Deal is reached on TEE center

Rainier Ehrhardt/Staff
Bryan Mitchell, owner of the Cotton Patch restaurant and The City Club event facility on Broad Street.

Though it was expected to happen Monday, when word came that the Augusta Commission had finally approved a deal to build a downtown trade, exhibit and event center, it was still a "pinch me" moment for many of the business owners who stand to benefit, according to Cotton Patch owner Bryan Mitchell.

"I'm a happy, happy, happy, happy camper," he said.

Mr. Mitchell said the restaurant in a historic building near the Savannah River levee saw about a 20 percent growth in business after the opening of the convention center in the Augusta Marriott Hotel & Suites -- then Radisson Riverfront Hotel -- in the early 1990s. He's expecting at least that from the TEE center two blocks away and the new Hyatt hotel one block away, first from construction workers and then from conventioneers.

"It's just a matter of numbers," he said. "If they're bringing in thousands of people to events, certainly 100 are going to end up in our restaurant."

Monday's vote broke a gridlock that had the Augusta Commission split along racial lines and at times seemed unbreakable over the past seven months. The plan, which includes an effort to generate nearly $100 million in economic development to rebuild blighted inner-city neighborhoods, passed 7-1-1, with Mayor Pro Tem Alvin Mason voting no, Betty Beard abstaining and Calvin Holland absent.

The vote came six days after the election of Matt Aitken to the District 1 seat, which assured at least six votes for the TEE center had it not been approved before his first meeting, on Jan. 5. However, the TEE center subcommittee leader, Mayor Deke Copenhaver, who was out of town Monday, had said he hoped to have the matter resolved by the Dec. 15 meeting.

Though changes have been made since the impasse began in early May, the main components of City Administrator Fred Russell's first proposal remained intact.

The TEE center will be built for $38 million -- the price black commissioners balked at initially -- and an $8 million bond will be issued to jump-start projects in the Laney-Walker and Bethlehem communities.

Because a lack of money has ground the revitalization projects to a halt, $1 million will be taken from the general fund and put into the initiative for the short term, then paid back with bond proceeds.

The TEE center will be built at the previously agreed-on site on Reynolds Street, attached to the existing convention center and operated by the same company, Augusta Riverfront LLC, another source of disagreement in the negotiations. The company has ties to the ownership of The Augusta Chronicle.

A 400-space parking deck will be built across the street for $10 million, with Augusta Riverfront donating most of the necessary land. Mr. Russell's first proposal had the deck priced at $17 million, which was yet another sticking point for black commissioners, who said voters approved no such thing when they passed a penny sales tax package that included the center.

Something commissioners on both sides of the aisle had disliked initially made its way back in. An Urban Redevelopment Authority will issue the inner-city bonds.

A bond attorney advised them Monday that this was the most efficient, cost-effective method of raising the money. The Augusta-Richmond County Coliseum Authority will issue $19 million in bonds for the TEE center.

The motion to approve was made by Don Grantham and seconded by J.R. Hatney.

In his motion, Mr. Grantham tweaked the formula for spending proceeds of a $1-a-night bed fee. The first $350,000 will go toward TEE center operations; the next $750,000 will go toward the inner-city neighborhoods; and the next $400,000 will go to Augusta Public Transit.

Any collections over $1.5 million a year will be split -- 60 percent to expand the bus system and 40 percent for a special fund for revitalizing neighborhoods throughout the city.

Mr. Hatney said after the meeting that he still believes taxpayers would have been better served had the TEE center been built within the James Brown Arena and operated by management company Global Spectrum. He said he went along with Monday's "painful compromise" because he feared if the issue waited until next year, after Mr. Aitken joins the board and whites have a 6-4 majority, the inner-city projects could be taken out of the package.

"There are a lot of folks sitting up there on the commission who could really care less," he said, declining to name names.

Commissioner Joe Bowles said he takes offense to such suspicions.

"I would have thought after the District 1 race," he said, "that some people would have learned that it's time to get rid of the race-baiting."

Mr. Hatney said he believes scrutiny of the deal has made it better for Laney-Walker and Bethlehem. For example, he said, Mr. Russell's first proposal had $9 million in taxable and tax-exempt bonds issued for the inner city, but commissioners learned that under that plan there would have been restrictions on how the money could be used.

"Today, all the $8 million can go toward the Laney-Walker project, no doubt about it," he said. "I believe in my heart that this was the best time, and we got the best information we've had."

Mr. Mason said he cast a no vote because he still holds the same objection he had from the beginning -- a vote to approve $20 million for an exposition center in the 2005 sales tax referendum has ballooned to more than $100 million in projects. With all the deals cut and changes made, he said, he believes the TEE center needed to go back before voters.

He said he also still has reservations because of an alleged attempted bribery involving retired attorney David Fry, who's charged with trying to persuade Mr. Mason and Corey Johnson to change their votes on the TEE center by offering them lucrative posts in a parking deck management company.

