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EDA in Focus

County breaks silence on EDA functions, oversight and alleged criminality

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The county supervisors were not expecting the forensic audit result they got – but were there signs that were ignored? Royal Examiner File Photos/Roger Bianchini

The nine-defendant, 199-point civil suit filed Tuesday, March 26, on behalf of the “Warren EDA” as it is referred to in the lawsuit has broken the Warren County Board of Supervisors months of silence regarding its Economic Development Authority’s operations. As of yesterday they are operations alleged to have concealed for at least three years a criminal embezzlement and theft conspiracy directed by former EDA Executive Director Jennifer McDonald.

It is an allegation the lawsuit states McDonald admitted to, at least in part, as of December 20, 2018, the day she resigned under increased scrutiny by her board as a forensic audit of several years of EDA finances completed its third month of what eventually became a six-month investigation.

Named as co-defendants with McDonald in the civil action seeking recovery of a minimum of $17.6 million, are Warren County Sheriff Daniel T. McEathron; Truc “Curt” Tran and his ITFederal tech solutions company contracted as the first commercial client at the former federal Avtex Superfund site’s Royal Phoenix Business Park; local businessmen Donnie Poe and Justin Appleton and their Earth Right Energy Solar Commercial company; and two real estate companies started by McDonald. See Related Story:

Sheriff, ITFed principal Tran, Donnie Poe named with McDonald in EDA civil suit

In a press release issued at 9:40 a.m., Wednesday, March 27, listing Board Chairman Dan Murray as contact person, County Administrator Doug Stanley begins, “First let me say that we are all shocked at the breadth of the allegations,” and concludes, “Due to the ongoing nature of the continuing investigation, the Board will have no further comment on the matter until it is concluded.”

County Administrator Stanley, right, and Supervisor Tony Carter prepare to hear the worst in March 22 EDA board closed sessions.

In between Stanley deflects blame for a conspiracy alleged to have occurred for a minimum of three years under the noses of the EDA Board of Directors, County and Town officials. It is noteworthy that the county attorney also serves as EDA attorney and that the EDA board is appointed by the county board of supervisors.

“Every year the EDA has a professional audit performed by a CPA to provide a level of comfort to the EDA Board of Directors, the Board of Supervisors, the Town Council, and the citizens of Warren County that the financial operations of the Authority are handled appropriately. We have relied on those audits to ensure that the EDA was, in fact, using taxpayer dollars for the purposes intended,” Stanley observes.

The annual audit of the EDA is handled by Yount-Hyde-Barbour at an approximate cost of $17,000. The last audit commenced in mid-September 2018, about a month after Town of Front Royal Finance Director B. J. Wilson discovered a nearly decade-long pattern of annual overpayments by the Town to the EDA totaling over $291,000.

And while the annual audit was again commissioned to Yount-Hyde-Barbour at a price of $17,500 according to EDA and County Attorney Dan Whitten, this time it was accompanied by a forensic audit conducted by a thus-far unnamed certified public accounting firm which has been paid to this point $150,000 of county taxpayer money.

Also eventually contracted to handle the EDA and County’s legal interests resulting from the forensic audit was the law firm of Sands-Anderson. That Richmond-based law firm has thus far been authorized for payment of up to $100,000, also of county taxpayer money.

Unidentified participant in EDA closed sessions, left, and Sands-Anderson attorney Cullen Seltzer chat between Friday’s closed sessions.

“We know that expending funds to hire these two firms has drawn the ire of citizens; however, the Board of Supervisors found it necessary to bring in outside help to ensure that any and every issue has been identified and investigated thoroughly,” Stanley states in the release, adding, “The expenditure of these funds has caused great anxiety for the Board, but it was necessary to perform a thorough analysis and identify appropriate actions to ensure that we begin restoring the public’s trust.

“The Board of Supervisors has faith that the current EDA Board of Directors, the forensic auditor, and Sands-Anderson (legal counsel) will get to the bottom of these issues, make sure that all of those responsible are held accountable, and make every effort to recover the money that has been embezzled.”

Stanley’s press release addresses both past EDA successes and the hope community does not lose faith in the EDA’s mission. He cites 2500 jobs created and $500 million invested in the community since the mid-1990’s, primarily surrounding development of the Route 340/522 North Corridor.

“This activity allowed Front Royal-Warren County to recover from the loss of its largest taxpayer and employer, Avtex, which was shuttered in 1989. This effort took the hard work of many individuals and the financial support of the community.”

The County asks citizens not to forget that positive things have been accomplished through the EDA – most prominently development of the Rt. 340/522 commercial corridor.

Related to that corridor development, the County took over the Town’s share of operational funding of the EDA several years ago as part of ongoing compensation negotiations surrounding the 1998 Corridor Agreement that saw the Town extend water-sewer service into the county facilitating that commercial development.

