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EDA in Focus

Developer, EDA answer questions on Afton Inn demo-rebuild proposal

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Wait, you expect me to go in THERE?!!? Photos/Roger Bianchini

Following the Tuesday, August 15, Board of Architectural Review (BAR) tour of the Afton Inn, MODE Development Partnership Architect Jim Burton and EDA Executive Director Jennifer McDonald fielded questions about the demolition proposal forwarded to the Town by the EDA on July 28.

The BAR will be asked to make a recommendation on approval or rejection of that proposal following a public hearing scheduled for Tuesday, August 22.  At this time the BAR meeting and Afton Inn demolition public hearing is slated for the same second floor Town Hall meeting room in which the architectural board’s work sessions have been held the past two weeks.

How far this week’s work session Q&A with the EDA and MODE went in providing the BAR with the information it wants to make an informed decision on August 22 remains to be seen.


Above, BAR Chair Toler decides a building may not be the only thing worth saving on the Afton site; below, back in safer climes the dynamics of what may come are discussed, as Town Planning Director Jeremy Camp listens.

BAR Chair Angela Toler asked McDonald to walk her board through the EDA marketing process leading to the current application seeking demolition of what may be the oldest surviving building in Front Royal.  The EDA chair recounted a two-year effort to market the 149-year-old structure (circa 1868) for renovation.  She said four candidates came forward, all to drop out near the “finish line” due to costs and the unavailability of redevelopment grant money each felt necessary to cover what were discovered to be the additional costs of renovation.

MODE Partnership Architect Jim Burton of Carter-Burton Architecture PLC out of Berryville told the BAR that renovation could cost an extra $300,000 to $600,000, with the high-end number “easily” possible.  The difference in costs with that high-end estimate is $2.1 million for a demo-rebuild versus $2.7 million, essentially to attempt to save the outside brick shell of the building.

Noting the BAR’s preference for saving a historic structure, perhaps the oldest surviving in Front Royal’s downtown at the head of its historic district, Toler told Burton of what is proposed, “When the historic façade is gone, that is when we care.”

BAR member Michael Whitlow told Burton that the board hadn’t had the details on cost differentials in the original proposal forwarded to them.  However, an elaborated “structural report” written by Burton included in the August 15 agenda packet did cover that detail absent in the previous week’s work session packet.

That assessment states, “Overall the added cost to work with the existing building and to bring it up to code could add an additional $400,000 plus or minus depending on the final approved Schematic Design.  (Snead Co. of Boyce has stated it could take $2,000,000 to bring the shell up to code strength and standard.  It is possible the building could collapse in areas during construction if the proper shoring expenses are not factored in)

“After investigating the structure we have found it does not make financial sense to renovate while adding and changing use in certain areas.  By clearing the site and reusing some brick and wood it will allow for the Design Intent to be achieved at a fair market price while insuring the quality that is needed for this prime location.”

Architectural Board member Michael Whitlow, red shirt, and his colleagues seek and find more specific answers to redevelopment questions – but are the answers specific enough to authorize demolition of Front Royal’s oldest downtown historical structure? – Stay tuned over the course of two public hearings (Aug. 22 & 28) in the next two weeks.

MODE Partnership exterior drawing of a re-constructed Afton Inn.

Asked about the drawings presented and what the main replacement structure would be made of, Burton replied “modern stucco”.  The submitted plan indicates that reclaimed brick and wood would be utilized for the outdoor patio/beer garden envisioned for the Royal Avenue side as part of the first floor restaurant including a proposed pizza oven.

“You can see where we would prefer more preservation,” Toler told Burton.  The architect replied that the crumbling interior brick, among other variables included in his updated report made that a risky and expensive proposition.

Told that IF it was agreed demolition was necessary the BAR would prefer more brick used in a rebuild, Burton replied the developer was open to that suggestion, particularly at the front facade.  Whitlock pointed out to his fellow board members that he brought back a section of brick from the building’s interior to illustrate that he had been able to crumble portions of that brick in his hands.

