

***Do you have a story idea, a tip, or would you like to write for City Stink? Then please contact us at: CityStink@gmail.com ***

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Brad Owens: A Rebuttal to Austin Rhodes Over ParkingGate

DISPATCHES FROM EXILE; Vol. 1, No. 1

November 5, 2011

Who’s the Big Winner Here? 

By Brad Owens

Austin Rhodes column in this week’s Metro Spirit, ‘Incomplete Information Makes for a Bucket of Mud’ took Augusta Today, City Stink and Jill Petersen to task for what he perceived as a huge injustice we all had perpetrated on State Senator Bill Jackson when we made it known that he had traded a 0.07 acre piece of property he owned, valued at $28,000.00, for a piece that was worth $119,500.00. (City Stink would love to be able to link to Rhodes' column, but The Metro Spirit is still in the Dark Ages and has none of their content available online).

Austin’s ‘bone of contention’ was not the facts that were in Jill ‘Jilly Bean’ Petersen’s amazing and creative article posted in City Stink: The Parking Deck of Wonders, but that Jill had not given the “whole” story and that hence it led folks to come to the wrong conclusion that State Senator Bill Jackson had made out like a bandit with tax payer money.

Seems the records show it in plain black and white (links provided at bottom of this article) and the facts we posted were never in contention for that reason.

No, it is not the facts surrounding this land swap that got Austin’s attention it was that when he read it he concluded that State Senator Bill Jackson, a “close friend” of Austin’s, had done something wrong.  The blog did not state that State Senator Bill Jackson had done anything wrong, in fact, I was even quoted as saying that it was not illegal, yet Austin’s own conclusions led him to feel like he needed to start damage control immediately for his ‘good friend.’

Austin’s problem with the fine piece of blogging is not, so he says, because we posted the facts of the trade, but that they were laid out in such a way that it made it look like State Senator Bill Jackson (AKA Po’ Ol’ Bill) got a sweetheart deal when in fact he did not. 

In fact, to hear Austin tell Po’ Ol’ Bill’s side of it, he lost money on the deal and was forced to give up a piece of property that he didn’t want to part with.  In Austin’s eyes, Po’ Ol’ Bill is a victim and we were misrepresenting the facts surrounding the deal to tar and feather him unfairly.  Despite the fact he was reading into it what he wanted to see and that we were just asking questions on what looked like a part of the ParkinGate scandal that was breaking at the same time.

By the way, ParkinGate was caused by research we did into the land deals surrounding the parking deck and the TEE Center where we saw that 933 Broad Investment Co LLC owned land our new parking deck is built on.  We broke that story and made it public that the county did not own the property I might add. I digress.

I guess in the interest of ‘fairness’ Austin allowed Po’ Ol’ Bill to get on the radio and tell his “side” of the story on Austin’s radio show (The Austin Rhodes Show, WGAC 580 AM, 15:00hrs to 18:00hrs Monday through Fridays). It seems that although the land was listed as being owned by a Mr. Goldberg, and the paperwork shows it was valued at $28,000.00 for ten years, and ownership only shifted to Po’ Ol’ Bill just a month before Augusta-Richmond County swapped a piece of property valued at $119,500.00 (see HUD link) for it, that in fact Po’ Ol’ Bill had owned it since 1969. 

Po’ Ol’ Bill claimed that he was partners with Mr. Goldberg and the property had been owned by them both for a long time.  The $24,000.00 listed for the sale from Po’ Ol’ Bill to Mr. Goldberg was what he paid to get full control of the property and cannot be called the “fair market value.”  Po’ Ol’ Bill went on to say that he didn’t want to sell it and that the county threatened to start a condemnation action, he even had a paper to “prove” it.

Ok, fair enough, no one ever said that was not the case, well, I can’t say no one ever said that, but I can tell you that no one from our group disputed that the county wanted the property and got it from him.

Dost Thou Protest Too Much?

It seemed odd to us that for simply telling the facts of a very odd land swap deal that took place that we would be called all sorts of names like “wannbes” and “amateur journalist.”  It seemed to me that anything looking as shady as the land swap deal with Po’ Ol’ Bill in conjunction with the ParkinGate scandal that had been unfolding at the same time would have been local radio talk show gold.

