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Front Royal
Saturday, December 16, 2017

EDA announces changes to ITFederal’s Royal Phoenix agreement

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Following a closed meeting on Friday, February 24, the Front Royal-Warren County Economic Development Authority announced extensions and alterations to its deed of trust contractual agreement with ITFederal for economic redevelopment at the Avtex/Royal Phoenix Business Park site.

Completion deadlines on Phase One, a two-building project where fill dirt is currently being moved just to the west of EDA headquarters in the old American Viscose Administration building will be pushed back a year.  The time extension seems perfectly logical since ITFederal has been delayed for almost exactly one year in its plans to break other than ceremonial ground to begin what was announced in June 2015 as a multi-phased, $40-million project that could bring as many as 600 jobs to the community.

Will as much fill dirt need to be deposited at the planned site of ITFederal’s Phase One development in the wake of the Feb. 24 EDA board vote authorizing extended deadlines and a reduced project scope? Photos/Roger Bianchini

Those delays were two phased, with state wastewater permitting and federal approval of removal of the 30-acre ITFederal parcel from a $2.06-million lien on property to facilitate a one-dollar sale price, overlapping.  Final approvals came in between September and December of last year.

The extension on Phase One will push back deadlines on the entire multi-phased, seven building site plan with ending dates now of September 2020, rather than 2019.

Perhaps more troubling than the easily-explained push back of deadlines to fit the reality of acquiring state and federal permission to proceed was another aspect of announced changes – a reduction in the SCOPE of Phase One of the ITFederal plan.  The initial Phase One investment had been projected at $5-million.

During a phone interview on February 28, McDonald said details on how the reduced “scope” would impact that investment, or the overall project investment, were not yet known.

Royal Examiner responds to Berdyck denial of Tran e-mail

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On January 20th and 21st respectively, this reporter’s Opinion piece “In Defense of Jennifer McDonald and the EPA” and follow-up story “Superfund ‘watchdog’ reached out to ITFed owner prior to attack blog” were published on the Royal Examiner news site.

Since those publications, blogger and self-proclaimed Superfund watchdog Matthew Berdyck has been posting increasingly shrill and accusatory online statements and videos, as well as sending a number of similarly-toned e-mails to the Royal Examiner, among others.

We have made an editorial decision to NOT engage Mr. Berdyck directly over his litany of false accusations made against us as a news organization or this reporter personally for, among other things, having a name he can’t spell or pronounce – (that one actually made me laugh out loud – “Roger Biawhateverhisnameisnoonecares,”).  However, we HAVE decided to respond to Mr. Berdyck’s assertion that he did not send the referenced e-mail of December 23, 2016 to ITFederal CEO Truc “Curt” Tran.

The top of Matthew Berdyck’s Facebook page on Jan. 24 – we’re not sure what the presence of ‘Twilight Zone’ creator Rod Serling, or the guy sitting at the desk in the back means.

Among the places Berdyck has expressed that denial was in a January 22 “cease and decist” (sic) message to our news department threatening litigation if we did not retract the information in that story.

We at Royal Examiner stand by the legitimacy of that e-mail and the quotes attributed to Berdyck in our story “Superfund ‘watchdog’ reached out to ITFed owner prior to attack blog”.

While our initial copy of the Berdyck-Tran e-mail was received from a third party, EDA Executive Director McDonald, the “From” source of the e-mail to Tran – <mberdyck@gmail.com> – is the same e-address from which Berdyck’s first several hostile messages to Royal Examiner were delivered January 20, the day BEFORE publication of the story about the content of that e-mail.  Following our request for further verification, Tran communicated through McDonald that the Berdyck e-mail dated December 23, 2016, “was sent directly to him, but that he did not respond.”

However, following receipt of Berdyck’s January 22 claim that, “At no time I have I (grammar in context) communicated with ITFedral (sic), Curt Tran, or any of his employees or agents …” claiming defamation, we again sought direct, first-party verification from Tran himself.  So, we sent that request to the same e-mail address Berdyck’s December 23 e-mail to Tran was delivered to.  The following morning we received two e-mails from Tran.  The first had the succinct reply – “Yes.  I will forward you the original email as well.”

That forwarded Berdyck e-mail to Tran dated December 23, 2016, was identical to the first copy we received from McDonald, with the same three-word exclamation “Soli Deo Gloria!”

Tran’s Latin exclamation initially attached to his January 18 forward to McDonald was apparently a reaction to the appearance that day of Berdyck’s “SuperfundResearch.org” blog widely circulated online here under the title “EDA Executive Director Caught In Web Of Lies Over Avtex Redevelopment”.  It was our January 20 response to this blog in our OPINION and BREAKING NEWS sections that changed Berdyck’s initial assessment of our coverage of ITFederal and Avtex redevelopment from “brave, and brilliant” to “fake news” three days later.

About those ‘Comments’

In a side note to our readers, we have received numerous COMMENTS to those two pieces concerning Berdyck’s allegations about McDonald, ITFederal, the EPA and Avtex Superfund site.  We appreciate the support, background information and related links regarding Mr. Berdyck’s past; and we apologize for having posted only about a quarter of those COMMENTS due to time constraints related to editing requirements and verification of some information related to Berdyck’s personal, as well as cyber history of similar behavior in various locations around the nation that have been included in many of them.

In a related matter, we have noticed that in one of Mr. Berdyck’s e-mails dated January 23 sent to numerous local officials, he makes a rather startling announcement – “I’ll be issuing a national press release to announce my run for Mayor in 2018.” – And in an earlier e-mail to McDonald dated January 19, he states, “I’m warning you though, if this course of action you are taking continues, by the time this is over, it will be me that is running this town.”

However we wonder, if Berdyck lives in Linden as he publicly claims, is he planning a move into town before the BIG announcement?  We are sure a worldly fellow such as he is aware that one must live within the boundaries of a municipality they plan on running for elected office in.

And lest he also deny writing these posts about taking over Front Royal politically, they both came from the same <mberdyck@gmail.com> e-address as the above-referenced e-mails to Tran and Royal Examiner.

