"Five Points Merchants Mafia"
March 14th, 2007
By Todd Morehead and Paul Blake
The association received a total of $225,000 from City of Columbia hospitality and accommodations tax funds.
By Todd Morehead and Paul Blake
To many, tailgating at Williams-Brice or picking apart a funnel cake at the SC State Fair signifies the official coming of autumn. Some Columbia natives would argue that these seasonal traditions are as venerated and sacred as turkey on Thanksgiving. Similarly the annual Five Points St. Patrick’s Day festival has come to signify the onset of spring in the Midlands. Each year, this non-profit event for charity attracts drunken revelers by the thousands to enjoy a day of parades and good music in a virtual orgy of sunburned thighs, novelty clown wigs and green beer vomit.
But under this cheerful facade a heated debate has raged for years. According to some, the festival—originally intended to be for charity—has turned into what many would consider a slush fund for the Five Points Association (FPA).
According to a document entitled “Five Points Association: Profit and Loss By Class: April 2005 through March 2006” the association contributed $40,000 of festival revenue to charity yet paid out $65,777.20 in what were listed as “commissions.” Many merchants in the area wonder who gets those commissions and why.
First, a look at the total numbers, using the document cited above as an example. The association received a total of $225,000 from City of Columbia hospitality and accommodations tax funds. Coupled with other pre-festival income such as corporate sponsorships and previous years’ sales the total pre-festival income weighed in at $701,518.92. All told, the total expenses for that festival amounted to $520,008.88 which gave the festival a profit of $181,510.04. (Note that without the city taxpayer money it would have been a loss.)
So, what expenses could be shaved off the overhead to make a profitable festival for the community? If one views the expenses with a careful eye, a pattern of “commission” expenses listed throughout the budget will begin to emerge. A line simply tagged “Administrative fees and commissions” listed $14,500; the “Beer sales commissions” line totaled $16,233 (18% of gross beer sales at $4 per beer); and the “Wristband Sales Commission” line came to $29,044.20. There was also an “Entertainment commission” paid in the amount of $6,000.
In all, if one were to go by the above budget sheet, total commissions paid out to mystery people for mystery services at the non-profit, for charity, mostly volunteer St. Patrick’s Festival totaled $65,777.20. Again, they gave $40,000 to charity ($25,777.20 less than they paid out in commissions).
Jack Van Loan, former president of the FPA, is currently the association’s Director of Economic Development and acting chairman of the St Patrick’s Day festival committee. Though he currently owns no business in Five Points, Van Loan is employed by the association to bring in corporate sponsorships. The association’s proposed budget for fiscal 2006 listed “Jack’s Fee/Comm” at $20,900.00, “Jack’s Expenses” at $3,600 and “Jack’s Bonus” at $5,000 for a total of $28,000. Van Loan recently said that the amount he is currently paid is much less.
“I was paid $1,500 a month and I was paid $300 a month for expenses,” he said. “That’s $18,000 per year, plus a bonus of $5, 000.”
It was Van Loan, many believe, who brought in Skip Anderson of Tri State Merchandising to handle the wristband sales for the festival. Anderson confirmed that he uses a volunteer staff at the wristband booths.
“I use a lot of volunteer groups like Knights of Columbus,” he told City Paper. “I use a mixture, I use a lot of volunteer groups, because they are volunteer organizations.”
Thus, according to the aforementioned budget sheet, $29,044.20 was paid out to a volunteer staff or to Skip Anderson himself.
Randy Dennis owns 2 G’s clothing store in Five Points and is currently the president of Our Five Points, a growing association of merchants who feel alienated and cheated by the FPA.
The Five Points Association has continued to break SC open records laws and skirted the Freedom of Information Act
“Commissions being paid out of St. Patrick’s Day easily could raise an additional $100,000 for charity,” says Dennis. “That is what this [festival] is supposed to be for. Not to line the ticket takers pocket. … We have enough people here to volunteer to take tickets and let that money go to charity.”