“Restoration of the public’s trust and confidence is as important to the Board of Supervisors as recovering the public funds that have been taken from our community and holding those responsible accountable for their actions. To that end, at its regular meeting on March 22, 2019, the EDA Board of Directors adopted a resolution to request the County to serve as the fiscal agent for the EDA; this will require that all financial transactions be handled by the County and its Treasurer and will provide additional layers of oversight and protection. This is just the first step in a long recovery process.

“The EDA Board, like many others, was apparently misled by the former Executive Director. They did ask questions and were given plausible explanations at the time, but unfortunately, they were unaware of the extent and magnitude of the scheme.”

Plausible, hmm – wonder if Mark Egger and his daughter, former Councilwoman Bébhinn Egger Rowland would agree?

Better late than never

Stanley’s release does address the months of scathing criticism the board has come under regarding EDA operations and a perceived lack of meaningful municipal oversight of those operations. That criticism has come primarily from two sources, the above-mentioned Mark Egger, and Birth Local critics of EDA and municipal handling of Valley Health’s now EDA bond-issued financing of a new hospital will not provide several medical services, including maternity, that the old Warren Memorial Hospital did.

Mark Egger picked up the baton of EDA scrutiny left behind and unattended by both Town and County officials for over a year in the wake of his daughter’s June 2017 resignation from council to marry and relocate to Maryland. Over the past year Egger has most regularly appeared before the supervisors, who as noted above are now most directly involved in municipal oversight of the EDA.

Mark Egger addresses council on Monday – ‘The chickens are coming home to roost’ he warned. The next day those chickens began landing at the Warren County Courthouse.

However on Monday in the wake of the EDA board’s March 22 authorization of litigation to be filed on its behalf regarding the alleged conspiracy to misdirect and embezzle EDA funds, with his daughter Mark Egger appeared before the town council with a reminder to its longer term members:

“Well, the chickens are coming home to roost … My daughter Bébhinn, when she was on this Council, asked the necessary questions in order to bring out the truth, and you all were either completely disinterested in the truth, or actively tried to impede her in exposing the truth.  And two former members actually publicly berated her from this Council dais.”

And of her appearance, Egger’s daughter told council:

“The main reason I am here tonight is to implore you to recognize your grave errors, publicly admit them, and work to bring about solutions to the problems that have been created by those errors. For some of you, the best possible thing you could do now to help our community is to leave public office and let those who are more capable try to lift our town out of the hole that you’ve played a major part in creating.”

Bébhinn Egger Rowland asks public officials to admit their collective mistakes, and learn from them. But for some former colleagues on the town side she suggested resignation as the best course of action.

While there was no Tuesday county board meeting this week for Egger and his daughter to echo their message of the previous day to the county’s elected officials, for many the County shares in that municipal culpability, perhaps even more prominently with their direct responsibility for EDA operations and board appointments.

Stanley addressed that criticism.

“We know over the past few years that citizens have raised issues to the Board of Supervisors and staff. Please know that while citizens may not have seen any visible or public response to those concerns, the issues were certainly noted and looked into.

“When additional information was brought forward, including the concerns raised by the Town relative to the debt service payments, this ultimately led to the Board’s encouragement and financial support for the County Attorney’s hiring of a forensic auditor to perform a thorough and complete review of the EDA finances for the past 13 years.

“At the time, the Board of Supervisors was not sure if the issues were simply accounting errors or something far more concerning. The audit left open the potential to continue to dive deeper if and when any such issues were identified, and as we now know, the issues do indeed run much deeper and appear to show a long period of misuse of funds that hurt the reputation of the EDA, the Town of Front Royal, and Warren County. As problems were identified by the forensic auditors, the County also assisted the EDA Board of Directors by retaining the law firm of Sands-Anderson to help identify legal issues and pursue appropriate methods for the recovery of identified funds.”

But for many in the community, like Mark Egger and his daughter, if some basic due diligence had been exercised by a majority of Town and County elected officials when then Councilwoman Egger, as well as this media source, were raising questions about easily-identifiable gaps between what was being said and what was verifiable about EDA projects being brought forward in 2016, the additional scrutiny leading to yesterday’s civil action and who knows what next, could have begun at least two years earlier.

Stanley addresses how administrative oversight failed in the EDA’s case.

“The issues appear to be systemic in the manner in which the EDA has operated. The reality is that the scope of the EDA’s operations have changed considerably in the past two decades, however, the processes and procedures for financial management did not. This ultimately led to the ability for the misuse of funds to occur. The Board is committed to working with the consultants and the EDA Board to put safeguards and policies in place to ensure that something like this will never have a chance to occur again in the future in our community.”

