A questionable deal that ultimately steered money from a River City Company enterprise to the pocket of one of its employees raises serious concerns about how the partially taxpayer-funded organization operates.
River City is a nonprofit that serves as Chattanooga’s de facto downtown redevelopment agency. The large number of city and county elected officials required to sit on the River City board of directors, and the millions in combined public funding the outfit has received over the past two decades — and the tens of thousands annually it still receives — is a testament to that fact.
One of River City’s roles is working on behalf of the city government to negotiate taxpayer-funded and revenue-sapping corporate welfare deals. Another is acting as judge and jury to decide which businesses are allowed to locate in certain downtown Chattanooga commercial spaces. (River City president Kim White admitted last October that the non-profit has kept at least six different businesses that wanted to locate downtown out of empty storefronts.)
With River City performing functions that, in most cities, are left to governments, it is necessary that the organization act with integrity and good judgment.
Unfortunately, integrity and good judgment were in short supply when River City leaders agreed to give a sweetheart catering and venue management deal to River City’s own Director of Creative Strategies, Tiffanie Robinson, and her husband, Michael.
The Robinsons own BrewHaus pub on Frazier Ave., co-own Fork & Pie Bar on Market Street, and, until last fall, owned On the List catering. River City, which owns and operates Miller Plaza and the plaza’s event space, Waterhouse Pavilion, saw an opportunity to pass along customers and money to the Robinsons by making On the List the venues’ preferred catering company.
River City worded the Miller Plaza/Waterhouse Pavilion rental agreement and contract so that people renting the facilities faced an ultimatum — either use On the List for their catering, or pay a $400 penalty. The move steered thousands of dollars to the catering business owned by River City’s Director of Creative Strategies and her husband.
The money the Robinsons pocketed courtesy of River City’s dubious assistance didn’t end there.
Public records available from the city show that when city agencies rented Miller Plaza and Waterhouse Pavilion, On the List was paid, not only for catering, but for the price of the entire rental as well.
At one September 2012 Miller Plaza function — an event hosted by the city-run Gang Task Force — On the List provided no catering whatsoever. Still, the check for the rental — $2,021.25 of Chattanooga taxpayers’ money — was made out to On the List catering.
Instances such as this allowed the Robinsons to put thousands of dollars that should have gone directly to River City for venue rental fees into On the List bank accounts.
When asked why On the List was paid money due to River City, White said that she had allowed On the List to manage the venue in exchange for a cut of the rental revenues. White claims that On the List — and, ultimately, one of River City’s highest-ranking employees and the employee’s husband — was allowed to keep half of the revenue generated by venue rentals, and the other half was reimbursed to River City.
The agreement between River City and On the List appears to be a violation of River City’s own conflict of interest policy.
Just days after the Robinsons sold On the List catering in October, River City changed the Miller Plaza/Waterhouse Pavilion rental agreement to remove any reference to preferred catering vendors and eliminate the $400 fee for not using On the List. Apparently, once the Robinsons could no longer financially benefit from the agreement, River City no longer saw the need for the venues to maintain a preferred caterer.
This catering/management agreement between River City and On the List is not the only example of cronyism that has benefited the Robinsons’ bottom line.
Fork & Pie Bar, which is partially owned by the Robinsons, received assistance from River City to open the restaurant. Although, thankfully, none of the money River City used to subsidize Fork & Pie came from taxpayers, the situation again indicates that River City’s penchant for cronyism is not isolated.
The people of Chattanooga are at the mercy of River City. Because Chattanooga’s city leaders have abdicated much of their downtown redevelopment duties and left those responsibilities in the hands of River City, the nonprofit must act in a way that is trustworthy and accountable.
Since taxpayers’ money is used to subsidize River City’s work — the Chattanooga City Council agreed to give the organization a $67,500 handout this year — River City owes it to Chattanoogans to act responsibly with its money.
If this catering deal is any indication of the way River City conducts its business, city leaders need to look long and hard at the power it gives the organization over defining downtown Chattanooga.