Properties – What and where they are? What condition they are in? What to do with them? At what cost?
Processes – How to refine, retool and provide adequate redundancy to prevent a recurrence of past alleged abuses?
Accounts and assets – what we have, what we owe and what loans are necessary to carry forward; were primary topics of interest at the July monthly meeting of the legally embattled Front Royal-
Warren County Economic Development Authority Friday morning, July 26.
All seven board members, including most recent appointment Marjorie “Jorie” Martin at her first meeting for departed Vice Chairman Bruce Drummond, were present for an approximately two-hour regular meeting sandwiched around a two-and-a-half hour closed session after which several motions authorizing movement on several property repairs and/or marketing for sale were unanimously approved.
Those unanimously approved motions by Ed Daley included:
– approval of repairs to the damaged apartment rental building at 514 East Main Street and further coverage pending insurance settlement negotiations of housing displaced tenants in the nearby Quality Inn; and advertise the property for sale at $159,000;
– authorization of EDA attorney Dan Whitten to give notice to the tenants of 506 East Main Street (the Main Street Market) that the property will be advertised for sale at $299,000. It was later noted that the tenants have a first right of refusal on purchase of the old Stokes Mart building they now occupy in a building needing extensive roof and HVAC, among other repairs. An amendment was added giving that tenant Ginny Lesser 30 days to exercise that first right of refusal;
– authorization for the executive director to solicit proposals and contract with an engineering firm for unspecified services at the Happy Creek Industrial Park at a cost of up to $40,000.
Board Chairman Gray Blanton raised another high-interest real estate project to his board, gesturing out of the board meeting room toward the seemingly completed or close to it on the exterior at least, 10,000 square-foot ITFederal building on the first 30-acre Royal Phoenix commercial property believed to be under development in the wake of its “sale” as a one-dollar gift in 2015.
“I’d like to know what’s going on out there – are we in contact with him,” Blanton asked Whitten of ITFed CEO Truc “Curt” Tran. Whitten explained that due to Tran and ITFederal being named as defendants in the $21-million EDA civil suit for return of allegedly misdirected or embezzled assets, $10 million of which went to Tran and his company according to the EDA lawsuit, contact was limited at best. However, Whitten said he would contact Tran through his legal counsel to attempt to get a status report on his intentions for the property.
Conditions on the $10-million bank loan approved by the EDA board required only that Tran spend $2 million here and have a 10,000 s.f. building constructed by the middle of 2020; and stay current on his loan payments. Whitten later reported during a highly interesting Financial Report that Tran was current on his now $42,160 monthly payments which more than cover the EDA’s monthly payment of $40,000.
In other business Ed Daley was unanimously approved to replace Drummond as board vice chairman; and then Jeff Browne was unanimously approved to replace Daley as board secretary.
Watch the EDA board efforts to right the ship of economic development in this community in the Royal Examiner video:
EDA announces that the Afton Inn sale has been finalized
The Economic Development Authority (EDA) and Town of Front Royal issued the following joint press release today, February 19, 2021:
On Friday, February 12, the Economic Development Authority (EDA) Board of Directors passed a resolution accepting a final sales price from developers 2 East Main, LLC of $325,000 for the purchase of the Afton Inn located in Front Royal’s downtown. The Board is pleased to announce that the settlement has taken place and the building has been sold!
This transaction came to fruition with the cooperation among the Town Council of Front Royal, Warren County Board of Supervisors, EDA, and the developer. The Board is grateful for the willingness of Town Council, and Warren County Board of Supervisors to focus on a goal that resulted in a “win” for everyone. EDA board members Greg Harold and Jeff Browne, plus EDA Legal Counsel Sharon Pandak, of Greehan, Taves, and Pandak worked hard to make this sale happen. The developers, Jim Burton and Alan Omar, had an unwavering commitment to the vision for this property.
“This is a privately funded transaction. It won’t cost County or Town taxpayers anything to transform the Afton Inn into a welcoming anchor building for visitors to Main Street,” said Jeff Browne, EDA’s chair.
Front Royal Mayor Chris Holloway welcomed the news of the sale. “On behalf of Council, I am proud to share in the celebration of the sale of Afton Inn and look forward to partnering with the developer to remove any barriers to restore and modernize this building expeditiously. The sale of Afton Inn marks an important milestone for our community as we continue to focus on redevelopment,” said Holloway.
