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High drama on day two of Sayre defamation suit against McDonald

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The Warren County Courthouse continues to be ground zero for EDA-related activity. Royal Examiner File Photos/Roger Bianchini

As Royal Examiner reported on September 11, that day Shenandoah District Supervisor Tom Sayre was awarded $20,000 of $25,000 in damages he was seeking in a General District Court defamation civil suit against former Front Royal-Warren County Economic Development Authority Executive Director Jennifer McDonald.

Sayre awarded $20,000 in defamation suit against former EDA director

While an overview of the case and Judge Ian Williams’ decision and damages ruling was presented in that linked story, there was quite a bit of courtroom drama that led up to that decision that went unreported due to time constraints. We will endeavor to fill in some of that detail now. And with neither side in the case requesting a court reporter for day two of the trial, this is the best you’re going to get.

As Sayre took the stand to open day two of his defamation lawsuit against McDonald there soon were tears from the plaintiff upon recalling the moment he discovered he had been implicated in a series of alleged criminal incidents targeting McDonald and the EDA headquarters.

Sayre based his $25,000 General District Court claim of defamation of character upon the presence of his office cell phone number and the instruction “Do not call Tom during business hours” on a crumpled note McDonald pointed out to Warren County Sheriff’s Office responders to her June 15, 2017 report of an act of vandalism at her home.

Sayre contended that the typed note, as well as the alleged criminal incidents to which it appeared linked, was fabricated either by McDonald or at her direction as a means to deflect attention from her activities as the EDA’s chief executive that led to her December 2018 resignation and current civil and criminal legal problems. Those problems include being a primary defendant in civil suits brought by the EDA and Town of Front Royal seeking recovery of as much as $20 million and $15 million, respectively; as well as 28 felony criminal indictments stemming from the EDA financial fraud investigation launched in September 2018.

Backdoor men – on April 16 it was not an illegal entry with no signs of forced entry when the FBI and VSP searched the EDA office complex, including the former executive director’s office which was locked down since her Dec. 20 resignation.

Though you might think it would be the defendant crying in this circumstance, it was the plaintiff’s tears that began shortly into direct examination by his attorney Tim Bosson. Asked how he found out he had been implicated in criminal activity targeting McDonald and the EDA, Sayre began to recall an August 2017 phone call from former Royal Examiner Editor Norma Jean Shaw telling him he needed “to protect” himself due to the above-cited references in the vandalism scene note.

“I was in the kitchen,” Sayre began haltingly, as he glanced over his shoulder from the witness chair toward his wife seated behind press row. Sayre’s testimony halted for several minutes as he tried to regain control of his emotions, sobbing gently at times.

Those tears eventually evolved into sometimes confrontational cross examination exchanges with McDonald attorney Lee Berlik that led to admonitions from the bench to Sayre not to critique Berlik’s questions to him: “These are yes and no answers – you were doing real well there for about eight seconds,” Judge Williams told Sayre at one point during the plaintiff’s nearly two-and-a-half hours on the stand.

The eight seconds of court-approved exchange between Berlik and Sayre referenced by Williams was Sayre’s reply to the question, “Did you ever tell the police that Mr. Bianchini (yes, this one) was suspected of cutting the brake wires on your car?”

After a slight pause Sayre replied, “I’m going to answer no,” elaborating that he had three suspects to what he testified was discovered to be sliced brake wires causing warning lights to come on and the vehicle not to start as his wife attempted to leave their property in their Chevy Traverse several years ago.

It would not be the only reference to your humble reporter during the day’s testimony and closing arguments. That is due to Bianchini’s (I hate referring to myself in the third person) day one testimony that McDonald told him details of the vandalism the afternoon of June 15, 2017, during a lengthy meeting at her office. It turned out that conversation came five to six hours before McDonald reported the stone-throwing vandalism of her home at 9:02 p.m. that evening. Also drawing attention to this reporter were the plaintiff’s day one introduction of a series of texts and emails between him and McDonald regarding the vandalism event at her home and her private investigator’s research into the incident.

They were messages largely concerning a potential suspect supposedly connected to Sayre as a past criminal client, who was approached about wearing a wire to draw an admission from Sayre to his involvement. McDonald’s Private Investigator Ken Pullen testified there was neither an ID’ed suspect nor any plan for wiring a suspect during his day one testimony on August 2.

Sayre – McDonald defamation suit continued to September 11

Asked by Berlik during cross examination if he had feared for his safety or that he might be murdered, Sayre explained that he feared McDonald or associates might kill him for crossing the then EDA executive director concerning the Workforce Housing Project. During a June 2017 county board-EDA work session Sayre and fellow county supervisor Archie Fox had questioned McDonald and EDA board Chairman Greg Drescher about the process of that project.

Archie Fox and Tom Sayre were skeptical of some answers given by McDonald and EDA board Chair Greg Drescher concerning the rationale and process of the EDA Workforce Housing project at a June 6, 2017, work session. However, such questions had been on table from media and one council source for eight months.

It was a project that bore questioning, as it evolved from a reported 2014 $10 “gift” from McDonald’s aunt and uncle for whom the EDA executive director maintained a real estate broker’s license and job, to a $445,000 “moral obligation” purchase of 3-1/2 acres by the EDA upon disclosure a previously unmentioned federal tax credit deadline had not been met in 2017. Of course Sayre and Fox weren’t the first to question that and other recent EDA projects. Councilwoman Bébhinn Egger and Royal Examiner had begun asking questions, particularly about Workforce Housing and the ITFederal project over the previous year.

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

“There are people who get knocked off if they know too much,” Sayre explained, referencing the 1983 murder of Front Royal Police Sgt. Dennis Smedley, and another apparently fatal incident involving a local physician he identified as “Doctor Lind”.

“She talked about killing me … that she missed an opportunity to ‘take me out’,” Sayre told Berlik, adding of the still unsolved Smedley murder, “There is a theory he knew too much about drugs in the community.”

The give and take between McDonald’s attorney and Sayre led to Berlik’s closing argument that because the plaintiff believed something in his mind did not mean it was true, or that his client had caused those beliefs to formulate.

Berlik argued that Sayre’s fears were stoked more by Shaw’s phrasing of her warning phone call to him, the recollection of which led to Sayre’ initial battle with his emotions on the stand, more so than the actual presence of his number and the instruction “don’t call Tom during business hours” on the typed note pointed out by McDonald to first responders at the home vandalism scene.

This social media photo of Tom Sayre and Jennifer McDonald during the ITFederal ground breaking ceremony was referenced by Sayre during his testimony – he said it illustrated what he perceived to be a good working relationship with McDonald at the time.

Berlik also questioned whether Sayre had suffered any actual damage from the note and its contents. While Sayre testified he had gone from full-time legal practice to part-time in the wake of the note’s discovery, Berlik elicited the information that his salary at job he took upon cutting back his legal practice, as Human Resources Director at Seton Home School, paid him $93,000 to $95,000 with subsequent Cost Of Living (COLA) increases. However Sayre insisted he had taken about a $10,000 loss of income hit due to his employment shift.

Berlik also referenced previous testimony from witnesses who all indicated they did not believe Sayre’s reputation had been impacted in the community by the alleged conspiracy note.