Superfund ‘watchdog’ reached out to ITFed owner prior to attack blog

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Less than a month prior to his circulation of an aggressively personal blog attack on EDA Executive Director Jennifer McDonald, accompanied by corresponding swipes at the ITFederal project at Royal Phoenix and EPA Superfund cleanup efforts, “SuperfundResearch.org” principal Matthew Berdyck reached out to ITFederal CEO Truc “Curt” Tran by e-mail.

And for anyone aware of the content of Berdyck’s January 18 blog post, what is contained in that December e-mail may come as a surprise. – For if Berdyck was questioning McDonald’s integrity, Tran’s ITFederal plan, and the effectiveness of the EPA cleanup at Avtex, on December 23 he was singing a different tune.

Photos/Roger Bianchini

“I have been paying attention to this IT Federal deal, for quite some time, because as a Silicon Valley transplant, whose business partner works for Facebook, I know the value of what you are bringing to town, the socioeconomic benefits, the value that tech workers can hold to our local economy,” Berdyck’s e-mail to Tran begins.  “I for one, stand in total support of your efforts, and I really want you to move forward with this project … I feel very strongly about you bringing this data center to our town, and I hope you can ignore the haters, and make this happen … At the same time, I have fully investigated the site, and found it to be one of the only Superfund sites I have come across, in a long time, that was actually cleaned up correctly.”

That latter sentiment regarding the Avtex site is a far cry from what he publicly posted three-and-a-half weeks later:  “Citizens of Front Royal can only rely on the statements of The US EPA, and Ms. McDonald, as to whether the site is safe or not.  Considering that the US EPA has endured repeated waves of controversy over the mishandling of the clean up of the 1,337 Superfund toxic waste sites in The US, to the point that Erin Brockovich calls it the ‘Superfail Project,’ it’s hard to trust anything the EPA says, especially from our point of view, since we’ve been investigating corruption in the Superfund Project for many years.”

As for his “total support” of Tran’s ITFederal plan for the Avtex site expressed on December 23, twenty-six days later that support was reduced to total skepticism — “It seems Tran is not building the ITFederal site to service existing contracts, but is building his “top secret nuclear data center” to foster the creation of new contacts, using an ‘If I build it they will come’ mindset, which is more akin to gambling with Front Royal’s tax dollars than fostering a solid, reliable economic opportunity for Warren County residents,” Berdyck’s blog posted on January 18.

But if Berdyck was playing nice with Tran, and indirectly the EPA, in December, it was a different story for his newfound neighbors in Front Royal and Warren County. – But then I guess when you’re a well-connected, retired Silicon Valley hotshot with former partners deep in Facebook corporate, us Helltown rubes can seem pretty simple.

“Many of these people in Front Royal, they aren’t so smart, they don’t know what is good for them, and they don’t have the education to know any better.  You have to forgive these people because they really know not what they do,” Berdyck wrote Tran of the public and media scrutiny he was facing in November and December.

Berdyck also describes earlier advocacy efforts to Tran – “In my career, I have fought all over the country, from coast to coast, exposing environmental atrocities, everywhere from small towns, to the largest cities in the county.  Everywhere I go I get criticized, attacked, defamed, abused, insulted, threated (sic), and retaliated against, by the very people I am trying to help.”

Toward the end of his December e-mail to Tran, Berdyck says, “If you want to hit some dinner and talk about any of this, feel free to reach out.  I’m a pretty well connected person, and if there is anyway (sic) I can help push this deal through, using my expertise and wisdom, let me know.”

Our information, albeit second hand, is that Tran did not bite at this offer.

Maybe such “well-connected” people from Silicon Valley just don’t take rejection well here in dumb, old, backwoods Virginny.

In Defense of Jennifer McDonald and the EPA

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I for one was somewhat taken aback when I saw an online blog identified as SuperfundResearch.org widely circulated in this area on January 18.  The blog titled “EDA Executive Director Caught In Web Of Lies Over Avtex Redevelopment” alleges intentional fabrication by EDA Executive Director Jennifer McDonald about ITFederal and calls for her “immediate resignation”.

But that is just the tip of iceberg.  The blog’s presumed author, SuperfundResearch.org founder Matthew Berdyck, adds attacks on the Environmental Protection Agency; Superfund remediation in general, ITFed CEO Tran’s plan for Royal Phoenix, not to mention a large swath of the population of Front Royal and several local media outlets.

And while we at Royal Examiner came out okay – Berdyck calls our coverage of ITFederal “nothing less than brave, and brilliant” – As lead Royal Examiner reporter on the ITFederal and Avtex site stories, I must take issue with the two main thrusts of what reads as a virulent, personal attack piece.  Those main thrusts are Berdyck’s assessment of EDA Executive Director Jennifer McDonald as a liar; and the Environmental Protection Agency as an accomplice, if an inept one, in an alleged failed attempt to cleanup and remediate the 467-acre Avtex site over the past quarter century.

Jennifer McDonald takes notes, under the watchful eye of Board Chair Patty Wines, at a recent EDA meeting. Photo/Roger Bianchini

Now everyone who reads Royal Examiner knows this reporter has expressed concerns about the ability of ITFederal to accomplish what has been promised in the way of jobs and economic investment in this community at the Avtex/Royal Phoenix Business Park site (check our 11-story ITFederal news folder to catch up or make your own assessment on the quality of our coverage).

However I, this news site and its Managing Editor Norma Jean Shaw, who has contributed mightily to our research of ITFederal, have never let those concerns translate into personal vendettas against anyone involved on any side of the ITFederal proposal.  In fact, we at Royal Examiner have bent over backwards to get the “other side of the story”.  And in the ongoing absence of responses from our US Congressman Bob Goodlatte, who is credited with bringing ITFederal to this community as “an economic development opportunity”; Tran’s ongoing silence; and the refusal of ITFederal Vice President Sean Parkhurst to answer questions about the project, that “other side” has for the most part come from EDA Executive Director McDonald.

And I have found McDonald to be forthcoming, if occasionally obtuse or miss-spoken on certain details – as in her public identification of an ITFed federal contract with the Nuclear Defense Department, which she later corrected to us as the “Defense Special Weapons Agency”, a subsidiary of the US Department of Defense, which Mr. Berdyck harps on in his blog post as one of Ms. McDonald’s major offenses.

