The truth behind the tensions between Southern Ohio Port Authority (SOPA) and the Scioto County Commissioners came out in Thursday’s Port Authority meeting with the revealing of a secret partner in an ongoing economic development project.
On Sept. 21, Scioto County Commissioners changed the function of SOPA by issuing a notice stating, “The Southern Ohio Port Authority will no longer represent Scioto County in matters related to economic development. In the future, SOPA may still be utilized for bonding of specific projects and potential land transfers.”
The decision came after the resignation of SOPA’s Project Manager Adam Phillips and just prior to the resignation of Economic Development Director Jason Kester.
“I think the future of SOPA is very much in the hands of the SOPA board,” Commissioner Bryan Davis stated at Tuesday’s Commissioners meeting.
In addition to serving as a county commissioner, Davis is also an officer in the Scioto County Republican Club, owner of Sole Choice in Portsmouth and heads the Scioto County Land Reutilization Corporation (commonly referred to as the land bank).
Under Ohio Revised Code, commissioners can establish a port authority by resolution, dissolve a port authority by resolution and appoint members to the Port Authority board. However, commissioners have no control over operations and bylaws.
During a discussion of SOPA, Commissioner Mike Crabtree continued to stress that the issues between SOPA and the Commissioners came about because of funding cuts from the State, arguing that the county was providing $150,000 to SOPA for economic development, which is no longer feasible for the County. Crabtree stated that the County attempted to restructure SOPA three years ago and planned then for the entity to become self-sustaining.
“With our looming, possibly shortage of revenue, we made it clear that we probably couldn’t fund them (SOPA) further,” Crabtree commented. “By law, we have to fund the elected offices first. That’s our duty as commissioners. Everything else is just icing on the cake, if you will. But, we made it clear to SOPA early on that we did not want to grow beyond our means. We wanted SOPA to be able to be self-sufficient, and it basically fell on deaf ears because you can see they’ve grown and grown and grown, and now they’re in a position where they may not be able to survive at their current staffing level.
”Personally, I don’t have anything for or against SOPA one way or another. This is not a vendetta. I know there’s been some suggestion that that’s what it is, and it’s not that by any means. We put some of the most trustworthy people that we felt on that board, and we hoped that they would make the best decisions possible and strive to be self-sufficient and be able to survive. I think that instead they have gotten more and more dependent on the County. We have worked hard to try to keep them above water for years and that should be evident to everyone.”
When the commissioners announced that they would no longer be using SOPA for economic development activities, they also added that county economic development activities would now be going through a county economic development office, yet to be established. Davis further commented on this during the discussion.
“A lot of economic development is already done in our office,” he stated.
Davis added that the County already has a grant writer that has worked with SOPA to write grants in the past.
“This won’t be a giant leap of faith,” Davis stressed. “This has been done before. This is the way it was set up just literally four years ago.”
Davis further added that the action made by the Commissioners was not to dissolve SOPA.
“We want them to fulfill their obligations under current contract,” Davis stated as he again reiterated that the Commissioners would like to retain SOPA to do bonding and land transfers. “What they do in the future is completely up to them.”
Davis also added that when funding was first negotiated for SOPA, the plan of the port authority was to hire a director. According to Davis, they hired a director, assistant and intern.
“That wasn’t what was proposed,” he said.
When Commissioners were asked if recent decisions regarding SOPA had come about in regards to a project proposed for the Minford area, Crabtree stressed that it was not.
“I don’t let my personal feelings affect my better judgment. I may not like somebody, but if they’re doing a real good job, I keep them working,” Crabtree commented.
Crabtree continued to urge that the decision was based on funding issues. Davis also continued to clarify that funding was the issue.
“We have had multiple conversations with port authority about their funding,” Davis stated. “We thought it was going to be resolved in March. This is a political football if I’ve ever seen one, and it’s sad.”
Davis said the Commissioners have explained to SOPA that they needed to find other revenue sources.
“What we got was more of the same – blame, excuse, denial. Blame us, make excuses and deny that it’s a problem,” Davis commented. “It is in the best interest of the port authority to become self-sufficient. Why? Because government is not reliable. Things like the MCO tax issue are what happen in government. Money dries up. We’re saying smaller government, more private.”
