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EDA in Focus

EDA civil case judge considers more defense motions to remove defendants

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Several more Economic Development Authority civil defendants were in court Thursday morning, July 30, to hear their attorneys echo past EDA defendant counsel arguments on dismissal of their clients from one or the other of the EDA’s two civil litigations now totaling at least $26 million.

Present from the nine-defendant list of people and companies named in the April 14, 2020, filing of a civil action seeking “not less than $4.45-million” in actual damages and $350,000 in punitive damages were William T. Vaught Jr. and Rappawan Inc. principal Stuart R. Vaught and Walter and Jeannette Campbell of Century 21 Realty. Dismissal motions were also argued for Tracy L. Bowers of TLC Settlements LLC, though she did not appear to be present for those arguments. Not having motions before the court were Service Title of Front Royal LLC and agent Victoria L. Williams.

Chief 26th Judicial Circuit Court Judge Bruce D. Albertson of Harrisonburg presided over the 8:30 a.m. hearing that ended a 11 a.m. with the judge taking the various defense motions under consideration.

More motions in the EDA civil litigation against a second set of defendants were heard Thursday morning in the Warren County Courthouse.


Those motions began with Robert Light and Joseph Silek Jr. representing William T. Vaught Jr. and Rappawan Inc. Other than Silek and Light, the latter who presented the Vaught-Rappawan motions case, and EDA attorneys Vivian Giles and Sean Hutson of Sands Anderson who countered the defense motions, all other attorneys were present by remote telephone connections to the courtroom. Those remotely connected attorneys generally cited agreement with Light’s initial presentation for Vaught/Rappawan, adding specifics of the allegations against their clients, to call for their removal from the civil suit list of defendants.

At issue for all defense attorneys was an alleged lack of specific actions in the EDA complaints against their clients that proved they were aware of being part of an alleged conspiracy to defraud and misdirect EDA assets in conjunction with central civil suit defendant, former EDA Executive Director Jennifer McDonald. Also contended for all defendants were arguments that the nature of those allegations indicated that Statute of Limitations timelines on bringing charges had expired by the time the EDA civil litigation against their clients was filed.

Plaintiff attorneys Giles and Hutson countered that there was, indeed, detail of the participation of the defendants in alleged schemes utilizing real estate transactions to move EDA funds through McDonald companies in order to “launder” stolen EDA money and give it the appearance of legitimacy through those real estate transactions from which all involved parties allegedly saw profit from.

According to the EDA Complaint, the Vaught-Rappawan case utilized TLC Settlements to move $2-million of EDA money into McDonald’s DaBoyz real estate company to purchase several parcels from Rappawan with that money, which was then sold back from DaBoyz to Rappawan at a $600,000 loss a month later.

While not present with no motions before the court, the shadow of primary EDA civil defendant Jennifer McDonald was present in the courtroom Thursday. ‘They were duped,’ EDA attorney Vivian Giles said of the past EDA board, pictured here with McDonald on the job in Sept. 2018. On Thursday Defense attorneys argued the same for their EDA civil case clients, to which plaintiff counsel countered – BUT they profited, the EDA lost assets.

“Through these transactions over just a month’s time, Defendant Rappawan and Jennifer McDonald effectively laundered stolen money from the EDA. McDonald put $650,000 of the EDA’s cash in her pocket; Rappawan got back all the land originally sold and put $250,000 in stolen EDA cash in its pocket. The EDA, of course, got neither land nor its money back,” paragraph 75 on page 15 of the 30-page complaint states.

Of moving money through a bank into a real estate deal for someone other than the source of the money (in this case the EDA), Giles told the court, “Transactions like this just don’t happen when you pocket $600,000 in one month. Money in the bank makes it clean? – It’s a drug dealer’s dream – but it doesn’t work like that. Were they unjustly enriched? – Absolutely. If we’re wrong let a jury decide,” Giles told the court.

She told Judge Albertson that the defendants were essentially trying to make evidentiary arguments best suited for trial, during pre-trial motions. – “This is Discovery,” she said of defense arguments seeking additional clarity on the plaintiff’s case against their clients.

The statute of limitations arguments largely revolved around a debate on the nature of the charges and when the EDA actually became award of the alleged theft, embezzlement, and misdirection of their assets.

Of the defendant counsel assertion then EDA Board of Directors Chairman Greg Drescher had signed off on one of the enabling transactions, legitimizing it as EDA business, Giles told the court, “Mr. Drescher was duped, like the EDA was. What was happening was not discovered till much, much later.” – Which is essentially what defense attorneys are arguing for their clients.

