Councilman warns ITFederal CEO may bail over questions

Egger wonders why those questions would kill a promised $40-million investment

By Roger Bianchini
(Norma Jean Shaw contributed to this story)
Royal Examiner

“Sticks and stones may break my bones, but words will never hurt me.”

While that is a familiar childhood refrain illustrating a traditional folk wisdom, it may not apply to a promised $40-million investment on a 30-acre “gift” promised to bring as many as 600 jobs to the former Avtex Superfund site – THAT was a warning conveyed by Bret Hrbek at Monday night’s (Nov. 28) Front Royal Town Council meeting.

As Bébhinn Egger, who has raised questions about ITFederal at recent Council meetings, listens, Bret Hrbek conveys a warning that ITFederal CEO ‘Curt’ Tran is offended by questions about his business interests and is considering pulling out of his agreement to become the first commercial client at the former Avtex Superfund site.

“It has come to my attention, as well as several members of Council’s attention over the past week, it seems that ITFederal, specifically the owner, Mr. Curt Tran, has become highly offended by the hostility that he feels is directed toward him, and the accusations that have been made in his direction, to the point where, Ms. McDonald (EDA Executive Director) if she wasn’t dealing with an emergency right now, would be here telling us this; and the fact she has been scrambling all week trying to appease him and keep him within the Town, if not at least the County.  And they’re ready to pull up roots and walk away.”

Hrbek cited no names in issuing his warning.  However, it was just over a month ago (Oct. 24) that Councilwoman Bébhinn Egger began seeking assurances that ITFederal was in a position to achieve the promised $40-million economic investment at the former federal environmental disaster site.  That first private commercial investment at the 147-acre Royal Phoenix Business Park portion of the 467-acre former Avtex Superfund site has been projected to create 400 to 600 jobs.

“I’m not sure if I should be complimented or offended that Mr. Hrbek is suggesting that I could bring down a $40-million company singlehandedly,” Egger replied to Hrbek’s warning that questioning the business dynamics of ITFederal and its CEO could be the reason an ITFederal-led Avtex redevelopment project is aborted.

“I agree with both Mr. Hrbek and Mr. Connolly,” Egger continued, “I AM anxious to see this project come to fruition.  I AM anxious to see 600 new jobs come to Front Royal.”

However, she added that she perceived her job to include conveying legitimate concerns brought to her by constituents – “things in black and white that don’t appear to add up.”

While she didn’t specify in her reply, concerns she has raised about ITFederal over the past month include:

• CEO Tran’s peripheral land purchases in the area;
• Non-IT-related side business projects for that land described on websites;
• Tran’s involvement in a federal program that grants educational visas to family members of foreign nationals in exchange for financial investments in U.S.-based business;
• still unanswered questions about the contract base that would support the announced $40-million ITFederal investment in the Royal Phoenix Business Park (writer’s note: the one ITFederal website Tran’s primary liaison in this community, EDA Director McDonald, has agreed IS the company’s, states ITFederal LLC was created in 2016; has one employee; and estimates an annual revenue of $33,499. An online search found no contract history for ITFederal LLC or ITFederal Inc.  However, it turned up a contract history for one of Tran’s oldest businesses, VDN Systems.  That contract history on the “InsideGov” website dates back to the year 2000.  It shows 3 years of DoD (Department of Defense) contracts just over $1.1-million between 2000 and 2002.  However, after what appears to be a negative-$933,000 balance in 2003, <insidegov> indicates VDN never had another DoD contract; and over the past 11 years averaged about $38,000 in annual income and just $9,100 annually since 2011.  The site indicates six contracts with the Executive Office of the President between 2006 and 2011, the last for $50,000 in 2011).  The last listed contract for VDN Systems is $5,000 under the heading “Other” in 2014.)

“I don’t think it is insulting or out of line for an elected official to ask questions or get answers,” Egger replied to the suggestion that her inquiries could be seen as an excuse to bail out on a $40-million, 500-job promise to this community.  “I think it’s important for all of us to keep in mind that we shouldn’t get anxious about getting an awesome deal or being nationally known for our great (Superfund site) comeback or any of that.  We need to proceed cautiously and keep Front Royal in mind first.”

Egger concluded by reasserting her enthusiasm for the promise of ITFederal – “I want there to be an awesome IT firm out there.”  However, she added a note of caution – “Again, people have brought questions to me they are concerned about.  And I think we do deserve an answer … and IF the Congressman’s answer is, ‘Oh, I was at the groundbreaking,’ I think the people of Front Royal deserve a little bit more than that.”