Pressed publicly for other details such as the connection between Tran companies ITFederal LLC and VDN Systems, McDonald has, correctly I believe, identified them as “totally separate LLCs” without elaborating on any contractual or operational ties they may have.

And if her information on past contracts and web presences has been occasionally incomplete, it has prompted our own research that has led to the discovery of Tran company business ties and past legal and contractual histories upon which much of our ITFederal reporting has been based.  If McDonald is occasionally obtuse on details, we choose to believe that is because Mr. Tran himself may be somewhat obtuse in explaining those details to her.  Tran for his part remains aloof from the debate, either forwarding our inquiries to his ITFed Vice-President Parkhurst or letting McDonald field the tough questions publicly.

As for Berdyck’s tirade against the EPA and its Superfund program, it almost seemed as if he was a right-wing, anti-government proponent hoping to contribute to the dismantling of the EPA and any federal oversight of industrial abuses of the environment in communities nationwide, while portraying himself as an environmentalist

Yes, there have been problems at Superfund sites around the nation – the level of contamination and the difficulties they present in cleanup and/or remediation are WHY they are Superfund sites in the first place.  As one EPA employee told us about the blog’s attack on the agency and its Superfund program, “with all his whining about the job we do, let me ask him, since he doesn’t trust the government to clean up the mess, what corporation would he like to enlist to do the job?  I’m sure that they’ll all be glad to come in and clean up the mess they made just so they could make a big profit … Willfully ignorant people shouldn’t have a platform to spread such blatant stupidity.”

Jennifer McDonald, red pull over, heads back to EDA office after recent discussion with manager of fill-dirt placement work at the ITFederal Phase One site. It’s been a long and arduous haul to bring light to the end of the tunnel of economic redevelopment at the Avtex Superfund site. Photo/Roger Bianchini

And that is a main criticism of many blogs and bloggers – the TOTAL lack of editorial oversight and accountability to assure posted conclusions are based on factual assessments grounded in adequate and documented research.

Sure, some of Berdyck’s information may be based in truth. His contractual assertions about ITFederal raise questions that may bear further exploration.  And the notion that the planned ITFederal computerized-virtual world “cloud” operation tied to its federal defense department contracts, real or anticipated, could make Front Royal an ISIS target is, indeed, an interesting and troublesome thought.

HOWEVER, what I would call Berdyck’s blog hit job on McDonald, the EPA and Superfund remediation in general seems totally OFF BASE, personally vindictive and counterproductive to any rational discussion of any of these topics.

Goodlatte throws Congressional opening into disarray – his first order of business – junk independent ethics oversight on Capitol Hill

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Our own representative on Capitol Hill, House Judiciary Committee Chairman Bob Goodlatte (R-VA 6th), brought shame to himself, his state, district, and his Party on the ceremonial opening day of Congress, January 3.

Bob Goodlatte, R-6th, has had an inauspicious start at the 115th Congress – drawing the ire of anti-corruption advocates, the public, AND President-Elect Donald Trump.

On a day that the elected representatives on both sides of the aisle celebrated the opening of the 115th Congress, Goodlatte and a tribe of rank-and-file Republican lawmakers, many of whom were under investigation for possible violations of congressional ethics laws, were preparing to make their first order of business the dismantling of the independent oversight Office of Congressional Ethics.  The OCE was created in 2008 to put an end to excessive gift-giving and receiving between lobbyists and House members, most prominently illustrated by the Jack Abramoff scandal.  In the intervening eight years it has been criticized by both Republican and Democratic legislators, indicating that “hands in the cookie jar” may be an across-the-aisle Congressional issue.

Goodlatte’s secretive move – Republican leadership had assured Congressional watchdogs the OCE’s charter would be renewed this session – was made Monday.  But by Tuesday amidst a growing public backlash it was dealt a death blow by none other than President-elect Donald Trump.  Trump Tweeted his displeasure with Goodlatte and his associates, suggesting they should focus on “other more important things” than what was perceived as a transparent attempt to remove objective scrutiny of their behavior.  The House Republican Caucus immediately backpedaled in the face of Trump’s objection and the growing public outcry.

“We were elected on a promise to ‘drain the swamp’, and starting the session by relaxing ethics rules is a very bad start,” GOP Representative Tom McClintock of California was quoted as saying of the Goodlatte-sponsored move against the OCE.

The GOP’s new era in Washington has gotten off to a rocky start; and our doughty Sixth District Representative in Congress will have to wait for a more propitious moment to do his mischief.

Goodlatte recently drew some local criticism by failing to reply to a request to officially endorse ITFederal, the company he was credited with bringing to Front Royal as an “economic development opportunity”.  The request was made by EDA Executive Director Jennifer McDonald after Councilwoman Bébhinn Egger raised questions about ITFederal’s business model and financing.

(Malcolm Barr Sr. was press secretary in the office of U.S. Sen. Hiram L. Fong (R-Hawaii). Now retired, he is a former Associated Press correspondent in the mid-Pacific and Washington, D.C.).

EDA Executive Director addresses questions on ITFederal process as site work begins at Royal Phoenix

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We asked Front Royal-Warren County Economic Development Director Jennifer McDonald about Councilwoman Bébhinn Egger’s original line of questioning about ITFederal at the October 24, 2016 Council meeting; and the subsequent public portrayal of company CEO “Curt” Tran’s reaction to Egger’s line of questioning.  Egger alleged a “Perfect Storm of Silence” surrounding ITFederal as delays in final approval of the negotiated deal with the EDA drug on for over a year.  She also raised questions about the reliability of companies funded through the EB-5 visa program.  Then you had Councilman Bret Hrbek voice not only concerns Tran was re-considering his investment at Royal Phoenix, but suspicions of intentional delays orchestrated by the Office of Democratic Governor Terry McAuliffe in State DEQ permitting.

QUESTION: So Jennifer, what is going on with ITFederal and the process to bring, and keep it here?!!?

Jennifer McDonald: The EDA applied for the DEQ permit November 25th 2014, we received the permit November 16th, 2015.  Nothing Mr. Tran did caused this delay; this was simply a year-long process to get a stormwater permit from DEQ. (writer’s note: ITFederal did not enter the Royal Phoenix equation until June 2015, and a contract with the EDA for the 30-acre Lot 6 parcel was not agreed upon until September 2015.  So DEQ permitting came within two months of the deal being announced, and exactly three weeks after ITFederal’s ceremonial groundbreaking.)

