Update: EDA Asset Committee Chairman challenges Town on ‘bad faith’ acts and ‘charade of partnership’

As part of his Asset Committee Report at Friday’s Front Royal-Warren County EDA Board of Director’s meeting, Greg Harold began a two-phased counterattack on the Town of Front Royal’s recent actions toward the EDA. Primary among those actions are the Town’s refusal to make good on its legal commitment to repay the EDA for $8.4 million in principal payments made thus far on the new Front Royal Police Department headquarters across Kendrick Lane; the initiative for a special state code waiver allowing the Town to create a second EDA while remaining legally connected to the existing one; and the “ambiguous claim of damages” totaling $15 million in the Town’s civil litigation against the EDA.

“The EDA may soon be sponsoring an introductory level class on Municipal Financing and Understanding Loan Commitments,” Harold wrote in his Asset Committee Chairman’s Report. He continued to reference “bad debt and shady accounting” from a “community partner known as the Town of Front Royal” which he described as continuing “to act in bad faith”.

And that was just the start – at the meeting’s outset Harold made a motion to add a statement he wanted to make on the above topics to the meeting agenda. That motion passed unanimously.

Harold’s statement read into the meeting record following the second of two closed sessions was titled “The Town of Front Royal’s Charade of Partnership”.

In it, Harold describes a pre-Thanksgiving meeting he and Board Chairman Ed Daley had with Town officials that was “cordial, respectful and collaborative”. However, it isn’t the smiling “town face” at issue, but rather what is increasingly perceived as an active “knife in the back” in legal and legislative town government actions aimed the EDA’s way that has aroused the ire of the Asset Committee chairman and his EDA Board colleagues.

Greg Harold points to a list illustrating his contention the Town has engaged in bad faith actions and a campaign of disinformation designed to discredit a re-tooling EDA board and staff’s efforts to right its direction in the wake of a $21.3 million financial scandal. Royal Examiner Photos/Roger Bianchini

“Actions speak louder than words,” Harold stated before his cheerful “Merry Christmas” Friday, December 13th sign off.

See Harold’s scathing indictment of Town officials’ recent behavior toward the EDA as a newly re-tooled EDA staff and board of directors works to right its situation in the wake of what stands at a $21.3-million dollar financial scandal alleged to have been forged during some portion of the 10-year executive leadership of Jennifer McDonald, in the linked Royal Examiner video.

But for you old-school readers out there let us summarize and analyze the genesis of Harold’s pointedly critical response to the Town’s elected and appointed leadership’s about face. From the EDA perspective that about face includes abandoned efforts on EDA reform and partnership, as well as the Town’s refusal to pay what appears to be an undisputed $8.4 million in principal financing by the EDA for the Front Royal Town Police Headquarters construction project.

Responding to a question from board member Mark Baker during the Asset Committee Report, Harold observed that while the General Contractor on the FRPD project “is whole” not so for the EDA, which has covered the above-mentioned $8 million-plus in construction expenses come due as the Town’s financial agent on the project.

“They (the Town) hold the contract and the lien; we hold the note with no lien rights,” the Asset Committee chairman told his colleagues.

OUCH.

Following the meeting Harold, Daley and Board Vice-Chairman Jeff Browne noted they have yet to be presented with any specificity regarding the alleged “up to $15 million dollars” the Town is suing the EDA for recovery of. In fact, they agreed that other than approximately $575,000 dollars – half in disputed interest payments on the FRPD project and half in alleged debt service overpayments discovered by the Town Finance Director last year, they have no idea what the Town is claiming as a basis for that “up to $15 million” claim of misdirected Town assets.

We observed that may change now that the town council has authorized $45,000 to pay Mitchell & Company for auditing services in its civil suit against the EDA. And no telling what the Damiani & Damiani attorneys might come up with as a legal basis for the Town’s claim of losses in the EDA financial scandal at a price of $200,000 for starters.

WAIT, that’s not in my Town Report, Interim Town Manager Matt Tederick may be thinking as EDA Board members began grilling him about recent Town actions, including an unprecedented move to gain a state legislative exemption to become party to two concurrent EDA’s.

The Town filed its suit against the EDA on June 21, just short of six months ago, initially claiming $3 million in compensatory damages. The Town Attorney explained the suit was seen as a safety measure to protect the Town against any potential Statute of Limitations lapse on yet-to-be-determined transactions that might be nearing. The Town amended its complaint to the $15 million amount on July 12, though at the time Town Attorney Doug Napier explained that amount as an “up to $15 million” figure since the Town had still not determined exactly what losses it could or would claim.

‘Fake (Town) News’

Asset Committee Chairman Harold appears to have taken the lead in presenting the EDA’s counterpoint to what he and his colleagues believe to be an escalating Town campaign of disinformation about the existing EDA in order to justify an unnecessarily expensive and hostile stance both legally and policy-wise against the Front Royal-Warren County EDA.

In fact, during Friday’s open meeting the issue of a recent assertion made in support of the Town’s second EDA initiative reported in the local media was raised. Tom Patteson disputed the Town notion that the EDA has shown favoritism toward County projects outside the town limits. A nod in two directions was made across Kendrick Lane from the EDA office front door and toward the Royal Phoenix Business Park out its back door. Visible from the EDA offices are the ITFederal and West Main Street connector road projects in one direction, and the FRPD station and the Lord Fairfax Community College Tractor-Trailer Driving School in old Avtex parking lot, in the other. All three lie within a stone’s throw of the EDA office complex in the old Avtex Admin building in town.

Uh, do these look familiar to you at all? EDA officials maybe be asking their town counterparts of economic redevelopment projects in town. And those are far from all the EDA has and is working on, on the Town’s behalf, EDA staff and board point out.

Further acknowledgment of the EDA’s role in marketing the Afton Inn for redevelopment, a project currently in limbo due to legal and financial complications stemming from the financial scandal, as well as ongoing tier ranking and marketing of vacant town parcels, including in the Happy Creek Technology Park which lies primarily on Town land, were also acknowledged.
Executive Director Doug Parson later noted to the media that while some larger scale industrial and warehousing projects naturally gravitate toward more open parcels that generally lie in more rural areas of the community, he and the EDA have been and remain highly proactive on recruitment and marketing of town land for economic development, as well as on business retention inside the town limits.

“So it wasn’t fake news, it was false representations made to the media (by the Town),” Board Chairman Daley observed of the daily paper news article.

And it appears the EDA Board’s pointed Q & A with Interim Town Manager Tederick reported in a related story; and Asset Committee Chair Harold’s scathing statement on “The Town of Front Royal’s Charade of Partnership” were just warning shots fired across the Town “ship of state’s” bow.

Interim Town Manager Matt Tederick, left, and EDA Board Chair Ed Daley, seated far right, are eye to eye Friday, if not eye to eye on issues like the Town’s refusal to compensate the EDA for over $8 million in undisputed principal payments on the FRPD construction project.

“I advised the Town Administration that relations between the Town and the EDA were going to get very difficult and very uncomfortable for many people,” Harold observed in concluding his “Charade of Partnership” statement, adding, “For this reason my future actions and presentations will be based upon fact, and fact only. These will not be opinion pieces or ‘hit jobs’ but they will lay out very concisely the shortcomings that the Town has demonstrated to the EDA and more importantly, to the entire Town of Front Royal.”

In his concluding remarks Harold challenged Town officials, elected and appointed it would seem, to a trial by public opinion. But Harold suggested that trial be based on “truths and accountability” rather than the type of “disinformation” and “bad faith” actions the EDA Board believes some within the Town government, including its elected officials, have either been steered toward on dubious grounds or voluntarily chosen to move forward on for their own reasons.

Walter Mabe was an interested observer at Friday’s EDA board meeting. He and fellow supervisor elects Cheryl Cullers and Delores Oates have all attended various recent EDA meetings as observers. Following the meeting Mabe said his perception is that it is important for the County and Town to maintain an EDA.

If anyone in local government or economic development is looking for a second trade, LFCC has a tractor trailer training program set up right on Kendrick Lane inside the town limits. We hear graduates can earn in the $80,000 range annually.

Update: EDA Board grills Tederick on Town’s intent toward this EDA