First impression of EDA reply: 383 pages later what have we learned?

On Friday, May 19, the Front Royal-Warren County Economic Development Authority released a 383-page document in response to questions that have arisen about its workforce housing project.  Those questions began last November prior to a final Front Royal Town Council vote approving a Special Use Permit enabling the project.  Questions multiplied following the April 28 revelation the EDA would now have to purchase the property that had originally been gifted to it 11 months earlier by Mr. and Mrs. Walter L. Campbell.

On Monday night, May 22, Councilperson Bébhinn Egger said no answers to the specific questions she raised on May 8 appeared to be part of the May 19 EDA explanation of the workforce housing project. Photos/Roger Bianchini

A one-page cover letter and eight-page press release accompanies the document release.  That cover letter, signed by EDA Board Chair Patricia S. Wines and Vice-Chair Greg Drescher, calls “any criticism” directed at the EDA Executive Director Jennifer McDonald “unfortunate and unwarranted.”  Wines and Drescher note that McDonald “works under the direction of the EDA Board. She is not permitted to make significant decisions without board approval,” adding that “the EDA Board carefully vets every project undertaken.”

McDonald has found herself at the center of questions about the workforce housing project largely because she is the board’s spokesperson at Town and County meetings; the initially-gifted property came from her aunt and uncle, as she disclosed right off the bat; and as explained in the May 19 release, she misspoke in telling the town council on November 14, 2016, that the price attached to the then-gifted deed of transfer was based on an appraisal.

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Royal Examiner’s staff review of the 383-page EDA document indicates that it raises more questions than it answers.

Questions answered:

1. Why the EDA Board became interested in pushing forward the idea of workforce housing targeting young professionals “unable to afford mortgage payments”;
2. The EDA Board considers the $445,000 “agreed upon” price “reasonable” and a “small price to pay to launch the workforce housing initiative”;
3. There was a confidential agreement aspect of the “gift” from the Campbells, including a March 1, 2017 “construction start deadline” that the EDA Board did not feel necessary to share with Town officials involved in meeting that deadline – to quote, “the EDA was witness to a confidential real estate transaction and no monies from the Town were involved in the transaction, therefore, the EDA upheld its responsibility to confidentiality and was under no obligation to inform Council.”
4. The March 1, 2017 deadline contained in the confidential agreement with the Campbells was a “start construction” date, that if not met would require purchase of the 3-1/2 acres at the “agreed upon price”;
5. From the EDA Board perspective the site layout development process with the Town Planning staff bogged down between October 2015 and January 2016 (the deed of transfer was executed in June 2016);
6. According to its one-page cover letter attached to the 383-page workforce housing document, the EDA Board Chair and Vice Chair believe “It is understandable that community members may have questions” about the workforce housing project.

The view down what will remain a dead-end Royal Lane towards the EDA workforce housing project parcel that will add 24 to 36 residential units to 99 homes and 3 commercial buildings already there.

Councilperson John Connolly reiterated Monday that he does NOT want to hear ANY questions from Ms. Egger about EDA-driven economic development initiatives inside the town limits – even if council had to issue a Special Use Permit to enable such projects.

Questions unanswered:

1. What the EDA did to attempt to create private-sector interest in developing workforce housing on either developed or undeveloped, privately-owned residential property between 2002 and 2014 before deciding to undertake the project?
2. EXACTLY why the EDA Board considers an “agreed upon” price that was $140,000 above the assessed value of the property reasonable?
3. WHY a confidential agreement tied to the “gift” was necessary; when it was executed (see # 5 above and below); not to mention why the EDA Board felt so nonchalant about incurring an additional $445,000 expense on the project???
4. Any detail at all on how the $445,000 price was reached, particularly NO information on the “comparable” properties that “agreed-upon” price is now said to be based upon.
5. WHY the October 2015-January 2016 site layout delay matters since the deed of gift was not executed until June 6, 2016; OR was the confidential agreement with the Campbells already in force prior to the June 6, 2016 deed of transfer?? And if the confidential agreement and its SECRET March 1, 2017 “start of construction” deadline was already in place, WHY wasn’t the Town Planning Director informed the EDA was working with time constraints to have the property gifted?
6. Why on the last page of an eight-page press release accompanying the 383-page document, Board Chair Patricia Wines alleges there “seems to be a group of people in Front Royal who are determined to manufacture a scandal” – apparently by asking the very same questions the cover letter she signed says are “understandable”.
7. And exactly how much the EDA has spent on development of the project? Following the April 28, 2017 unanimous EDA Board vote to proceed with a purchase of the property at the $445,000 “agreed upon” price, a primary rationale was that the EDA had already spent an estimated $500,000 on site development of the Campbell parcel.  – “We’re frugal,” Chairman Wines commented of the decision to add $445,000 in acquisition costs to half a million dollars the EDA says it has spent without an apparent shovel of dirt having been turned at the site; or for that matter ownership of the property being finalized.  A “Project Invoices and Contracts” summary sheet in the packet lists a total of $420,765.  However, while some of the support documentation are invoices, others appear to be proposals.  Also, $207,380 of the $420,765 total includes two items – creation of a $125,000 escrow account through Owen Loan Servicing; and an $82,380 10-percent contingency fund on Pennoni’s site work cost estimate (of $823,380).  It is not clear how much, if any of those funds have yet been spent.

Those are first impressions of the 383 page document.  Coverage of Councilperson Egger’s first impressions, as well as Councilperson Connolly’s disdain that she had an impression she dared voice during the “Requests and inquiries of Council members” portion of the Monday, May 22, Front Royal Town Council meeting will be forthcoming.