EDA discusses property sales, legal rep, FRPD costs and appointment

The EDA Board of Directors and staff get down to business in Tuesday morning’s special meeting. Royal Examiner Photo/Roger Bianchini. Video by Mark Williams, Royal Examiner.

At its Special Meeting called for Tuesday, September 10, the Front Royal-Warren County Economic Development Authority met in open session for a half hour before going into an hour and thirty-five minute closed session.

Discussion in closed session included disposition/acquisition of property; prospective business or expansion of existing business; legal advice on loans, accounting, debt service and the Afton Inn. Open session discussion of EDA Asset Committee developments indicated a two-hour meeting between committee member Greg Harold and the Afton Inn development group the previous day. Harold reported that the developer (2 East Main Street LLC) was “very anxious” to be allowed to restart work.

Work was halted when the EDA civil litigation filed March 26 alleged that former EDA Executive Director Jennifer McDonald had used the Afton Inn renovation project to embezzle or misdirect EDA assets. Thus far there has been no indication of any wrongdoing by the development group.

Following the closed session the board approved two motions by 6-0 votes (Mark Baker absent) related to the movement of properties. First, Vice Chairman Jeff Browne moved to initiate a 30-day study period on a $375,000 offer on the 404 Fairgrounds Road property; and then to obtain quotes on repairs to the damaged residential rental property at 514 East Main Street.
As part of that latter motion it was authorized to notify the misplaced East Main Street tenants that the EDA would stop paying their temporary housing costs in a nearby motel as of September 30.

EDA property records indicate the Fairgrounds Road property was bought by the EDA in 1997 for $141,000. It is currently assessed at a value of $530,000.

The Stokes Mart property was purchased by the EDA in 2014 for $530,000. Current assessments total $456,800, $370,100 for the market and $86,700 for the apartments.

Legal representation
The EDA also voted to authorize use of the Warren County Attorney being hired to replace Dan Whitten on an interim basis for a 12-day period at a cap of $10,000. Whitten’s last official day is September 13, but he indicated he will work through the weekend before departing for his new job as Prince George County Attorney.

It was observed that it was unlikely the EDA would need attorney services anywhere near the time it would take to reach the $10,000 cap on legal costs between September 16 and 27. The EDA is pursuing the hiring of its own attorney, as opposed to utilizing the county attorney to avoid future potential conflicts of interest as Whitten occasionally ran into as the EDA financial fraud investigation was proceeding and leading to civil litigation.

FRPD costs
As the brief five minute open session following Tuesday morning’s closed session was adjourned, Front Royal Town staff and two councilmen, Vice-Mayor William Sealock and Eugene Tewalt, were among those on the Town side gathering to meet with EDA staff to discuss payment on the debt service on the new Front Royal Police headquarters across Kendrick Lane at Monroe Avenue.

Earlier discussion has indicated some areas of disagreement. The town council is balking at paying the full 3% interest rate the EDA has been paying on the approximate $8 million construction loan. Citing its pursuit of the New Market Tax Credit option which would have carried a 9-year interest free period, council is seeking to pay only 1.5% interest, leaving the EDA to cover the other 1.5%

Open session discussion appeared to indicate a balance of about $4.4 million on a project cost of $7.7 million. EDA Finance Committee member Jorie Martin noted that thus far there has been no reimbursement by the Town to the EDA for the new police station – “We need to come to terms” Martin told her EDA board colleagues.

That situation is likely complicated by the Town’s civil suit seeking recovery of as much as $15 million in allegedly misdirected Town assets as part of the EDA financial fraud investigation.

When this reporter asked to stay to observe the EDA-Town staff meeting plus two councilmen on the FRPD payment situation, legal counsel for both the Town and EDA concurred that as a “staff meeting” it was not open to the public or press.

Reform appointment
Also prior to that disappointment, the EDA board voted to appoint new Chairman Ed Daley as its representative to the EDA Reform Committee, with Vice-Chairman Browne as alternate.

It was noted that while the three-way joint meeting had approved an amendment to the EDA request for board representation on the committee allowing the EDA to select its nominee, the initial motion on the appointment of the member had been defeated on August 27.

“What’s the point of approving the amendment when you deny the underlying motion,” Daley wondered. The consensus was there was some confusion as to voting rights for only one of the two EDA reps – EDA Executive Director Doug Parsons is also a Reform Committee member – and that Daley’s EDA board nomination should be forwarded for approval by the joint Town-County-EDA committee overseeing the Reform Committee activities.

See all these discussions and more in this Royal Examiner video: