EDA, 2 E. Main LLC move forward on Afton Inn redevelopment

Hard to miss that long-floundering eyesore across Crescent St. from Town Hall. The EDA has announced progress on redevelopment despite an absence of assistance from the town government. Royal Examiner Photos/Roger Bianchini

Following a special meeting closed session Friday morning, June 12, the Front Royal-Warren County Economic Development Authority issued the following press release titled “Afton Inn Purchase Agreement Reached Between EDA and 2 East Main, LLC” through Executive Director Doug Parson’s office. It announces a change in the status of the Afton Inn redevelopment project adjacent to the Front Royal Town Hall, at the head of Front Royal’s Historic Downtown Business District.

“The Front Royal-Warren County EDA is pleased to announce the purchase agreement for the sale of the Afton Inn to 2 East Main, LLC.

“The EDA has been working with 2 East Main, LLC for nearly a year. The contract structure enables 2 East Main, LLC to advance the project in either a 3-month period at a sales price of $325,000 or a 6-month option at $345,000. Upon settlement, the EDA and 2 East Main, LLC have agreed to terminate the existing Lease/Purchase Option that was signed on May 11th, 2018.

“2 East Main, LLC has shown a strong commitment to the Front Royal community and fully intends to rehabilitate the Afton Inn to again be a cornerstone in Front Royal. This is the third sale of EDA property in the Town of Front Royal and Warren County this year. Transferring the Afton Inn to 2 East Main, LLC also secures and helps ensure the survivability of the Community Development Block Grant (CDBG). The Afton Inn was key to the Town’s application and the influencing factor in ultimately receiving the grant award.

“The EDA is excited to move forward on this project with 2 East Main, LLC with the full support of community leaders and citizens alike,” the release concluded.

Previous work 2 E. Main LLC was performing on the Afton was halted when the renovation project was named as a means that former EDA Executive Director Jennifer McDonald allegedly used to misdirect funds to her personal use. 2 E. Main has not been implicated in any way in any misdirection or knowledge of those alleged activities.

Contacted later, Parsons added, “I’d like to thank 2 East Main and Asset Committee Chairman Greg Harold for their hard work in the last year to bring this deal together. The Afton Inn is a crucial property in Front Royal, and we are glad to see progress being made.

And Parsons reiterated a point in the release about the Afton’s role in securing the CDBG funding: “It is our understanding that the Afton Inn was a key property in the grant the Town got for façade improvements downtown and along East Main Street. So, this is
Elephant in room

As Royal Examiner readers and almost everybody not sleeping under a rock for the past year knows, the Front Royal Town Council has authorized civil litigation against the over half-century-old joint Town-County EDA, rather than engage in offered “good-faith negotiations” to establish exactly what in Town assets were actually lost or misdirected during the alleged financial scandal discovered in a forensic audit of EDA affairs commissioned by the County and EDA in mid-2018.

The “at least $20 million” amount of the Town civil action against the EDA essentially matches the $21.3 million amount of the EDA’s initial civil action seeking recovery of misdirected EDA assets from 14 original civil defendants and alleged associates of former EDA Executive Director Jennifer McDonald. McDonald is the primary civil defendant in the EDA’s litigation.

The Town has since lobbied the state and received permission to create a second, unilateral Town EDA, while still technically retaining membership in the existing EDA. The Town has also refused to pay an undisputed debt on about $8.4 million in principal payments on the new Front Royal Police Headquarters financed by the EDA on the Town’s behalf. There is also a steadily accumulating interest rate on that principal payment, though there is also a legal dispute at exactly what that interest rate is.

As council critic and now awaiting certification of his candidacy for council in the November election, Bruce Rappaport observed at the Monday, June 8, council meeting, about two-thirds of the EDA’s current property assets, about $21 million of $31 million Rappaport asserted, lies inside the town limits.

The announced new Afton Inn agreement illustrates that point.

Parsons confirmed Rappaport’s numbers essential accuracy, noting that the $21.8 million of EDA assets in town equals 69.2% of EDA properties total value of $31.5 million.

Asked about the Town’s decision and somewhat daunting task of creating and funding a second EDA amidst hostile civil litigation with the existing EDA still working on the Town’s behalf,
Parson’s reiterated a point he has previously made, if thus far futilely with the town council, on multiple occasions: “If and when the Town is willing, we’re always ready and willing to sit down and talk with them to resolve our issues.”

Maybe come January 2021 in the wake of the November Town Election, Doug, maybe then.

Mayor Tewalt, here at an EDA board meeting, has been a lonely minority of one in attempting to bring the Town and EDA to the table to resolve any outstanding financial issues between the two entities.