Burton told the BAR he appreciated their desire for preservation; that in fact he had helped write preservation codes for some localities.

Replying to the architectural board’s desire for an assurance a rebuild would occur if demolition was approved; McDonald said the EDA would have “no problem” asking for a performance bond from the developer.  She noted, however, that she could not guarantee that such a request could be legally mandated; but that she would have no issue with forwarding a performance bond request to the development group.

Questioned about how aggressively the EDA had marketed the Afton Inn for redevelopment, McDonald replied that it had been advertised on numerous state websites and presented at a number of regional trade shows.

Asked about placement of “a sign out front”, McDonald replied the EDA had put one up but had to take it down due to restrictions on EDA’s being perceived to compete with private sector developers.

Noting what she had seen from the side doorway, Toler wondered at the interior state of the building with what she called “trash” piled up – trash that appeared to be interior debris from the structure itself, but certainly trash at this point.  “I feel like the building got a little short changed,” Toler said of the interior state with no apparent effort to stem the state of the deterioration over the past two years.

Toler wondered about a budget for preservation efforts after the Town acquired the Afton Inn from Frank Barros in a trade for old town hall two years ago.  McDonald replied “there was no budget” presented to the EDA with the building.

“I feel like we’re being asked to approve this with demolition being the only option,” BAR member Joan Harding said.  She bemoaned the loss of another historic structure, stating she believed it was “detrimental” to the town, adding, “I want the façade kept.”

An invited observer was Aubrey Vonlindern, an architectural historian for the Virginia Department of Historic Resources.  Noting her job was preservation, rather than demolition and redevelopment, she observed that she had seen buildings in worse shape that had been saved in other communities (don’t think she was present for the interior tour).

Noting the Afton Inn is “the oldest structure” in downtown Front Royal, Vonlindern suggested taking an application for tax credits for saving the façade to Richmond – “It’s the oldest building in downtown, it should be given a chance,” she said.

As the work session ran to a conclusion, Harding re-stated a complaint from the previous week, that the drawings of the redevelopment plan were not compatible with surrounding buildings or the Afton shell – “I have grave reservations on this,” she said.

Board Chair Toler concluded that she feared that if the Town approved demolition of its oldest historic structure, the application for a State “Community Development Block Grant” now on a desk in Richmond “goes right in the trash.”

Asked following the meeting what she thought of the hard questions being asked about possible preservation options for the Afton Inn at this point, EDA Executive Director McDonald said, “They are absolutely doing their job to try and salvage a historical building, that’s their role; and we are doing ours.  The Town has to decide, do they want a building to sit there vacant or do they want something that will be creating tax revenue and be a viable part of Main Street.”

As BAR Chair Toler said near the conclusion of the August 8 work session, “We REALLY welcome the public’s input on this.”

Remember that time and place, Tuesday, August 22, 7 p.m., second floor meeting room of Town Hall …

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EDA in Focus

Out of Friday Closed Session, EDA announces Settlement Agreement with Linda Hassenplug in financial scandal civil case claim

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Following a lengthy closed session to open its meeting of Friday, May 27th, the Warren County Economic Development Authority Board of Directors announced a civil case Settlement Agreement with Linda Hassenplug related to her former Little Rug Rats daycare center. Hassenplug, Jennifer McDonald’s mother, was one of the co-defendants named by the EDA in its civil litigation effort to recover as much as $21 million in assets the EDA believes to have been misdirected to the personal financial gain of herself and others by former EDA Executive Director Jennifer McDonald between 2014 and 2018.

That Settlement Agreement as described to Royal Examiner by EDA Board Chairman Jeff Browne, is for payment of $50,000 at a 6% interest rate at the time Hassenplug and her husband’s house is sold. As we understand the agreement there is no imposed timeframe on the Hassenplugs having to leave their home. But as with the “no-fault” $9-million civil case Settlement Agreement also involving real estate reached with McDonald earlier, resolution of EDA claims outside the courtroom reduces the time and resources put into legal actions related to asset recovery tied to the financial scandal. Settlements with four or five other civil case defendants have also been reached.

The WC EDA office off Kendrick Ln. where the May 27 meeting was held, and another financial scandal civil case Settlement Agreement was announced.

In other business the EDA board approved a change in its bylaws as it currently operates with two vacant board positions. That change reduces the number of members required to be present to create a meeting quorum from four to three. The four-person quorum was created for a full seven-person board. At two members down, the EDA board is currently at five.


Also approved at the meeting was an annual housekeeping matter, reaffirmation of the Support Agreement with First Bank and Trust of Winchester on the EDA’s reworked loan package. As Browne explained, that renegotiated loan package accomplished several years ago saved the EDA several hundred thousand dollars over the life of the loan.

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Crime/Court

Update: April Petty awaits Judge’s decision on motion to dismiss EDA civil case seeking return of $125,000 received from Jennifer McDonald during 2016 home sale process

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(Author’s note: As of Saturday morning, May 28, at 11:15 a.m. this story has been updated with additional detail on the $125,000 check transferred from an EDA account by Jennifer McDonald to Ocwen Loan Servicing LLC during April Petty’s 2016 home sale process.)

Judge Bruce D. Albertson took dueling arguments on a defense motion to issue a summary judgment dismissing all civil claims regarding the FR-WC EDA’s action against defendant April Petty under advisement Tuesday afternoon, May 24. Cullen Seltzer represented the plaintiff EDA, now trading as the Warren County EDA in the wake of the Town of Front Royal pulling out of involvement as it litigates against the half-century-old joint Town-County EDA over disputed losses tied to the FR-WC EDA financial scandal. Petty was represented by defense counsel William Shmidheiser III.

Petty’s case, among a number of others alleged as beneficiaries and co-conspirators of former EDA Executive Director Jennifer McDonald are scheduled for civil court trials beginning in early July. Following taking the Petty motion under advisement the court dealt with jury selection issues with attorneys for a number of civil case defendants patched in by phone. Those included counsel for Truc “Curt” Tran and ITFederal, Donnie Poe and Earthlink Energy, Ms. Hassenplug, and Samuel North. With input from Circuit Court Clerk Angie Moore, it was decided a rather complex process involving a fairly large jury pool with begin Wednesday and Thursday June 29th and 30th.

The Petty dismissal motion filing dated April 21 targets all five aspects of the EDA’s civil case against Petty, scheduled for jury trial on July 5 and 6. All the civil liability aspects of the plaintiff EDA’s case against Petty revolve around receipt of a $125,000 EDA check from Jennifer McDonald that was applied to payment on a mortgage loan at Ocwen Loan Servicing on Petty’s home, during Petty’s 2016 effort to sell that home. That money is cited as part of the estimated $21 million in EDA assets that McDonald is alleged to have misdirected to unauthorized personal use and benefit of herself and others.


The five aspects of the plaintiff’s case against Petty are “Unjust Enrichment”, the receipt of benefit by one party from another without a reciprocal benefit to the other party (in this case the EDA); “Conversion” (unauthorized possession); application of the “ultra vires” standard of acting beyond one’s legal authority; “Conspiracy” in knowingly acting in concert with Jennifer McDonald in the receipt of misdirected EDA assets; and “Fraud” related to the “Conspiracy” allegation that Petty knew that $125,000 McDonald applied to her mortgage loan was money the EDA asserts was stolen.

Plaintiff EDA and civil case defendant April Petty are awaiting the court’s ruling on her motion for dismissal of case against her. Royal Examiner File Photos by Roger Bianchini

Petty’s attorney pointed out that when an earlier grand jury was handing out blanket criminal indictments against alleged McDonald co-conspirators including two full EDA oversight boards, April Petty was not one of those indicted by the grand jury. Pointing to what he believes is a lack of evidence against his client having any knowledge of the alleged embezzlement conspiracy, Shmidheiser asserted to the court that “all the charges” related to the plaintiff’s “conspiracy theory” involving her should be dismissed. Essentially that is the final four of the five above EDA claims against Petty.

“All they had, have today is the check,” Shmidheiser told the court of the $125,000 check drawn on an EDA account appearing to be co-signed by McDonald and then EDA Board of Directors Chair Patricia Wines made to Ocwen (misspelled as Owen) Loan Servicing LLC that was applied to Petty’s home sale price.

At this point Judge Albertson asked defense counsel if McDonald had, in fact, transferred that money to April Petty. “Yes, but April Petty did not know that it was embezzled money,” her attorney said walking a legal tight rope between knowledge and consequence.

“You’re asking me to skip over the trial part of this case,” Judge Albertson told Shmidheiser. “Yes, I am,” defense counsel replied moving toward his argument against the “Unjust Enrichment” aspect of the case against Petty.

Noting his client’s belief McDonald was acting in her role as a real estate agent with Century 21 Real Estate in helping Petty accomplish the sale of her home, Shmidheiser asserted that his client was not by legal definition “unjustly enriched”. He elaborated that in exchange for the $125,000 check Petty believed was fronted to her mortgage loan to help facilitate her home sale, “plus another $210,000 Petty received at Closing on her home, she Deeded her house, which was listed for $330,000, to purchasers Mr. and Mrs. Leary,” Shmidheiser explained.

“She didn’t get money for nothing, she got money for her house,” the defense attorney later elaborated to this reporter on his courtroom arguments. During those arguments in support of his motion for a dismissal of the civil case against his client, Shmidheiser revealed how he prioritized his case for dismissal. And it appeared he felt the optimum legal path forward if a trial was required would be in dispelling the notion that April Petty was a conscious co-conspirator of Jennifer McDonald’s in her alleged embezzlement schemes.

“We’ll live with all but ‘Unjust Enrichment’,” Shmidheiser told the court of the prospect of a two-day trial in early July. “I’m confident we will win at trial,” Shmidheiser added of having to present the defense case to a jury on the conspiracy aspect of the EDA’s civil claims against his client.

Defense counsel also cited an established three-year statute of limitation standard he said the plaintiff had not met in charging his client for liability for funds she received in March 2016. The case of Belcher vs. Kirkwood was cited by Shmidheiser in support of the three-year statute of limitations having expired by the time his client was charged civilly. To not apply the three-year Statute of Limitations precedent would be tantamount to the court altering existing state legal precedent, which the defense attorney theorized would lead to a higher court reversal of denial of his motion for dismissal on the Unjust Enrichment aspect.

Counterpoint

In countering Shmidheiser’s arguments, EDA attorney Cullen Seltzer disputed defense assertions surrounding the applicability of the Belcher vs. Kirkwood case in an alleged financial fraud not discovered at the time it was occurring in 2016 when Ms. Petty is believed by the plaintiff to have been involved. He also argued that the defense points being made in support of a motion for dismissal were more appropriate for a jury to hear for a finding of guilt or innocence.

For dismissal to be granted the defense must show that “no facts are in dispute” Seltzer told the court. And from the plaintiff’s perspective that is not the case. Seltzer noted that Petty admits the $125,000 check went to pay on her mortgage loan during her sale process.

“She was very anxious to sell,” Seltzer told the court of Petty’s motivation to accept money he said she had expressed “suspicion” about when offered. Of his client’s initial “suspicions” about the money offered from an EDA account referenced by the EDA attorney during arguments, Shmidheiser noted that Petty had been assured by, not only McDonald, but others that it was “business as usual” on the economic development/real estate transaction front.

Of Petty’s close friend Robin Richardson, who was said to have brought McDonald to Petty during her attempt to sell her house, plaintiff counsel told the court of a second transfer of funds. Seltzer asserted that when Petty put “almost $42,000 in her pocket from her home sale, she had given Ms. Richardson $10,000. Is there evidence that was money previously owed by Petty to Richardson or was it comparable to a “finder’s fee” for bringing McDonald into the picture to help facilitate the home sale with the $125,000 loan payment on Petty’s behalf, Seltzer asked the court.

And now both plaintiff and defendant are awaiting the court’s ruling on all aspects of the defense motion for summary judgment on dismissal of the case against April Petty.

The EDA office on Kendrick Lane was ground zero as the alleged financial scandal unfolded between 2014 and 2018.

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EDA in Focus

WC EDA explores property sales, LFCC intern program, and meeting notification updates

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The Board of Directors of the Front Royal and Warren County Economic Development Authority held the monthly board meeting on April 22, 2022, in person at the Warren County Government Center. The Board held the open session first. Items on the open agenda were change in time for the monthly Board of Directors’ meeting, review of the EDA properties, update of list for individual notice for EDA meetings, and an intern program.

The Board reviewed the EDA properties and possible avenues for disposition of the parcels. Jeff Browne stated LFCC interns would be available in May for possible EDA projects. The interns would be working for credit. Jeff asked board members to get back to him by April 29th at the latest with any ideas. Potential projects include review and organization of past strategic plans for the EDA and community and making them available to all at the library.

Jorie Martin, secretary, stated all monthly meeting dates and special meetings of the EDA are posted on the website currently with the agenda. Jorie informed the board currently notice is sent to 32 individuals who requested to be individually notified of all meetings via email. The notification list has not been updated for over 18 months. Jorie Martin requested the board authorize her to notify current individuals on the list that all meetings are posted on the web and to verify they wish to continue with individual notice. The board agreed notice could be sent to persons currently on the list confirming their desire to continue to receive individual notice. In addition, anyone currently not on the list but would like to receive individual notice via email of all EDA meetings please send an email to mmartin@wceda.com.

Jeff Browne requested the EDA meetings return to 8 a.m. on the fourth Friday and the meeting location return to the EDA building. The board unanimously supported the changes. The changes will be posted on the website.


The Board went into closed session and no motions were made a result of closed session.

The next meeting is May 27th at 8 a.m. Please note time change. All meetings are posted on the website.

(A WC EDA Press Release)

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EDA in Focus

WC EDA takes no action out of Special Meeting Closed Session 

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The Front Royal-Warren County Economic Development Authority (EDA or WC EDA), now working without Town of Front Royal involvement in the midst of Town-initiated civil litigations regarding relative liabilities and losses from the 2014-18 EDA financial scandal, held a Special Meeting at 9 AM Friday morning, April 8, to convene a Closed or Executive Session to discuss five matters. Two of those were the now dueling civil litigations between the WC EDA and Town of Front Royal. The other three related to possible real estate transactions.

The agenda listed the real estate discussions as involving “Avtex Redevelopment”; the “426 Baugh Drive” property; and the “Happy Creek Industrial Park” and “legal advice” related to those three matters.

EDA Board Chairman Jeff Browne confirmed there were no announcements or actions taken out of the closed session. The now County overseen EDA met at the Warren County Government Center.

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EDA in Focus

Watch: Royal Examiner video of WC EDA monthly meeting of February 2022

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Watch the exclusive Royal Examiner video of the Friday morning, Feb. 25, Warren County Economic Development Authority (WC EDA) meeting at the Warren County Government Center.

Open session action items included approval of the C-CAP lease arrangement. Discussions included updating of the EDA Strategic Plan, the EDA’s FY2022-23 budget, and pursuing joint work with the new Town of Front Royal EDA (FREDA) on a vision for 147 acres of developable land with restrictive covenants on the former federal Superfund site at the Avtex property inside the town limits, but under control of the WC EDA.