(The EDA Board of Directors will have their regular February monthly board meeting via Zoom on Friday, February 26, 2021, at 8 a.m.)
After year-and-a-half gap, town council catches up on EDA activity, in and out of town
In restarting a public dialogue between the existing Economic Development Authority and the Front Royal municipal government on February 8, EDA Board of Directors Chairman Jeff Brown reminded town officials of his observation to them on that last occasion 18 months earlier while the Town was still involved in a three-pronged effort with the EDA and Warren County to investigate and correct what allowed the now $24-million-dollar-plus EDA financial scandal to fester and develop over a several-year period.
Noting he had also been the one to give that report, Browne revisited it: “I said there was a catastrophic failure of oversight by the EDA, County, and Town with plenty of blame to go around*. I haven’t changed my view on that,” he said in opening.
“There was massive embezzlement, bad investments, poorly written agreements, and a dangerous system of overly centralized check writing and bookkeeping. It all set up for a perfect storm,” Browne echoed from his 2019 report to council, pointing to “insufficient checks and balances, lots of misplaced trust and weak verifications” – concluding, “You had a right to be concerned then.
But that was 18 months ago as the new EDA Board of Directors, with County, and initially, for a short time Town, assistance were already involved in dismantling, replacing, and rectifying the EDA structure as the financial scandal evolved under criminal and civil court scrutiny.
Of the direction since then, Browne pointed to installation of the very checks and balances previously missing, including County-mandated third-party bookkeeping, and “multiple eyes on all transactions”. He said the refurbished EDA Board had developed what he termed “a guns and butter strategy” that freed the new EDA staff – Executive Director Doug Parsons and Administrative Assistant Gretchen Henderson – to pursue economic development initiatives (butter), while the new EDA Board of Directors oversaw the legal and peripheral issues (guns).
However, that year-and-a-half of “Guns and Butter” was a strategy the Town Council missed involvement with, choosing rather what one might term a “Lawyers, Guns and Money” strategy as so poetically described on our Opinion page recently by Fred Schwartz. The lawyers, guns (metaphorically of course) and money to a great degree were pointed directly at the EDA over the objection of then Mayor Gene Tewalt, who unsuccessfully recommended a policy of cooperation and rebuilding with the EDA and County, as opposed to a litigious one supported by council and pushed forward through the office of the former interim mayor and interim town manager.
Browne proceeded into detail on the EDA’s current holdings, in and out of the town limits, and explanations on the EDA’s attempt to divest itself of properties it “never should have been involved in” by the new board’s estimation.
He also pointed to over a million dollars thus far recovered in insurance and settlements with involved parties in the EDA’s civil litigation.
He pointed to the recent recruitment of drone manufacturer Silent Falcon to the county; as well as the potential landing of an eastern regional medical marijuana manufacturer/distributor in Parallel LLC, that could bring a major commercial tax revenue source, along with hundreds of jobs to the county and town, not to mention the purchase of Baugh Drive warehouse the EDA hopes to divest itself of ownership of as soon as possible.
The EDA Board Chairman pointed to a drive west for business relocation into the Valley that he said the EDA and County are working to take advantage of, utilizing advantages like the Interstate Highway system crossroads and Inland Port that are located here. Of working together to achieve the maximum result of that effort, Browne observed, “We either hang together or we hang separately”. As to the advantages of working together economically, Browne pointed to the pending sale of McKay Springs parcels that are jointly owned by the EDA, County and Town.
In response to queries, he admitted the EDA was currently financially insolvent due to repercussions of the financial scandal, and was being financially supported by the County at this time. However, some council members seemed surprised to learn that Warren County had not absorbed the EDA into its departmental structure, which could present a roadblock to the Town actively reengaging its continued membership in the half-century-plus old joint Town-County EDA. While the Town is currently advertising for applicants to a unilateral Town EDA Board of Directors, an EDA it would be totally responsible for the financial support of, the County has kept the EDA’s quasi-governmental, independent status open as a door by which the Town could reenter into active membership with the existing EDA.
And while some council grilling of Browne on details, particularly with pre-prepared written notes, took the tone of hostile cross-examination, the end result of Browne’s report and Q and A with council appeared, four days later, to be positive, as illustrated with the EDA’s Friday move toward the completion of the sale of the Afton Inn for redevelopment without a Town challenge on the title to the property.