Sayre countered that he had run into a woman during his current campaign for re-election who said she would not vote for him because of a belief he had been involved in the alleged incidents targeting McDonald. Asked her name by Berlik, Sayre could say only that she lived “up on Freezeland Road”.

Sayre also testified that he had a perhaps unexpected opponent in his run for re-election to the Shenandoah District Supervisors seat. Berlik asked if that opponent, identified as Walter Mabe, was running against him because he believed Sayre had been involved in a criminal targeting of McDonald.

“Where is he? … Where is the woman on Freezeland Road?” Berlik asked during closing arguments. His point to the court was that if either could provide evidence of the plaintiff’s assertion of damage to his reputation, why hadn’t they been produced as plaintiff witnesses.

“I don’t believe it happened,” Berlik said of the Freezeland Road encounter.

Sayre testified that Bianchini was just one of several he suspected might be involved in a brake line cutting incident on one of his vehicles several years ago. He also testified he had worked to repair the relationship with the reporter.

Berlik also questioned Sayre’s claim of emotional damage. The plaintiff said he suffered a great deal of stress and anxiety about his personal, professional and political future in the wake of information about the note circulating in the community. Sayre said he had talked to a priest, among others, though not in professional clinical treatment settings.

Defense counsel also cited a number of examples involving personal disputes with a variety of people to illustrate that the plaintiff was exceptionally thin-skinned and might take offense where others wouldn’t. Berlik pointed out that others implicated in the note, including Shaw and Michael Graham, had not filed defamation actions as a result.

Sayre attorney Bosson countered by saying the defense “eggshell” ego argument didn’t matter – that if his client was negatively impacted, as he asserted the plaintiff had illustrated he was, that was the bottom line in a defamation case.

“She was trying to destroy me – I called the BAR about it,” Sayre told Bosson on direct examination about fears for his professional future.

Noting his client has never been proved to have been the author of the vandalism scene conspiracy note, defense counsel Berlik pointed to others in the community who might have motive to attempt to set Sayre up for criminal acts out of various personal or professional conflicts with him.

Wait, what – WHO?!?

“We’re not saying Mr. Bianchini threw the rock – but they have a negative history. He had as much motive as anyone,” Berlik told the judge of testimony of past conflicts between the reporter and plaintiff including Sayre’s brake wire cutting suspicion of Bianchini and Bianchini’s filing of a 2011 stalking report involving Sayre around the time of the multi-million dollar SolAVerde tortious interference in a business contract lawsuit against Sayre and then fellow councilmen Chris Holloway and Carson Lauder.

However in his closing argument Sayre attorney Bosson pointed to the past tensions between the reporter and his client brought out by the defense as a positive for the plaintiff’s case. “In a way Mr. Berlik is our best witness – he’s gone out of his way to show Mr. Bianchini doesn’t like Mr. Sayre; so his (Bianchini’s) bias is in the opposite direction.”

Defense counsel Berlik argued that it was Sayre himself, upon being informed of the note and its contents by Shaw in August 2017, who had done the most to spread the information he was implicated throughout the community.

However plaintiff counsel countered that McDonald had played Bianchini with the “off the record” information about the note and investigation in order to get the information spread into the community.

Sayre was asked on the stand about Bianchini’s testimony that he only told four “close associates”, three professional and his long-time girlfriend, in confidence about the information he had gotten from McDonald about her PI’s investigation into the vandalism situation.

“I think he may have forgotten how many people he told,” Sayre replied. (Why is everybody picking on my memory?!? – What were we writing about?)

Bianchini reflective, perhaps pondering suing everyone who has ever questioned his memory due to all the existential emotional angst it has caused him over the years …

In the end the case revolved around two primary arguments – who was a likely author or architect of the note and the reported crimes against McDonald and the EDA offices; and were there actual damages involved, or just Mr. Sayre’s perception of damage where none actually existed.

In closing Bosson said the plaintiff didn’t have to prove McDonald herself wrote the note or threw the rock through her front door window.

“She told Mr. Bianchini that afternoon – how does she know about a crime that hasn’t happened? We are not saying she threw the brick or that she wrote the note. What we are saying is Ms. McDonald knows who threw the brick; what we are saying is Ms. McDonald knows what was in the draft note – she was the one behind it …

“This was all a scam by her to deflect attention off of herself – she may have thought it was for kicks to implicate Tom Sayre in a crime,” Bosson told the court, referencing both the home vandalism and McDonald’s report in May 2017 of a break in at the EDA headquarters.

On the stand Sayre expressed distress at being tied to racial slurs on one of the photos of McDonald and family members discovered at the EDA office after McDonald reported a break-in there on May 17, 2017, about a month before the reported vandalism at her home. The vandalism scene note referenced “Norma Jean” and “the Examiner” waiting for information supposedly taken from the EDA office that day.

At the time Shaw was exploring the large amounts of cash McDonald was using in her real estate business transactions, as well as the presence of the Sheriff as an agent on one of McDonald’s two real estate companies.

McDonald approached this reporter in January 2018 concerning his interest in a story about what she said was a three-year lucky streak at the Hollywood Casino slot machines netting her around $2 million in winnings. State Police report a different outcome, about $750,000 in losses, including what she won over that period.

“This is far from a simple case,” Judge Williams said after a 10 minute recess to formulate his ruling. He cited four elements of defamation: 1/ publication, or perhaps in this case dissemination; 2/ an actionable statement; 3/ recklessness; 4/ false and defamatory information.

Noting that both parties were public figures constantly under public scrutiny, the judge observed, “They must be thick skinned about such things – but they don’t need to be thick skinned about malice.”

Williams said the evidence must be viewed in its totality, rather than compartmentalized.

“The plaintiff has evidence that the defendant had compelling reasons to use the plaintiff as a dupe in this,” the judge said referencing EDA/County Attorney Dan Whitten’s testimony that “things were falling apart” at the time and that “the defendant had reason to keep a lid on it … She had a reckless disregard for truth” and “reason to shift attention from herself to another public figure,” Judge Williams observed.

What, me worry? Why would municipal and EDA officials worry over McDonald’s suddenly publicly-admitted gambling habit – if she’s winning, it’s not a problem, right?

Conflicting resolutions

Judge Williams then referenced the different outcome he was about to render to the not guilty verdict in McDonald’s criminal misdemeanor false police report case last October 31. Judge W. Dale Houff dismissed the case against McDonald regarding her reported vandalism of June 15, 2017, at her home. That case was initially developed by FRPD investigators based on information supplied by this reporter during a police interview  the morning of June 16, 2017. After nearly a year the warrant was brought forward by the Virginia State Police on June 13, 2018.

Judge Williams said it was unfortunate the outcomes were conflicting, adding of a key witness in both trials, “Mr. Bianchini’s memory seem to have been rehabilitated.”

The reference was to McDonald criminal attorney David Crump’s October 31, 2018 cross examination question to this witness about a notation on EDA Administrative Assistant Missy Henry’s 2017 calendar about an alleged meeting Bianchini had scheduled with McDonald at 9:30 a.m. Friday morning, June 16. It was then that McDonald and her attorney asserted Bianchini was told about the vandalism of the previous evening at her home, rather than the previous afternoon as he claimed.