Political dynamics (local)

Interim Town Manager Joe Waltz is in …

Hrbek wondered if history wasn’t repeating itself in the way of lost economic development opportunity for the Town.  He recited a series of business opportunities the Town has let slip away over the past decade.  He attributed the loss of three major businesses, at least two of which (SolAVerde and KRATOS) were primarily the result of Council infighting, obstructionism and even unfounded accusations of criminal behavior; and one (Energy Answers) he attributed to “jealousy and infighting between the Town and County.”

Of the one-dollar giveaway of 30 acres valued at $2,010,000 to ITFederal, Hrbek noted that were the company not to live up to its contractual promises, the land must either be purchased at full value or reverts back to the EDA.

Hrbek also worried at the potential loss of $150,000 in government grant money for the West Main Street Extension, were the ITFederal project to fall thru.

Political dynamics (State & Federal)

Hrbek then addressed the base query of ITFederal’s economic ability to achieve what has been promised at the Avtex site.  Egger has suggested Council seek an official assurance about the company’s economic viability from Congressman Bob Goodlatte.  EDA Director McDonald has credited Goodlatte with bringing ITFederal here as “an economic development opportunity.”  Hrbek said that Goodlatte’s staff had relayed the Congressman’s statement that his “stamp of approval was my coming to the groundbreaking.”  That groundbreaking occurred on October 26, 2015, and ceremonially shoveled the only dirt thus far moved at the site.

Hrbek referenced what he termed “a bidding war” between Goodlatte (R-6^th) and Democratic Governor Terry McAuliffe’s offices for credit for bringing ITFederal to Front Royal and the Avtex site.  He suggested the alleged competition for credit in bringing economic redeveloping to the Avtex site, led both politicians to adequately vet the company.

Hrbek then pointed a partisan finger at governmental bureaucracies from DEQ to VDOT, for delaying, perhaps even intentionally sabotaging the start of the ITFederal project. – “I wouldn’t put it past the Department of Environmental Quality under this (McAuliffe’s) administration to have delayed it on purpose because of being upset that even though the governor offered them more money, the congressman got the credit (for bringing ITFederal to the former Superfund site).”

Later asked about the “bidding war” Hrbek replied, “I shouldn’t have used the term ‘bidding war’ – That wasn’t a very accurate description,” elaborating, “There were money/benefits that Goodlatte secured.  McAuliffe offered more and IT Federal turned down McAuliffe due to loyalty to Goodlatte.”

Baby, please don’t go …

Hrbek wrapped up by addressing Tran directly, stating it “is not the Town’s desire to see you leave” and asserting that the Town has done all it could to facilitate his business interests developing at the Avtex site.  He then suggested Council approve a Resolution of Support of Tran and ITFederal to further express its collective desire he not “pull up roots and walk away.”

John Connolly then endorsed Hrbek’s remarks, further vilified big government and “unelected bureaucrats in a position to delay things.”  Connolly said that the lone player involved, other than Council itself; that had not played a part in delaying the project 15 months was the company itself.

Following Egger’s reply to Hrbek and Connolly’s remarks, Jacob Meza, Gene Tewalt and Mayor-Elect Hollis Tharpe added their support of ITFederal and Hrbek’s initial concerns that the Town not be perceived as a barrier to the company and its CEO coming here.

… and 5-year incumbent Town Manager Steve Burke is out, and on his way to the City of Manassas as its Public Works Director.

Tharpe noted any qualms Tran might have about Town support should have been eased by its initial bridge loan of October 2015 – “I think if you loan somebody $10-million that speaks for itself,” Tharpe said.  He also observed that ITFederal’s January 2016 payback of that loan should “speak for itself.”  (writer’s note: When the First Bank & Trust $10-million construction loan went through in January 2016, only after a bank-requested Resolution of Support of the ITFederal project was unanimously approved by Council on November 23, 2015, the Town loan, ostensibly given so ITFederal could begin construction-related work in the fall of 2015, was paid back.)

Mayor Tim Darr agreed with everybody that encouraged ITFederal to stick to its announced plan to come here and accomplish what has been described by the EDA – a $40-million investment resulting in as many as 600 jobs.  However, the Mayor issued a note of caution in criticism of any elected official doing what they perceive as due diligence based either on their own research or the input of citizens.

Council’s job description

“I also want to make sure that everybody understands that as an elected official and a Council member, that it is the Council member’s position that if they feel that something isn’t right or the citizens think isn’t right, that they do have that right to speak up.  That doesn’t mean it reflects Council’s [position],” Darr pointed out of individual versus majority opinions.

The Mayor added that he respected any Council member who raised legitimate issues, but said he did not share the particular concerns Egger had raised regarding ITFederal.

“I do think she has that right as a Council member, and the people of this Town elected her to do that and it’s her job to do that,” the mayor said, concluding the conversation.