Still, he did address the Minford project by stating, “That deal in and of itself is not what drove our decision, but I will say from my standpoint, it also showed me some things that showed me the weaknesses of our current port authority. What I mean by that is this. I went to them (SOPA). This project (the Minford project) has been going on since December of last year. It was absolutely not moving anywhere. It was not moving at a sufficient enough pace of what the company wanted. At the end of the day, the customer is the company. The customer is always right. You find a way to make the customer comfortable, and in this case, the company wasn’t comfortable.”
On Aug. 30, a press release from SMV Land Holding LLC was issued stating that developer Mundanus Group LLC would be partnering with local companies including SMV, who they claim to have partnered and developed, for building an industrial area at the Greater Portsmouth Regional Airport.
“Through the great dedication and commitment of the Scioto County Commissioners and support of various state agencies, SMV is working to begin development of the new facility and will be in full operation by early spring 2018,” the release stated.
As part of that project, SOPA was asked to transfer 10 acres of property at the airport (a site where SOPA and the Commissioners have been working towards development of an industrial site and a site that will be near the Southern Ohio Veterans Memorial Highway).
Davis explained that the Commissioners were asked by SMV to get involved. He further stated that the Commissioners tried to mediate between the company and SOPA.
“Reluctantly, we became more involved,” he said.
Davis stated that while working with SOPA and the company, he was “bad mouthed” and “talked about.”
“The words that were used to describe your commissioners and our efforts were beyond the pale, just sad, just very sad,” Davis said.
He added that even after tensions started to build, the Commissioners stayed involved.
“We broke down some barriers,” Davis commented. “We got with some people that could help. They (SMV) had to reorganize some things to make things happen on their end, and we’re moving forward now. But, through that whole process, there was some ugly stuff that happened, and it is very unfortunate what some people were put through.”
Davis further stated that no matter what the Commissioners did to help, tensions continued to rise.
“We’ve tried not to be adversarial. I have bit my tongue,” Davis commented. “For some reason, there was not a desire to help this company.”
He added that questioning the motives of investors and “bad mouthing” those involved in the deal is “bad business.”
“I’m going to tell you right now, nobody like that is going to represent me. And, in my decision making, they don’t represent Scioto County,” Davis stated. “People need to make their own decisions on what happened.”
Commissioner Cathy Coleman then stepped in and explained that there were tensions within the SOPA board.
“There’s so much division within the port authority itself. I don’t know how they expect to be successful if they can’t work together. They have to be a team. They’ve got a lot of work ahead of them. They can be successful. They just have to get it together,” Coleman said.
SOPA Chair Bud Sayre responded by explaining that in January, the Commissioners appointed four new members to the board – Kay Reynolds, Phil LaJoye, Shawn Stratton and Mark Ward, all of which have Republican affiliations. According to the Scioto County Republican Party website, Reynolds is the co-chair of the party. The other co-chair is Rodney Barnett who is also on the SOPA board. Ward is with Conley Trucking. LaJoye is the manager of the airport in Minford. Stratton is a local attorney.
“What’s happened in the last month, I see nothing about financials,” Sayre told the Commissioners during the last SOPA meeting.
He added that division within the SOPA board did not exist until the aforementioned appointments made by the Commissioners and stressed that SOPA will not argue but rather stand on the works done by SOPA and by Kester.
Kester objected to the notion that he or SOPA held up the Minford project. Rather, he explained that there were concerns that held up progress.
“We (Kester and the Commissioners) had a very significant disagreement about the viability of the project,” Kester stated. “I really started working on the project in March, and I laid out some requirements for the company, and the things that I thought we needed to make the project go forward didn’t happen.”
He added that there are occasionally requests that companies may need assistance with, but assistance usually comes through SOPA.
“Normally, when that happens, we work with the company to work through those (issues), but this one became very politicized for some reason,” Kester commented. “It wasn’t anything outside of the box. It wasn’t anything out of the ordinary. It’s something that we’ve worked through with 20 other companies before, but this one, when we requested information and some different documents and different things, they instead chose to politicize the project.
Kester explained that the items he asked for included total investment, total jobs created and “who was the actual owner of the company.”
