EDA Approves Resolutions Moving Toward Settlement of Old EDA Financial Liabilities, and Sale of 113 Acres at Avtex Site

At its meeting on Friday morning, April 24, the newly formed County overseen but legally still the Front Royal/Warren County Economic Development Authority (EDA, FR/WC EDA, WCEDA) adjourned to Closed Session on several items of business. Those included:

1/ An agreement on settlement of EDA debts dating back to the “Financial Scandal” era, circa 2014 to 2018. From the meeting agenda packet the motion into Closed Session on this item was stated as follows: “Motion to convene into closed session pursuant to Virginia Code section 2.2-3711(A)(8) to consult with legal counsel regarding ongoing negotiations relating to the proposed Term Sheet to resolve matters between United Bank, FB&T (First Bank & Trust), the Town of Front Royal, and the EDA, and pursuant to Virginia Code section 2.2-3711(A)(7) to consult with legal counsel regarding probable litigation relating to same, where such consultation in open meeting would adversely affect the negotiating or litigating posture of the EDA.”

That motion would seem to indicate a desire by not only the EDA and Warren County, but perhaps the Town government as well, to avoid a public legal battle over the Town’s initial claim of a lack of financial liability for misdirected EDA assets due to its previous 2012 decision to give up appointments to the EDA Board of Directors. That voluntary decision was done as part of ongoing efforts to avoid the double taxation of town citizens for public services funded by both the Town and County. It did not appear to put any end to the Town’s involvement in FR/WC EDA operational initiatives.

That was perhaps best illustrated by the Town government’s extension of a $10-million dollar “Bridge Loan” to the FR/WC EDA requested by then EDA Executive Director Jennifer McDonald. If we recall correctly, the initial one-month “Bridge Loan” with lost interest accommodated to the Town was eventually extended three additional months without the interest accommodation in what the now-imprisoned McDonald then termed an effort to give the involved banks a sign that the entire community was behind the ITFederal business proposal on 30 acres of the former Avtex Superfund site (1-Footnote). According to information given to us at the time, the banks did not believe ITFederal had the assets and means to meet its submitted developmental plan. That plan was reliant to a great degree on successful federal funding applications by the company, which never occurred, and the project was eventually abandoned.

But back to the present, perhaps the presence of both Interim County Administrator David Martin and Town Manager Joe Petty at the April 23rd FR/WC EDA meeting is an indicator an eventual reuniting of County and Town Economic Development initiatives will be achieved.

Two shots of a portion of the FR/WC EDA Board quorum getting ready to adjourn to Closed Session. First, standing from left are Town Manager Joe Petty and EDA Board member Robert Cullers, then Interim County Administrator David Martin, Board Chairman Rob MacDougall, chatting. Seated is board member James Fox. Below, Fox and Cullers talk with Petty while MacDougall and Martin continue their conversation. Not pictured is board member Bruce Townshend, away prepping for the coming closed meeting. Royal Examiner Photos Roger Bianchini.

The former Avtex site, about 440 acres, was also cited in another section of the April 23rd FR/WC EDA meeting, which moved into Closed Session.

Pending EDA property sale

2/ Resolution of the Board of Directors of the Industrial Development Authority of the Town of Front Royal & the County of Warren, Virginia (the “EDA” or the “Seller”) Approving Purchase and Sale Agreement with PRA ACQUISITIONS I LLC (the “Purchaser”) for Sale of 113 acres, more or less, located in Front Royal, Virginia on the former site of Avtex Fibers.

The staff report on the potential sale states:

“WHEREAS, the Industrial Development Authority of the Town of Front Royal & the County of Warren, Virginia (the “EDA” or the “Seller”) and PRA ACQUISITIONS I LLC (the “Purchaser”) wish to enter into a Purchase and Sale Agreement dated April 24, 2026 (referred to hereinafter as the “PSA”), pursuant to which Seller agrees to sell and Purchaser agrees to purchase 113 acres of land, more or less, and all rights and appurtenances thereto belonging, located in Front Royal, Virginia, and located on the former site of Avtex Fibers … subject to the terms and conditions set forth in the PSA; and

“WHEREAS, Seller agrees to sell, and Purchaser agrees to purchase the Property for the sum of $6,451,500, which the Seller considers to represent a fair market price for the Property; …”

The sale is subject to a number of financial and operational conditions. Some of those are: “Purchaser may inspect: Environmental conditions, Structural conditions; Additional deposit required: $400,000 during due diligence period of 270 days;

“Property is part of the Avtex Fibers Superfund Site Subject to CERCLA environmental regulations; Purchaser acknowledges: Environmental restrictions; Ongoing government oversight (EPA, DEQ, etc.)”; and “Sale contingent on Government approvals and consents.”

No information on the property’s planned use was included in the topic summary.

Other Business

And the EDA is considering two other proposed actions. Those include: Approving the Award of a Contract for Real Estate Brokerage Services and the Issuance of an IRP Loan to a Local Business.

As to the first, it was resolved that “The EDA Board of Directors, based on the negotiations and recommendation of its Chair, awards the contract for real estate brokerage services outlined in the RFP (Request for Proposal) to Commercial Specialists, Inc., dba SVN Commercial Specialists (SVN), located in Winchester, Virginia.

“The EDA Board of Directors bases its procurement decision on SVN’s proximity to the EDA’s market, its familiarity and experience with the Front Royal and Warren County commercial real estate market, the costs of its services, and its ability to be uniquely responsive to the needs of the EDA because of its location.”

And the final of our listing of Post Closed Session discussions and actions, we note the approval of “a Loan of $50,000 from the EDA’s USDA Intermediary Relending Program (IRP) Account to … On Cue Sports and Billiards LLC.”

Of the IRP loan the EDA summary report states, “Having reviewed the SCCF (Shenandoah Community Capital Fund) recommendation and the financial data and other documentation in support of the loan application, the EDA Board of Directors does hereby approve a loan of $50,000 from its IRP Fund to borrower On Cue Sports and Billiards LLC … on the terms and conditions as outlined in the SCCF recommendation and as reflected in the Promissory Note.”

During the pre-closed session discussion On Cue Bar & Grill’s successful 8 years, the last 3 at its new location on East Main Street, were noted. It should also be noted that On Cue is hosting an international 9-ball billiards tournament this weekend.

Prior to the closed session, EDA Board Chairman Rob MacDougall noted that while he believed he had no conflict of interest in the matter, he would recuse himself from the vote. In the past, MacDougall has been involved with groups that have hosted events at On Cue.

During the 20-minute open meeting prior to the closed session, updates from the Executive and Asset Committees were heard, along with board member updates. Some of those reports alluded to the Closed Meeting topics, reminding the board that action on those items might be forthcoming before the meeting’s adjournment.

FOOTNOTE: 1  For readers who weren’t present for the demise of the Avtex situation, a little online research is presented here as background: “Avtex was a heavily contaminated former rayon manufacturing plant in Front Royal, VA, active from 1940 to 1989 (when it was the community’s leading employer). Listed on the National Priorities List in 1986, it underwent extensive cleanup, including removing PCB-contaminated soil, underground pipes, and hazardous structures, with ongoing groundwater monitoring.”