Well you know what they say – better late than never.

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EDA in Focus

New Town Manager welcomed to EDA Closed Session discussion of Afton Inn, litigation

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The EDA Board of Directors met on Friday, January 22, 2021, for a regular monthly board meeting. New Front Royal Town Manager Steven Hicks joined Board of Supervisors Chair Cheryl Cullers, Supervisor Walt Mabe, and Interim County Administrator Ed Daley at the beginning of the meeting for a two-hour Closed session. Those present appreciated Mr. Hick’s participation and welcomed a frank discussion about topics of common importance to the Town, County, and EDA.

Of primary importance is working together to get the sale of the Afton Inn across the finish line. Developers Jim Burton and Alan Omar, of 2 East Main, LLC, are looking forward to closing by February 12th and getting the renovation project under way. This building is a featured property in the Town’s historic Community Development Block Grant award and promises to be a marquee of Main Street in Downtown Front Royal.

EDA Chair Jeff Browne reviewed the 2021 calendar dates for the remaining regular monthly board meetings and Director Jim Wolfe shared an update on the progress of the Strategic Plan development. Finance Chair Jorie Martin gave a budget update and noted that Brown Edwards is working to finish the FY 2018 and FY2019 audits and hope to have working drafts ready for review in February.

Executive Doug Parsons updated the Board on a variety of activities and projects, including the latest on the new EDA website and a Leach Run Parkway financial review. Lastly Mr. Parsons discussed a proposal by the economic development authorities in Clarke, Frederick, Page, and Shenandoah counties to participate in a regional workforce talent attraction website. The Board tabled the discussion until further information about goals and functions of the site could be reviewed.

The EDA Board of Directors will have their regular monthly board meeting via Zoom on Friday, February 26, 2021 at 8 a.m.

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EDA in Focus

County Supervisors review VDOT issues, contracts, coming FY-2022 outside agency requests and public comment rules

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On Tuesday afternoon beginning at 4 p.m. and continuing after a brief adjournment at 6 p.m., the Warren County Board of Supervisors held a work session to discuss, first VDOT issues entering the new year and later early FY 2022 budget items. Those items were requests of partner agencies, including Samuels Public Library, Northwestern Community Services, the Economic Development Authority, and County Health Department.

The EDA discussion included some reference to the ongoing $20-million legal dispute with the Town of Front Royal and how to approach any future work for the Town, should the Town desire it.

As EDA Board Chairman Jeff Browne listens to left, EDA Executive Director Doug Parsons told county officials the EDA will work with the Town or without it, as the Town chooses. The supervisors have not absorbed the EDA as a County Department while waiting to see if a new town council and new town manager will bring a new direction to Town attitudes regarding the EDA. Based on unchallenged mayoral comments Monday evening, the answer would appear to be ‘no’.

There was also discussion of meeting rules regarding the length of time devoted to public comments and how that should be addressed in the future, by code or meeting decisions by board members.

Also, on the agenda was a review of the parameters of several renewable contracts tabled for supervisors unaware of those contract dynamics and use and value to the county government.

See the County meeting video here.

Is it live or is it virtual? With a nod to an OLD Memorex cassette tape commercial; and an additional nod to the 1960’s-70’s ‘surreal’ comedy troupe Firesign Theater for the timeless observation about time and space that has been challenged in 2020 – ‘How can you be in two places at once when you’re not anywhere at all?’ the 1969 album cover of which is pictured below just so you didn’t think I was making that one up. Royal Examiner Photos by Roger Bianchini

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EDA in Focus

EDA Board extends Afton Settlement date, approves Crime Coverage insurance claim among other post-Closed Session actions

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This press release has been updated to include the resolution documents passed by the Board of Directors. Additionally, the first two motions passed out of Closed Meeting have been corrected from yesterday’s press release to include specific language from their corresponding resolutions.


The EDA Board of Directors met for a Special Board meeting Wednesday, January 6. After a 40-minute Closed Meeting, the Board voted on three actions in greeting the new year:

  • On a motion by Jorie Martin and seconded by Tom Patteson, the board unanimously passed a resolution approving a Release and agreeing to an amount of $500,000 with Cincinnati Insurance which represented the total amount of the Commercial Crime Coverage policy to settle a claim regarding alleged misconduct by, among others, its former Executive Director, Jennifer McDonald.
  • On a motion by Jorie Martin and seconded by Greg Harold, the board unanimously passed a resolution approving the Commonwealth of Virginia’s Commonwealth Opportunity Fund Performance Agreement with Silent Falcon UASA Technologies. The $161,482 grant is an inducement to the company choosing to move from New Mexico to Warren County. With this agreement, Silent Falcon is committed to bringing jobs to the county as well as making a significant capital investment in building construction for their new operation here.
  • On a motion by Jorie Martin and seconded by Tom Patteson, the board unanimously passed a resolution approving a Release and agreeing to an amount of $500,000 with Cincinnati Insurance which represented the total amount of the Commercial Crime Coverage policy to settle a claim regarding alleged misconduct by, among others, its former Executive Director, Jennifer McDonald.
  • On a motion by Jorie Martin and seconded by Greg Harold, the board unanimously passed a resolution approving the Commonwealth of Virginia’s Commonwealth Opportunity Fund Performance Agreement with Silent Falcon UASA Technologies. The $161,482 grant is an inducement to the company choosing to move from New Mexico to Warren County. With this agreement, Silent Falcon is committed to bringing jobs to the county as well as making a significant capital investment in building construction for their new operation here.
  • On a motion by Greg Harold and seconded by Tom Patteson, the board unanimously approved a motion to extend the date of settlement with 2 East Main, LLC for the purchase of the Afton Inn to February 12, 2021. The developers, Jim Burton and Alan Omar, are dedicated to renovating the historic building which will bring jobs and commerce to downtown Front Royal.
  • Lastly, in New Business, on a motion by Jorie Martin and seconded by Tom Patteson, the board unanimously approved an annual grazing lease with Jeremy Baldwin for $1,000. Board Chairman Jeff Browne congratulated the new Town Manager and new Town Council members. He had a good meeting this week with Town Manager Steven Hicks and is hopeful of starting a new chapter for EDA-Town relations back that focuses on economic development issues.

The EDA Board of Directors will have their regular monthly board meeting via Zoom on Friday, January 22, 2021 at 8 a.m.


APPROVAL OF COMMONWEAL TH’S DEVELOPMENT OPPORTUNITY FUND PERFORMANCE AGREEMENT WITH Sll.,ENT FALCON UAS TECHNOLOGIES

WHEREAS, Warren County (“County”) has been awarded a grant for $161,482 from the Commonwealth’s Development Opportunity Fund (“COF”) to induce Silent Falcon UASA Technologies (“Silent Falcon”) to locate in the County and creating and maintaining a significant number of new jobs; and

WHEREAS, the County will provide those grant funds to the Industrial Development Authority of the Town of Front Royal and County of Warren dba the Warren County Front Royal Economic Development Authority (‘•EDA”) so that the EDA can provide the funds to or use them for Silent Falcon provided that Silent Falcon meets criteria relating to Capital Investment and New Jobs;

NOW, THEREFORE, BE IT RESOLVED that the EDA hereby approves the attached Commonwealth’s Development Opportunity Fund Performance Agreement with Silent Falcon VAS Technologies, Warren County and the Virginia Economic Development Partnership, and authorizes its Chair to sign the Performance Agreement.

APPROVAL OF SETTLEMENT WITH CINCINNATI INSURANCE COMPANY OF POLICY CLAIM FOR EMPLOYEE THEFT

WHEREAS, the Industrial Development Authority of the Town of Front Royal and County of Warren dba the Warren County Front Royal Economic Development Authority (“EDA”) made a claim on its insurance policy with Cincinnati Insurance Company (“Cincinnati”) under the Policy’s Commercial Crime Coverage, which has a $500,000 limit of liability, regarding alleged misconduct by, among others, its former executive director Jennifer McDonald; and

WHEREAS, the EDA and Cincinnati desire to resolve the claim by Cincinnati making payment to the EDA in the amount of$500,000 upon the EDA executing the attached Release of Cincinnati from any further liability;

NOW, THEREFORE, BE IT RESOLVED that the EDA hereby approves the settlement and the attached Release, and authorizes its Chair and Secretary to sign the Release on its behalf.

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EDA Board Chairman and Executive Director look back, and to the future

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On Wednesday, December 30th this reporter sat down in the Royal Examiner/National Media studio with Front Royal-Warren County Economic Development Authority Board of Directors Chairman Jeff Browne and Executive Director Doug Parsons for a perspective on the long, strange, and productive year they have experienced as a newly aligned board and staff navigate the EDA into the future of economic development in this community, while attorneys focus on recovering from the past financial scandal.

The conversation began with two recent announcements – the landing, literally, of drone manufacturer Silent Falcon UAS (Unmanned Aerial Systems) in Warren County with the potential of eventually adding as many as 249 quality jobs to the local market; and the EDA’s heading into the final round of consideration, with experienced distributor Parallel LLC, to land the Eastern regional medical marijuana distribution contract. Should Parallel LLC score that contract, it would also entail the purchase of the huge Baugh Drive warehouse the EDA has been marketing for some time.