“We also needed to see three years of financials, and we needed to verify that those three years of financials met the requirements,” Kester said. “We never received that information satisfactorily through the Southern Ohio Port Authority or any of our nearly half dozen outside consultants that we brought in trying to work on this project. At the end of the day, we asked for some things that we didn’t get back, and I wasn’t able to work on the project. It was the same things we ask of every company.”
As stated by Kester, among the items needed was company ownership. As explained during Thursday’s SOPA meeting, on Aug. 31, SOPA voted to transfer the 10 acres from the Commissioners to SMV for $1; however, the Commissioners have since decided to transfer the land through the land bank. In the discussion, SOPA explained more about why it was never clear who the company was. Sayre stated that the company started as FSSI. Later it changed to SMV. Ownership became even more confusing.
SOPA was not informed as to why the change took place, according to Sayre. During the meeting, it came out that FSSI was the company originally interested. At that time, FSSI (Federal Supply Services International) was owned by Glen Baldridge. FSSI already has a site in Lucasville.
According to Sayre, Baldridge had explained that he was the sole owner of the company but that stock was available and that there were two men from Turkey who were interested in partnering. As revealed in the meeting, since that time, FSSI has gained public and private partners.
Five investors purchased stock and formed a subcompany – SMV. SMV had three public and two private partners. The public partners were the two men from Turkey and Aaron Smith from Virginia, all of whom were also partners in FSSI. According to the company’s articles of organization on the Ohio Secretary of State’s website, Billy Whitaker, Deputy Chair of the Scioto County Republican Executive Committee and owner of Solid Rock Construction, is not only listed as the statutory agent for SMV but also the organizer. Additionally, Solid Rock is listed as the “agent of the company upon whom process against the company may be served.”
Solid Rock construction has been used by the County on various projects including the recent Splash Pad in West Portsmouth, several paving projects, the demolition of more than 20 land bank properties this year and various other projects, as confirmed by Davis. Davis added that there are six companies certified but only two that frequently submit job bids.
Whitaker was present at Thursday’s meeting and admitted to being a silent partner in the SMV as well as a partner in FSSI. He stated that he originally got involved with the FSSI to help them and to be considered for site development. He added that after becoming a partner, he and other partners formed SMV. He stated that he chose to remain a secret partner because he goes to church with a SOPA board member and Davis and works with other individuals involved in the project through SOPA and otherwise and did not want there to be an influence. Additionally, Whitaker explained to the board that SMV stands for Solid Rock Mundanus Venture. Mundanus is owned by Smith.
Davis admitted to knowing the other secret SMV partner, who is also local. However, Davis refused to disclose the identity. He did, however, state that it was not him or his company Sole Choice.
Still, SOPA and Kester wished the project well, in hopes that it brings the jobs to the community.
“If the Commissioners can make this work, God love them,” Kester said. “I’ll give them hugs if they can make this work. I hope nothing but the best for this company and the Commissioners. I really hope they can make it work. I truly hope that this works out. I wasn’t able to do it.”
Sayre concluded by urging the community to learn from this event.
“This county will never reach its full potential until everyone is willing to work together. Politics, egos and jealousy should never replace progress and cooperation. The Southern Ohio Port Authority should never be a political subdivision. For three years, politics played no part in our decision making. Until early this year, we had a very cohesive board whose common goal was the welfare of our area,” he said.
Sayre also told Davis that he and SOPA hope the Minford SMV projects works out because the area needs the jobs.
Other items on the agenda:
At Thursday’s SOPA meeting, several donors to SOPA, including Southern Ohio Medical Center, OSCO, Appalachian Wood Flooring and Glockner Enterprises expressed a desire to withdraw their funding to SOPA after the loss of members of leadership, County funding and the ability to complete economic development activities in the County.
SOPA also voted to buy out Kester’s contract, which requires him to give a 90-day notice and would force him to remain in his position three weeks into December.
SOPA also voted to rescind their vote to transfer the 10 acres at Minford since it would no longer be going through SOPA.
SOPA also voted to return City property being held in the East End to the City to allow the City to take over maintenance.
Reach Nikki Blankenship at 740-353-3101 ext. 1931.