Blair Mitchell, Counsel for the EDA at the time, sent a letter to EPA requesting the partial satisfaction. That letter was sent September 15th, 2015. The EDA received the signed letter back from EPA September 23rd, 2016. Not a single thing that Mr. Tran did to cause this delay in receiving this letter.

Is there light at the end of the remediation tunnel at the former Avtex Superfund site? EDA Executive Director Jennifer McDonald, red pull-over, leaves discussion with site work supervisor Stevie Lockhart on Wednesday, Dec. 28. Photo/Roger Bianchini

During the time period that Mr. Tran was putting his site plan together he had met with Town staff several times to discuss the layout and design of West Main Street extended because his development was based upon the design and features of that road and if VDOT was going to participate in the funding of the road. If VDOT would not fund their portion ITFederal would have to put their entrance off Kendrick Lane rather than West Main Street extended. – Again, nothing that Mr. Tran could control.

QUESTION: We asked McDonald about her effort to get a response to Councilwoman Egger’s request that Sixth District Congressman Bob Goodlatte, whom McDonald has credited with bringing the company to the EDA as an “Economic Development Opportunity”, for an official endorsement of ITFederal’s business model.

J McD: I did send Mr. Goodlatte’s office a request for a letter supporting the legitimacy of ITFederal on November 15th after Ms. Egger’s request.  I did not hear anything back from the office and sent another email asking if they had seen my request and received an email that staff had been in D.C. at a meeting.  He replied that he would get back to me with the Congressman’s answer.  We have not received a reply.

Q – Are there precedents for the type of up-front economic incentive done for ITFederal, in this case a one-dollar sale on a parcel valued at $2-million?  Also, were there difficulties in marketing a Superfund site that played into the decision to give away the first commercial lot?

On Dec. 9 at the EDA’s final meeting of 2016, Executive Director Jennifer McDonald, gray sweater, summarized positive movement on the ITFederal project at the Royal Phoenix Business Park … Photo/Roger Bianchini

J McD: There absolutely is a precedent for this type of economic development incentive.  Back in the early 90’s when the County was trying to jumpstart the economic growth they offered free land to Toray for jobs investment and tax investment.  Toray has been in the community since 1995, so it seems that this type of incentive works and turns out to be a great investment for the community.  Also, PenTab was offered land at a very reduced rate to attract their company.  Now the community has a taxable piece of property and a building that remains occupied.  This is economic development 101 and happens across the Country during hard economic times or with difficult sites to develop.

It is not as easy as everyone thinks marketing a Superfund site to potential users.  The word Superfund alone scares investors away.  We were lucky that Mr. Tran was willing to be the first to take a chance on development.  Once others see there is no danger in putting a business on a completely re-mediated site, then it will be much easier to recruit and develop.

… Three weeks later there was visible evidence of that movement behind the EDA’s Kendrick Lane headquarters on site. Courtesy Photo/EDA

It was the belief of the EDA, EPA, and FMC that taking a loss on the sale of the first 30 acres of the site in order to start the redevelopment efforts was worth the risk. These three agencies are the ones taking the loss upfront, not the Town of Front Royal and we were willing to do so to generate the investment and would most likely make that decision again if we had to.

Q – Also, can you explain a little about jobs ITFederal will create versus other businesses he may market to – you/EDA talked about a “Campus” on the Lot 6 parcel, I think there is confusion about how much space he and his business interests will occupy versus other business he will market to as clients, retail or whatever they may be.

J McD: The complex will include approximately 37,000 square feet of office spaces for ITF, a 10,000 square foot cloud data center facility and approximately 20,000 s.f. of space that ITF will rent out to retail and commercial customers (10,000 s.f. on first floor of phase 1A and 10,000 s.f. on phase 2B)

These two graphics shows the complete ITFederal site plan. The first, closer perspective shows ITFed building in orange, with parking in gray. Kendrick Lane runs across the top of the graphic – the EDA office complex is the long, lighter colored building to right. The longer shot, below, gives more perspective with most of the Royal Phoenix Business Park shown. The ITFed complex at left, with Kendrick Lane running from bottom left toward top center. The lighter-colored building complex at center of second graphic is projected future development.

As for job creation you can see from the table below what the anticipated ITF jobs will be salary wise and a total of jobs for the entire ITF operation based on year.  Year 1 was based on a start date of Fall 2015, so the numbers are a little lower because of the time of year. All of these jobs are strictly ITF jobs and not related to the retail component.

Table: Personnel

Personnel Plan
Year 1 Year 2 Year 3 Year 4 Year 5
Executive Staff $180,000 $298,000 $317,800 $400,000 $500,000
Executive Assistance $45,000 $74,000 $64,800 $77,760 $93,312
Operation $90,000 $94,500 $99,225 $104,186 $109,396
SG&A Staff $180,000 $848,062 $1,122,093 $1,346,499 $1,750,449
Overhead Staff $330,000 $941,180 $1,246,770 $1,496,110 $2,468,550
NRC Contract Staff $2,249,724 $5,155,900 $6,233,850 $7,480,550 $8,228,500
Other Contracts Staff $889,000 $1,778,000 $2,667,000 $4,000,500 $6,000,750
NRC Subcontractors Staff $642,779 $1,187,400 $1,781,100 $2,137,300 $2,351,000
Other Subcontractors Staff $254,000 $508,000 $762,000 $1,143,000 $1,714,500
Other Government Staff $0 $225,000 $337,500 $675,000 $1,012,500
Commercial Business Staff $67,500 $525,000 $1,050,000 $2,100,000 $4,200,000
Office Assistance $41,392 $49,136 $49,163 $49,259 $49,385
Total People 168 366 465 525 616

 

Below is a chart that depicts first year jobs including direct and indirect jobs.  This is the chart that shows construction jobs and retail jobs that are not included in ITF job count that was given to the EDA for consideration.

