With no management agreement in place, the TEE Center loses convention and luster
At a special called meeting before Monday’s committee meetings, commissioners again failed to approve the TEE Center management agreement. As a result, the Georgia Association of Chiefs of Police canceled two conventions, citing the commission’s inability to come to an agreement with hotel officials over the management of the new venue.
A frustrated Mayor Deke Copenhaver, who had warned them in an email Friday about the urgency in approving the management agreement, hoped the news of the lost event would be enough to motivate commissioners to come to an agreement.
“I’m still hopeful, and I hope the police chiefs backing out really creates a sense of gravity in the situation for the commission, because if you want to talk about lost revenues, to come out of the box losing your first major convention — just the domino effect is harmful,” he said. “So I think it’s imperative that we do get an operating agreement in place.”
Some commissioners have resisted the agreement because of concerns over an October 12 report detailing a first year operational loss of more than $700,000. Additional complaints have recently surfaced over a catering agreement and potential co-mingling of kitchen equipment between the existing conference center and the newly constructed convention center, both of which would be managed by the Marriott, which is also attached.
In a work session in early October, Paul Simon, president of Augusta Riverfront LLC, warned commissioners that the management agreement needed to be approved soon so that the facility could be ready for the January convention. Staffing and training would take time, he said.
Copenhaver said he thought commissioners didn’t realize the urgency of the timetable, though some have accused them of digging in their heels to resist Simon, who is perceived by some to be unfairly benefiting from the arrangement, in which Augusta Riverfront is paid a flat management fee and suffers none of the losses, which obviously can be considerable.
According to Russell, however, the loss issue has been a part of the conversation since the beginning and should have been a surprise to no one.
“The benefit is not the profit for the TEE Center, but the ancillary money that will come in because we had those people in town,” he said.
Russell said the reason the management contract is being revisited is because of the city’s decision to save money by using tax-exempt bonds.
“There are rules for tax exempt versus taxable bonds, and that’s what made the difference,” Russell said. “There are things you can’t do with a tax-exempt bond that you could do with a taxable bond. For the tax exempt, the rules are a little bit more complex.”
That said, Russell maintained that in spite of all the protests, the renegotiated contract commissioners are taking exception with is actually stronger than the original.
“The first one was a 50-year deal, and we’re down to 15 now,” he said. “Some of the controls that aren’t in the convention center/conference center deal that people have complained about ad nauseum we’ve placed into this deal as far as the inspection of the books and auditing and the annual plan that they have to approve. None of that was in the initial deal, but is there now. We have listened to everything they have said to do and done it, and now they’re not happy.”
Commissioner Bill Lockett, a vocal opponent with a long history of resisting the TEE Center, the accompanying parking deck, Riverfront LLC and Administrator Fred Russell, spoke out against the agreement at Monday’s called meeting, implying the agreement was so deficient that it left commissioners to do all the work.
“It is not the job of this governing body to negotiate contracts with anyone,” he said. “We have people who are being paid big dollars to do this, but it appears that the people we placed in charge have sort of mixed obligations. They’re trying to serve two masters, and at this juncture, I do believe that the administrator and the outside council that is handling this should either remove themselves from it or they should resign, because they’re not doing what they get paid to do.”
Not surprisingly, Russell later disagreed.
“I would suggest to you that we’ve developed a contract that meets the needs of the citizens, meets the needs of the building and is fair to both parties,” he said. “And it’s obvious to me that the commission can’t see that.”
At the meeting, Lockett further pushed the issue by asking General Council Andrew MacKenzie whether or not it was even legal for commissioners to negotiate contracts, implying that Russell’s inability to deliver on a contract the body could agree on was pushing the commission where it didn’t belong.
That proved to be one point upon which everyone seems to agree — the commission should not be negotiating contracts.
“I don’t do that,” Copenhaver said of negotiating contracts. “I would never enter into contract negotiations on behalf of the city. That’s not the role of elected officials. Elected officials should be policymakers. I think it becomes a little bit dangerous when you have individual commissioners effectively entering into contract negotiations.”
So far, the commission’s indecision has resulted in the loss of the police chief’s convention, but what happens if an agreement simply can’t be reached?
