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The association received a total of $225,000 from City of Columbia hospitality and accommodations tax funds.
Publisher's note: "Five Points Merchants Mafia" was an actual quote from Mark Gillespie of Marx Hair Salon. The competition at the time admittedly made up the quote "shitty paper" while not reporting this story. For the good of the community we hope they get back to doing the legitimate journalism that they did ten years ago versus special sections and unethical practices.
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.
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