 

Activity

Direct Empl Indirect Empl Induced Empl Total Empl
New Construction [79.5] 28.3 44.6 72.9
IT Operation 203.4 61.4 160.8 425.6
Facility Engineering, Maintenance 51.4 5.5 12.0 68.9
Computer/Com. Design, Maintenance 12.8 8.9 11.8 33.5
Cloud Services 91.7 29.0 56.3 177.0
Commercial/Retail Lease 27.3 3.6 6.0 36.9
                     Total

lllll

386.6 136.7 291.5 814.8

 

So we based our job count on the 705 jobs for IT operation, Facility engineering, computer/communications design and cloud services.

As the EDA views this, any developer that is interested in developing this parcel to be for their own use or to lease out for commercial use it is still a win for the Town of Front Royal because of the tax investment in real estate and personal property.  Back in 2006 the EDA considered selling the entire parcel to Lerner for development because of the tax investment involved.  At that time everyone thought that was a great idea, but unfortunately Lerner became nervous because it was a Superfund site.

Q – How big was the Commonwealth Transportation Board Main Street extension okay you mentioned at the December EDA Board meeting – how much will the state contribute?  Could you also explain the $150,000 Tran offered the Town to that road project in lieu of the bridge loan interest in months two and three?

J McD: The Town applied for a matching grant for the first phase of West Main Street extended. I believe they applied for a $650,000 grant, ($500,000 unmatched, $150,000 matched). Mr. Tran agreed that in lieu of interest for months 2 & 3 of the bridge loan that has been paid in full, he would donate $150,000 towards the road construction.  The Town agreed to that arrangement.

Looking southeast near the Kendrick Lane entrance to the site is the existing interior road that outlines the path of West Main Street extended. Now approved for State Industrial Access Funding, the West Main Extension is envisioned as the primary access road to the ITFederal complex. Photo/Roger Bianchini

Q – Can you comment on Hrbek’s politicizing the delays & suggesting maybe the Democratic Governor’s Office purposefully used DEQ to delay construction because “he was mad Goodlatte got credit for bringing them here” even though as Hrbek phrased it, he (the governor) offered more in the way of economic incentives.

J McD: DEQ is a State organization that has control over the stormwater, so I’m not sure McAuliffe had anything to do with that delay.

Q – And finally, Mr. Tran’s readiness to proceed from last year as originally hoped; his willingness to take on 30 acres at a former Superfund site, and other things he may be involved in, at Millennium Lotus or wherever – tell us exactly what someone willing to invest in THIS community, even relocate here, can mean economically – and the impact of the negativity or questions that have arisen during the year-plus of delays he did not create?

J McD: The EDA’s goal when recruiting a large industry or company tries to also recruit the President or head of the company to locate their family to the community.
That way they become involved in the community and have a vested interest. We now have one of the best school systems we’ve had in years and our healthcare system continues to improve, so marketing the community to not only the company, but to the owner of the company seems pretty easy from our point of view.  This time it worked, Mr. Tran loves this Town and wanted to be a part of it not only as a businessman, but as a resident.  So we considered that a success, not a scam.

Q – Would Mr. Tran really consider taking his $40-million ball and going home — or to Shenandoah County, as Mr. Hrbek suggested was the case on Nov. 14?

J McD: As I mentioned to you, Mr. Tran is not mad that anyone questioned the validity of a company moving to the area, but he is very angry that someone made a personal attack on him and called him a money launderer and scam artist.  The personal attack was unnecessary and frankly viewed by some as illegal.  I don’t know if you remember when former Council members had lawsuits filed against them for similar comments.

Again, I remind everyone that the Town of Front Royal has not invested a single dollar in this company.  They have not offered ITFederal any incentives, they have not been asked to offer any incentives; they have, however, been offered $150,000 towards the construction of their road and have been offered an investment on a Superfund site owned by the EDA that will generate tax revenue for the Town of Front Royal.  Not sure where the downside is for the Town of Front Royal or its citizens.  If it’s a risk that we get 400-600 jobs and $40 million worth of investment, it’s a risk the EDA Board of Directors was willing to take.

Workforce Housing Project

Q – While we had the EDA Executive Director’s ear, we decided to ask about the EDA Board decision to enter the apartment-management business related to the Workforce Housing Project.  Some have questioned whether it is appropriate for the EDA to be involved in apartment management, even if it relates to the young, local professional workforce it is designed to serve – and keep in this community.

J McD: The EDA has worked diligently on the workforce housing project for 10 years trying to get developers to step up to the plate to do the development of non-subsidized, quality apartments for our workforce.  Not a single developer stepped up to make it happen, so the EDA decided we would work on this on our own accord.  Once we made the announcement a few developers stepped up and wanted to participate, but at that time we had already made a commitment to the grant that we would own the property and it was put in our Special Use Permit by the Town.

A comment was made at a recent Council meeting that they had never heard of an EDA getting involved in this type of activity and that is true, but at the same time we were the first EDA to offer small business loans to start-up or existing businesses and that program has been very successful in providing over $1.7million dollars to local businesses, 85% of which were Main Street businesses. We are one of very few EDA’s that gets involved with road and utility infrastructure projects like the Leach Run Parkway, Baugh Drive Extension, West Main Street extended, and corridor utility extension. So, yes we are thinking outside of the box and the Board of Directors felt very confident that it is the right thing to do for the workforce of this community.

Site work begins at ITFederal’s Royal Phoenix property

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In this final week of 2016 dirt is being moved to the site of the first ITFederal building at the Royal Phoenix site adjacent to EDA headquarters on Kendrick Lane. Photos/Roger Bianchini
Site prep work marking planned spring construction on the first commercial structure at the former Avtex Superfund site after a quarter century and millions of dollars of federal and mandated private-sector money is indeed a landmark.

The fill dirt being moved in will replace dirt moved from the site to the Conservancy Park side of the Superfund site that left the ITFed site 10-feet below the street level of Kendrick Lane.

The dirt being moved to site will raise the ITFederal construction site to the street level of Kendrick Lane.

EDA ends year on positive note; and says goodbye to Sealock

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The Front Royal-Warren County Economic Development Authority ended 2016 on an upbeat after a year of frustration revolving around delays to Avtex site re-development.

At the EDA’s final meeting of 2016, Executive Director Jennifer McDonald told her Board, First, that the State Commonwealth Transportation Board had approved the Town of Front Royal’s application for Industrial Access funding for the West Main Street extension that could be worth as much as $500,000 in unmatched state funding for one of the primary access roads to the Royal Phoenix Business Park;

And Secondly, that a new Environmental Protection Agency Superfund Project Manager had given the okay for walking trails through the Conservancy Park section of the property.