Aside from the St. Patrick’s Day festival there are commissions paid out for other tax-payer funded association events in the name of services like “professional fees.” Executive Director Merritt Brewer is considered by many association members to be the only paid staff member and her salary doesn’t reflect the $9,259.40 listed under “marketing salaries and wages.” So whose salary is that?
So far Columbia City Paper has been unable to obtain copies of the various commission checks and to whom they were paid because the Five Points Association has continued to break SC open records laws and skirted the Freedom of Information Act by claiming to require thousands of dollars in photocopying fees before it will comply. Last week, City Paper retained the law firm of Baker, Ravenel and Bender to pursue the records request.
According to a media law attorney George Reeves, “if they [FPA] do not comply with the act we will pursue the remedies provided by the act; mainly, legal action.”
Saluda Street Cosa Nostra
Inside the “Five Points Mafia”
“It all started when we had our beer truck out back selling cold ones for a dollar a draft,” says Bruce Miller, owner of Groucho’s Deli on Harden Street in Five Points, when asked about his experiences with the Five Points Association and St. Patrick’s Day.
According to Miller, who is not a member of the association, some FPA muscle came over to his parking lot in the form of board member Duncan McCrae, who told Miller that he was pissing off “him and the mayor” by selling beer for less than $4.00. Miller explained that Groucho’s gives to charity all year long and the Mayor’s office was quick to apologize for McCrae in the form of a letter recognizing Groucho’s charitable donations.
The following year, claims Miller, McCrae ordered the production crews to set up a stage so that it would block out the Groucho’s lot. But, Miller says he knew members of the stage crew, who assembled the stage so his parking lot was involved.
“At about 10:45,” Miller recalls, “Duncan comes back around and the stage is built and he asks the crew, ‘What are the odds of you getting this shit to where it is supposed to be?’ And one of those dudes said, ‘Slim to none and slim just left.’ And Duncan grabbed a fold out chair and threw it as hard as he could at me.”
The next year, Miller says, “they tried to block us with Porta Johns and fences.” And so it apparently goes for business owners who stand in the way of the Five Points Association. “They blocked out It’s All In The Name last year,” said Miller. Elizabeth Comer, the owner of the former business in Five Points confirmed the allegation.
Comer herself has experienced more passive aggressive attacks from the association, such as a newsletter feature about niche businesses being successful in Five Points which was about board member Debbie McDaniel’s store Revente. Revente, a very successful consignment store, is by no means a niche business compared to Comer’s once struggling gift shop. The advertising placement for board member establishments in other tax-payer funded promotional material such as the Five Points Guide is also blatantly preferential.
“I got the front because I came up with the idea,” explained McDaniel who later called back to say that such placement had a premium price. When asked if she paid a premium, McDaniel skirted the question.
“It seems like everything they do is for the night based businesses,” said Comer. One of the first retail-based events, “First Fridays,” also seemed suspect to some merchants because the shopping event was planned for a Friday night. A raffle was held at participating retailers for a chance to win a $25 gift certificate to one of the board member’s bar & restaurant establishments.
Started as an association of small businesses, the association now averages around one hundred strong including larger corporations and many members who don’t own businesses in Five Points, each of whom pay dues of $250. Five Points based businesses pay $100. It is unclear whether board members pay dues, as FPA won’t share simple financial information. As the association has grown, many in the area feel that it has lost touch with the original intent drafted in its bylaws to “develop a spirit of cooperation among the merchants.”
Many merchants also express concern about the direction in which the association seems to be heading: turning from a merchants association into a development corporation. Transcripts from meetings between FPA president Dennis Hiltner, the Quackenbush architectural firm and various community leaders outline an extensive development plan for the area dubbed “Future Five.” Most agree that the proposed development would benefit the area greatly, but some worry that area business owners outside of the association haven’t been allowed a say in the matter. “All this redevelopment stuff,” says Mark Gillespie of Marx Hair Salon “…just watch peoples’ livelihoods—[those who] depend on their small business down here—go under so they can bring in something else that brings in more money.”