Hear how Randolph-Macon Academy’s drone program played into Silent Falcon’s decision to locate its manufacturing headquarters here, and how the drone manufacturer and operational services local presence might stimulate similar educational initiatives in Warren County’s Public School system. And learn why Warren County Sheriff Mark Butler got a big smile on his face upon learning Silent Falcon was bringing its operations to Warren County.

Questioned about the controversial Sheetz proposal at the base of Apple Mountain in Linden, they also explained the EDA’s role there – absolutely NONE.

Browne and Parson also noted that a conversation with the Town of Front Royal to finalize the sale of the Afton Inn property to developer 2 East Main LLC is continuing – and where there is conversation, there is hope. And they hope those discussions are just the beginning of continued conversations that will lead to repaired relations with the town government to everyone’s benefit, not only at the intersection of East Main Street and Royal Avenue but countywide on both sides of the municipal boundary line.

Hear Browne and Parsons reflect on 2020 and look toward a productive 2021 for the EDA, Front Royal, and Warren County in this Royal Examiner video interview:

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EDA in Focus

R-MA, County officials react to EDA ‘landing’ Silent Falcon UAS Technologies in Warren County

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The Industrial Development Authority of the Town of Front Royal and the County of Warren (FRWCEDA) is excited to welcome Silent Falcon, UAS (Unmanned Aerial Systems) Technologies to Warren County and the Front Royal/Warren County Airport.

Silent Falcon is a UAS Original Equipment Manufacturer (OEM) drone builder that specializes in aerial data collection and analysis for a variety of applications. At their Warren County location, they will design, fabricate and build their drones using advanced carbon fiber materials. They typically build 1-3 aircraft per month. This new location will also be their maintenance repair and flight training facility.

Silent Falcon has a fleet of 10+ drones that they deploy to remote locations to fly and capture data with their pilots. They also hire pilots with full aviation ratings for manned aircraft. Silent Falcon provides firefighting and security services in which a live feed from the tracking sensors is provided to law/fire officials.

Their software team, using data collected from the drones and their proprietary Artificial Intelligence (AI) and Machine Learning (ML) software, they create data visualization pages and reports for their customers. Their most popular product is their PCI+ (Pavement Condition Index) report and pavement management program (PMP) which is required by FAA regulations for airport pavement management. They can scan an airport in a short period of time and produce a report in just a few hours.

Silent Falcon will also utilize their cutting edge, technologically advanced aircraft in a partnership with the Randolph Macon Academy (RMA) in Front Royal to train their students in the UAV program. This will provide RMA students the opportunity to learn about and work with the latest UAV technology. “To say we are “excited” about this announcement doesn’t quite capture what we are all truly feeling. This partnership with Silent Falcon strikes at the very core of our mission at the Unmanned Systems Lab at Randolph Macon Academy”, said Brian Kelly, Director of the Unmanned Systems Lab at RMA.

“As a signature offering in our pre-professional pathway’s initiative the R-MA drone program provides students with the tools and real-life experience needed to leverage the potential of unmanned technology in whatever career field they choose. Much of what we are doing is out of the classroom learning — applying drones and drone collected data to solving real-world problems. In this environment students take part in real projects from planning through execution and experience first-hand how “actionable” drone data is applied to many of today’s community management, business, environmental and economic challenges”, Kelly added. The partnership will also benefit the company due to the workforce talent pipeline that RMA offers through their well-developed UAV curricula.

The Warren County Board of Supervisors and Staff played a crucial role in successfully competing for this project. They worked with the EDA and the Virginia Economic Development Partnership (VEDP) to structure a state and local incentive package that is entirely performance based. “The efforts of all the team members have made things happen to build an additional industry in our community. We wish Silent Falcon well and we all are looking forward to their expansion and future successes.” added Walt Mabe, Chair of the Warren County Board of Supervisors.

Supervisor Delores Oates added, “It is my privilege to welcome Silent Falcon to our community. Their investment in Warren County to provide higher paying jobs focused on emerging technologies is a positive step toward our goal of building a community where we can live, play and work! Our County Staff, EDA and EDA Executive Director, Doug Parsons have done a tremendous job partnering with Silent Falcon to achieve this win for Warren County!”

“The Airport Commission is enthusiastic and excited about the UAS capabilities and services that Silent Falcon is bringing to Front Royal/Warren County Regional Airport.”, said Kenneth Roko, Chair of the Airport Commission. “We offer our support to help Silent Falcon pursue its business and R+D interests and their ongoing collaboration with Randolph-Macon Academy. As a Commission, we welcome the increased visibility of the Airport as one of many valuable assets to attract industry, tourism and economic opportunities to Warren County. We thank Grant Bishop, CEO of Silent Falcon and his company for selecting KFRR (our airport code). We also thank the Virginia Commonwealth, Warren County Board of Supervisors, Randolph-Macon Academy and the Warren County Economic Development Authority for supporting and enabling this important addition to our community.”