Jennifer McDonald, gray sweater, cheers her board up with some positive news to close the year – at the top of the list is positive movement at Royal Phoenix; an expected road-ready Leach’s Run Parkway by April; and Town permitting approval of the EDA’s Workforce Housing Project. Photos/Roger Bianchini

During earlier monthly reports McDonald had already informed both the Front Royal Town Council and Warren County Board of Supervisors that final authorization of the first property sale to a commercial client, Information Technologies Solutions contractor ITFederal, had been authorized by the Department of Justice on September 23, 2016.

That authorization, which according to EPA officials required approval by all involved Avtex Superfund stakeholders, including the EPA/DoJ, the Town of Front Royal, Warren County, the EDA, and former owner and mandated cleanup partner FMC Corporation, was required to remove the ITFed parcel from a $2,060,000 lien on the property.  That lien is designed to provide some compensation to the feds and FMC for the millions of dollars in cleanup and remediation costs spent by both over a quarter century of work at the site.  The feds alone spent over $24-million there.

As first reported at Royal Examiner, the EDA request to remove the 30-acre ITFederal parcel from the lien to facilitate a one-dollar sale price was sent by then-EDA and Warren County attorney Blair Mitchell to the EPA on September 18, 2015.  Unfortunately for time considerations, long-time EPA Superfund Project Manager Kate Lose retired, leaving a vacuum of EPA leadership concerning the Avtex Superfund site just as the EDA request was made.  But with Fed sale approval and State road funding authorization now in place, along with a new Superfund Project Manager, things appear to be taking a positive turn.

Even State DEQ approval of a stormwater management plan vilified by outgoing Town Councilman Bret Hrbek as a primary delaying factor on November 28, was received over a year BEFORE Hrbek made his recent allegations of possible partisan hanky panky by the Democratic Governor’s Office.  According to a document provided to us by McDonald, DEQ verified the necessary permitting was in place under guidelines established in July 2014, on November 16, 2015.  The EDA-ITFederal sale negotiation wasn’t completed until September 2015.

McDonald has predicted ITFederal will start breaking ground this spring on the first of as many as eight buildings shown in their site plan.  Exactly what kind of businesses may occupy the bulk of space in those buildings remains a matter of unresolved contention on the Town Council.  BUT I guess the majority thought process is as they said in the baseball fable “Field of Dreams” – “Build it and they will come” … whoever “THEY” may be.

Other business

Despite low temperatures delaying the laying of the Leach’s Run Parkway road surface, McDonald said contractors remained confident the key north-south connector road on the Town’s east side would be ready for traffic by April.  The project deadline is June 24, 2017.

She also reported positive movement on the EDA’s Workforce Housing Project designed to provide 36 rental units in three buildings off an extension of Royal Lane on Front Royal’s south side.  The Front Royal Town Council gave final approval to a Special Exception Request for the extension of a dead-end cul d’sac road enabling the project on November 14.  Only Bébhinn Egger opposed the permitting, citing authorization of the construction project without attaching what her colleagues agreed were necessary road improvements to dead-end Royal Lane.  Royal Lane will require an extension to reach the currently landlocked property donated to the EDA in return for tax credits to the former owners.  Royal Lane already funnels traffic from nine single-family homes, 99 apartments and two commercial buildings onto John Marshall Highway.

EDA Board member Greg Drescher, who is also Superintendent of Warren County Public Schools, noted that 65 percent of new teachers hired by the system did not live in the county.  The primary rationale for EDA development and management of an apartment complex is the need for affordable housing for young professionals, most commonly cited as teachers and law enforcement officers.

McDonald also reported that the Railroad Workers Brotherhood located off Shenandoah Shores Road near the Happy Creek Commercial Park was seeking an exemption from parking requirements attached to a planned expansion of that facility.  She noted the RR Brotherhood would have to buy additional land for the expansion if they did not receive the permitting exemption from the Town.  McDonald said the building now houses office space essentially for one person.

EDA Board Chair Patty Wines presents Bill Sealock with a plaque of appreciation for his 5 years of service on the EDA Board of Directors. Sealock resigned the EDA Board to take the Front Royal Town Council seat he won in November. Photo/Roger Bianchini

The EDA Board and staff also bid farewell to Bill Sealock.  Sealock is resigning to take the seat on the Front Royal Town Council he won in the November Election.  Sealock was presented with a plaque and acknowledgement of his five years on the EDA Board. – “I’ll miss you all, we’ve had a good run,” he told his colleagues.  He added that as a Town Councilman he would not contribute to “silly fights with the County – it ought to be cooperative for both,” he said of the attitude he will take to Town Hall.

If Public Discussion of ITFederal is Counterproductive – Who is to Blame?

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Readers contribute to the ITFederal discussion

– Our Editorial Board decided to post this portion of an exchange in the “Comments” section to our Story “Council bids Farewells – continues sparring over ITFederal” in our “Opinion” section because of the breadth of issues addressed in this portion of a discussion with local citizen and businessman George McIntyre.  If this portion of what “Comments” participant Michael Graham termed an “informative and spirited discussion” piques your interest, we suggest you visit the story and read the full exchange of “Comments” following it – and if so moved, add your own thoughts to the conversation. – Roger Bianchini

The Public Discussion of ITFederal is counterproductive

Reader’s Comment, George McIntyre

Roger, I feel like the Councilwoman is carrying her concerns too far down the public pike.

In the past process of courting a prospect, most of the information was done quietly and professionally.  Today’s media, of all kinds, carries the information out into the public before the courtship and its results culminate.  In other words, in the past, professional courtesy becomes more important than the sensationalism and public scrutiny that exists today.  Once the EDA has completed their mission on behalf of our community for a new business, the information can be told to the public. – This works, rather than upsets or insults a prospect and forfeit what they may offer our community.  I can say, without hesitation and experience, this works.

The marketing of SHELL BUILDINGS has worked for many years, in Warren County and throughout the country. This approach offers prospects an opportunity to finish an empty warehouse building and move their business in quickly.  Most of our industrial parks have done this with public, as well as private investments, even in the current year.  This is the perfect way to introduce new business into our community.  This is especially true about moving into a condemned property, like we have here.  This also keeps the cost down for our community.