I mean the facts didn’t line up over the city’s failure to own all the land a $12,000,000.00 parking deck the county owned was sitting on.  Why was Po’ Ol’ Bill’s land bought with a swap at what appeared to be a much greater value when 933 Broad was not forced to sell or trade too?  As far as I was concerned, it merited further investigation and what is wrong with asking questions when it is dealing with our tax dollars?

Would that deal that gave the apperanace of greatly inflating the value of the land the parking deck is built on going to cause the County to have to pay what would amount to $1,700,000.00 per acre?  What was the reason that the County did not just buy the land from Goldberg at fair market value?  Why was Po’ Ol’ Bill allowed to dictate the terms in which he was going to give up his land in the swap?  Was he given special treatment because he is a political figure?  All of these are valid questions given the ParkinGate scandal in my opinion.

Austin’s opinion is that we were trying to smear Po’ Ol’ Bill and it was out non-professional media skillset that caused this.  I think it was our much more professional research that uncovered all this rot, but then again, opinions are like assholes, and everybody has one but sometimes your opinion makes you one.  I digress again.

My Opinion and Rebuttal to Austin’s Column on Augusta Today

This is my opinion that has been articulated by me from facts presented by members of Augusta Today and City Stink. I hope folks will look at the data, the links and see that it seems Austin left out some pretty major parts of the story and is missing many facts that don’t help support his opinion.

Maybe he was not aware of these facts, but research seems to be a strong point of this group and so I will give him a pass on shooting first and asking pertinent questions later, I mean after all, Po’ Ol’ Bill is a dear friend of his and emotions could have played a part in his vision when looking at these facts.

Austin said, "Bill paid 24k for the property, which was listed as the 'value' because 'that was what he paid for it.”  Here Austin is trying to say that what someone pays for a property is not valid and cannot be used for calculating “fair market value.” 

That is not really exactly true, but first let’s addresses the listed values and then we can look at fair market value of the property.  It was listed as $28,600.00 and had been for the previous 10 years. It was $30,000.00 in 2000, but had declined somewhat. The $24,000.00 only came up when he was buying it from his (dead?) partner Mr. Goldberg and remember, Po’ Ol’ Bill already knew the deal he was getting in the $119,500.00 land swap. Did his partner's estate know?  I mean one of Austin’s major arguments is that the swap was fair because it was rental property and hence the values were jacked way up due to the loss of that revenue stream to the owners.

He said, "Ignoring rental income when condemning a property...MAJOR NO-NO."  I don't believe that in the first place, and go tell it to the Goldbergs, but the fact is, this was not a condemnation anyway now was it?

Austin elaborated that false point on Augusta Today when he posted this little gem, “Brad...in a condemnation, the total value of the property (rental income) is taken into consideration. BTW...I have been told that you compute such value at between 10 and 20 times annual income.”  Oh REALLY?  Then let’s look at that and see if Po’ Ol’ Bill was cheated, or was someone else?

First off, the property was not acquired through a condemnation action, and Austin’s assertion that rental income is always taken into consideration on a condemnation is just not the correct statement about this, that is in fact 100% wrong given the fact this was not a condemnation.  In fact, on commercial properties rental income is already a part of the appraised fair market value.

Also, what is "fair market value?" While it is not explicitly in the value, but the fair market value is the highest price one willing seller would sell the place for to one willing buyer.  It is fair market value that takes into consideration rental values and it is not related to a condemnation in this case because the land was NOT CONDEMED!

That's in theory, of course. Now look up a 1033 conversion (forced conversion). That would deal with eminent domain and capital gains, which was NOT the case here as claimed by Austin and Po’ Ol’ Bill (his excuse as to why he didn’t want to sell and wanted a swap was because he didn’t want to pay capital gains taxes).

In fact Bill got a 1031 conversion (land swaps).  This whole deal is just not the norm and Austin misses the ever loving point. This is about the fact that SOMEONE was so desperate to get this parking deal done that they were able to force the city to do this out of the ordinary swap and it was NOT an eminent domain issue, otherwise ALL the land would have been purchased or swapped in the same way. Bill did NOT have to do the deal.