“I’d like to thank the BOS and Staff at the Warren County Government for their hard work and collaboration on this project. There were several departments involved, including the General Services Division, Public Works, the Administration and Legal teams and the Front Royal/Warren County Airport Commission. We also want to thank our partners at VEDP for bringing us this great opportunity and giving us the chance to compete for this investment.”, said Doug Parsons, Executive Director of the FRWCEDA. “This project shows that collaboration is the key to success in attracting jobs and tax revenue. We look forward to working with Silent Falcon and RMA going forward to ensure they are as successful as possible in their endeavors”.

For more information about this exciting new business, please contact Doug Parsons at 540-635-2182 or dparsons@wceda.com.

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Could Town-EDA disagreement over dynamics of Afton Inn sale kill redevelopment plan?

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During the Asset Committee report at Friday’s Front Royal-Warren County Economic Development Authority meeting, the Town of Front Royal, specifically through its legal department, was accused of “obstructing” the closing process on the sale that would allow redevelopment of the historic Afton Inn site to proceed at the head of the town’s Historic Downtown Business District.

“2 East Main, the contract purchasers of the Afton Inn, continues to work toward a settlement by the end of December. The Town of Front Royal, via their legal department, has begun obstructing this process by not cooperating with requests made by both 2 East Main and the EDA,” Asset Committee Chairman Greg Harold stated in his December 4th meeting agenda written report.

Greg Harold during the Dec. 4 EDA Board virtual meeting. His Asset Committee report highlighted a recent email exchange between potential Afton Inn developer 2 E. Main St. LLC and Town Attorney Doug Napier expressing the opinion the EDA cannot finalize the sale without written Town approval, which apparently has not been given. Royal Examiner Photos by Roger Bianchini

Harold’s Asset Committee report on the status of the Afton Inn sale that would facilitate redevelopment observed, “The EDA’s sole ambition in this sale is to remove it from our asset book by selling it to a private developer that is qualified and capable of rebuilding this historic structure to the benefit of the entire community, including the Town Administrative Offices that sits adjacent to this currently dilapidated building.”

Royal Examiner called Harold following the 10:40 a.m. adjournment of Friday’s EDA Board of Directors meeting to seek more information on the impasse between the Town and EDA over the sale and redevelopment of the Afton Inn property. Harold referred us to Board Chairman Jeff Browne as point man on the EDA’s effort to solicit cooperation from the Town of Front Royal governmental apparatus to facilitate the long-pending sale to redeveloper 2 East Main Street LLC.

Contacted by phone, Browne explained that the 2 East Main Street development partnership and its title company had sought legal assurance from the Town that it agreed to the pending sale. The Town Attorney’s November 30th email reply to 2 East Main and the involved title company – the EDA was not copied in Napier’s response, Browne noted – disputed the EDA’s ability to sell the property to the development group without the Town’s written consent, consent apparently not yet given. Napier referenced a 2014 Land Exchange Agreement (LEA) and Memorandum of Agreement (MOA) in making the assertion, Browne said. That was a condition of the referenced 2014 MOA, he explained.

With Town Hall’s proximity to the derelict Afton Inn, one is left to wonder why the town council would not have already endorsed the EDA sale for redevelopment.

In response to this assertion the EDA Board of Directors is preparing a response to town officials, including the mayor, council, and town manager, seeking a meeting of all involved parties as soon as possible to resolve the impasse to everyone’s mutual benefit, Browne told Royal Examiner. The EDA and 2 East Main Street LLC hope to have the sale closed by the end of the calendar year.

Town perspective

In an email response to our inquiry on the matter, Town Attorney Doug Napier explained his and apparently the town council and its governmental apparatus’s stance.

That stance is that the EDA has simply been a real estate broker for the Town in dealing with the Afton Inn property. “The EDA itself never had any skin in the game. The Town was never about to ‘give’ the EDA a million-dollar piece of property in the form of Old Town Hall for nothing, that would be insane,” Napier wrote, perhaps highballing the 2014 assessment a bit in referencing the eventual EDA-enabled 2014 swap of the old Town Hall building the town government had outgrown, for the Afton Inn in order to facilitate its marketing and redevelopment.

The town attorney and interim town manager at a recent council meeting. Questions may have risen through EDA Board discussion as to whether there are sufficient communications between staff and council and the mayor on the status of the EDA’s attempt to sell the Afton Inn for redevelopment.

