City spends more than $1M fighting claims of airport contract failure, nepotism

ATLANTA — More than $1 million in taxpayer money has been spent fighting an ongoing dispute involving the City of Atlanta, airport contractors and claims of nepotism in the former city administration.

The yearslong dispute, centered around an airport spa, is set to play out in federal court. The case and its plaintiff have  garnered the attention of state and city leaders in recent weeks, as legislators voted in favor of a bill for the state to take over operations at the world’s busiest airport.

Shelia Edwards is a minority contractor who  alleges XpresSpa and its partners used her investment and federal certification status to cement an airport contract, and then colluded to kick her out of a partnership in favor of a partnership that benefited childhood friends of former Mayor Kasim Reed.

It was facilitated through a federal minority business program run by the City of Atlanta, Edwards said.

“Everyone speaks about the legacy of Maynard Jackson, who created this program, but Maynard created it for a reason and it wasn’t for the personal benefit of mayors that came behind him to help benefit his friends,” Edwards said.

“If you follow the chain of benefits, if you follow the money, it goes to the mayor’s circle of friends,” said  attorney Carl Gebo, who represents Edwards.

The pair said Cordial’s trouble began shortly after partnering with XpresSpa in 2012. By 2014, Edwards said she’d complained to airport management about essentially being blocked out of business dealings to include accounting and revenue information.

“So when Cordial raised those questions, XpresSpa basically told it to shut up and play ball,” Gebo said.

“Once XpresSpa found out that we had met with the airport general manager they became angry,” Edwards added.

Edwards claims retaliation ensured, and soon after Cordial was replaced by another minority contractor in a deal allegedly brokered by Reed’s childhood friend, Bernard Parks Jr. and his wife, Kenja Parks.

“There has to be a hearing,” Gebo said about the termination process. “Good cause has to be shown to allow that termination to occur. None of that happened.”

In legal filings, XpresSpa cited questions about Cordial’s certification at the time. An attorney for the group writes, “XpresSpa Holdings, LLC and XpresSpa Atlanta Terminal A, LLC both flatly deny the fabricated allegations of the Complaint."

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In 2015, the FAA sided with Edwards, determining the city had a duty to uphold the XpresSpa partnership. It ordered the city to make corrective actions, something the city disputed in its own set of hearings.

“To turn around and see the City  bypass the FAA regulations, bypass their own regulations, their own program goals and obligations to make sure the friends of the mayor are taken care of…I feel violated,” said Edwards.

The city and Reed have asked for the case to be dismissed, with Reed calling the allegations of nepotism “baseless.”

“Plaintiffs depict Reed as a puppeteer, vaguely alleging that the City and other officials acted ‘at the direction of Reed’ to violate their purported constitutional rights and other, so-called ‘rights’ under federal regulations,” Reed’s motion to dismiss the suit reads. “While these various allegations of the Complaint are sensational, glaringly absent from the Complaint are any non-speculative, non-conclusory allegations that Reed was involved in the XpresSpa-Cordial dispute, generally, much less in the specific.”

The City denies any liability in the dispute. In court documents they go on to say Cordial is not constitutionally protected in the airport contract.

Channel 2 Action News and the Atlanta Journal-Constitution did not receive a response from the Parks' attorney.

Edwards and Gebo told Channel 2 Action News and the Atlanta Journal-Constitution that the suit is seeking at least $15 million in damages, include lost revenue, damages, operations and legal fees.

Meanwhile, Edwards' written plea for city council president Felicia Moore to step into the matter was sent to councilman Andre Dickens. Dickens is the transportation committee chair. According to the AJC, he declined to comment on the suit after being briefed in a closed-door executive session last week.

Cox Media Group