Google is a Good Friend

Now, related to rental values and values on a condemnation, some quick online searches produced this gem.

http://ftp.resource.org/courts.gov/c/F2/373/373.F2d.870.22000.html   

From the article..."As stated, the city contends that the practice of capitalizing earnings to arrive at enterprise value is not acceptable in Louisiana, citing Rapides Parish School Board v. Nassif, supra. In that case the school board expropriated an owner's property in order to remove the building and construct a school.

The court held that the owner was entitled to fair market value computed on the value of the land plus value of the building on a cost of replacement less depreciation basis.

The owner urged that he was entitled to a valuation of the building on the basis of capitalized rental income plus the value of the land.

The court rejected this contention by stating that rental income and the value of the business are not sole criteria but are material to the extent that they assist in determining the fair market value."

After all, Reggie's Hot Dogs was bringing in for them the princely sum of $7,200/annum. How was Po’Ol’ Bill’ able to get away without compensating his partner's estate for that dried up revenue stream (something Austin did not mention even in passing in his Spirit article), but he did say "Oh, but of course the city should pay through the nose for such a fabulous producer of rental income."

Austin’s reasoning here is garbage when he says “he (Jackson) was losing (against his will) a property generating a minimum of $7,200 a year in revenue." According to his logic, Po’ Ol’ Bill should be compensated for that, but for some reason not his partner's estate?  Remember, the land swap deal had already been worked out when he did the deal to get 100% ownership of the property. Austin’s own reasoning at the very least makes Jackson look like a Scrooge.

Hot Dogs and Hot Property

Seems like one of the “forgotten” parts about this deal was that not only was Po’ Ol’ Bill Jackson sorted out, so was his tenant on the property, Reggie’s Hot Dogs. 

The Commission minutes from the called meeting where this buyout was approved say they compensated Reggie's Hot Dogs $32,000.00 as part of this deal as well. That proves that when Austin brought up the ‘booming business’ Reggie was doing it’s a red herring argument to defend Bill’s compensation.

Po’ Ol’ Bill Jackson had no part in it (unless he was a silent partner), and Reggie was compensated separately to the tune of a lease buy out for the $32,000.00 listed in the minutes.

Land Values and the Big Winners

Regarding market value and sales, there's this item from earlier this year;

"Also, for the first time, Senate Bill 346 allows a recent sale to be considered a property's fair market value, Ross said."

http://chronicle.augusta.com/news/government/2011-05-15/assessment-notices-mailed

So Austin’s assertion that you cannot assess values based on recent sales is also not correct. He is just flat out wrong on that one too.

State Senator Bill Jackson voted to pass SB 346 so he knows about this.  That means that theoretically the deal he did could have the effect of raising the value of the property the parking deck is built on to $1,700,000.00 per acre!

So given that Austin challenges our assertion that Bill’s deal can cause the values of the property under the parking deck to go up let’s revisit the land values argument Austin made once again, but this time from a point of view of how this screws us twice.

If the stated value was $28,000.00 that Bill was paying taxes on for over ten years and as Austin says "When condemnations take place, they ALWAYS are based on the appraised price of property BEFORE any condemnation action or consideration is announced..." it proves the point that Bill got a sweetheart deal.

If it was valued at $28,000.00 then that is what Bill should have received for the property according to Austin’s ‘absolutes’ of land purchases. Not $119,000.00 plus the $32,000.00 buyout of Reggies.

Thanks for making my point Austin that Bill was given a great deal and it seems everyone jumped through hoops to make sure they did NOT need any condemnation action Austin, otherwise he would have only gotten $28,000.00 in compensation, well, according to your logic.

Let's stay on topic here. Was the property worth $28,000.00 or $151,000.00 which is what we ended up paying to own it?

Fair market value CAN be based on recent sales (as the law says now) so 933 Broad has a good argument now because of what was done with Bill.  That property is worth MORE now because of the trade and that cannot be debated so the values could be raised up considerably.  It doesn't mean it WILL happen, but according to the law it could happen.

The odd swap, and puffed up values given to Bill means if they try a condemnation action 933 Broad can argue that what was fair for Bill is fair for them too?  Again, no one has said it’s against the law and no one is saying it will happen, but it CAN, and the law DOES allow it.