Perhaps coincidentally, that swap was bitterly opposed by then citizen Matt Tederick who repeatedly appeared before the town council to berate the swap idea. That idea was hatched to get the Afton property out of the hands of its owner, Northern Virginia developer Frank Barros. Barros let the property languish for several years, refusing to take calls from the Town about the property after the town council had alienated him, in part by suing its own Board of Zoning Appeals to overturn its code exception granted to allow Barros’s elaborate Afton Inn redevelopment plan to increase the height of the building to about 10-feet above the height of the County Courthouse across the street. Building above the height of the courthouse was and remains against Town Code.

“For many years the Town had been trying to get the owner of the Afton Inn to fix up that building, but could get nowhere with the owner,” Napier wrote in his December 4th reply to our inquiry on the current sale impasse, adding, “Town Council had an idea to exchange Old Town Hall for the Afton Inn, but it is difficult for local governments to do real estate investment deals on its own under the Code of Virginia, a big reason EDAs exist in the first place … The title company doing the real estate closing agrees with me. It’s the law, as well as the facts of the case. There is no real controversy here at all.”

No real controversy here?

However, the EDA Board of Directors and its legal counsel do not agree.

The 2014 Land Exchange Agreement and Memorandum of Agreement referenced above by EDA Chairman Browne were attached by Napier to his reply to us to bolster his contention the EDA does not own outright and cannot sell the Afton property without the Town’s written authority.

However, Harold pointed us to a December 1st email from EDA attorney Sharon Pandak in response to Napier’s November 30 reply to 2 East Main Street LLC and its title company seeking the Town’s signing off on its purchase contract with the EDA. In the letter, Pandak counters Napier’s conclusion and the developer’s title company’s concurrence with it. – The short version:

1 – the 2014 MOA, which came after the LEA, was never signed by an EDA representative; and

2 – the Town was not a party to the Lease Exchange Agreement in which Barros’s Afton Inn LLC conveyed the Afton property directly to the EDA.

The complete explanation of the EDA stance penned by the EDA attorney elaborates:
“As I indicated to you … previously, we do not believe that 2 East Main LLC’s current title company’s (Chicago/Champion Title Company) position is meritorious. The EDA can convey “good and marketable fee simple and unencumbered title” to the Afton Inn for the following key reasons:

1 – The conveyance to East Main is not for a required “future purpose” under the Memorandum of Agreement between the Town and the EDA, dated June 23, 2014 (MOA). The MOA, if operative, relates to future use of the Afton Inn, and is not a limitation on the EDA’s ability to convey the property. Therefore, the MOA, if operative, simply does not apply.

2 – The MOA was signed by the Town after the conveyance of the property by the Town to the EDA (June 11, 2014). The agreement is not signed by the EDA.

3 – The Land Exchange Agreement (LEA) between the EDA and Afton Inn, LLC conveyed the Afton Inn to the EDA. The Town was not a party to LEA, and the land never passed through Town ownership to get to EDA ownership. There are no restrictions on the EDA’s use or future conveyance in the LEA. The LEA precedes the incomplete MOA,” Pandak wrote. But she wasn’t finished countering the Town stance.

Two perspectives of March 2019 Town-permitted work on the Afton Inn related to the 2 E. Main St. LLC redevelopment plan. If the Front Royal Town Council finally authorizes the EDA sale to the developer, within a year or so the site might be worth a second look from the town trolley.

“There are other reasons for believing that the Town Attorney’s recently expressed opinion is not well-taken which include: The Town has already issued permits to 2 East Main for some work on the Afton Inn and the Town has implicitly approved 2 East Main’s proposed redevelopment by including it in its VDHR (Virginia Department of Historic Resources) grant application (resulting in the Town’s Community Development Block Grant – CDBG award from the State). These actions indicate a Town approval of the ‘future purpose’ by 2 East Main for the Afton Inn, if the MOA is operative. Mr. Napier also does not acknowledge that the EDA gave the Town notice of its Purchase Contract with 2 East Main on June 16, 2020, directly and through him.

“The Title Company’s requirement to have the Town of Front Royal provide consent to the transaction is not well-grounded for the reasons set forth above,” Pandak concludes.

Delaying sale to what end?

Asked what investment the EDA has made in marketing and moving the Afton Inn property toward redevelopment since acquiring it in 2014, Brown and Harold both pointed to $478,000 in various legal, closing, and developmental costs, including masonry work to shore up the crumbling building as its sale and redevelopment have stalled. The sale price if made this month will be $345,000. Had it been made by September it would have been $325,000. So, the EDA is not looking to even recoup its total investment in the property, which means the Town would not be eligible to collect any proceeds from the sale according to the disputed MOA were it ruled to be enforceable without an EDA signature on it.

