2008-09-12 / Business

City agreements and campaign contributions

By John Temple Ligon Temple@TheColumbiaStar.com

Photo by Mike Maddock Columbia's Hilton Hotel Photo by Mike Maddock Columbia's Hilton Hotel The City of Columbia and its design/development team came together for a city- financed and city- developed 300- room Hilton Hotel in late spring 2003. A memorandum of understanding (MOU) under a top sheet indicating Hilton Hotels Corporation World Headquarters was circulated and signed among the players, to include the City of Columbia and Stevens & Wilkinson of S.C. (S&W), the Columbia- based architecture/engineering firm.

Columbia City Manager Charles Austin signed the MOU for the city.

The design fees indicated in the attached "Exhibit A" of the MOU were $2,238,000. In the MOU (VIII. ROLE OF THE ARCHITECT) it said, "The Architect is to paid a fee of 7.25% by the Design/ Builder based on hard construction costs together with the Design/ Builder's general expenses and fees."

However, also stated in the MOU (I. GENERAL CONDITIONS) was, "Notwithstanding anything herein to the contrary, if the City determines that is is not feasible to proceed with the Hotel project it shall have no liability under this MOU."

In late 2003, S&W was reportedly paid $697,812, but the amount was identified as "the advance payment to S&W."

Including the S&W payment, the city paid altogether $1,581,615.29 as "Total Expenditures To Date." Then the city shut down the project and asked for a whole new request for proposals in March 2004. The city- financed, city-developed hotel had lost control of reasonable costs, and the hotel didn't appear to hold out much hope for near- term profitability. All in, the rooms were about to cost twice what the market room rates could support.

The privately built hotel, now down to 222 rooms, was developed by Windsor/Aughtry of Greenville.

In July 2005, S&W sued the city for its uncollected fees, about $1.3 million. That combined with about $700,000 already paid, and S&W's fee came to an even $2 million, presumably, for the full architectural/engineering services, to include management of the contract for construction and follow- up through final punch- list items.

In fact, the 222- room Hilton that's on the same site today, replete with a Ruth's Chris Steak House and the full Hilton-approved finishes package, cost a little less than $400,000 for the A/E, down to the final punch- list items, according to the development team.

A slightly larger project, 300 rooms vs. 222 rooms, the city- financed Hilton apparently planned to spend five times the A/E fee than what actually got built, the Windsor/ Aughtry Hilton: $2 million vs. $400,000.

Also suing the city are Garfield Traub Development and Charles Gary Realty, two other players in the original MOU for the original city- financed Hilton, for another $2.1 million.

S&W's lawyer, Dick Harpootlian, contributed $1,000 to Mayor Coble's reelection campaign on Dec. 6, 2005, about five months after filing suit against the city on behalf of S&W.

A little later, Bobby Lyles, CEO at S&W, contributed $500 to Mayor Coble's re- election campaign on Feb. 3, 2006, bringing his total to date for the election cycle to $1,000. His firm, S&W, also contributed $500 to Mayor Coble's re- election campaign on Dec. 30, 2005, again about five months after filing suit against the city for $1.3 million.

The contributions are recorded with the S.C. Ethics Commission. The city can't discuss such matters during the course of the law suit.

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