Like McDonald, Henry has since been indicted on criminal felony charges related to the EDA financial fraud investigation, though in Henry’s case only two indictments related to disbursement of EDA assets related to the EDA-financed B&G Goods operation in the old Stokes Mart building.

But as Bianchini testified in this defamation trial, if he admitted to an “imperfect memory” and expressed confusion on the stand last October, it was confusion about whether he had scheduled a meeting with McDonald for that Friday morning 16 months earlier, rather than confusion about the Thursday meeting.

And Judge Williams noted that two witnesses called in this defamation trial corroborated key aspects of Bianchini’s testimony. Those witnesses were former EDA Marketing Director Marla Jones and FRPD Investigator Landin Waller. Neither was called as a witness by the prosecution in McDonald’s 2018 false police report trial.

On August 2, 2019, Jones testified that Bianchini was in McDonald’s EDA office for an extended period of time behind closed doors on Thursday afternoon, June 15, 2017, around 3 p.m. She also testified that she did not see Bianchini in the office the following morning. It was that Friday morning that Jones told FRPD investigators that McDonald had told her about the vandalism; and that the two talked for much of the morning.

Also on day one of the defamation trial last month Investigator Waller confirmed that Bianchini had informed him and Captain Crystal Cline in an interview the morning of June 16, 2017, between 10:40 a.m. and 11:30 a.m. about receiving the information about the vandalism from McDonald the previous afternoon.

And as Bianchini testified on day one of this defamation trial, had he been told about the vandalism at a meeting with McDonald within an hour of arriving for his interview at FRPD’s investigative headquarters, he would not have forgotten that – “I probably would have had to go straight from the EDA office to police headquarters,” Bianchini observed on the stand during his August 2 testimony.

And as Bianchini told fellow reporter Josh Gully during a phone interview for his story on the defamation trial, “Anyone can write anything on a calendar at any time”; and that if a meeting had once been scheduled with McDonald for June 16, 2017, it had previously been cancelled.

But without the corroborating witness testimony and no redirect examination to explain his hesitancy in response to the June 16, 2017 morning meeting question posed by the McDonald defense on October 31, 2018, Judge Houff dismissed the criminal case against McDonald without the defense even having to present its case.

However 10-1/2 months later the civil litigation surrounding McDonald’s vandalism report would have a different outcome.

As previously reported, after hearing nearly 3-1/2 hours of testimony and arguments on day two of the trial, Judge Williams awarded Sayre $5,000 in damages, $15,000 in punitive damages, and $676 in court filing costs. McDonald has 10 days from the judgment to file an appeal to Circuit Court.

Settle down boys

In another ruling, Williams declined to impose sanctions on either attorney for their conduct in or out of court during this case.

“There has been some hostility in this case … at times moderate to heavy … about what a dog the opponent was,” Williams said of the attorneys, describing “braggadocio” from both sides on how tough they were going to be in seeking a successful resolution for their clients.

In fact as Bosson and Berlik argued a motions point during last Wednesday’s hearing, Judge Williams admonished them at one point, “Now both of you, sit down.”

Despite the theatrics and contentious nature of the case, Williams said, “I am not inclined to sanction either side in this case.”

Bosson argued for some sanction against Berlik for attempting to bury the plaintiff in motions filing in the case’s earlier days. In fact during a March hearing the number of motions filings and legal hours spent on the case led the judge to question how much money the two sides were spending in a case with a maximum recovery cap of $25,000.

“It’s very curious – but I’m giving you more time to arrange the deck chairs on the Titanic,” Williams famously observed of the hours and expense of the case on March 30 when he put a lid on further motions hearings.

In fact costs were a point of testimony during Sayre’s lengthy cross examination last week. Berlik asked the plaintiff if his legal costs had reached $77,000. Sayre replied, “No, they are much less than that,” estimating them at $6,000.

Following the trial’s adjournment outside the courthouse Bosson explained to the media that he had taken a flat up-front fee of $6,000, with a percentage of the award granted by the court. Typical percentage arrangements could add another $6,000 to Sayre’s legal fees.

While Bosson indicated he and his office had actually put $77,000 worth of legal time into the case, he said he had taken the reduced fee arrangement because he thought it was the right thing to do for his client in this particular legal circumstance.

Tom Sayre, left, and attorney Tim Bosson outside the courthouse following awarding of $20,000 in Sayre’s $25,000 defamation suit against Jennifer McDonald. How much did you say you were making at that human resources director’s job, Bosson may be have been thinking.

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COVID-19 meeting restrictions lead to 2nd EDA grand jury extension

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Contacted by phone, Rockingham County Assistant Commonwealth’s Attorney Michael Parker confirmed that Judge Clark Ritchie had extended the term of the Warren County Special Grand Jury impaneled to explore potential criminality tied to the Front Royal-Warren County Economic Development Authority (EDA) civil litigation.

That extension is for six months and came as the grand jury’s first extension was coming to an end Tuesday, March 31. The EDA special grand jury was empaneled shortly after the EDA civil litigation was filed on March 26, 2019. Its first six-month term was extended another six months in October 2019.

Parker said the newest six-month extension comes from an “abundance of caution” both legally and medically.

The COVID-19 pandemic response has stopped many activities we once took for granted, including some court proceedings. Royal Examiner File Photos/Roger Bianchini

Due to restrictions on public gatherings ordered by Governor Ralph Northam as part of the Commonwealth of Virginia’s emergency management response to the COVID-19 Coronavirus pandemic, what have been described as non-essential court functions have joined other enterprises deemed “non-essential” in the private sector in being put on hold at least through much of April. Consequently, it was decided it was unsafe for the grand jury to continue meeting in this pandemic emergency response environment.

In this fluid medical and legal environment, it is uncertain when the EDA Special Grand Jury will be able to meet again. However, Parker said he believes once those meetings begin, it will not take anywhere near six months for the grand jury to complete its business.

“Our goal is to conclude as soon as possible,” Parker said.

The entire current Warren County Commonwealth’s Attorney’s Office has recused from all EDA legal matters due to past or ongoing professional or personal relationships with involved parties. Jennifer McDonald during her local Rotary presidency, circa 2016-17.

Following the recusal from EDA legal matters of Warren County Commonwealth’s Attorney John Bell and his entire staff in the wake of his November 2019 election, Parker was appointed to handle criminal indictments stemming from alleged EDA financial improprieties discovered by a forensic audit commissioned by Warren County on behalf of the EDA in September 2018.

The EDA civil litigation is now seeking recovery of $21.3 million from 15 defendants, including former EDA Executive Director Jennifer McDonald and two real estate companies she is alleged to have used to misdirect EDA assets to her own benefit.

In a series of filings by the EDA grand jury, McDonald now faces a total of 34 financial felony charges. Also indicted criminally on fewer charges has been a tight circle around McDonald, including her husband Samuel North, her former EDA Administrative Assistant Michelle “Missy” Henry, and former EDA small business loan recipient and B&G Goods proprietor William Lambert. At the time of his business relationship with the EDA Lambert is purported to have been in a relationship with a McDonald sister.