I mean, why was Bill given the option to force a swap instead of a regular condemnation action where we would have gotten the property for $28,000.00?  Bill could have been able to claim a loss given what he paid for it and the loss of revenues form rent, hence no "capital gains" taxes would have been owed so that is a hollow argument as well. I guess the parking deck just should have not been built, because if Bill didn't want to sell, I don't think we have the right to force him to, right? Not according to “Imminent Domain” in Georgia.

Eminent Domain or Imminent Dough-train?

Austin’s entire argument really makes no sense when he keeps talking about condemnation when it did not happen and this is what is not making sense to me about the eminent domain argument.  How can the city threaten eminent domain against Jackson when they were not acquiring the parcels owned by 933 Broad Investment LLC?

In fact the 0.07 acre parcel acquired from Jackson is the only piece of land where the parking deck sits that owned by the county.  The rest of the land is owned by 933 Broad Investment LLC. 

The city built the deck on private property.

Maybe Bill Jackson could now say he was tricked into selling (heck maybe he could have kept control of his 0.07 acre parcel and the hot dog stand could have been incorporated into the new deck). I mean how can you threaten eminent domain against Jackson to get his land but not do that for the vast majority of the land where they built the deck?

The fact is the city should have gotten all of this land together before building the deck.  As anyone can see they went to rather great lengths to acquire Jackson’s small parcel but neglected to get the remaining 90%.  Has anyone asked why it was a must that they buy Jackson’s parcel?  I mean doesn't seem fair to me that Jackson has to relinquish his land but 933 Broad LLC gets to keep theirs.

Speaking of eminent domain, after the US Supreme Court's notorious Kelo decision, the Georgia legislature created an act to limit the definition of the "public benefit" that justifies taking by eminent domain.

"The Act specifically defines "public use" as;

(1) literal possession by the general public or government entities;

(2) use for public utilities;

(3) use for roads and channels;

(4) acquisitions in instance of clouded title;

(5) friendly condemnations; and

(6) takings of "blighted" property.

The legislation specifically excludes economic development from the definition of public use. As has been the case in many states, the restrictions on public use have a loophole in the "blight" exception.

Blight is to be determined on a property-by-property basis. The only specific direction in the Act is that the subject property must be "urban" and must also meet certain conditions, such as abandonment, environmental contamination or illegal activity on the property."

Could construction of a public/private parking garage justify using eminent domain? I doubt it considering they did not condemn all the land and the very narrow definitions in the act.  Anyway it would have been interesting to see.

But since they did not use that but wanted the property (I think they knew they could not force Bill to sell without forcing everyone to sell too) it looks like they had no choice but to buy him and his partner out.

Does anyone else think it is funny that the city was only dealing with one member of the partnership? The agreement states something like; we will trade you this $119,000.00 property so long as you can get your partner's interest in your joint property first. So Jackson did. Austin claims that Bill Jackson and his former partners are settling up lots of deals behind the scenes.  How did that conversation go about this property I wonder?

"Hey, the city wants the trade a $119,000.00 property for our property. I know you guys just want to get out of Augusta, so I'll tell you what. Our property is appraised at 28,000.00. I'll buy you out by paying what is very nearly the market value on the place, $24,000.00. Deal? Deal."

It was very generous, really, and I'm not sure why Austin thinks they are settling things up behind the scenes, hell, this was in plain sight. If the Goldberg heirs were looking to cash out of Augusta according to Austin, why would they take less than the property is valued and get no compensation for the loss of rent?

It's weird that Jackson's partner's estate settled for so little. I mean, the city had already made the deal with Jackson that they would trade him the $119,000.00 property (and compensate the partnership's tenant $32,000.00 for terminating his lease) before Jackson obtained his partner's interest in the property.

I'm no fan of eminent domain in any but the most urgent case of public need, but if they've changed it so that now a property owner is entitled to 20 years projected income free and clear without regard to 20 years of maintenance costs, taxes and insurance, I just may change my view of the whole thing. And get another rental property to boot? Sweet!  Well, sweetheart of a deal!

Oh well, I guess Bill’s partners just wanted to cash out, like Austin says, or did they even know?  I will assume Jackson told them everything in the interest of full disclosure.

The Big Loser

So who really lost here? The tax payer did, as usual when dealing with the CABAL.

