EDA was not a signatory to workforce housing confidential agreement

The Front Royal-Warren County Economic Development Authority was NOT a signing party to the “confidential agreement” that added a $445,000 purchase price to its workforce housing project.

That was the stunning revelation found near the end of an eight-page press release accompanying the May 19 release of a 383-page informational packet about that project.  Failure to meet a start of construction deadline in that “confidential agreement” was the stated reason the EDA is now planning a $445,000 purchase of a 3-1/2 acre parcel it had previously told Town and County officials had been “gifted” to it.

Bébhinn Egger, left, has thus far been the only elected Front Royal official to express concern about crucial information the EDA withheld from the Town during the site plan approval and permitting process for the workforce housing project. Photos/Roger Bianchini

Addressing concerns raised by Front Royal Councilwoman Bébhinn Egger, EDA Board Chair Patricia Wines was quoted in the press release stating:

“In response to concern from certain Town officials that we did not disclose the March 1^st construction start deadline, the EDA was witness to a confidential real estate transaction and no monies from the Town were involved in the transaction, therefore, the EDA upheld its responsibility to confidentiality and was under no obligation to inform Council.”

There are two bombshells in that one sentence:

• first, that the EDA Board believes it has no legal or ethical obligation to inform the municipalities that created it, and for whom it conducts economic development-related business, about crucial information impacting cost and its ability to proceed with plans presented during local permitting processes;
• and, that the EDA was NOT a signing party to the confidential agreement and its secret deadline negating the “gift” status of the 3-1/2 acre property.

The first of those issues is addressed, along with questions regarding money spent, and why no effort over a six-month period was made to correct misinformation given the Town about how the value of the property was established, in our accompanying story.  However, we will address the EDA’s role as a “witness” to a confidential agreement between third parties here.

see related story

We do not believe our questions are unanswerable because they do not relate to the content of the confidential agreement.  Rather, they address the EDA board’s knowledge of and witness to the agreement:

• Who were the involved parties in the confidential agreement?
• Who witnessed it for the EDA?
• Do the conditions of an agreement the EDA was not party to, nor was part of the deed of transfer recorded at the courthouse, legally require the EDA to return the property “gifted” to it?
• When did each board member become aware a confidential agreement related to the workforce housing parcel existed? – And more specifically, were they aware the agreement included of a start-of-construction deadline that if not met would negate the gift?
• Have they seen the agreement?
• Did the EDA board discuss the potential ramifications of keeping Town of Front Royal officials in the dark about the start of construction deadline?

Background

The existence of the confidential agreement the EDA now says it was only witness to was first revealed following an April 28 EDA Board closed session and consequent vote to proceed with a $445,000 purchase of the workforce housing parcel.  Following the April 28 vote, the EDA board chair and executive director revealed that a March 1, 2017 “drop-dead” date to begin construction was part of the previously undisclosed confidential agreement.

The failure to meet that deadline nine months after a deed of transfer was executed on June 6, 2016, was said to require that the EDA either return the 3-1/2 acre property or purchase it from Mr. and Mrs. Walter L. Campbell.

Citing a half-million dollars already spent on development of the property, on April 28 the EDA board voted 6-0 (Eastham absent) to proceed with a purchase.  That purchase is slated to be made at the $445,000 value placed on the “gifted” deed of transfer of June 6, 2016.  It is a price Ms. Egger noted on November 14, 2016, is $140,000 above the assessed value of the property.

At May 18 town-county liaison meeting, EDA Executive Director Jennifer McDonald fielded more questions about the status of the McKay property than about the work-force housing project – that may not be the case at a June 6 morning work session with the Warren County Board of Supervisors.

It is also a price Council was told last November, was based on an appraisal.  Now the EDA says that was a “misspeak” by its executive director, and that it was an “agreed upon” price – though agreed upon based on exactly what, they have yet to reveal.

Due to the EDA not meeting the secret deadline, a deadline town officials involved in permitting to achieve the project were not aware of until two months after it had passed, the EDA Board has also proposed reducing the workforce housing project from what it presented to the Town during that permitting process.  That reduction, due to the added cost of the purchase, is from three-buildings and 36 units, down to two buildings and 24 units.

Egger, who cast the only dissenting vote against the permitting, is the lone councilperson to thus far express concern that crucial information impacting both the cost and dynamic of the EDA’s workforce housing project was withheld from town officials during its fall 2016 permitting process.