How much later we will find out the result of Thursday morning’s legal arguments is unknown. Judge Albertson did not give a hint as to a timeframe for his ruling. To this reporter’s knowledge, thus far no EDA civil case defendant removal motion has been successful.

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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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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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WC EDA moves forward with bank refinancing, welcomes Joe Petty to directorship

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The Board of Directors of the Front Royal and Warren County Economic Development Authority held a special meeting on February 4th, 2022, via Zoom. The meeting was authorized under Governor Northam’s executive mandate for the health emergency.

The Board adopted a resolution reapproving an agreement that:

  • consolidates the First Bank of Strasburg loan into the existing First Bank and Trust loan and restructures the FB&T loan, and,
  • extends the term and reduces the rate on the IT Federal loan while leaving the Town of Front Royal support arrangement unchanged.

The Warren County Board of Supervisors approved the agreement at the February 1st Board of Supervisors meeting.

In other business, James Wolfe, Treasurer updated the board on the final transfer of fiscal responsibility to Warren County. Mr. Wolfe updated the Board on the budget process for 2022/23. The draft budget will be approved by the EDA board and presented in April to the Board of Supervisors for review and approval.


Board members welcomed Joe Petty as the new Front Royal Warren County Economic Development Executive Director. Mr. Petty will continue his duties as the Interim Planning Director until his replacement is hired. Mr. Petty is a life-long resident of Warren County and brings many skills to the position.

Here is the resolution adopted.

RESOLUTION OF THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE TOWN OF FRONT ROYAL AND THE COUNTY OF WARREN, VIRGINIA RELATING TO THE FIRST BANK AND TRUST COMPANY LOAN REFINANCING

WHEREAS, the Industrial Development Authority of the Town of Front Royal and the County of Warren, Virginia (the “Authority”) has previously accepted a Term Sheet dated August 19, 2021, (the “Term Sheet”) from First Bank and Trust Company (the “Lender”) with respect to proposed modifications to three existing Lender loans to the Authority as described therein (collectively, the “Loan Refinancing”);

WHEREAS, the Authority approved the Term Sheet originally at its August 27, 2021 meeting, and subsequently reapproved the same at its September 24, 2021 meeting and desires to reaffirm and approve the Term Sheet at this meeting;

WHEREAS, there have been modifications made to the documents relating to the Loan Refinancing since such prior approvals, copies of which have been presented to the Authority in substantially final form, including but not limited to the Loan Agreement, the Support Agreement and the Deed of Trust (collectively, along with related closing documents and certificates, the “Refinancing Documents”);

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE TOWN OF FRONT ROYAL AND THE COUNTY OF WARREN, VIRGINIA AS FOLLOWS:

1. It is hereby determined to be in the best interests of the Authority to proceed to consummate and settle the Loan Refinancing upon substantially the terms and conditions described in the Term Sheet and as reflected in the Refinancing Documents.

2. The Chairman or Vice-Chairman of the Authority (hereinafter the “Chairman”), either of whom may act, and the Secretary are hereby authorized and directed to execute and deliver such documents and take such actions as may be necessary or appropriate in order to consummate and settle the Loan Refinancing upon substantially the terms and conditions described in the Term Sheet, and as reflected in the Refinancing Documents.

3. The Secretary or any Assistant Secretary of the Authority, either of whom may act, is hereby authorized and directed to affix the seal of the Authority to such Refinancing Documents as may require a corporate seal and to attest to such seal.

4. All Refinancing Documents shall be prepared or reviewed and approved by the Authority’s outside counsel, and shall include such completions, insertions or changes not inconsistent with this Resolution as may be approved by the Chairman and Secretary of the Authority, in their sole discretion, in consultation which such counsel. The execution and delivery of the Refinancing Documents by the Chairman and Secretary of the Authority shall constitute conclusive evidence of their approval of such completions, insertions or changes.

5. The Chairman or Vice-Chairman and Secretary are authorized to sign an extension or extensions of the loan until the refinancing is completed.

6. This Resolution shall take effect immediately.

 

Warren County appoints Planning Director Joe Petty to direct its EDA from in house

 

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County supervisors ponder expensive departmental equipment replacements, modifications to EDA Support Agreement

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In addition to the surprise announcement of Planning Director Joe Petty to head the now County-overseen but legally still FR-WC EDA from within the County’s departmental staffing apparatus as noted in the related story –“Warren County appoints Planning Director Joe Petty to direct its EDA from in house”, the Warren County Board of Supervisors took on a number of important matters at its regular meeting of Tuesday morning, February 1st. One of those was EDA-related, as new EDA Director Petty listened on what would be his first official day on his new job.