Footnote: As Royal Examiner has previously reported, while the Town has attempted to distance itself from any portion of “blame” for the EDA financial scandal due to its agreement to no longer have EDA board appointment authority after the County took over full EDA operational funding nearly a decade ago, it was heavily involved with in-town EDA operations throughout the financial-scandal timeframe. In fact, it was the town council that authorized a $10-million-dollar “bridge loan” to the EDA to help facilitate the bank loan for the ITFederal construction project at the Royal Phoenix Business Park at the former Avtex site. That $10-million loan said to have been acquired “under false pretenses” in the EDA civil litigation, is the largest single item in the EDA’s civil suit seeking the return of over $24 million in allegedly misdirected or embezzled EDA, County, or Town assets. In seeking the “bridge loan” then EDA Executive Director Jennifer McDonald told town officials that without that show of “community support” in fronting that $10 million for the ITFederal project in town, the bank was hedging on approval of the loan to ITFederal through the EDA. That was likely because, as Royal Examiner has also previously reported, other than the $2-million value of the 30-acre Avtex property parcel gifted to it for a dollar by the EDA in 2016, ITFederal listed assets of only about $20,000 in its loan application.
EDA Board authorizes sale of Afton Inn as Town withdraws title claim
“Can we sing Hallelujah now,” Economic Development Authority Board member Jorie Martin exuded following 5-0 roll call approval (Gordon absent) of a motion by Greg Harold, seconded by Martin, authorizing the sale of the Afton Inn property to developer 2 East Main LLC at a price of $325,000. The sale is to be accomplished upon signing of the Deed of Sale and necessary Title company documents “at the earliest possible time”.
The landmark achievement, in the works now well into last year if not longer as the EDA and Town negotiated some rocky legal terrain on a variety of fronts, was accomplished Friday afternoon following an approximate 45-minute Special Meeting Closed Session of the EDA Board of Directors convened shortly after 2 p.m.
Royal Examiner contacted EDA Board Chairman Jeff Browne, who along with Board Secretary Greg Harold will sign the Afton Deed of Sale for the EDA, shortly after the 3:05 p.m. adjournment of the February 12 Special Meeting. “Is this a done deal, is the Town okay with this,” we asked Browne four days after an occasionally tense Monday night meeting exchange with Front Royal Mayor Chris Holloway on the dynamics of a potential Afton sale.
Yes, the EDA board chairman replied, explaining that subsequent communications with the Town this week enabled Friday’s action to proceed on the most recent extended 2 East Main LLC sales contract deadline date of February 12.
“To me this is symbolic that we’re working together to get some things done and getting the Afton Inn resolved is a good sign. And hopefully we’ll move on and get other things resolved as well,” Browne said of renewed EDA-Town communications.
He noted that the EDA had received a letter from the Town indicating it would not dispute the EDA’s title claim to the Afton property ownership. And while there was some language in that message found somewhat “cloudy” by the Sterling-based title company or EDA counsel, a subsequent letter signed by Mayor Holloway dated February 12 promised that language would be clarified to remove any perceived ambiguity.
Browne pointed out the sales price is the originally discussed one that has fluctuated somewhat up and down over the months the sale was on hold due to variables involving both the EDA’s financial scandal civil litigation and Town questions over its ownership interest in the property.
As Browne noted during his February 8 report to the Front Royal Town Council, 2 East Main LLC plans to begin its massive renovation project within a year and hopes to complete the $2-million project within two years. See more detail on those renovation plans in Royal Examiner’s December 29 story “From Town Eyesore to Downtown Anchor: Reimagining the Afton Inn”
Also following Friday’s closed session, the EDA approved a short-term lease proposal on part of the Baugh Drive warehouse space with WOW Airlines. An initial three-month lease will be offered on 4400 square feet (s.f.) of warehouse space and 860 s.f. of office space, which includes a $1,000 security deposit and $900 utility payment, with month-to-month renewal options after the initial three-month period.
WOW Airlines would be the fourth short-term lease tenant in the sprawling Baugh Drive warehouse that the EDA eventually hopes to sell, possibly in relation to its connection to Parallel LLC’s bid to become the region’s medical marijuana distributor.
EDA chairman’s reference to Royal Examiner Afton Inn redevelopment story leads to mayoral media attack – Why does that sound familiar?
The Front Royal Town Council and staff got their first, face-to-face, first-hand, factual update on Town-County Economic Development Authority business in over a year on Monday, February 8. “I want to tell you how much we appreciate the opportunity to update town council and restart a dialogue on issues of mutual concern,” post-financial scandal revamped EDA Board of Directors Chairman Jeff Browne said in opening that dialogue.