The site plan submitted indicates ITFederal will build its first two buildings just west of the old Avtex Administration building, toward the Old Virginia Plant in the back-ground, where the EDA and several other businesses and the Northern Shenandoah Valley Regional Commission are now located. Photos/Roger Bianchini

Ask some of the current successful businesses that live, work, employ and play here how much of their private information and contracts were questioned?  Ask the Virginia State Department of Economic Development in Richmond; ask Bryan Schull, former EDA Director; and Stephen Heavener, a very successful EDA Director about this – worst case scenario: we become owners of buildings for the future; best case scenario: successful business, jobs, growth, taxes and a positive image of our community and more move their businesses here.

As we saw in the recent elections, all the sensationalism created by public involvement and done “on behalf of our community” is working against us, as far as separation.  Just like pretending the elimination of cameras at the Gazebo is going to save someone’s rights.  Working on BEHALF of our community and all the residents says NOT.

We want ITFederal here.  If we are upsetting him, then stop and move forward.  As the Branding Committee says, ONWARD!

Thanks for wanting to see Front Royal and Warren County continue to strive forward and remain “A GREAT PLACE TO LIVE”.

Who is to Blame for the Public Discussion of ITFederal?

Writer’s Reply, Roger Bianchini

George, as for the role of “today’s media” carrying information “out into the public before the courtship and its results culminate” – I don’t believe it is the media’s role to suppress available information of public interest to citizens that information impacts.  And I would hope you agree that it is, indeed, the business of elected officials to be informed of the dynamics of economic development being recruited by their own quasi-governmental agencies created to do so – in this case the Town-County Economic Development Authority.

But I also understand the need for privacy in early business negotiations to keep from undermining those deals during their early stages.  My expectation as a Town citizen is that the Town’s elected officials would be informed behind closed doors about those early-stage dynamics that will impact the future of the community they are elected to represent. – As you note, THAT is an important function of Closed Sessions.

Judging from the public discussion, in the case of the Town of Front Royal, the EDA, ITFederal and Royal Phoenix that has NOT happened – not even in the wake of Councilwoman Egger’s publicly voiced questions of October 24.  That vacuum of internally-circulated substantive information surrounds publicly-available information, much of it cited by Egger on October 24.  As we have previously reported, that information revolves around funding sources for the project such as the previously undisclosed EB-5 visa program under the auspices of the United States Citizenship and Immigration Services; ITFederal’s contract base and its financial ability to accomplish what has been publicly promised; ITFed CEO Tran’s purchase of other Town land for other business purposes unrelated to the Royal Phoenix plan; and how those peripheral purchases were financed and might impact the plan for 30-acre Lot 6 at Royal Phoenix.

After the first two structures, as many as six more buildings are planned for the 30 acres on ITFed’s Royal Phoenix Lot 6, spreading out behind the EDA headquarters off Kendrick Lane. Everyone hopes the plan leads to business and jobs relocating to a portion of the site that was once the largest private-sector employer in the Town of Front Royal – public questions now persist as to how that plan will be accomplished.

I contend these are legitimate inquiries for a member of Town Council. – Where the fault lies that those questions were not INITIALLY addressed in CLOSED SESSION with the EDA remains to be seen; however, I would suggest the fault lies with Council itself.

I say that because Council discussion since October 24 indicates an apparent 5-member majority does NOT believe it is their responsibility to stay informed in Closed Session or elsewhere about what the EDA is doing on the Town’s behalf.  That stance has been repeated both during and after work session and meeting discussions since Egger went public with her questions.

Should Ms. Egger have first requested a joint Closed Session of Council and the EDA to discuss her and her constituents’ concerns? – Probably.

But if she had, would a Council majority have agreed to such a meeting? – My guess is NOT.  I base that guess not only on the above-referenced Council comments, but also upon the fact NO such Closed Session appears to have occurred in the seven weeks since Egger first publicly confronted the EDA Executive Director about details of the ITFederal project.

After all, Councilman Tewalt has publicly stated he doesn’t believe Avtex redevelopment and EDA marketing of the property, or anything else the EDA now does on the Town’s behalf is any longer any of Council’s business.  And Councilman Hrbek has publicly stated he believes it IS the media’s job, not Council nor perhaps even the EDA’s, to vet a company Council and the EDA immediately loaned $10-million in September 2015; and officially endorsed in November 2015.  That latter act, approving Council’s first Resolution of Support of ITFederal, according to the EDA Executive Director, was made in order to achieve the bank loan of $10-million for the company, so that the Town’s $10-million “bridge” loan would not have to become more than a “bridge” to the bank loan, and be kept and used for the planned ITFederal construction project.

Has there been any other Council voice contesting Tewalt and Hrbek’s lack of interest in seeking details on the EDA’s recruitment of ITFederal to the Royal Phoenix site? – NONE that I have heard; and I’ve been listening pretty closely.

In such a vacuum, one might suggest a malfeasant vacuum, of public responsibility should we be surprised things took the public turn they did?

And once they did, George, what would you suggest is the role of media present when these questions were publicly posed?  Should we join Council’s five-member majority and put our heads in the sand and pretend we didn’t hear them or have no interest in the answers?

I would contend in the perhaps disappearing world of independent, investigative journalism that Thomas Jefferson and other Founding Fathers believed was a cornerstone – “the Fourth Estate” – of the American Republic, it IS media’s responsibility to seek answers to publicly-discussed questions; and use publicly-available information to seek not only those answers, but also pose new questions the answers to which impact the future of the communities they cover.

Perhaps the questions posed by Egger on October 24 would have best been first discussed in Closed Session with the EDA – they weren’t.

And if the resultant public discussion leads Mr. Tran to “take his promised $40-million investment and go home” – or perhaps elsewhere into the Northern Valley – I would suggest the blame most appropriately be placed on ALL those elected Town officials who do NOT believe it is their job, behind closed doors or elsewhere, to seek relevant information on business recruitment and the use of public funds to foster that recruitment.

After all, it’s only recruitment and financing of the business poised to shape development of a large swath of this Town and community’s employment future – what’s to know, right?

