Thursday, November 1, 2012
Augusta, GA
By Lori Davis
Augusta Riverfront LLC is the proposed caterer for the City
of Augusta’s new Tee Center and a sister company is slated to be the Tee Center
Manager. On Tuesday Augusta Riverfront’s Darryl Leach appeared on the Austin
Rhodes show on WGAC to defend the controversial contracts for catering and
management presented to the Augusta Commission.
During the show Leech brought up the fact that the existing Augusta
Conference Center had cost Augusta about $14 to $15 million to build.
Since I just got back a response to my Georgia Open Records
Act Request for Conference Center lease payments last week it was surprising to
hear that those buildings cost $15 million 11 years ago. What was more
surprising is that Augusta only sees about $25,000 a year in lease payments on that
$15 million complex!
Yes, you read that
right. Augusta’s return on the Augusta Conference Center is 0.17% a year!
Scanning the accounting I got from Augusta’s legal
department was interesting, to say the least.
In the Tee Center Workshop on October 10, 2012, Augusta
Riverfront LLC President Paul Simon said this regarding the Conference
Center lease : “However, we get in that
case we get all of the profits from the center except we give the city 5% of
the room rents, not just catering .” Maybe he meant to say “just not catering”, but then Augusta
attorney Jim Plunkett earlier in the same meeting referred to Conference Center
profits/ losses being shared by the city.
Wait a minute. The records that I got from the records
request show that the leases were figured at 5% of the greater of Center
expenses or Center revenues, with Augusta getting $23,395 in 2003, $21,493 in
2004, $25,137 in 2005, $24,381 in 2006, $27,559 in 2007, $14,828 in 2008,
$26,277 in 2009, $26,434 in 2010 and $25,992 in 2011! The revenue figures were room rentals alone with NO CATERING REVENUES
INCLUDED!
The 1999 Agreement that covers this says that “miscellaneous
revenue” is supposed to be included in the base for the annual lease payment
calculations. Isn’t catering an item of “miscellaneous”
revenue, when it was not excluded from the contract language for the lease
payment calculation?
The Conference Center lease says that the annual lease
payment and reporting is supposed to be submitted by Riverfront’s “certified
public accountant”, but we could not
find the name of the Riverfront
controller on the roster of Georgia CPA’s.
Expensive Issues for
Augusta:
In 2008, Riverfront deducted $13,164 from Augusta’s payment
for resurfacing the hotel parking lot. This sort of expenditure doesn’t seem
covered as an Augusta cost because hotel parking lots are hardly this city's responsibility, although it might be covered under the separate
parking lease referenced in the agreement. It looks like Riverfront
arbitrarily reduced Augusta’s payment to cover an expense that they felt
entitled to.
If Augusta gives them a bank account that is an open pipeline
to taxpayer general funds, like Finance Director Jerry Brigham told us two
weeks ago will be the case, will Riverfront feel ENTITLED to make
deductions from payments to Augusta like this?
The next thing I saw that was surprising is that Riverfront
figures ½ the electrical utility costs for the entire complex of hotels and
conference center go to the conference center! How was this percentage arrived
at? For the Tee Center, is this how the
$350,000 Paul Simon suggests as the estimated Tee Center Power bill will be
figured – a ballpark guesstimate? Should not there be separate metering for
the conference center? Is there separate metering to make damned sure that the
$350,000 power bill all goes to the Tee Center and not the hotel/conference center
complex?
I have submitted an Open Records Request for the electrical
design drawings for the Tee Center, in the hope of getting answers to these
question from the Augusta Today membership, which now provides access to
engineers who now join the Augusta Today and CityStink.net of investigators and
watch dogs.
More than one commissioner is sniffing around this one, too.
Even bigger an issue is whether the Convention and Visitor’s
Bureau is actively marketing events that cross over from the Tee Center where
Augusta gets the costs, into the Conference Center, where Augusta gets no
revenue – all revenue goes to Augusta Riverfront LLC.
More than one commissioner wants that question answered too.
It is wonderful to have a clear majority of Augusta
commissioners now working for the people. I never thought I would see the day.
Most frightening to those wanting to drain Augusta’s general fund should be
this – These guys are showing real signs of UNITY!
When do we go the other way and start getting our money
back? In the case of the TEE Center, a
power shift is overdue. From the looks of how aggressively Riverfront pursues
Augusta’s money, the taxpayers need this commission to show backbone!***
Conference Center 2008 Schedule
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