“It’s been a year-and-a-half since an EDA Board member addressed Town Council – it’s too long. We need to be talking, we have a lot of issues we have to address. This is a great start,” Browne said, acknowledging “other meetings” that led up to his appearance before council the second Monday of February 2021. Contacted later about that impetus, Browne told Royal Examiner that he had “reached out” to new Town Manager Steven Hicks in January.
“We had a good exchange of ideas while I briefed him on some issues on the immediate horizon. He then invited me to speak to Town Council, updating them on what the EDA was doing and to answer the question of whether EDA could help the Town buy properties,” Browne explained.
What turned into an approximate 50-minute report highlighted by some constructive back and forth with council, also had a less constructive moment. About 35 minutes into his EDA report, Browne got into an exchange with Mayor Chris Holloway on the topic of the prospective sale of the Afton Inn for redevelopment. It is a sale of the derelict and long-deteriorating Afton Inn next door to Town Hall at the head of Front Royal’s Historic Downtown Business District that Browne said he hopes will come to fruition by the new extended deadline approaching over the next week.
Browne pointed out that prospective buyer 2 East Main LLC has promised to start redevelopment within a year of purchase and complete it within two years. The Town is currently disputing the EDA’s ownership and ability to sell the Afton Inn without the Town signing off on a sale. It appears that despite the content of a disputed 2014 MOA (Memorandum of Agreement) between the Town and EDA indicating that the EDA would first recover whatever proceeds an Afton sale generated towards its expenditures in maintenance and marketing the property since 2014, that the Town is seeking the first call on those proceeds. The current proposed sale price of about $330,000 would not cover all those claimed EDA expenses.
Mayor Holloway pressed Browne on whether, were the involved bank, First Bank & Trust, willing to reconsider taking what the EDA owes on its Afton property/construction loan, would the EDA be willing to split the proceeds with the Town. Browne replied that to whatever extent that was legally supported he was on board. However, with the EDA’s claim of about $500,000 invested in the property since the 2014 property swap that extracted the Afton from the angry-at-the-Town hands of Northern Virginia developer Frank Barros in exchange for old Town Hall, there will essentially be nothing left over for either the EDA or Town from the pending sale after the bank takes its share to cover the EDA property/construction loan.
“But you have to understand our position – we basically gave up two buildings, two buildings, for what you’re saying we’re going to get nothing,” Holloway replied, adding, “And over $500,000 of work you say has been put into the Afton Inn so far, with a two-million-dollar completion to do it up right. I think anybody that could go buy that building right now would wonder where that $500,000 went.”
The mayor continued to wonder at the EDA’s numbers and the forecast cost of $2 million dollars for 2 East Main Street LLC’s renovation project, which building professional Holloway forecast might replace windows.
When Mayor Holloway said, “I think the citizens of the Town deserve something out of this. We gave up the old Town Hall, we gave up the Afton Inn, and we’re getting basically nothing in return,” Browne attempted to respond twice to point to the 2 East Main LLC redevelopment plan replacing a festering eyesore with a new anchor building for Front Royal’s downtown business district. However, twice Holloway cut Browne off by continuing his line of thought, first that “There’s nothing to show for it yet” and then that “It’s been going on for over 10 years, if not longer” before Browne regained the floor.
“You are getting – I don’t know if you read the Royal Examiner article, but you’re getting a fabulous-looking” – Browne got out before Holloway again cut him off, commenting, “I don’t read the tabloids, I want facts.”
“Okay, well it’s factual what’s in there on that issue (of redevelopment plans). The developers, who are world-class developers, are the ones interested in doing it, and it will be a beautiful looking building,” Browne continued of the referenced December 29 Royal Examiner article on 2 East Main Street LLC renovation and expansion plan. – “From Town Eyesore to Downtown Anchor: Reimagining the Afton Inn”
Contacted later, Browne elaborated of the referenced article, “I was getting ready to point the Town Council to the Afton Inn article you wrote that outlined the vision of 2 East Main to rehab the Inn. I found it very factual and balanced.”
But facts that don’t merge with certain politician’s personal agendas or self-serving worldviews have been typically dismissed as “fake news” or “tabloid journalism” 70 miles to our east in recent years. Now it seems some of our local elected officials with “alternate fact” laced agendas have learned the “bait the media” game from their political mentors to the east.