Council bids farewells – continues sparring over ITFederal

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Mayor Darr acknowledges departure of fellow lame-duck Bret Hrbek, who also did not seek re-election this year.

At its final meeting of 2016 (December 12), the Front Royal Town Council bid adieu to two retiring members, Mayor Tim Darr and Councilman Bret Hrbek, and continued its internal debate about exactly who it is that the EDA has contracted to become the bringer of economic re-development to the former Avtex Superfund site.

Between the fond farewells and philosophical impasse over the mystery company ITFederal, Council also concluded the year by:

  • unanimously voting to become an official sponsor of the five-year-old Memorial Day event that acknowledges, not only the human sacrifice of war service, but of canine service as well;
  • by a 4-2 margin, Hrbek and Meza dissenting, authorizing purchase of a new rear-loading garbage truck at a price of $175,935 to be paid over four years by an internal, interest-free loan from the Water Enterprise Fund;
  • unanimously authorized over $39-million in funding to be carried over into the FY-2017 Budget for multi-year projects. As pointed out by Gene Tewalt, over $25-million of that amount is attributed to State-mandated upgrades to the Town’s Wastewater Treatment Plant; and almost $9-million to construction of Leach’s Run Parkway;
  • authorized a deadline of December 28 for applications to fill the Council seat that will be vacated by Hollis Tharpe’s ascendance to Mayor. Council heard from one citizen, Tina Smith, who urged them to appoint the fourth place finisher in the November Election, Mike McCool, of National Media Services (and publisher of this online news site).

Annual Resolution

But all the “Reality Show” drama that has become the standard for American politics in 2016 was reserved for the fond farewells and not-so-fond majority-minority of one debate over the ability of ITFederal to achieve what it has promised in the way of investment ($40-million) and jobs (400 to 600) to this community.  That debate centered over Council’s second Resolution of Support of ITFederal LLC in two years.

The first was approved on November 23, 2015, at the request of First Bank & Trust before the bank would authorize a $10-million construction loan with which the Town’s “bridge loan” to ITFederal through the EDA was paid back around the turn of last year.

Boy Scout Troop 53 accompanies Mayor Tim Darr, who left the Council dais to join them, and Council in Pledging Allegiance to the American Republic.

This one was suggested to appease ITFederal CEO Truc “Curt” Tran after Hrbek conveyed the message that Tran was considering pulling out of that promised investment on 30 acres at the Avtex/Royal Phoenix site.  However, Tran might find it hard to walk away from what was essentially a $2-million gift of that 30 acres for development.  After several months of negotiations, the EDA agreed to sell the 30 acres valued at $67,000 per acre, to ITFederal for one dollar.

That gift, which EDA Executive Director Jennifer McDonald asserts there are local precedents for including Toray in the North Corridor, was made in an attempt to jump start commercial redevelopment at the Avtex site.  For about four decades the site housed the largest private-sector employer in Town, successively American Viscose, FMC Corporation and finally the Avtex synthetic fibers manufacturing plant.  However, the 467-acre site has been dormant economically over a quarter century of federally-overseen environmental cleanup and remediation.

At Council’s November 28 meeting, Hrbek said Tran had been offended by the nature or tone of questions posed about him and his company, most prominently at Council’s meeting of October 24.  As reported here in our Egger-and-Hrbek-inspired ”Perfect Storm of Silence” mini-series, in late October Egger questioned McDonald about:

  • Tran’s purchase of the 70-plus-acre Millennium Lotus property off Happy Creek Road and business plans for that property;
  • his involvement in the EB-5 Visa Immigrant Investor Program’s “America Commonwealth Regional Center, LLC located at Tyson’s Corner;
  • and what she said were past issues with some businesses under the auspices of that program failing to live up to promised economic development.

Egger suggested seeking assurances from Sixth District Congressman Bob Goodlatte, credited by McDonald with bringing Tran and ITFederal to the EDA as “an economic development opportunity”, for assurances about the economic viability of the company.

Prior to Monday’s vote Egger re-asserted her enthusiasm for the promise of ITFederal and said there was a lot in the Resolution she liked.  Prominent among things to like was acknowledgement of ITFederal’s commitment to contribute $150,000 to the West Main Street Extension, seen as a key access road to the planned Royal Phoenix Business Park.  McDonald noted to this reporter that commitment was integral to Council’s decision not to seek about $4,000 per month in interest on the two, one-month extensions of its September 2015 construction “bridge loan”.

Factual Evidence?

However, Egger questioned one paragraph included in the Resolution of Support related to her earlier queries.  That graph states, “Whereas, the EDA has factual evidence that ITFederal has been the recipient of awards of substantial federal contracts, which is one reason why Virginia Congressman Bob Goodlatte has strongly promoted ITFederal’s location in the Town of Front Royal;”

Egger asked if that “factual evidence” was available to Council.

Hrbek replied that McDonald had seen it.

Perhaps appropriately under the County Government Center Meeting Room’s declaration “In God We Trust”, following adjournment Bébhinn Egger and Gene Tewalt continue the debate over whether silence and secrecy is enough in the case of ITFederal’s promise to this community.

Egger asked if the EDA Executive Director was in possession of that evidence so that it could be shown to Council in order to verify the contention that the evidence of those large government contracts does, in fact, exist.  Discussion indicated she is not; but Egger’s subsequent amendment to delete the paragraph died without a second.

However, having admitted the alleged “factual evidence” was NOT in the EDA’s possession, Hrbek offered an amendment to reword the paragraph in question to state, “… the EDA has reviewed the evidence that ITFederal has been the recipient” of those large federal contracts.  Hrbek’s amendment to his original motion to approve the Resolution passed unanimously.

Mayor-Elect Hollis Tharpe reads acknowledgment of Mayor Tim Darr’s multi-terms of service to the Town. Tharpe ran essentially unopposed to succeed Darr after the Mayor announced he would not seek re-election this year.

But Egger continued to oppose the blanket endorsement without more facts.  Citing the veil of secrecy over basic facts concerning the financial basis upon which ITFederal can achieve what has been promised, Egger cast the lone dissenting vote to this year’s Resolution of Support of ITFederal and its plan to build at, develop, and populate a 30-acre parcel at the Royal Phoenix Business Park.