EDA had spent only $10,500 at time of workforce housing purchase

Under watchful eye of his executive director, board Vice-Chairman Greg Drescher reads motion to authorize EDA’s $445,000 purchase of the workforce housing 3.5-acre parcel on April 28, 2017. Royal Examiner File Photos/Roger Bianchini

As referenced in our second story on ramifications of the investigation into financial wrongdoing and alleged embezzlement of FR-WC Economic Development Authority assets, the rationale used for proceeding with a $445,000 purchase of the workforce housing project parcel when its “gifted” status evaporated in April 2017 was the EDA’s expenditure of a half million dollars on the project to that point. See Related Story:

And that’s not all – the mysterious EDA workforce housing transaction

From last week’s story we quoted from an April 2017 Royal Examiner story (See Related Story): “Asked about the decision to purchase following the meeting, McDonald said the EDA had already spent a half-million dollars in preparatory work, including site planning, engineering, town and state DEQ permitting fees, so the board decision was that it would be best to proceed with the transaction as a purchase, rather than abandon the project and site at this point.

“’We’re frugal,’ then-EDA board Chair Patty Wines commented.”

The following month, on May 19, 2017, coincidentally one day after an alleged break-in of the EDA office in which no signs of forced entry were apparent, the EDA released a 383-page explanation of the workforce housing project following then-Councilwoman Bébhinn Egger’s submission of six specific questions concerning the project.

Stacks of the EDA’s 383-page explanation of the workforce housing project released on May 19, 2017, one day after an alleged break-in and vandalism of the EDA office

• Who put the $445,000 price on the now-voided gifted deed of transfer;
• A timeline on all permitting for the project, particularly now that fingers have apparently been pointed the town’s way for the failure to meet the previously secret March 1, 2017 deadline;
• Why there was a confidential agreement between the EDA and the Campbells on the land transfer;
• An itemization of how the EDA has already spent $500,000 on the project, leading to the decision to proceed with a purchase of the property;
• Public disclosure of all familial relationships between anyone involved in the transaction;
• And finally, appraisal prices on the Afton Inn and old Stokes Mart/B&G Goods building the EDA is also involved in managing or marketing.

Of her colleagues failure to join her in seeking answers as a group, Royal Examiner reported, “However, her colleagues seemed less interested in the misinformation and previously undisclosed confidential agreement that gave the EDA less than nine months to accomplish – WHAT isn’t exactly clear.” See Related Stories:

Egger, Connolly butt heads over workforce housing project changes

Connolly again berates Egger for continuing workforce housing discussion

Of the 383-page EDA response to her above questions, Egger said at a subsequent council meeting, “It sort of reminded me of the person who goes in to pay their fine with all pennies… it was every piece of paper they could find with the words workforce housing on them. And I had asked very specific questions and I expected very specific answers to those questions. After looking through the packet, very few of those questions are answered.”

Bébhinn Egger, above left, and John Connolly, below right, had some testy exchanges about the viability of raising questions about how the EDA was functioning and representing those functions in 2017. Three of her then-colleagues, including Eugene Tewalt and Hollis Tharpe also pictured (as well as Jacob Meza) apologized to Egger on March 25, 2019, for their stances at the time.

In Royal Examiner’s exploration of that voluminous EDA response to questions about the workforce housing project, we noted that many of the specific items cited as expenditures, in fact, appeared to be proposals or in one case an escrow account created to cover future expenses: “While there was a ‘Project Invoices & Contracts’ section in the May 19 package, as we pointed out in our ‘First Impressions of EDA reply…’ story it is NOT clear exactly how much money has actually been spent on development of the Campbell parcel versus how much has been theoretically committed to it. That is because while some of the included documents are invoices, others are proposals, or relate to the establishment of escrow accounts and contingency funds, the latter two alone totaling $207,380 of the $420,765 “expenditure” total listed in the document.  The documents appearing to be proposals containing amounts that may not yet have been spent could total from as little as $6,000 to as much as $70,000 or more,” this reporter wrote. See Related Stories:

First impression of EDA reply: 383 pages later what have we learned?

County attorney invokes attorney-client privilege on EDA workforce housing questions

Contacted by email about the discrepancy between money actually spent that is not recoverable versus money just committed to the project, EDA Executive Director Jennifer McDonald responded to Royal Examiner that “all but $10,500 spent on a traffic study IS recoverable.”

As this reporter wrote at the time, “Since even this cynical reporter estimated more than that actually spent based on information provided in the May 19 informational packet, I e-mailed her back for double verification – “All but $10,500 for a traffic study is recoverable, and that is on the record??”

“Absolutely,” McDonald replied.

So much for frugality as the stories surrounding the workforce housing project continued to unravel in May and June 2017. See Related Story:

Some answers, more questions, (one hint) on EDA workforce housing