Criminal charges against another McDonald associate, Donald Poe, were dropped by Parker due to an approaching January perjury trial date he was not prepared for with his late 2019 appointment and the mountain of paperwork filed in relation to the EDA civil and criminal cases – estimated at or around a million pages of documentation.

Donald Poe following a 2019 court hearing – indicted, charges dropped, what does the future hold?

However, as he noted at the time, Parker can refile the criminal indictments against Poe if he feels the evidence so warrants. Poe’s perjury charges related to his testimony to the EDA Special Grand Jury regarding his business ties to McDonald.

The next EDA criminal case hearing dates are scheduled for April 17. Parker said he should have more information on how things will be proceeding forward within the coming week.

A federal grand jury has also been impaneled in Harrisonburg related to the EDA financial allegations and civil litigation. On April 16, 2019, agents from the FBI and Virginia State Police searched and seized documents and materials from the EDA’s Kendrick Lane offices, including the executive director’s office that had been cordoned off and locked down since McDonald’s December 20, 2018 resignation under increasing scrutiny by the investigative auditing firm Cherry Bekaert and her EDA Board of Directors. However, the federal grand jury has yet to issue any indictments from its investigation.

Above, FBI, State, and local authorities gathered to search and seize possible evidence at EDA headquarters in April 2019; including from Jennifer McDonald’s former office, below, which is pictured being locked down, including from remote access to her computer, following her Dec. 20, 2018 resignation.

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EDA passes series of motions following 3-hour, virtual closed session

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County Emergency vehicle in a nearly empty WCGC parking lot during the recent Emergency Management team meeting. Royal Examiner File Photos/Roger Bianchini

One day after the Warren County-Front Royal COVID-19 Coronavirus Emergency Management team held its first briefing available to the public live only by remote video link-up, the Town-County Economic Development Authority followed suit at its monthly meeting of Friday, March 27.

However, the EDA took additional steps on the pandemic response social distancing frontier and the enabling of live remote participation and viewing. Only EDA Executive Director Doug Parsons and Administrative Assistant Gretchen Henderson were at the EDA Kendrick Lane office where board meetings are normally held. The six EDA Board of Directors members, as well as media, public and county board representatives were all linked in remotely by home or office audio-video computer hook up.

Or as the meeting notice colorfully stated, “Due to the state and local state of emergency declarations, this meeting will be conducted virtually, as will all EDA board meetings until further notice during the emergency. The EDA sincerely welcomes public access to this unprecedented event. The EDA will be using the web conferencing platform Zoom”.
Access was also available by telephone link-up.

A tally of those connected virtually included two members of the public (Linda Allen, James Wolfe), one county board member (Oates), two media (Royal Examiner, NVD), three attorneys (Pandak, Seltzer, Seigel), the six EDA board members and two EDA staff – may be only a couple supervisors short of normal 8 a.m. in-house attendance.

After virtual meeting moderator and EDA Board Vice-Chairman Jeff Browne helped participants through their connections, the board adjourned to closed session to discuss four primary topics:

1 – legal advice on the “disposition of … 2 East Main Street/Afton Inn”;

2 – a prospective business or industry client at the 426 Baugh Drive warehouse;

3 – legal consultation on the Town of Front Royal’s civil litigation against the EDA and the EDA’s civil litigation against its former Executive Director Jennifer McDonald et al; and

4 – auditor contracts with Yount, Hyde & Barbour P.C. and RFO auditor services regarding small business loan debt collection.

Afton Inn ownership isn’t the only thing the FR Town Council and EDA Board of Directors aren’t seeing eye to eye on these days.

 

As noted above, three attorneys were involved in the meeting’s virtual hook up, the EDA’s contracted attorney Sharon Pandak and Sands Anderson attorneys Cullen Seltzer and Dan Siegel, the latter two who have been involved from the March 26, 2019 filing in the EDA’s now $21.3 million civil actions against McDonald and 14 co-defendants alleging embezzlement, fraud, and misdirection of EDA assets. Hired as independent EDA counsel in the wake of Dan Whitten’s resignation as County and EDA attorney, Pandak has been the EDA’s legal adviser in response to the Town’s now-amended $20-million-plus litigation against the EDA.

With that full plate of closed session business, the estimate of an hour behind virtual closed doors coming shortly after 8 a.m. fell about two hours short.

And while there were no announcements or motions regarding the two civil litigations or the now apparently disputed by the Town of Front Royal status of Afton Inn ownership, a series of resolutions and motions were approved by 6-0 votes prior to the meeting’s 11:10 a.m. adjournment.

However, as to the status of the Afton Inn, in the written monthly Asset Committee Report it is noted that “There is no public report on the Afton Inn status other than the Town of Front Royal has listed the Inn in their revised complaint in the Town of Front Royal vs. FR-WC EDA. This simply provides a new dynamic that we have to deal with in our continuing efforts to re-position this property. We continue to discuss the dynamics of this with 2 East Main (LLC, the proposed redeveloper of the property under contract with the EDA as current owner).”

The 2 E. Main St. LLC plans for Afton redevelopment have been halted by the EDA financial scandal and its monetary consequences, including the Town’s reluctance to pay an $8.4-million principal debt to the EDA on the construction of its new police headquarters.

 

Virtual Business
As for the series of approved motions and resolutions, they included:

1 – a resolution to return the $5,000 deposit of William Huck after the failure to close a contract with the EDA on the old Stokes Mart building at 506 East Main Street;

2 – a resolution to approve a contract on a backup offer to sell the 506 East Main building to an alternate buyer at a price of $190,000;

3 – a resolution to amend EDA bylaws to facilitate the electronic meetings during the COVID-19 Coronavirus state of emergency declarations;

4 – an amendment extending the deadline on the removal of the solar panels from the EDA Kendrick Lane Office Complex from the original April 30 date. The new deadline will be 30 days after the Governor of Virginia lifts the COVID-19 state of Emergency.

That contract with Sunshine Properties LLC will pay the EDA $40,500 for the two-building solar panel array originally installed during McDonald’s executive directorship in an arrangement with Earth Right Energy. McDonald, ERE and ERE principal Donnie Poe were all named as defendants in the EDA’s March 2019 civil litigation. Consequently, the plan for the provision of solar power to the EDA office complex went south with the filing of that litigation and other technical complications;

It appears the EDA will recoup over $40,000 of its solar panel installation costs upon the pending sale of those panels.

 

5 – a motion authorizing the reacquisition of the 3.5-acre Royal Lane parcel from the Cornerstone LLC branch of the Aikens Group at cost of $26,776.54. The difference in the EDA’s sale price of ten dollars to Cornerstone LLC reflects pre-construction work and planning services done by the Aikens Group for work it will not now be able to achieve after resolving the situation on the somewhat inexplicable late November 2018 EDA transfer of a property it paid $440,000 for. That price was agreed upon by the McDonald-led EDA board Chaired by Patty Wines after an initial $10 gift by McDonald’s relatives was negated by a missed tax rebate deadline.

Serving as EDA attorney on that sale in the wake of then EDA-attorney Dan Whitten’s recusal, Joe Silek Jr. said the deed of sale was sent to Cornerstone attorneys without a price on it. Then EDA Board Chairman Gray Blanton, who signed the deed of sale, said he only saw the signature page. At the time the sale situation became public in early 2019, the Winchester-based Cornerstone attorneys’ group never responded to three messages left seeking information on how the $10 purchase price was established.

