published Sunday, January 27th, 2013

River City crony catering deal is cause for concern

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.

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aae1049 said...

Chattanooga has pervasive nonprofit fraud, from Allied Arts (changed name to Art Build, because the public is sick of their tax payer thieving) River City wants one thing, public financing for their private pursuits. Kim White, $200,000 plus CEO, is nothing more than a puppet for Chattanooga's A List of companies that don't delineate between public and private funding. It is all for them to get richer, on the backs of the poor paying taxes. Scum, all of them. Should I say what I really think here?

January 27, 2013 at 12:10 a.m.
aae1049 said...

Allied Arts and River City, both non profit frauds.

January 27, 2013 at 12:39 a.m.
Gidget said...

This is sickening. Such a gross abuse and major conflict of interest. I would love to say that I'm shocked...but unfortunately, I'm not. It's just par for the course around these parts I'm afraid.

Absolutely aae1049 - and according to RiverCity's 2010 990 Kim White made $256,000 (now it is supposedly almost $300K).

January 27, 2013 at 9:40 a.m.
timbo said...

Some of us have been chronicling this kind of fraud for years and years. Edna Taylor spent a lifetime revealing this type of thing to the public. For most of those years the Times Free Press spent its time being unabashed cheerleader for the nonprofits and the power structure.

Watch out Drew, they're going to come and get you.

January 27, 2013 at 9:41 a.m.
cooljb said...

These people give themselves an interesting and harmless name like River City, Black Creek Mountain, On the List, it goes on and on, yet they are the biggest tax money inheriters in society. Google, River City, Wamp, Mallen, Stein, Chazen either separate or in any configuration and you will see who is benefiting from you tax payers so much that you'll be broke from now on. They are your big-shot attorneys, developers, government medians. I challenge any of you to do so and you will see a connection from beginning to end.

January 27, 2013 at 11:19 a.m.
aae1049 said...

Local citizen groups can simply do an open records and scratch the surface, and find fraud committed against the taxpayer. Fraud, corruption, theft of public resources is such a way of life for River City, Allied Arts, they operate in a very blatant and open manner. These nonprofits are in our local property taxes. River City and the Chamber of Commerce also try to control where public resources are placed for public infrastructure, while each receives annual taxpayer operating funds. It is so absurd, they are given a license to steal from the public.

Chattanooga has a poverty rate of 30 percent, How long are we going to let these self proclaimed do gooders that are nothing but store fronts for taxpayer robbery and fraud, continue unchecked? We must stop it head on, and expose the Tiffers, Pilots, and corporate welfare that steals from the public every day. We need to start buying ad space and expose them, and continue to collect proof that is irrefutable, we should not be moved at all by lawsuit threats. Excalibur told the TFP they were going to sue Little Chicago Watch or it's members, when pervasive bid corruption was exposed. Sue away, we got proof. :-)

We needs real journalists, that are not cowards, Drew Johnson is definitely more of a fan of truth, than any journalist in Chattanooga. Thank goodness the public has him.

January 27, 2013 at 1:27 p.m.
nucanuck said...

Without attempting to defend any specific occurence, we should keep in mind that Chattanooga was a hopeless backwater in the 1960s and '70s. The Chattanooga of today didn't happen by accident and it didn't happen because of political vision.

Parts of Chattanooga's "power structure", the private part made a conscious decision to try to bring Chattanooga back from the doldrums by involving as many people as possible in the decision making process and by bringing in top experts to guide anyone who would listen. The process was long and painful with more hope than true gains for many years.

Private money poured into the process. Loud mouth harpies like Edna Taylor decried every idea that was put forward. Even Mayor Roberts was afraid to wholeheartedly endorse the Aquarium until after it had become a certainty. One of the biggest tasks was to try to educate public sector leaders about what our new city might become. They were all but forced to go on retreats and listen to lectures...and many of them didn't like it much.

Public private partnerships had shown good success in other cities that were trying to re-invent themselves. Consultants convinced both the public and private sector to follow this route and the results have been truly amazing. Chattanooga is relatively better off than much of America today because of this initiative taken by private sector people who had only pride of place to gain.

Should River City be over-hauled? Maybe so, but the good that has been channeled through those doors is enormous. We should be careful before destroying something that has benefited us all.

January 28, 2013 at 12:39 a.m.
bladegage said...

Wonderful article....and true. We used to cater there when Chattanoogans could decide who they wanted to use - and now its so wonderful that Chattanooga can see what they have done to A - local contributing business income streams as well as B - the local Chattanoogans decisions....swandered both. Chattanooga is a wonderful place and many wonderful changes are happening here, but its time to stick a "fork" in this type of behavior as these types of businesses should be done and "off the list".

January 28, 2013 at 7:03 a.m.
Handleit said...

As long as we continue to elect the type of people that are now running our local government, these type of dealings will continue. We are our own worst enemy when electing representatives. It is election time for the city. Obviously the present set of representatives have not done the job. Let's get them out of office and put in some fresh thinkers. Then let the new people know that if things stay status quo they will be out come the next election.

January 28, 2013 at 12:27 p.m.
daytonsdarwin said...

Chattanooga's Red-light District has expanded. No longer just on Lindsay Street, the bright-red bulbs are flashing on Market Street.

January 28, 2013 at 1:19 p.m.
aae1049 said...

The Red Light district is home to the Lindsay Street Cartel. The natives call that area Little Chicago.

January 28, 2013 at 3:31 p.m.
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