Conflicts of Interest
Aside from the obvious conflict that arises from an association of small businesses that involves itself in large-scale urban planning and employs a Director of Economic Development to court corporate sponsorships—and aside from the more blatant conflict that arose when it was discovered that acting president of the FPA, Dennis Hiltner, was also the treasurer (he later stepped down from the latter)—many worry that the association’s cozy relationship with city government could lead to ethical dilemmas. For example, Richard Burts, a current board member who has been involved with the association since 1989 is also on the city’s hospitality tax funding board, which allocates funding for events like the St. Patrick’s Day festival and the Five Points After Five concert series.
Burts doesn’t think it is a conflict of interests.
“I remove myself from the subject of Five Points or the application of Five Points,” he said. When asked about hospitality board voting procedure when it comes to Five Points, Burts said, “I just leave the room.”
Former employees of Vice President Jeff Whitt’s establishments have also done quite well by the association. FPA Executive Director Merrit Brewer made quite a career leap from bartender at Delaney’s to Executive Director of the association.
“The Executive Director is laughable, she knows nothing about non-profits or grant writing,” said Comer who organized “The Quest,” an event for retailers when it was apparent the Five Points Association was out for themselves.
More recently, former Delaney’s bookkeeper, Alyson Greene, has been given exclusive rights by the association to sell official event T shirts at this years St. Patty’s Day.
“Why wasn’t a business located here in Five Points given that opportunity?” asks Dennis.
Don’t Ask Too Many Questions
In 2005, for example, the Five Points Association—which represents roughly a 2 x 5 city block area—reported net assets at over half a million dollars so its no wonder the board members get cagey when people start asking to see the financial records. So far, the FPA has scoffed at South Carolina open records laws and refuses to allow its members or the media to see just where exactly the money goes.
Columbia City Paper, once a dues paying member of the association, learned the hard way what happens when one asks too many questions about the FPA. City Paper racks have been banned from FPA board member establishments and outdoor paper boxes have been stolen or vandalized on sidewalks adjacent to their buildings. Association board members have called City Paper advertisers encouraging them to pull out. No chairs have been thrown at City Paper staffers yet, though McRae did tell publisher Paul Blake to “buzz off” at a recent meeting when Blake asked financial questions regarding the Five Points After Five concert series before another board member, Debbie McDaniel, told an attending police officer to “get him [Blake] out of here!”
When McDaniel was confronted about having a stack of new City Paper’s hidden behind her counter at Revente, she wrote via email, “We’re open until 5 today if you want to pick up the remaining papers-I handed out copies to those that asked for them.”
“The problem there,” says Gillespie, “is that it is the Five Points merchants mafia. If you aren’t part of their little group then you aren’t in their favor and then they don’t want you here.” Other merchants were hesitant to go on record like Pat Mason at Five Points Bookstore, who resigned from the association.
Harrell’s Jewelers told City Paper, “I have a lot to say about the association. I appreciate what you are doing but I still have a business here.”
The future of the FPA is easily predictable. Merchants will pay them dues, the city will pay them tax dollars, no one will ask questions and the same handful of people will run things from behind closed doors.
“Everything is still behind the curtain just like it was,” says Randy Dennis, president of a newly formed merchants association called Our Five Points. “It is still the same people doing the same things.”
The association recently announced to its members that there would be a special after party at a designated establishment after every Five Points After Five concert. It was quickly announced that only 8 bars could participate, each bar would receive advertising, and that the list had already been finalized.
When Brewer was asked about the selection process for that event she claimed that she sent her intern out to approach people who sponsored last year. She was unsure of the complete list when City Paper called on Friday afternoon, the sound of a television humming behind her in the background. After a moment, she began to rattle off the names of board member establishments.
March 14th, 2007 at 09:36 PM "claiming to require thousands of dollars in photocopying fees before it will comply. Last week, City Paper retained the law firm of Baker, Ravenel and Bender to pursue the records request." Nice move on the Associations part avoiding those expensive photocopy fees. I'm sure their attorneys fees will be much cheaper. No wonder this guy Hilter? made such a lousy treasurer.