While the Royal Lane parcel was intended for the development of a workforce housing apartment complex under EDA direction, Parsons told Royal Examiner after the Friday’s meeting adjournment that the EDA will likely seek to sell the parcel to the private sector for residential development, which as he has previously noted, is not a normal undertaking for EDA’s.

The $10, $445,000, $10, $26,776 ‘magical mystery tour’ of the Royal Ln. workforce housing parcel continues as property returns to EDA hands – for a while.

 

6 – a motion to amend the loan agreement with First Bank on a $3.59 million note covering several older projects to illustrate the County’s support of the EDA on the issue as it grapples with the aftermath of the financial scandal the above-referenced civil litigations revolve around;

7 – a motion on a monthly payment agreement on a rural business enterprise loan with Ontiveros;

And 8 – Due to the governor’s COVID-19 emergency declaration closing “non-essential” businesses, the EDA will offer rent/loan payment forbearance “to all clients in good standing”. The plan is to temporarily waive April payments and then offer quarter payments on a monthly basis until there is some resolution to the emergency declaration allowing businesses to reopen.

And so it goes on the Front Royal, Warren County Economic Development front as the retooled EDA Board of Directors, staff and County officials try to navigate the turbulent waters, increasingly stirred to a boiling point by the Town of Front Royal’s hostile litigious stance, amidst the COVID-19 pandemic emergency declarations wreaking havoc with small businesses across the town, county, commonwealth, and nation.

And ‘The Doors’ Jim Morrison thought ‘Strange Days’ were here in the late 1960’s. Jim, you wouldn’t believe the end of the second decade of the 21st century – we’re sure a lot of small business owners don’t. They are, indeed, ‘Riders on the Storm’ …

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Town amends civil suit against EDA, McDonald to over $20 million

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In a nice touch of calendar irony, the Town upped the ante on its civil claim against the EDA on Friday the 13th – Royal Examiner File Photos by Roger Bianchini

On Friday, March 13, legal counsel for the Town of Front Royal filed its amended civil complaint against the Town and County Economic Development Authority and the EDA’s former executive director and her two real estate companies, Da Boyz and MoveOn8.

It remains to be seen which way the traditional Friday the 13th bad luck will eventually fall legally in what has now grown from a $2-million precautionary civil litigation to what nearly 600 legal paragraphs contained in the 83-page amended complaint explains is now “not less than” a $20.22 million claim for damages by the Town of Front Royal.

With 39 additional pages of supporting documentation surrounding the 2014 Town transfer of ownership of the Afton Inn to the EDA for marketing for redevelopment – the Town also wants the Afton shell back free and clear – and its 10-page “Prayer for Relief” summary claim of the alleged financial damage suffered by the Town during the EDA Executive Directorship of Jennifer McDonald, it was a total of 132 pages of occasionally dizzying legalese dropped on the Warren County Courthouse and the EDA’s counsel and board of directors today.

The Afton Inn and Town Hall – nice bookends?

The Town is seeking a civil jury trial to determine the validity of its claims.

The Town’s counsel – the amended complaint is co-signed by Town Attorney Doug Napier and Anthony and David Damiani of the contracted Damiani & Damiani Alexandria law firm – cites negligence by the EDA Board of Directors in its lack of oversight of then EDA Executive Director Jennifer McDonald; accuses the EDA Board of “unlawfully vesting in McDonald all of the power and authority granted to the EDA” by state code thereby causing “the Town to suffer economic harm and damages exceeding $20 million and damage to its reputation.”

 

The EDA executive director and four of her then board members in mid-2018

Afton Inn claims
On the Afton Inn front, the Town alleges a violation of the 2014 Memorandum of Agreement (MOA) between the Town and EDA on the ownership transfer for marketing and development purposes.

“Pursuant to the Memorandum Agreement, any lease, agreement to sell, or agreement concerning the future use of the Afton Inn Property was expressly subject to the Town’s review and written authorization.

“The EDA breached the Memorandum Agreement by failing to submit the Afton Inn Development Agreement to the Town for review and written authorization and accordingly, the Afton Inn Development Agreement has no legal force or effect or validity as it pertains to the Town,” paragraphs 462-463 read, leading to the plaintiff’s conclusion regarding that development agreement between the EDA and 2 East Main Street LLC that, “Any funds spent or debts incurred as a result of the Afton Inn Development Agreement are the sole debts of the EDA, and the Town has no legal or moral obligation to satisfy those debts,” the plaintiff states, adding that were there to be any Town liability ruled, “then the Defendants are jointly and severally liable to the Town for breach of contract in the number of funds expended, which is $357,044.”

 

Now inexorably intertwined – the Afton Inn and Warren County Courthouse

Following the assertion of an invalid development agreement, the amended complaint continues that “in the alternative” to a breach of contract ruling, “the Town is a third-party beneficiary of the Afton Inn Development Agreement, and is entitled to specific performance of that agreement. If the EDA is unable to perform with respect to the Afton Inn Development Agreement, then the Town is entitled to have the title of the Afton Inn transferred to the Town.”

As previously reported by the Royal Examiner, due in large part to the EDA’s current financial situation and approaching insolvency fueled in part by the Town’s refusal to pay what has been called “an undisputed $8.4-million principal debt” to the EDA on construction of the new Town Police headquarters, the Afton Inn redevelopment project has been stalled since last spring when the EDA civil litigation against McDonald et al was filed.

The town council and staff have been behind closed session doors recently with 2 East Main Street LLC representatives. And Interim Town Manager Matt Tederick referred to 2 East Main Street LLC as the owner of the Afton Inn during a Community Development Block Grant (CDBG) Committee meeting of March 3.

The times they are a-changin’ – citizen Tederick and the former EDA executive director at a 2017 town council meeting

EDA-McDonald allegations
The Town amended complaint’s references to McDonald often assume her guilt on the 34 financial felony fraud and embezzlement indictments she has been served with since the EDA filed its $21.3 million civil litigation against her and what has climbed to 13 co-defendants since March 26, 2019.

“At all times relevant hereto, McDonald was acting within the course and scope of her employment as Executive Director of the EDA and her malfeasance was committed while conducting the business of the EDA.

“The EDA is vicariously liable to the Town for the fraud, deceit, conversion, and embezzlement of McDonald under the theory of respondeat superior,” the amended complaint states.

What doesn’t make sense? then EDA Board Chairman Greg Drescher may have been thinking at a June 2017 BOS work session discussion of the EDA’s Workforce Housing gift, not-a-gift project.

The Town’s amended complaint also accuses the EDA of “Unconstitutional Taxation” in justifying its “not less than $20,226,153” claim.

“Article I, Section 6 of the Virginia Constitution states in relevant part “that all men … cannot be taxed … without their own consent or that of their representatives duly elected ….” the complaint reads on page 80, leading to page 81 observation that, “The EDA’s actions resulted in an unauthorized tax on the citizens of the Town and County. Therefore such tax is unconstitutional and invalid and has caused the Town and the Towns’ taxpayers damages in excess of $20 million.”