Bullet point 5D of the MOA states the “EDA shall be entitled to retain from the sales proceeds an amount equal to any sum it has paid without reimbursement from the Town during its ownership, management, maintenance, repairs and marketing for sale or lease of the Afton Inn property.”

So, one might wonder why the Town is stalling on endorsing the EDA’s sale to 2 East Main Street LLC after past permitting of work related to the 2 East Main Street development plan and referencing that plan in its CDBG application.

“Their stonewalling this sale only hurts them and the community,” a perplexed Harold told Royal Examiner. Following conversations with 2 East Main principals Alan Omar and Jim Burton, the EDA Asset Committee chairman said, “I am fully confident 2 East Main Street wants to move forward and are willing to develop the property to the betterment of the community in a way that will make it a cornerstone of historic downtown Front Royal. We are willing to broker communications and we’ve both tried to work with the Town to realize this project since September.

“If this sale can’t occur because of obstruction by the Town we are going to execute any leverage we can to covey the property if this falls thru,” Harold said of the EDA, including acquiring a demolition permit “to keep all available options at our disposal”.

Harold’s written report to his board Friday morning added a call for public action to add another dimension to EDA Board Chairman Browne’s effort to bring all involved parties to the table for a mutually beneficial resolution before the year’s end.

“The community should start lobbying Town Council to allow this sale to commence without further delay or disruption. This is critical both from a safety standpoint as stated by Town Attorney Doug Napier and from an aesthetic standpoint being the corner of historic downtown Front Royal. Delaying the sale and settlement places additional unnecessary risk to public money in the maintenance and public security of this building which has been previously stated by the Town Attorney as the responsibility of the Town taxpayer.”

The EDA Board of Directors hopes a new face and perspective on the scene, new Town Manager Steven Hicks who begins work Monday, Dec. 7, might mean a new day in the EDA-Town relationship. Hicks was lauded by the council for his work in Selma, N.C. on a redevelopment project.

During subsequent open meeting discussion Friday morning, board member Tom Pattison suggested “reaching out” to new Town Manager Steven Hicks, who begins the transition from Interim Town Manager Matt Tederick on Monday, December 7, in an attempt to re-establish a meaningful relationship with the town government. That relationship has deteriorated into expensive hostile civil litigation and an absence of communications under Tederick and the current town council majority over the past year-plus. While a spot for a “Town Manager’s Report” has remained on the monthly EDA Board meeting agenda, as has been the case for much of 2020, no town manager or designee was present virtually to deliver that report Friday morning despite the Town’s continued legal partnership with Warren County in the operational oversight of the half-century-old joint County-Town EDA.

EDA Board Chairman Jeff Brown and the five-member quorum present virtually concurred with Doctor Pattison’s notion of attempting to restore a meaningful relationship with the town government with the coming personnel change at the head of the Front Royal Administrative network.

While we didn’t get a call back from Mayor Tewalt, we did reach Vice-Mayor Bill Sealock about the EDA board discussion of “Town obstructionism” in finalizing the Afton sale to 2 East Main Street. Sealock said his last recollection of council discussion of the proposed sale to 2 East Main Street LLC group was when the September option date was missed.

The vice mayor also expressed disappointment council and the mayor wasn’t included in the EDA communications with town staff over the project. “I’m very upset – we’re the ones who would decide these things,” Sealock said of Town approval or endorsement of the sale.

Above, in the wake of his proactive work bringing council and the Save Happy Creek Coalition together could Vice-Mayor Bill Sealock find himself at the point of helping correct another possible communication breakdown in Town affairs? EDA Board Chair Jeff Browne, below at Friday’s virtual EDA meeting, hopes to aid in bridging any communications gaps between the council, the EDA, and the Afton Inn redevelopment group.

“I’d be happy to do that,” EDA Board Chairman Browne said when told of Sealock’s observation, adding that he had personally been involved in several “reach outs” to council and the interim town manager in past efforts to resolve issues surrounding finalization of the Afton sale. And as reported above, he is planning to have a letter to all involved parties, including council and the mayor out by early in the coming week.

And he noted that the recent email exchange with the town attorney came from 2 East Main LLC and its title company’s direct effort to seek assurance the Town would endorse the EDA sale of the property, not from an EDA inquiry.

So, it seems the EDA, the Front Royal Town Council, and mayor, and 2 East Main Street LLC principals and staff will have an opportunity in coming weeks to sit down and get on the same page philosophically and legally to the joint benefit of the entire community. Will they be able to pull it off?

Stay tuned as the Afton Inn redevelopment project perhaps reaches a point of no return if a sale is not finalized within the next three weeks.

Can council reach a quick consensus that an EDA sale of the Afton Inn property to 2 E. Main LLC for redevelopment is a good thing for the community? One might wonder why that consensus hasn’t already been reached.

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