EDA in Focus
Some answers, more questions, (one hint) on EDA workforce housing
It seems like nothing comes easy regarding circumstances surrounding the Economic Development Authority’s workforce housing project. Discussion of the now controversial project was the first agenda item on a Tuesday, June 6, work session of the Warren County Board of Supervisors. That work session was scheduled following a Closed Session that would have been the last item on the board’s 9 a.m. morning meeting agenda.
Tough crowd, from left, ‘prosecutors’ Archie Fox and Tom Sayre, flanked by media savior Tony Carter. Photos/Roger Bianchini
Not so fast, sports fans. As the motion to adjourn to closed session was about to be read, Happy Creek Supervisor Tony Carter suggested putting the meeting into recess, so the work session could be held first (God bless you for this one, Tony). Carter explained that since the workforce housing project was also on the Closed Session agenda as a real estate matter, perhaps the work session discussion could shorten, or eliminate the need for much of the closed session discussion. And while it didn’t work – the closed session ended up going over two hours – it DID eliminate the need for the media to stick around through that two-hour closed session to get to the work session.
Because that work session was explosive in some of the information revealed:
- The EDA is NOT legally obligated to return or purchase the workforce housing property gifted to it on June 6, 2016, but feels it is “morally” obligated to now that the former owners (Mr. and Mrs. Walter L. Campbell) are not eligible for the federal tax credit they were going to receive in return for their gift of the 3-1/2 acres parcel earmarked for community economic development (based on the value placed on the gifted deed of transfer, that tax credit is estimated at about $150,000);
- The confidential agreement and its March 1, 2017 start of construction deadline related to the Campbells’ tax credit, which the EDA is not a party to, predates the EDA’s September 2014 decision to move forward on the workforce housing project;
- Legal counsel for the EDA over the 2-1/2-year life of the project may not have been aware of the confidential agreement and its cost-impacting start-up deadline;
- EDA Vice Chairman Greg Drescher, sent with Executive Director Jennifer McDonald to face the county grilling, had an earlier conversation with Shenandoah District Supervisor (and attorney) Tom Sayre in which he told Sayre he had no recollection of discussion of the March 1, 2017 deadline.
Following Drescher and McDonald’s work session assertion that the March 2017 deadline had been revealed to the EDA board in September 2014, when the EDA first decided to move forward on the workforce housing project, Sayre put on his attorney’s hat to grill Drescher on that assertion.
Grilled on the ‘stand’ were EDA ‘witnesses’ Greg Drescher and Jennifer McDonald, who were asked to do a lot of ’splaining.
Noting their earlier discussion, Sayre said to Drescher, “You said that Jennifer mentioned something about way back in 2014 but you didn’t have any recollection of that; that the minutes were checked and there was nothing in the minutes … and you said that you did not recall anything but you had no reason to doubt that Jennifer told you but you didn’t recall anything. That’s still accurate today, isn’t it, that you didn’t recall a March 1, 2017 deadline ever being discussed?”
“I’m sure it was,” Drescher responded.
“But you don’t recall it?” Sayre pressed.
“I’m sure it was,” Drescher repeated.
Despite the look and ambiance, it was not grand jury day at the Warren County Courthouse.
Later asked when other EDA board members became aware of the confidential agreement and its deadline, Drescher responded, “You’ll have to ask them.”
Justice(s) is/are blind?
County Attorney Dan Whitten, who inherited that job, as well as the EDA attorney’s job when his predecessor Blair Mitchell retired in the spring of 2016, was not aware of the confidential agreement deadline – at least until he recently read about it in the media. Whitten also told the supervisors that he had attended EDA meetings with Mitchell as assistant county attorney prior to Mitchell’s retirement. Asked later if Mitchell had ever mentioned the deadline to him, Whitten said “No.”
Whitten was asked when Mitchell had become aware of the deadline. He responded that he thought about the same time he did, on April 30 after media reports on the April 28 EDA meeting and vote to proceed with a $445,000 purchase of the property due to a failure to meet that deadline, were out.
County Administrator and County Attorney listen to the workforce housing Q+A. Photo/Norma Jean Shaw
With the EDA currently without legal representation on the workforce housing project in the wake of Whitten’s withdrawal due to conflicts of interest after questions about the project were raised by supervisors, who are his primary clients, Tony Carter attempted to fill the void. Carter objected, noting that Whitten’s representation of the absent Mitchell’s knowledge would be “hearsay” and should be inadmissible, just like in court where at times it seemed like they were.