In the succeeding and final allegation of the amended complaint the EDA is accused of “Unlawful Eminent Domain”.

“The Defendants, by their actions aforesaid, have condemned and exercised the power of eminent domain over the property of the Town and the Town’s taxpayers.

“The Defendants do not have the power of condemnation and eminent domain.

“The Defendants actions, in condemning the property of the Town and the Town’s taxpayers, is unlawful and unconstitutional, and has caused the Town and the Town’s taxpayers damages in excess of $20 million.”

Those “actions aforesaid” appear to reference the preceding 79 pages description of specific actions cited in the EDA’s civil litigation against multiple defendants, and the criminal allegations primarily against McDonald.

Connector road to where? It seemed like a good idea at the time – who first promised those 600, high-paying tech jobs at Royal Phoenix?

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EDA in Focus

Citizen concerns spur DHR briefing to Town staff on Afton Inn obligations

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As noted at the end of our related story on the EDA’s February 28 Board of Director’s meeting, following a closed session Friday morning the EDA authorized filing an FOIA request to the Town of Front Royal. That FOIA inquiry seeks all communications between the Town and the Virginia Department of Historic Resources (DHR) regarding the $700,000 Community Development Block Grant (CDBG) and the Afton Inn.

The Afton Inn, formerly Montview Hotel, prior to its porch structure falling victim to that new-fangled horseless carriage transportation thing, circa 1920-ish. Now the Afton appears in the crosshairs of State DHR scrutiny of CDBG funding. Courtesy Photo/Warren Heritage Society.Royal Examiner Photos/Roger Bianchini

That grant involves federal Housing and Urban Development (HUD) funding administered through the State for improvements to Front Royal’s Historic Downtown Business District. It also requires a $700,000 match from the Town and is running up toward a mid-September deadline for downtown façade and other grant enabled improvements to have gotten underway.

Royal Examiner believes a February 21 letter from the Review and Compliance Division of the Virginia Department of Historic Resources to Interim Front Royal Planning Director and Zoning Administrator Chris Brock is at the root of that FOIA request.

The letter, signed by DHR Architectural Historian Laura Lavernia, points out that the Afton Inn building is tied to the Town’s acquisition of the CDBG, which was awarded through the Virginia Department of Housing and Community Development and is bound by conditions of a “Programmatic Agreement executed between DHR and the Town for the Front Royal Downtown Revitalization Project.”

According to Lavernia, the Town would have to provide substantial justification to DHR for authorization of demolition.

“At a minimum, the rationale for this sudden change in scope warrants a substantive explanation and some discussion with our office before drastic measures are taken that cannot be undone,” she informed Brock.

‘At a minimum, the rationale for this sudden change in scope warrants a substantive explanation and some discussion with our office before drastic measures are taken that cannot be undone,’ DHR’s Review and Compliance Division wrote the Town on Feb. 21, concerning any potential plan to demolish the Afton Inn. But is Mother Nature taking care of that?

Lavernia’s letter opens by tracking the Afton Inn’s history, historical registries and a troubling observation about the Town’s intent toward the structure.

“The Virginia Department of Historic Resources (DHR) understands that the Town is considering the demolition of the Afton Inn located at 2 East Main Street … listed in the National Register of Historic Places (NRHP), the Virginia Landmarks Register, and contributing resources to the NRHP-listed Front Royal Historic District … Formerly called the Mountview Inn, the building appears to have been constructed sometime in 1868 – 1870 … in the Italianate style … Its successful rehabilitation will be a source of pride for years to come – and for future generations to appreciate,” the letter from DHR Architectural Historian Laura Lavernia states.

Contacted Wednesday, February 26, Interim Planning Director Brock acknowledged receipt of the letter but said it was not in response to any request for information on demolition from him.

“I don’t know what it’s in reference to, newspaper articles or what – I can’t speculate,” Brock told Royal Examiner. Brock said he forwarded the letter to Interim Town Manager Matt Tederick.

When contacted, Tederick concurred with Brock’s assessment, stating that to his knowledge no one at Town Hall had initiated a request to demolish the building, which he noted is still owned by the EDA. The Town transferred ownership to the EDA under a Memorandum of Agreement (MOA) in 2014 to facilitate the property’s marketing and redevelopment.

As for the impetus for the February 21 communication from DHR, Interim Town Manager Tederick suggested the possibility that media reports of past public meeting remarks by Mayor Gene Tewalt or EDA Board member and Asset Committee Chairman Greg Harold indicating the potential of demolition as a possible outcome of the languishing Afton Inn renovation project, as a possible cause.

“My impression is no one wants to tear it down. Everyone wants something to be done, Tederick said of the property.

However, as previously reported by Royal Examiner Harold revisited his discontent with the mid-December reversal of the Town staff’s initial prioritization of winterization of the 151-year-old building at the head of Front Royal’s Historic Downtown Business District during a perhaps ironically timed February 21 EDA Asset Committee meeting.

As recounted in detail in our related story on the Town’s absence and presence at the February 28 EDA Board meeting, Harold pointed to early November through early December emails from Town Attorney Doug Napier indicating winterization of the Afton Inn was a “priority” of the Town and that from a public safety perspective the Town had an obligation to see that the physical stabilization of the Afton Inn was accomplished.

However, as Tederick told the Joint Town-County Tourism Advisory Board about the future of tourism promotion in this community on Wednesday, “the devil is in the detail”.

‘The devil is in the detail,’ Interim Town Manager Tederick told the Joint Town-County Tourism Advisory Board about the future and funding of tourism in this community. That seems true on multiple fronts.

And the detail of financial responsibility for maintenance and repair, or demolition, of the Afton Inn appears to be a detail the Town Council, its administrative staff and attorneys aren’t ready to accept.

It was the interim town manager who informed the EDA on December 13, that any indication the Town would fund Afton Inn winterization costs was a “mistake”.

And while the Memorandum of Agreement referenced in our related EDA meeting story does state that the Town is responsible for covering maintenance and repair costs of the Afton building sought by the EDA as owner, it adds that “the Town shall not require the EDA to perform any repairs, maintenance or demolition of any part of the Afton Inn building UNLESS the Town AGREES to bear the cost of such repairs, maintenance and/or demolition.” (EMPHASIS added)

With the DHR letter’s impetus a mystery, Royal Examiner set out to get the answer from its writer. Two days after leaving several phone messages for Lavernia at various DHR numbers we got a call from DHR Media Relations official Randy Jones. After explaining our query on what led Lavernia to send the letter to Interim Town Planning Director Brock, he set out to get an answer.

A short time late he called back with that answer.

The impetus was three-pronged, Jones explained. It began with what Jones described as “several citizens reaching out to DHR” with concerns about the Afton Inn’s status and the Town’s role in assuring that status was maintained as the EDA negotiates to resurrect the stalled renovation project. Asked about names or numbers of the citizens who contact DHR, Jones would provide no additional detail.

Next door neighbors – maybe current Town officials don’t think any downtown building should be taller than Town Hall either. The Afton’s modern saga began in 2006-7 when the council sued its Board of Zoning Appeals for authorizing then-owner Frank Barros’s elaborate renovation plan that would have made the Afton 10-feet taller than the courthouse across the street, which is against town code.