March 15th, 2007 at 11:22 AM
March 15th, 2007 at 02:42 PM Paul Blake was asked to attend our association board meeting yesterday to ask questions. H came, but said he didn't want to waste our time with any questions. Huh? That's why he was invited-to get answers to all of the questions he so desperately wants answered. Fees quoted to Paul for compiling the information were $35.00 an hour, which he said he could not afford. Most of the info he has requested is on file with the city, readily available to him. He has been told this many times yet has not asked them for anything. He also misquoted me in his article, but that's another matter. I am used to him only printing what he wants rather than the facts.
March 15th, 2007 at 07:05 PM I don't see how the guy could lie about being kicked out of that one meeting in the article b/c there would be witnesses. And I doubt he would name a law firm thats representing him if it wasn't true. So if he's had to sue for records he probably thought that it was a waste of HIS time to come to your meeting. I don't know. Just my take.
March 15th, 2007 at 07:30 PM Debbie couldn't have been misquoted because she was never actually quoted in the article other than her very public comments in the FPA meeting. Debbie McDaniel called and asking for a correction saying she did not skirt the question regardind ad placement in the Fve Points Guide. Let’s go to the audio tape shall we… Debbie being straightforward I’d call that skirting the question, although if we were to actually quote her I guess we could have said, “I don’t remember.” It was explained to the board yesterday after our paper had hit the streets that Baker, Ravenel & Bender would be handling the records request that FPA has had an opportunity to respond to since May. Hopefully they will do less attacking and be more forthcoming so we can get public information and assure the public that their tax payer money is being spent wisely."
March 15th, 2007 at 08:20 PM I would prefer to have this run in full or not at all as I do not want to be misquoted or anything taken out of context. Having served on the board of the 5 points association for many years up until 2004, I speak from experience. Membership dues must be paid to run for a board seat. Many people that do get elected resign the first year because they don't want to actually do the work and put in the time it requires. Then virtually no one wants to be the president because of the enormous amount of time it entails. So why is there a smear campaign going on against the only people who were willing to do the work? My business has been in 5 points since 1989 and I've seen it year after year, everyone complaining, but no one wanting to serve on the board or on the numerous committees. Generally what you would have is a one man/woman committee simply because no one else would help. It was amost impossible to get anyone to agree to run for the board when there was an opening, which was often, so how is it these same people have so much time to complain now? So few people would agree to run that ultimately anyone who expressed an interest in doing so, eventually ended up on the board, so obviously it is not a closed system. We had to beg people to not resign, and had I not moved to the west coast on a part time basis, I would still be serving. And the money from the St Patricks Day festival benefits the area BECAUSE IT IS HELD IN FIVE POINTS. So now, the City Paper is going to cost the taxpayer many wasted dollars because it doesn't want to pay for the copies and labor time it takes to obtain all of this information which is already on file with the city. There is so much good everyone could do if they put the effort into that instead of continuing this divisive pattern. Good grief people. We've been through almost 3 years of hell with this construction. Of course everyone is frustrated. Give it a rest and let 5 points heal.
March 15th, 2007 at 09:14 PM I paid $650.00 for the ad in last year's Visitors Guide, the same price anyone else would have paid. Since I can't get the audio to play re our telephone conversation (that you taped without my knowledge) I have to rely on my memory which is that while driving and answering your questions I honestly did not remember the cost of that ad as it was months ago. Had you called back and let me look at my files, I could have given you that info or made a copy of the paid invoice. PS: The city is waiting for you to come get the info you keep saying we are witholding, so hustle on downtown.
March 16th, 2007 at 09:45 AM Wow,
Cat Fight!!! I love it.
"Fees quoted to Paul for compiling the information were $35.00 an hour"
This association better send that $70,000 a year secretary over to Kinko's pronto.
March 16th, 2007 at 10:45 AM I can see Lynn Sky's point about it being hard to find people to volunteer for the group because of the extra work it would take. But it seems there is A LOT of money floating around, too. There are people making 30,000 for one day of work on St Pat's? That seems like a pretty good incentive to be on the board to me!
March 16th, 2007 at 02:18 PM I just saw the line up for Five After Five and the After Bar Parties....which bars are current board member's establishments?