That led to a testy exchange between attorneys, I mean between Carter and Sayre over who was speaking for whom, ending Whitten’s cross examination.
Expensive gift
Undeterred, Sayre later asked why a $445,000 price had been put on the deed of gift. He said when the gifted deed was being recorded, Whitten whose name as EDA attorney is on the deed, asked “Where’s the check?” and “Patty (EDA board Chair Patty Wines) told him (the land) was free.”
“Why wasn’t a deed of gift used, I’m just curious,” Sayre asked.
His question was met with silence. Drescher and McDonald glanced toward the now recused Whitten, and McDonald said, “That’s a legal question.”
EDA board Vice-Chair Greg Drescher and Executive Director Jennifer McDonald didn’t always appear to be happy campers as some hard questions were asked about workforce housing added costs, consequences, conflicting statements and secret deadlines; but is there one more secret – light at the end of the tunnel?
“Is there going to be an answer to that or should we move on?” Fox asked. Met by more silence and a “no” headshake from McDonald, the questioning moved on.
Fox then asked if the property would generate tax revenue. McDonald replied that as a residential project, it would not be tax exempt like EDA-owned industrial projects.
Bombshell # $410,265
Questioned by Fox on the EDA’s expenditures thus far on the project, McDonald responded that “$420,000 is committed” to the project – actually $420,765 to be precise as listed in the EDA’s 383-page information packet on the project. There was a lengthy discussion of $82,000 set aside for DEQ permitting fees, that McDonald said was a minimum amount for that anticipated cost.
Sayre questioned the $800,000 estimate for site work. McDonald confirmed that was Pennoni’s estimate on the site work at the parcel. – “It looks kind of hilly,” Sayre observed.
After the EDA board voted 6-0 on April 28 to proceed with a purchase at the $445,000 value placed on the deed of transfer, Board Chair Wines and McDonald cited $500,000 already spent in developing the project as a major reason for the decision to purchase.
Contacted after the work session about “committed” money versus money actually spent that is not recoverable, McDonald told Royal Examiner that “all but $10,500 spent on a traffic study IS recoverable. Since even this cynical reporter estimated more than that actually spent based on information provided in the May 19 informational packet, I e-mailed her back for double verification – “All but $10,500 for a traffic study is recoverable, and that is on the record??”
“Absolutely,” McDonald replied.
Not exclusive tenants
Another blockbuster came from questioning by Fox. He asked if it was true that the EDA has no legal authority to limit workforce housing tenants to the targeted local workforce of entry-level teachers, law enforcement and fire and rescue personnel – Can others in the same income bracket qualify to live in the workforce housing apartments? Fox asked.
“True,” Drescher replied.
“We were aware of that,” McDonald added.
Not that targeted a clientele after all. Courtesy Photo
Despite earlier comments that the EDA was not enthusiastic about taking on ownership and management of an apartment complex but thought it was necessary to encourage young professional workforce retention, Drescher added that the EDA board thought offering such housing, even if some clients were simply in a similar income situation to the targeted clientele, was worth pursuing.
Private sector take over?
Asked by Carter if he thought the EDA could have done things differently to expedite the project so the necessary deadline would have been met, Drescher was hesitant.
“I think in the end, honestly, and I know I sound evasive, I do know I’m sounding evasive, but at the end of the day when we get this project done I think we’re going to be able to look back and see better that there were some things we should have done.”
Drescher and McDonald also revealed that the EDA still holds out hope that a private sector developer will take over the project. There was discussion of how that would impact grants available, the assumption of the purchase price and other variables. McDonald said no movement on that possibility was likely before the DEQ permitting response was received, which she said was “promised” by June 22.
County Board Chair Linda Glavis asked, in retrospect what the EDA would have done differently. Noting the project was “not done yet” Drescher said project assessments were difficult mid-stream.
“I don’t know if I have a real good answer at this point … I think maybe at the end of the day I would,” Drescher said.
Somebody else’s time and expense … eventually?
“Do you have a date for that?” Glavis asked, to some laughter.
“June 22,” McDonald injected, interrupting that laughter.
Hmm, the date DEQ has promised its permitting response; developer in the wings …