However, he said that Lavernia wanted the Town’s interim planning director and interim town manager to understand all the financial and legal implications of the Afton Inn’s inclusion in the East Main Street Community Development Block Grant for the revitalization of Front Royal’s Historic Downtown Business District. From the content of Lavernia’s letter, it would seem the Virginia Department of Historic Resources considers the Afton Inn an important part of that revitalization project.

One might ask, and we’re sure someone’s lawyer eventually will, could the Afton’s inclusion in the CDBG project mandate that Town funding of maintenance or repair work must be made available to the owner if deemed necessary to assure the structure’s survival?

So, is Tederick right – did media reports of past EDA or public criticism of Town actions regarding its relationship to the EDA and Afton Inn redevelopment fuel citizen concerns about the status of the Afton Inn, leading to Lavernia’s February 21 letter to Town Hall?

Harold’s pointed public comments aimed the Town’s way citing “The Town’s Charade of Partnership” with the EDA and numerous “acts of bad faith” seemingly designed to cripple the EDA’s ability to effectively continue to function, including in resurrecting 2 East Main Street LLC Afton renovation project, began on December 13, as noted above, the day Tederick informed the EDA that any impression given that the Town was prepared to fund winterization costs of the Afton was a “mistake”.

Perhaps ironically, Harold publicly refocused on the Afton Inn aspect of Town-EDA relations on February 21, the date of Lavernia’s cautionary DHR letter to a Town staff increasingly populated by interim administrators under the direction of a town council under increasing public scrutiny as to exactly what its vision of the future of the Town of Front Royal, its financial and governmental apparatus is.

We see you; do you hear us? – a number of town citizens, including Scott Jenkins here on Feb. 10, have asked council recently. At issue is as a radical reorganization and austerity plan tied to an FY 2021 budget proposal that began being implemented five months before the end of FY 2020 and six days before that 2021 budget proposal was publicly presented to council. Has saving the Afton Inn for redevelopment fallen victim to the council’s desire to reduce taxes and slash the Town’s annual operational budget?

Now it may be up to the Front Royal Town Council’s six members, and the mayor, to more clearly explain that vision and the decision not to fund the approximate $15,000 cost of a stabilizing winterization of the Afton Inn.

Citizens are left to wonder, is the council’s vision for $1.4 million dollars of renovated downtown business facades and Village Commons improvements, with a renovated Afton Inn pointing the way to that revitalized historic downtown business district?

Or is it perhaps a vision of bricks in the dust, surrounding a parking lot where the Afton Inn once stood, tied to a tax and revenue reduction in the face of $29 million in planned capital improvements? – Improvements apparently not tied to historic downtown revitalization or the restoration of the Afton Inn.

Yea, let’s fix it up and put it on the Historic Downtown Front Royal Trolley route. – BUT the devil is in the detail …

Now it appears that not only do Town citizens want those questions answered, but so does the Virginia Department of Historic Resources.


See related story

Town notifies EDA of Afton Inn issues – opts out of discussing responsibility

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EDA in Focus

Town notifies EDA of Afton Inn issues – opts out of discussing responsibility

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While there was no representative of the Front Royal Town government at Friday morning’s Front Royal-Warren County Economic Development Authority Board of Directors meeting despite the presence of a “Town Manager Update-Matt Tederick” on the agenda, the subject of town government interaction with the EDA did not take long to enter the February 28 meeting discussion.

“I thought you might want to know about this as soon as possible,” EDA Executive Director Doug Parsons told his board soon after the 8 a.m. convening of the meeting by Board Chairman Ed Daley.

EDA Board Chairman Ed Daley, left center, had a succinct reply to Executive Director Doug Parsons, white shirt upper left, recounting of the Town legal staff’s Thursday email on Facebook reports on the status of a windblown Afton Inn – ‘Have legal staff remind them they are responsible to pay for maintenance’ was the gist of that reply. Royal Examiner Photos/Roger Bianchini – Royal Examiner Video Mark Williams

“This” was a Thursday, February 27 email from Town Attorney Doug Napier to Afton Inn redeveloper 2 East Main Street LLC attorney Kelly Bundy, copied to Parsons, noting that Town Councilwoman Letasha Thompson had informed him “that she saw a few minutes ago on Facebook that the roof of the Afton Inn building next door to Town Hall and across Main Street from the Warren County Courthouse is flapping in the wind.”

Parsons continued to quote from the email, “The wind today is extremely gusty at times and strong, as you know pieces of wood soffit have already fallen onto the public sidewalk. The Town is worried that part of the roof, which appears to be metal, might be blown off onto the public streets.”

Parsons pointed out the town attorney continued to write “in parenthesis” that, “(The Afton Inn is at the intersection of the two busiest streets in Front Royal),” continuing that the situation had the potential of “highly dangerous results,” at which point the town attorney pivoted to the legal sphere.

“Because of the outstanding lease/contract to purchase status between 2 East Main and the EDA, the Town does not want to get in the middle of and opine a legal opinion as to who has the predominant obligation to repair and maintain the building; but the Town does want to draw this to your immediate attention.”

Daley responded that Parsons should work with EDA counsel Sharon Pandak, who was present for the meeting, “To respond to Mr. Napier and remind him of the Town’s responsibility.”

What roof? Well, it’s there – we’re just too low to see it, flapping in the wind or not flapping in the wind.

Legal obligations
That the Town has the legal responsibility to pay for maintenance and repair of the Afton Inn in the wake of its 2014 transfer of ownership to the EDA for marketing and redevelopment purposes has been a hot-button topic of discussion lately. That is due to the Town’s mid-December pivot from seeming agreement expressed in writing by Napier that it was the Town’s financial responsibility, as well as its province as a matter of public safety, to fund physically stabilizing winterization of the Afton Inn as a “priority”.

In fact, the town attorney included a copy of June 23, 2014, Afton Memorandum of Agreement (MOA) between the Town and EDA as part of his November-December 2019 correspondence with the EDA on the winterization project. That MOA reads in part, “The Town agrees that during ownership of the Afton Inn property by the EDA, the Town shall not require the EDA to perform any repairs, maintenance or demolition of any part of the Afton Inn building unless the Town agrees to bear the costs of such repairs, maintenance and/or demolition.”

In a December 6, 2019 email to EDA Executive Director Doug Parsons and EDA Asset Committee Chairman Greg Harold, Napier wrote, “Under the terms of the MOA … the EDA is responsible for repairs to the Afton Inn, at the expense of the Town. Regardless of any contract, the Town has an overriding duty as a municipal government, to the public to prevent injury and loss of life or limb. The Afton Inn is literally falling to pieces as I write this. It is not a defense in the public’s eye whether or not the Town can assert ‘sovereign immunity’ if a person’s vehicle, or far worse, a person’s body, is injured by something falling or collapsing from the building – the public will demand to know why the Town did not take immediate steps to secure the building, and rightfully so.”

On Dec. 13, EDA Asset Committee Chairman Greg Harold displayed November-December communications from the town attorney indicating a financial and moral responsibility for the Town to fund maintenance and repair costs for the Afton Inn.