And who benefitted? The majority beneficiaries are; 933 Broad, Riverfront, the Marriot and of course, State Senator Bill Jackson, much to Austin’s obvious chagrin.

OUT FOR NOW, B.O.

NOTES;

‎Called Commission Meeting August 9, 2010:

http://appweb.augustaga.gov/weblink8/DocView.aspx?id=19239&searchid=9a310139-abd0-4d2e-b79d-ffbe84dc9183&&dbid=0

William S. Jackson's Settlement Statement (HUD)

http://appweb.augustaga.gov/weblink8/DocView.aspx?id=24038&searchid=d5b83f7e-f03c-4381-aeb1-9fa413cb9901&dbid=0

SB 346

http://www1.legis.ga.gov/legis/2009_10/sum/sb346.htm

http://georgia.realestaterama.com/2010/04/30/georgia-property-owners-triumph-with-general-assembly-passage-sb-346-ID0198.html

http://www1.legis.ga.gov/legis/2009_10/votes/sv0819.htm

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Related articles:  

•  Land Swaps, Bonds and Air Rights: The parking Deck Saga Continued, 
•  The Parking Deck of Wonders, 
•  The Ghost of David Fry

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The Ghost of David Fry

The ghost of David Fry spotted near the new parking deck

Augusta, GA Nov. 3, 2011
The Outsider
Well Halloween may be officially over but the ghost of David Fry is still lurking the streets of downtown Augusta. No, not down at 5th and Broad streets by the Haunted Pillar, but instead his specter has been seen haunting another cursed Augusta landmark: the new TEE Center parking deck by 9th and Reynolds streets.

It seems that the recent revelation that the city of Augusta doesn't actually own the land where the new $12 million city owned deck sits and an impending trial over the attempted bribery of two Augusta commissioners involving this same parking deck has resurrected the restless spirit of David Fry.

Some of you may remember the name "David Fry" from two years ago. In August of 2009, the TEE Center and parking deck were in limbo because the commission had split along racial lines over whether to issue more revenue bonds because it was learned that the convention center was actually going to cost nearly double than the $20 million voters had  approved in a 2005 SPLOST referendum. Also, the addition of a parking deck across the street had some commissioners also crying foul, saying that the project had become too bloated and no longer resembled what voters approved and suggestions were floated to put in back on a ballot or redirect the SPLOST funds entirely. But that presented problems, because the TEE Center was inextricably tied to  a $37 million redevelopment project for Laney-Walker/Bethlehem. So if the TEE Center didn't get approved with the extra money needed to build it, some white commissioners were threatening to pull the plug on the $1 per night hotel/motel surcharge and pull the plug on redevelopment of Laney-Walker/Bethlehem. The situation was at a stalemate, and no one seemed eager to give up ground.

Now enter David Fry. He was an Augusta attorney and former nightclub owner. In late August 2009, commissioners Alvin Mason and Corey Johnson contact Augusta law enforcement that David Fry approached them with an offer of a bribe "if" they changed their votes on the TEE Center deal. Both Mason and Johnson had been voting consistently against increased funding for the TEE Center. The story didn't hit the news until early September 2009. What was particularly interesting is what Fry was offering the commissioners. According to Mason and Johnson, Fry told them that he could land them lucrative concessions in the new parking deck that would be built along with the TEE center (This is the same parking deck involved in the current "ParkingGate" saga).
WRDW's Chris Thomas  reported on the bribe in this story: WRDW coverage of TEE center bribe scandal

Chris Thomas also reports that Fry contacted commissioners Jerry Brigham and Don Grantham about a week after commissioners Mason and Johnson came forward to law enforcement about Fry's attempted bribe. Don Grantham says that he remembers being contacted by Fry on August 31st, one day before a vote on the TEE Center. Both Grantham and Brigham said they didn't report the incident because they thought the whole thing was "ridiculous." And it would have been ridiculous to try and get Grantham  and Brigham to switch their votes. Grantham had been the biggest proponent of the TEE Center on the commission and  Brigham had voted in support of it as well. WJBF also covered the breaking story of the bribery attempt here: Attorney arrested for trying to bribe 2 Augusta commissioners

The fact that Fry was offering concessions in the parking deck was quite interesting. What authority did he have to make such a deal? And why the parking deck? It seemed very odd because in all of the TEE Center drama that was taking place, the parking deck was not mentioned very much.