“I think we end up in court,” Russell said. “I was directed to negotiate with Riverfront and did so in good faith. They did so with us in good faith. We’ve come up with an agreement that, in my mind, is as reasonable as any you’re going to find, yet it’s being looked at with a level of scrutiny that, while you always want to scrutinize things, I’m not so sure that trying to figure out which steak comes out of the ice box to go where is something that’s…”
He let his voice trail off in exasperation.
Copenhaver reasoned that there was the possibility of bringing in another firm to manage the new facility, as Lockett has repeatedly suggested, but he characterized such a move as impractical, considering the fact that the conference center, convention center and hotel are all basically one contiguous building.
“To have two management companies for attached facilities from an efficiency and effectiveness standpoint doesn’t make a lot of sense to me,” he said. “But that would be the only other option that I would see to get the facility up and running.”
“I think that’s why you tangled it, so that it’s economical and makes sense to operate,” Russell said. “That’s why it’s all wrapped up together — it doesn’t make any sense to have a kitchen for the conference center and a kitchen for the trade center, and it doesn’t really make sense to have a refrigerator for one and one for the other. That’s why it’s co-located there.”
Copenhaver also pointed out that given earlier concessions made to Augusta Riverfront, moving to a different management company wouldn’t make sense.
“We had a significant cost increase in getting the air handling system to Marriott specifications,” he said. “But that was a significant cost increase that we did to meet the standards of the connecting facility, but if they’re not the management arm of it, why did we go to meet their requirements?”
As for the idea being floated on talk radio and on the internet that local activists and self-styled watchdogs Brad Owens and Al Grey, both harsh critics of the TEE Center contracts, should be brought into the process, Russell was amused.
“I’m sure that in areas where there are disagreements they bring in arbitrators all the time,” Russell said. “I’m not so sure that the arbitrators should have a position, though. They should be neutral, and they probably should have some skills and abilities and some degree of expertise.”
Owens, Grey and former mayoral candidate Lori Davis have consistently targeted Russell and the TEE Center for perceived mismanagement and malfeasance, something Russell has obviously taken issue with.
“I guess maybe Brad Owens and Al Grey might have been able to cut a better deal,” he said. “I’ve seen the things they’ve built and the budgets they’ve controlled… oh, wait… maybe I haven’t.”
For Russell, it’s the difference between the doers and the complainers.
“I’ve brought in quite a few buildings on time and under budget, as this one will be,” he said. “I’ve negotiated quite a few deals — some are good, some aren’t as good as others, but if you walk around this city, you can see what we’ve got done and my fingerprints are all over it. We’ve got a pretty good track record of doing things, and it’s sort of amazing to me that a guy who wears camouflage and somebody with sideburns all of a sudden became experts when I have yet to see what they’ve done.”
“To my mind, decisions ought to be made on the best information available using the input of professionals,” he said. “When we bring in outside influences that purport to be professionals but are willing to provide no references to prove that, that’s a dangerous situation to be in.”
And while he insists the complaints have little effect on the general public, which he says largely ignores the complaints, he can’t say same the same for some elected officials.
“Realistically, the outside influences operate pretty much in an echo chamber where they’re not influencing the general public,” he said. “But they are influencing decision makers, which is once again tantamount to the tail waging the dog.”
Like Russell, Copenhaver maintains that when it comes down to it, the details the commissioners find so troubling are quite small.
“To over focus on the minutia as we put this thing together puts us in the position we’re in now with the Georgia Police Chiefs,” he said. “People who back these events statewide — they definitely talk to each other. It’s a black eye on the city.”
Though Copenhaver initially agreed to Commissioner Joe Jackson’s request to hold another work session, he later changed his mind, fearing another public spectacle would only bring further negative publicity.
In a sternly worded letter sent to commissioners, Copenhaver reminded them that the loss of the first convention had made headlines in Rome, Atlanta, Savannah and Chattanooga.
“Basically, we are now in damage control mode and I would highly recommend that those parties who still have questions or concerns meet with the management group or their representatives directly as soon as possible as it is imperative that we get an agreement in place in order to not put future bookings at risk,” he wrote.You Might Also Like:
Posted in News