"I'm not upset or anything like that," he said. "The democratic process worked. There's no reason to beat a dead horse into the ground. We've got to move forward."

Reach Johnny Edwards at (706) 823-3225 or johnny.edwards@augustachronicle.com.

SEE THE PLAN

Click here to view a PDF diagram of the proposed TEE Center and its location in downtown Augusta.

WHAT IS THE TEE CENTER?

Unlike the existing convention center inside the Augusta Marriott Hotel & Suites, the new trade, exhibit and event center will have far more open space, allowing it to accommodate conventions showcasing products being sold - such as vehicles, industrial equipment and computers.

THE SIZE

The facility will have 40,000 square feet of exhibit-hall space, which could hold 195 10-by-10-foot booths, seat 3,500 people as a theater or feed 1,800 as a banquet hall. The building design also includes a ballroom, a kitchen, a loading dock and storage space.

THE MONEY

How the TEE center will be funded:

- $20 million from Special Purpose Local Option Sales Tax 5

- $5 million in excess sales tax collections

- $1.5 million from judicial center cost savings

- $2.5 million from sales tax interest earnings

- $9 million from tax exempt bonds*

* The bond will total $19 million, the remainder of which will pay for a $10 million parking deck.

Total expected in direct construction spending: $110.5 million

THE NEXT STEP

A construction manager must be chosen, a post which has been put out to bid. Next, the land-acquisition process will begin. Ground will likely be broken in the spring. With design and construction expected to take two years, the center could open in 2012.

WHERE MONEY IS GOING

TOTAL EXPECTED IN DIRECT CONSTRUCTION SPENDING: $110.5 MILLION

- $37.5 million for the Laney-Walker/Bethlehem projects (The Laney-Walker and Bethlehem Neighborhood Action plan is expected to generate nearly $100 million in economic development for those neighborhoods, most of it from the private sector)

- $38 million for the TEE center

- $10 million for a parking deck

- $25 million for a privately developed Hyatt hotel near Augusta Common

HOW THE TEE CENTER BOND WILL BE REPAID

- $1 million a year in hotel/motel taxes rerouted from the Augusta-Richmond County Coliseum Authority

- $425,000 a year from a car rental franchise fee

HOW $750,000 A YEAR FOR LANEY-WALKER AND BETHLEHEM, GENERATED BY THE $1-A-NIGHT HOTEL FEE, WILL BE USED

- $550,000 to make payments on $8 million in taxable bonds

- $200,000 for pay-as-you-go projects, essentially money on hand

Sources: Administrator Fred Russell; Augusta Riverfront LLC President Paul Simon; Augusta Convention & Visitors Bureau President and CEO Barry White; Augusta Finance Department; TEE architectural firm tvsdesign

WHAT THEY'RE SAYING

"It's going to be awesome. A new hotel with 139 rooms. The visitor dollars spent are going to be phenomenal. We're thrilled. ... This will kind of put us on the map when retailers are looking for new locations." -- Margaret Woodard, the executive director of the Downtown Development Authority

"I think it's a great thing for downtown. ... Just like any investment downtown, it's good for everyone who is a stakeholder down there." -- Bryan Haltermann, downtown property owner

"As long as it brings economic prosperity and new convention business to Augusta, it would be a great benefit to the whole city. Let's hope that everybody gets to share in the growth potential. ... Any time a convention comes to town, it always helps us because people go shopping on Broad Street." -- Jeff Gorelick, the owner of Ruben's Department Store and Ramada Hotel & Convention Center

"Anything that will bring business downtown, we're all for." -- Pam Clifton, the owner of Beamie's at the River

"I'm sure the election didn't hurt it, but I think we would have gotten it anyway. I've always thought we'd get it." -- Paul Simon, the president of Augusta Riverfront LLC

"As a taxpayer, I'm tickled we're going to get something going downtown. It's going to be a special addition, I think, in multiple ways to the city." -- Brad Usry, the owner of Fat Man's Riverfront Cafe and a member of the Augusta-Richmond County Coliseum Authority

"I firmly believe that it's an exciting day for downtown. The approval ... has the potential of bringing an incredible amount of business for downtown local restaurants and retailers. I do feel that what you'll see is the ancillary businesses that are needed to support the kind of activities that a trade and exhibit hall will bring into Augusta. More businesses will open up, and more restaurants will come in. It will create an even more vital downtown district than what we have today." -- Lara Plocha, the president of the Downtown Augusta Alliance

"It took a long time, but we got it done. It's a terrific day for the community. It's designed to have nothing but a positive impact for both the hotel business in our community and for the convention trade business, which will bring an enormous amount of economic impact." -- Darryl Leech, the vice president and general manager of Augusta Marriott Hotel & Suites

"I've always thought it was going to happen. It's a big project for this community. That's like $110 million in stimulus funds. It doesn't cost you, as a resident, anything." -- Barry White, the president and CEO of Augusta Convention and Visitors Bureau

-- Compiled by LaTina Emerson and Johnny Edwards, staff writers

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