A local afternoon radio talk-show personality tried to quickly explain it all away as much ado about nothing. He said that Fry was just an overly zealous lone gunman type who was extremely enthusiastic about the TEE Center and was upset with commissioners Mason and Johnson for holding it up. According to the talk-show host, Fry was particularly livid at Mason, whom he had donated money to in his campaign against Bernard Harper. According to this same talk-show host, many wealthy West Augusta types supported Mason in his first campaign, and that Fry felt "betrayed" by Mason. Don't forget that Mason also received what he called a "threat" from a West Augusta "millionaire" over his votes on the TEE Center: details emerge on Tee Center "millionaire" threat.

The radio talk-show host explains the bribe as a way for Fry to get back at Mason and Johnson. He would offer them something he knew he could not deliver, get them to change their votes, get the TEE Center passed, and then leave them high and dry when it came time to collect on the bribe. Well that's the theory of the talk-show host: Talk Radio Host's Theory on David Fry's Big Plan.

The problem was that the bribery attempt backfired and nearly sank the TEE Center.

But let's really think about this. If David Fry knew that he was throwing out a canard for the commissioners, then why not offer something more grandiose and more sexy than a parking deck contract? I mean why not offer a lucrative concession in the TEE Center itself or in one of the hotels? Why not throw in a condo in Palm Beach, Florida and lifetime badges to The Masters? I mean if he had no ability to deliver on any of this, then why not promise the moon? Why did he choose to offer a deal in this parking deck? And why was an attorney willing to commit a felony to get the TEE Center and parking deck passed if he had absolutely no connection to it or anything to gain from it? Many people didn't buy the story that David Fry was just some lone-gunman type and questions still linger if  perhaps more were involved and whether Fry was just a fixer for much bigger fish.

After Matt Aitken defeated Bill Fennoy in a run-off election for the Dist 1 commission seat, the approval of the TEE center was a forgone conclusion. His campaign had almost been entirely predicated on approving the TEE Center. So on December 7th, 2009, the commission quickly agreed to approve the TEE Center and parking deck along with the Laney-Walker/Bethlehem redevelopment. This also happens to be the same meeting when Fred Russell told commissioners that Augusta Riverfront LLC (or its subsidiary) had AGREED to donate the land for the parking deck.

The David Fry story disappeared about as fast as a sitcom on The CW network. The parking deck is finished and open and the TEE center is under construction. David Fry was indicted by a grand jury in June of 2010. An almost forgettable snippet of a story brought that news in the Augusta Chronicle: Chronicle: Fry indicted over bribe. And not much has been heard since then of David Fry. But now it is  being reported  that David Fry will now stand trial for the bribery attempt, more than a YEAR AFTER he was indicted. Apparently a plea-deal fell through at the last minute.Chronicle: Fry case to go to trial . We have to wonder  if the same attorneys involved in the Fry case are also the ones involved in the chronically postponed Scott Dean child molestation trial. But with the new information swirling around ParkingGate, the timing of the trial of David Fry couldn't be any better, or worse (if you are Augusta Riverfront LLC)

So now it has become known that 933 Broad Investment Co LLC (a shell company of Augusta Riverfront LLC) has owned the land where the new parking deck sits since 2003. That means they essentially own the ground floor of the parking deck. Augusta Riverfront LLC owns the Marriott hotel and will manage the new TEE Center. They want the management contract to run the new Reynolds street parking deck for a fee of $25,000 a year and they want to lease hundreds of city owned spaces at another deck adjacent to the Marriott for $50,000, which could net Augusta Riverfront LLC 10 times what they would pay the city for the lease. But either way, since Augusta Riverfront LLC owns the land where the new deck sits, they have control over those ground floor spaces.. and the ground floor of any parking deck is the most lucrative.

All of this new information prompts more questions. Did David Fry know  that Augusta Riverfront LLC would have a lock on the ground floor of the new parking deck and was that the concession he was offering in his bribe?  And is there a connection between David Fry and Augusta Riverfront LLC or one of their subsidiaries such as 933 Broad Investment Co LLC? Fry so far has has not been talking. Will he be willing to take the fall in exchange for something far more lucrative than a small "slice" of the parking deck? Or will Fry start to sing like a canary in his upcoming trial? And in light of the new turn of events and information learned over the past couple of weeks perhaps the FBI should take a second look at this case to see if Fry was merely an agent for someone else who could have delivered on the parking deck management contract concession. Would it be prudent to postpone Fry's trial so that this case can be investigated further?