Town moves toward reduced public meetings, one-reading action item approvals
In its meeting agenda action items of February 8, the Front Royal Town Council passed the first of two currently required readings of its proposed Town Code change to allow it to reduce the numbers of meetings and work sessions from two to one a month of each. Some debate, initiated by Scott Lloyd, was heard against the portion of the Code change reducing the number of readings required to approve action items from two to one. Lloyd wondered if the reduced public meeting exposure might not give citizens enough time to become aware and submit comments to council on matters of import to them.
However, a majority countered that work session discussion and the advertisement to authorize public hearings and votes on such matters should suffice to keep the public abreast of the planned actions of the town’s elected officials. Lloyd’s amended motion to remove the one-reading portion of the proposal failed by a 4-2 vote, with only Joseph McFadden joining Lloyd in support of maintaining the two-reading code requirement. Letasha Thompson’s original motion to approve the code change as presented, seconded by Gary Gillespie, then passed 5-1, with only McFadden dissenting.
According to the staff summary, the single monthly meetings will occur on the fourth Monday of the month, except for December, when it will be on the second Monday to accommodate holiday schedules. The lone work session will occur on the second Monday of the month. The meetings will continue to be at the Warren County Government Center and the work sessions on the second-floor meeting room of Town Hall.
Unanimously approved by voice votes were an amended agreement with Warren County to extend the COVID-19 Municipal Utility Relief Program to December 31, 2021; and a Memorandum of Agreement (MOA) allowing a Budget Amendment in the amount of $104,000 to be received from Warren County for the procurement of Wayfaring signs for county-directed “wayfaring” destinations.
A five-item Consent Agenda was approved without discussion on a motion by Vice-Mayor Lori Cockrell, seconded by Letasha Thompson. Prominent on the Consent Agenda was adoption of a resolution of support of code text amendments proposed to ease the permitting process and council issuance of Special Use Permits (SUP’s) for larger multi-family, apartment unit structures in the Commercial-2 Downtown Business District. Is a large apartment project proposal for the East Main Street old Murphy building site, or somewhere else along East Main, on the horizon? Stay tuned.
Also approved on the Consent Agenda were budget amendments to allow:
- a bid on a new refuse truck at a price of $181,204;
- receipt of a $2,500 grant from the Virginia Department of Wildlife for the bear-proofing of Town trash containers;
- a bid of $2,500 on multiple types of concrete from Rockingham Redi-Mix; and
- authorization to receive $2,000 from the Norfolk Southern Foundation’s Local Discretion Grant Program “to be used for community goodwill, diversity and safety awareness”.
The Town of Front Royal is looking for a few good men or women to fill the new Town EDA Board of Directors
The Front Royal EDA is a 7-member Board of Directors appointed by the Town Council. Members shall fulfill all the purposes and intents of the General Assembly of Virginia, as expressed in Title 15.2, Chapter 49, Code of Virginia, and as set out in Chapter 16 of the Municipal Code of the Town of Front Royal.
The general purpose of the Front Royal EDA shall be fostering and stimulating the development and redevelopment of Downtown, Town’s capital improvement projects, industry, commerce, higher education, and all other purposes set forth in the Industrial Development and Revenue Bond Act, Virginia Code § 15.2- 4900, et seq. in particular in the Town of Front Royal and in general in the Front Royal-Warren County community, for the general good of the people of the Town of Front Royal and, wherever possible, the people of the County of Warren, and for the citizens of the Commonwealth of Virginia. Each Town Council shall appoint seven (7) members to the Board of Directors.
Appointments shall be appointed initially for terms of one (1), two (2), three (3), and four (4) years; two (2) being appointed for one-year terms; two (2) being appointed for two-year terms; two (2) being appointed for three-year terms; and one (1) being appointed for a four (4)-year term. Subsequent appointments shall be for terms of four years, except appointments to fill vacancies, which shall be for the unexpired terms. Those applying shall be a resident of the Town of Front Royal.
Experience in economic development, real estate, banking, hotel/hospitality, planning, engineering, marketing, and government is desired by not required. Applications will not be accepted from an officer or employee of the Town of Front Royal or County of Warren.
Applications are available by clicking here. Application for Boards/Commissions and accepted until March 31, 2021, by 4:00 pm. Please send applications and/or resumes with a cover letter.