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EDA in Focus

Two adults in the room: Following Thursday meetings County and Town EDA boards move toward coordinated efforts

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Communications, cooperation, and joint efforts toward community economic development were a crucial theme at a Special Meeting of the WC Economic Development Authority Executive Committee, Thursday morning, February 17. It was also the EDA board’s first official meeting with the new County Director of Economic Development Joe Petty. Still also County Planning Director, at least till a successor is found, Petty clarified his position as a county departmental Director of Economic Development tasked with working with the EDA Board of Directors, as the half-century-old jointly created Front Royal-Warren County EDA remains a legally independent quasi-governmental organization. In fact, the potential of a name change for what is still legally known as the Front Royal-Warren County Economic Development, or Industrial Development, Authority was broached to avoid future confusion among potential clients due to the town council’s creation of a unilateral Front Royal Economic Development Authority.

New County Director of Economic Development Joe Petty, far left, joins the WC EDA Executive Committee, from Petty’s left around the table, Jim Wolfe, Greg Harold, Jeff Browne, and Jorie Martin. Royal Examiner Photos by Roger Bianchini

Other major topics were the FY 2022/23 EDA budget preparation process and updates to the EDA Strategic Plan. On the latter front, interaction with the newly created independent Town of Front Royal Economic Development Authority (FREDA) was a major topic of conversation. In fact, on the Strategic Plan update front spearheaded by Jim Wolfe, communication with FREDA was suggested to see that both EDA entities were in step, presenting a coordinated Economic Development strategy for the community on both sides of the town-county line.

Communications and coordination was a theme picked up at the FREDA Board of Directors’ second meeting several hours later, at noon in the Front Royal Town Hall. In fact, in the wake of the 9:50 a.m. adjournment of the open portion of the WC EDA Executive Committee meeting, Petty was sent as a liaison to the town EDA meeting just over two hours later by the WC EDA board to initiate that mutually beneficial line of communication. Chairman Browne noted that Town Manager/EDA Director Hicks had issued an invitation to Petty the previous day.


Joe Petty introduces himself to the FREDA Board of Directors near the outset of that noon meeting.

The bulk of the FREDA Board of Directors meeting was largely organizational as its members become familiarized with the role they are expected to play in conjunction with other Town departments, including Planning & Zoning as that department spearheads the first rewrite of the Town Comprehensive Plan this century. In fact, Town Manager Steven Hicks, chairing the FREDA meeting in his additional role as FREDA’s Executive Director, observed the last Town Comp Plan rewrite occurred in 1998. State law mandates that municipalities review their Comp Plans every five years to see if updates are advisable due to changing goals or circumstances.

As bylaws, responsibilities, and creation of various board officer positions were on the table, dates for a planned organizational retreat and its next board meeting were set for next month. The retreat will begin at 8 a.m. on Wednesday, March 16, with its regular monthly meeting the following day, Thursday, March 17.

The FREDA Board of Directors is getting its bearings, and familiarizing each other with their individual strengths and perspectives being brought to the table. They are also being familiarized with the Town’s work on a rewrite of its Comprehensive Plan, being explained by Planning Director Lauren Kopishke, below.

The one-two punch of a third board meeting directly following a full day of briefings on a variety of topics from future Town land use and development goals to State EDA support and grant availabilities, was cited as conducive to positive movement at the coming regular monthly meeting.

The WC EDA Executive Committee is comprised of Chairman Jeff Browne, Greg Harold, Jim Wolfe, and Jorie Martin, patched in by phone at the meeting’s outset while on the road with her husband. Martin arrived near the open meeting’s conclusion, and was on hand for the closed session to discuss the disposition of several identified properties including Baugh Drive and an Avtex parcel, and perhaps ironically considering all the positive communications discussion of the day, the dueling WC EDA-Town of Front Royal civil litigations.

After initial plans not to, the Town did videotape/stream Thursday’s FREDA meeting. And while the county EDA did not have videotaping capabilities at its Kendrick Lane office in the old Avtex Admin building, Royal Examiner cameraman Mark Williams was on hand to record that meeting’s open session.

 

 

 

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