Friday, November 11, 2011

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.

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Anonymous said...

Great stuff, keep the heat on them..

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