The Tee Center and parking deck has involved some of the most powerful players in Augusta, and the attempted bribery of two sitting commissioners of Georgia's 2nd largest city.  Perhaps the upcoming bribery trial will  finally put the ghost of David Fry to rest once and for all, or it might expose a whole lot more skeletons in Augusta's closet.
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Related Articles:

•      Land Swaps, Bonds and Air Rights: The parking Deck Saga Continued, 
•      The Parking Deck of Wonders, 
•      Media Coverage Time-Line of ParkingGate

***Do you have a story idea, a tip, or would you like to write for City Stink? Then please contact us at: CityStink@gmail.com ***

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An Open Letter to Planning and Zoning Concerning the Overlay Zoning Proposal for Laney-Walker

The vote for the proposed overlay zone will be Nov 7th!

By Mike Sheil

• Dear Planning & Development, 

  I was happy to see in the Chronicle today that residents of Laney-Walker got some much-needed answers about the overlay district that is to be imposed on their neighborhood. 

  
  

  
  

  
  

  Click Here--> Augusta Chronicle 11/01/11: Laney-Walker residents receive much-needed answers on zoning overlay proposals
  
  

  From the article, I have learned that all the overlay will do is to ban liquor stores and pawnshops in the section of "Foundry Place" that is currently zoned for business. 

  
  

  I believe this is a fair reading of the newspaper article. I take further that no changes will come to the current residential zoned area of the neighborhood. Again, that's what I get from this article. The story also says that current property owners will be exempt from the restrictions of the overlay district. I presume that they will be able to open liquor stores freely without hindrance from the city government. This is what I gather from the reading of the article, but is it a fair reading of the facts? 

  
  

  The zoning amendment that was passed in June which enables the city to impose the overlay districts says this, as I'm sure you know, "The full text of the proposed additional requirements for the proposed overlay district must be provided at the time of the application for designations."

  
  

  
  

  
  

  I have asked repeatedly for this full text. So have others. We have been provided with various vague information packets, one of which is even labeled as the application for zoning overlay, but none of them is a full text of the proposed regulations. Has the text changed? We have seen nothing about the "grandfather" exemption in any of the information packets so far provided to us by the city, but now that angle is being put out to newspaper reporters. 

  
  

  
  

  
  

  The text of the application that has been provided to us says that every lot in the proposed area will be open to residential, professional, institutional and business uses. Every single lot. This fits in with the plan for "heavy commercial development" of the area. Fits a lot better than simply "banning liquor stores." 

  
  

  
  

  
  

  "The full text" of the regulations seems to be as-yet-unwritten, or in a state of continuous evolution. This document should have been in its final form when the application was first presented to the city. This is what the plain meaning of the law requires. 

  
  

  We are in much need of an answer to this question–

  Where is "the full text of the proposed additional requirements for the proposed overlay district"? 

  We would like to see the overlay district regulations in the form they are to be voted upon this coming Monday. That is, the form that they will take in law, not watercolor sketches. Certainly, the Planning Commission cannot be voting on a blank check. What is the full text, where can it be obtained? 

  
  

  Thank you, 

  
  

  Michael Sheil
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  Afterthoughts:
  That was the letter. By the by, I knew that they would try to sway the people with watercolor sketches. No joke. You cannot believe the power of watercolor sketches to make people lose their minds. The new overlay will find itself in the law code of Augusta. What will it look like there? It's a simple question, but they have been avoiding it like madmen. And this new thing about grandfathering in the current property owners? That is ludicrous--it would include the brand new homes the developer just built there and did manage to sell. These are the homes for which they are placing restrictions on older residents. That's the whole point of it. What nonsense will reporters in Augusta not swallow happily?
  
  
  Related articles: Urban Redevelopment or Land Grab?
  
  ***Do you have a story idea, a tip, or would you like to write for City Stink? Then please contact us at: CityStink@gmail.com ***
  
  
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