EDA moves on legal representation, loan accounts – addresses indictments

A quorum of the EDA Board of Directors gets down to business, from left, Ed Daley, Tom Patteson, Executive Director Doug Parsons, with Gray Blanton and Jorie Martin to the right. Royal Examiner Photos/Roger Bianchini. Video by Mark Williams, Royal Examiner.

At the Front Royal-Warren County Economic Development Authority monthly meeting on Friday, September 27, a four-person quorum, plus one (Greg Harold) by phone connection for a portion of the meeting, dealt with some financial housekeeping and a decision on interim legal representation.

On the latter front, counsel from Sands-Anderson, which already represents the EDA as bond counsel and in its civil litigation seeking recovery of $17.6 million-plus in allegedly embezzled or misdirected assets, was announced to serve as the Authority’s general counsel for the time being.

And following a closed session, on a motion by Jorie Martin, seconded by Tom Patteson, Sands-Anderson was also named as the EDA’s Point of Contact in negotiations with First Bank & Trust regarding the EDA Line Of Credit (LOC). The vote was 4-0.

The EDA is exploring separate legal representation in the long run as Warren County also searches for a permanent replacement for departed County Attorney Dan Whitten.

The County’s Interim Attorney Jason Ham of the Litten & Sipe law firm has declined the traditional dual County-EDA attorney’s role due to potential of conflicts of interest regarding the EDA financial fraud situation.

Indicted members

And on the EDA legal front, recently-appointed EDA Board Chairman Ed Daley read a statement addressing the September 24 misdemeanor criminal bookings of several current and past EDA board members. Those members, including currently seated Tom Patteson, Mark Baker and Gray Blanton, along with past members Greg Drescher, Ron Llewellyn, William Biggs and Bruce Drummond, were booked along with all five sitting county supervisors, the county administrator and county-EDA attorney on misfeasance and nonfeasance charges alleging an absence of due diligent oversight of former EDA Executive Director Jennifer McDonald during the first four months of the Cherry Bekaert EDA financial fraud investigation (see below linked story).

“The Front Royal-Warren County EDA, as a committed stakeholder in this community, is fully aware of the misdemeanor charges levied against past and current board members. The EDA recognizes these allegations and will appropriately respond and act accordingly as the necessary due legal process is administered through the Justice System,” Daley began, adding, “The EDA has recently developed and continues to refine a series of operational processes, procedures, and guidelines to ensure that accountability and transparency are at the forefront of our operational goals.

“The EDA has highly functioning committees dealing with financial oversight, asset management, communications, and executive oversight. These committees are fully engaged, routinely convened, and report to both the executive committee and the board at large.

“The EDA will continue to provide and promote economic opportunities for business expansion, retention, and other economic activities to match our strategic plan in order to provide continued positive resources to our community,” the board chairman concluded.

Finances

The EDA board also acknowledged its move to hand over direct financial management to the county government and presented a list of bank account balances, loan payment schedules and balances, as well as its current properties list.

A total of $1,697,361.35 was listed in bank account assets.

A current loan accounts total balance of just over $41 million was shown with estimated monthly payments totaling $150,582.54.

The total assessed value of 25 EDA properties was about $32 million (if this reporter’s fingers and TRAC phone calculator were functioning properly in concert).

And don’t forget the EDA civil litigation total being sought for recovery has most recently been discussed at over $21 million; as much as $15 million of which the Town is claiming it is owed in its own suit filed against the EDA.

It was noted that two smaller account balances with United Bank totaling $23,067.85 were being closed due to delays on the projects they were opened to fund. Those projects are the West Main Street connector road ($16,968.64) and Phase Two if the Happy Creek Road improvement project ($6,099.21)

Phase One of the West Main connector had been planned to run through the 30-acre ITFederal property. The initial section of the road accessing the 10,000 square-foot ITFederal building on site is nearing completion. However the future of the remainder of the ITFederal site remains in doubt due to the company’s inclusion as a defendant in the EDA civil litigation. That litigation is seeking recovery of the balance of the $10 million EDA loan to ITFederal on the grounds that it was acquired “under false pretenses” according to former EDA-County Attorney Dan Whitten.

So that’s the vision of a developed property – a model of unknown origins of the Royal Phoenix Business Park spotted in a storage area of the EDA office. The skatepark and soccer fields are shown in brown at bottom, off the Kerfoot Ave. notation, and the arrow at top indicates location of the EDA office in the old admin building on Kendrick Lane. I have a hunch this is not an engineer’s schematic of the connector road path.

The West Main Street extension is ultimately envisioned as a main thru road in the 147-acre Royal Phoenix Business Park property. It would ultimately connect the West Main Street-Kerfoot Avenue intersection near the skatepark and soccerplex to the south and Kendrick Lane just east of the EDA office complex to the north, essentially serving as a portion of the long-discussed “western bypass”.

See discussion of these and other business on the EDA’s September meeting agenda in this exclusive Royal Examiner video:

See Related Story:

Defense attorneys move to quash grand jury misdemeanor indictments