That was the approval of modifications to the County’s Support Agreement with the EDA acknowledging “its moral obligation for the monthly debt service for FY 2021-22 only for EDA loans.” County Administrator Ed Daley noted that the FR-WC EDA was consolidating its loan situation into one bank from two. The agreement modifications will elaborate that the County can be reimbursed by the EDA for attorney’s fees and other litigation costs by asset recoveries related to the EDA’s ongoing civil litigations.

The staff agenda summary points out that Section 8.16 of the Loan Agreement “gives the County the right to be reimbursed up to $2.5 million from asset recoveries” with “amounts over $2.5 million split 50/50 between the County and the lender, with the lender’s portion being used to reduce the EDA’s debt.” However, it was further noted that “various carve-outs” within the Support Agreement allow the County to be reimbursed “without splitting funds with the lender” as in the case of the EDA vs. TLC Settlements, as well as in the EDA’s counterclaims against the Town of Front Royal on the Town’s disputed moral debt obligation to the EDA, including construction costs for the new Town Police Station.

When some questions about the modifications led the county administrator to suggest that conversation be held during the scheduled closed session, the board delayed action on the modification agreement. Out of the hour-and-45-minute closed session that included discussion of the EDA’s civil litigations with former executive director Jennifer McDonald and the dueling suits with the Town of Front Royal, the board on a motion by Delores Oates, seconded by Walt Mabe, unanimously approved the Loan Agreement modifications.


Welcome to EDA directorship, Joe.

Royal Examiner reached WC EDA Board of Directors Chairman Jeff Browne for comment on Petty’s appointment Tuesday afternoon. “I’ve had a chance to work with Joe Petty on several projects and have been impressed with his ‘can do’ attitude. He’s a great asset to EDA and the residents of Warren County. We look forward to working with him to bring economic development to the County that makes a real difference,” Browne told us.

Joe Petty got an earful of the complexities of County-EDA business on the day he was announced as the new EDA Director in a new county staff position. Royal Examiner Photos by Roger Bianchini


Fire Equipment purchase

However, chief among its business of the day according to County Administrator Daley was the approval of a budget transfer to facilitate the purchase of a major piece of firefighting equipment at a discounted price of $727,328. A $15,000 discount will be achieved if $500,000 of the full purchase price is made by July 31, 2022, the staff agenda packet summary explained.

Asked why he thought the purchase of the “2023 Pierce Pumper” would be the “most important thing” the board would do at the meeting, Daley cited ongoing delays in County authorization of replacement of costly, if essential emergency services equipment. “This equipment is old” and needs to be replaced “today … and this will start that process,” Daley told the board. Emergency Services Chief James Bonzano noted that upon submission of a purchase order the department was looking at an 18 to 19-month delivery period. And while the price, even discounted, is nothing to sneeze at, Bonzano told the board that any delay in placing the order would result in higher costs down the road, as such equipment pricing continues to be on a rising scale. The County’s Emergency Services Chief elaborated on details of his department’s struggles to maintain aging equipment, as well as adequate staffing, including within the volunteer departments.

County Fire & Rescue Chief James Bonzano outlines departmental needs as Deputy Finance Director Alisa Scott stands by to explain financing plans.

Responding to a question from North River Supervisor Oates on a funding strategy to achieve necessary equipment replacement over the long term – 10 years was cited – recently acquired from across town County Deputy Finance Director Alisa Scott said such a plan had just been implemented in conjunction with a debt management strategy.

Satisfied by the departmental and equipment analysis, coupled with the financial implementation strategy, the board on a motion by Vicky Cook, seconded by Supervisor Mabe, unanimously approved the purchase setting in motion the process of giving County Fire and Rescue the tools to adequately provide its crucial public safety functions.

And one more equipment purchase

Another purchase originally included in the meeting’s Consent Agenda was removed for discussion by Board Chair Cheryl Cullers. That was the slightly less expensive $67,423 (and 43 cents) purchase of a Bobcat Compact Track Loader for the Public Works Department. After a summary of the need and competitive low bid recommended purchase by Public Works Director Mike Berry, the board, on a motion by Mabe, seconded by Cook, unanimously approved the purchase. Delivery of the Bobcat was promised within 120 calendar days, some 14 to 15 months sooner than Fire & Rescue’s 2023 model Pierce Pumper is expected to arrive.

WC Dept. of Social Services Director Jon Martz describes his department’s case load and budget dynamics as DSS Assistant Director Christie Lawson listens.

See these discussions and other business conducted, including monthly reports by the Va. Dept. of Transportation, the Va. Cooperative Extension Office, WC Department of Social Services, as well as board and staff reports in the County video.

 

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