March 16th, 2007 at 03:40 PM People who think that the event of St. Pats. is one days work are screwed in the head. It takes months to pull off and more headaches and lining every asset up so that it goes off smoothly. Everyone who works in and visits Five Points should give a lot of credit to Five Points Merchants Association for the fountain, clean and safe, and the new fountain that is in the works after the 3 years of planning. If any of the people bitchin want to help be constuctive we could use the help. 10% of the people in the world do 90% of the complaining. We are doing the best we can. John Green, Owner, Cycle Center and proud Board Member, Five Points Merchants Association
March 16th, 2007 at 04:37 PM First, I am glad no one disagrees with the main points in the article. I guess the facts speak for themselves.
The official band list For Five After Five is here: http://www.fivepointscolumbia.com/after5/ The official list of after party places hasn’t been released but we can always go to the audiotape. I expect the after party list to change since questions about the selection process were raised, and in FPA’s defense Merritt admitted not knowing the complete list at the time of the questions.
Rest assured it will include board member establishments (whether or not they are the same ones she mentioned), and I think the main point merchants like Comer were making… “It seems like everything they do is for the night-based businesses.”
As for copying fees costing city money: that is just nonsense. FPA needs to allow City Paper to review documents. Actual copies of bank records would come from Carolina First (not the city of Columbia) for under 100 dollars, for which City Paper will gladly flip the bill.
The question is why would Hiltner obstruct open records laws by requesting thousands of dollars and then claim he never read our second request from our general council? Now that it is nine months later, I think it is reasonable that we have left it to the law firm of Baker Ravenel & Bender to handle the request.
FPA has not been forthcoming and their word has not been reliable in the past, so in the future we will let the records we requested speak for themselves. “Come pick them up” as if they are waiting for us is a ridiculous statement, as it is bound to be budget info and not actual bank statements. I’ll believe it when I see them. Again, media law experts at Baker, Ravenel & Bender can decide when the records request has been fulfilled.
Hopefully they will stop dragging their feet on this as it has created extra frustration in the area, and City Paper hopes to help relieve the tension by providing information to the community and the dozens of merchants that have had the same questions for years.
I’d like to print Lynn’s comments unedited in the next issue (without annotations). Her comments were thoughtful and well written. (Besides, I owe her some money for a painting and that should buy me time until Monday.) Again, no one is questioning the great commitment and service many have given in the area. Debbie McDaniel runs two cool and successful stores and has tried to do a good job with the FPA. But this doesn’t change the fact that we need this information that is supposed to be public. It doesn’t change the fact that there is vast room for improvement in community relations on the part of the FPA.
The merchants that aren't board members in the area are the ones that feel alienated by the FPA; all we have done is reported on it. So does attacking us prove otherwise or does it confirm the real concerns the merchants in the area have?
March 16th, 2007 at 10:11 PM I'm glad things are out in the open with the FPA. I'm also gratefull for this paper having the guts to aproach this story. It's been a long time coming. I think the headline "Merchants Mafia" may have been a little harsh, and hence the negative tone of some of these posts. These open records laws are a good thing though, and allow for proper scrutiny of the financials of organizations like this. Whatever you do don't let this ruin your St. Patty's day :)
March 16th, 2007 at 10:34 PM Oi wuh-in' leh it roone moo-eye Saynt Pot-eez-day for the loo-ife o' mee. Oi-m still gonna git me some drinkin' oi-n!
March 18th, 2007 at 02:58 PM Sounds like a racketeering case could be in the works soon.....watch out for the FEDS.....sounds like a RICO case.
March 19th, 2007 at 12:32 PM Anytime tax money is used, I think its good to get this stuff out in the open. Then the "healing" can begin.
March 19th, 2007 at 08:05 PM If by "healing" you mean misappropriation of public funds charges! Actually, I guess paying themselves like that isn't illegal. ...Just kinda slimy.
March 20th, 2007 at 01:23 PM Bruce Miller's always been a straight-up kinda' guy when I spoke with him so his comments about strong-arm tactics not to mention immature behavior lead me to want to 1)Find a list of all FPA member business' 2)Let each and every one of them know I am going to boycott and am going to publicly call, including using the media, others to do likewise. 3)Support those members of Our Five Points 4)Tell Duncan McCrae to stay put in his kitchen and bar. 5)Encourage Bruce Miller to run for Mayor of Columbia again. This time seriously! 6)Help if I can to distribute the CCP and be a witness in the prosecution of those who vandalize its machines! As a side note, to any of those who want to go see a real St.Patty's Day, skip FIve Points next year and just make the drive to Savannah in '08!
March 20th, 2007 at 03:27 PM I would like to set the record straight about The Guide to Five Points. I have published this guide annually since 1998 with the exception of 2005. First of all, it is not funded at all by the Five Points Association or city funds. It is supported solely by advertising revenue. The Gourmet Shop and Revente pay a premium rate for the positions they have held since the Guide's inception. Those positions are available on a first-come basis. Since Debbie and Dennis were involved in the initial creation of this guide, it is only natural that they got those positions the first year, and they have continued to support it. They pay more for their ads than any other advertiser. There is no preferential treatment to board members. I don't even know who is on the board.
March 25th, 2007 at 04:19 PM Mr. Blake, Isn't it againist the law to record someones telephone conversations without their knowledge? You have done nothing but start a pissing contest in which everyone ends up with wet pants. Getting in peoples faces, cussing people during meetings and throwing bombs at people who have been in 5 pts since before you were a twinlkle in your dads eye isn't the proper way to get people to give you info. the easy way. The incident with Mr. Groucho was what 15/20 yrs ago? Hardly new news. Could it be Mr. MacRae was peturbed at Mr. Grouch because he was undercutting the St.Pats. beer sales and wasn't giving a penny to the St.Pats committe? Look up the law on accomadation taxes and you will see they are collectd by restaurants and bars not by retail merchants and they are taken to be spent on promoting all buisnesses which I think they are. Look at 3 Rivers festival, city spent 250k /330k a yr ,5pts pays it's on bills including big bills back to the city.How much has been spent in the vista? 5 pts can't even get a parking garage and the vista has gotten 3 or 4. You are barking up the wrong tree,relax,be a nicer person and keep dry pants.Please make a list of who has given what in the last 25 yrs with time and monies included, I think it might open some eyes. Some have beer trucks on their property or sell beer out their windows and don't give one cent.The same merchants who complain about parking use to park in front of their own store all day and wonder why their was no turnover.Also using a crackhead rapist to do your bidding for you isn't going to help you seel papers or ads, you now have no cred.
March 26th, 2007 at 06:05 PM "1- No it isn’t illegal. It is my regular interview procedure. (This prevents people from lying or being mistaken and claiming they have been misquoted) We don’t want those questioned to lose “cred” and we have helped one board member keep her integrity with this procedure. We love genuine straight forward folks.
2- I never cussed at any one at a FPA meeting. I simply asked a few questions. (I have that audio too.) And audio of Duncan MacRae yelling then, and at the board meeting making the same lackluster points you have posted here. In fact Buck and Duncan seem to think alike, which is great that there's at least one other person in the area with the same opinion. Duncan did an incredible job starting this festival. The only problem is now he thinks he has ownership of it and the taxpayer's hospitality money.
3- The behavior of board members the past weeks as well as the past five years is relevant to the problems here.
Finally, Bum of The Week which is often on crackheads has nothing to do with the undisputed facts in this news article.
25 years in Five Points is no excuse for arrogance and ego's getting in the way of doing things better down here.
May 19th, 2007 at 11:28 PM
Great article and investigative job. You should be nominated for a Pulitzer or whatever Woodward and Bernstein got for breaking the Watergate case. This story just rings true for me, but is probably just the tip of the iceberg. It takes a lot of guts to print the truth and go up against the powers that be. I’m sure that I speak for many people when I say keep up the good work and we look forward to seeing those records. It use to be that the Free Times was Columbia’s alternative paper but now it is the CCP.