 

Best laid plans
However, in that December 6 message, Napier also notes that an inspection by one of the Town’s “most experienced and responsible workers” revealed complications, and likely added expense, that could impact the Town’s original plan to perform the winterization work in-house.

Napier asks the EDA for immediate contact with Interim Town Manager Tederick to arrange a mutual inspection by all three involved parties “to determine what can be done to secure the building to ensure its integrity and ensure the safety of the public …It is a violation of Town Code to obstruct or place an obstruction, which would include the permitting of an obstruction, upon a Town street or sidewalk.”

Napier then added, “The Town would be derelict in the extreme in its responsibilities to the public if the Town knowingly allowed a violation or violations of its own Code, in addition to allowing a public safety hazard.”

Then, in perhaps a hint of things to come, Napier concluded that December 6 correspondence by stating, “If the Town, the EDA, and 2 East Main are unable to reach a very prompt mutual resolution of this pressing problem, the Town will have no choice but to take such legal measures, without limitation, as are necessary to protect the rights of the public safety.”

As the wind blows, the Afton totters – it said so on Facebook.

 

On December 13, 2019, as part of his report on Town business at the EDA Board meeting, Tederick informed the EDA that any previous correspondence indicating the Town’s willingness to fund the winterization costs was a “mistake”.

And as noted above, the Town-EDA MOA on Afton maintenance notes the EDA is not required to perform any repairs, maintenance or demolition “UNLESS the Town agrees to bear the costs of such repairs, maintenance and/or demolition.” One is left to ponder the reason funding stabilizing maintenance of the Afton Inn went from a Town public safety “priority” to NOT a priority within a month as winter approached.

As the Afton turns
Following the February 28 EDA morning meeting, we asked Harold what the EDA’s response was to that December 6 request for the mutual inspection by the three involved parties. He said he contacted Tederick to inform him he would be out of town on business that week, and suggested a meeting the following week with two representatives from each party, the Town, the EDA and 2 East Main, but without attorneys.

There was no response from the interim town manager, Harold said.

As Ed Daley, seated right, and his EDA Board listen, Matt Tederick explained on Dec. 13 that earlier communications indicating the Town would cover winterization costs for the Afton Inn were a ‘mistake’.

 

In response to a FOIA request, the Royal Examiner received documents indicating a January 8 letter from EDA Board Chairman Ed Daley to Tederick providing an estimate of $13,200 to $15,700 from 2 East Main Street for winterization costs it would contract for. Daley asked the interim town manager to seek town council approval of covering those winterization costs.

In a January 16 response, Tederick informed the EDA Board Chairman that council took the matter up at its January 13 meeting and instructed the town attorney to reach out to the EDA attorney “to determine the best path forward”.

“Like you, we all hope to find an expedient resolution to the former Afton Inn and the safety hazard it has become,” Tederick wrote Daley.

According to Harold, the gist of that subsequent conversation between the Town and EDA attorneys was that the Town would accept ownership of the Afton property back at no cost.

But with no guarantees on a final outcome of such a transfer and the EDA still in negotiations with 2 East Main Street to resurrect a highly desired renovation project, the EDA declined that offer.

And now the Front Royal Town Council is a second vote of approval away from implementing a Dilapidated Property Abatement Code that would force property owners to develop a structural repair plan or accept the Town’s abatement plan to be implemented, at the owner’s cost. Failure to comply would result in the Town’s legal right to seize the property as they would if a back-tax lien had been issued.

A marriage made in lawyer heaven – why didn’t some Afton Inn stabilization work occur this winter? Let’s go across the street to the courthouse and talk about it. Royal Examiner Feb. 2019 File Photo

 

Wonder how the lawyers will be able to bat that one around the civil courtroom – and at what cost to town taxpayers, who again will face the double jeopardy of funding both sides of that legal battle, were it to occur.

Other business
Following an almost two-hour closed session, the EDA readjourned to open session and unanimously approved three motions. Those motions were:

1 – approval of an agreement for the reacquisition of the 3.5-acre workforce housing parcel from the Aikens Group for $26,722.54. EDA board members explained the difference in the reacquisition price from the $10 the property was transferred to the Cornerstone LLC branch of Aikens as covering preliminary engineering and other costs incurred by the Aikens Group since the late November 2019 transfer of the property. The EDA purchased the parcel for $445,000 following its initial gifting to the EDA for $10 by relatives of former EDA Executive Director Jennifer McDonald. The purchase decision was made after an undisclosed tax credit deadline for the gift was missed.

2 – acceptance of a tentative agreement for the sale of the apartment building at 514 East Main Street on the Stokes Mart property for a price of $130,000.

3 – and approval of filing an FOIA (Freedom of Information Act) request to the Front Royal Town government for all communications with the Virginia Department of Historic Resources related to the Community Development Block Grant or the Afton Inn.

See the meeting’s opening Afton Inn condition discussion, and various EDA committee reports on the marketing of properties, pending property closings, the status of the Town’s $8.4 million debt to the EDA for construction of the new town police headquarters, and other EDA business in this exclusive Royal Examiner video:

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EDA in Focus

Town reversed initial commitment to cover Afton Inn ‘winterization’ costs

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During an update on the status of various properties at a Front Royal-Warren County Economic Development Authority Asset Committee meeting, Friday morning, the status of the on-hold Afton Inn “winterization” project two months into the winter of 2019-20 was broached.

In the agenda summary the project, described as once “a high priority” of the town government, was now observed to apparently be dead in the cold winter elements.

Why?

According to Asset Committee Chairman Greg Harold, Town staff apparently did an about-face on responsibility for, or the necessity of, covering the winterization costs.

Harold told those present that since the Town approached the EDA about working together with Afton Inn redeveloper 2 East Main Street LLC in November to get the stabilization project underway to prevent further deterioration of the 151-year-old brick and wood building shell, he had a record of communications with Town Attorney Doug Napier indicating Town responsibility for, and intent of, paying for the winterization work.

Asset Committee Chairman Greg Harold, center, traces the status of EDA properties, including the Afton Inn and its now apparently-abandoned ‘winterization’ project. The bottom line as from left, Doug Parsons and Ed Daley listen – the Town decided not to fund those stabilization and safety measures. Photos by Roger Bianchini. Video by Mark Williams, Royal Examiner.

At various points in those communications a Memorandum of Understanding (MOU) dating to the 2014 transfer of ownership from the Town to the EDA for marketing and redevelopment purposes was referenced; as was Napier’s written expression of a “moral obligation” of the Town to provide for the “safety and welfare” of its citizens as pieces began falling off the building; and former Town Planning Director Jeremy Camp’s written notice of the apparent availability of Community Development Block Grant (CDBG) funding for the Main Street façade improvement work that could be utilized by the Town to pay for its own staff to work on the winterization project.

Consequently, Harold noted the EDA spent $3,500 on an engineering report to get a cost estimate on the project to the Town. However, several subsequent emails from the Town indicated logistical complications discovered by its staff leading to the likelihood of increased costs.

Harold observed that Interim Town Manager Matt Tederick had stepped in at a mid-December EDA board meeting to state that earlier communications indicating the Town would cover the winterization costs were a “mistake”.

Harold noted that his response to Town Attorney Napier asking for substantiation to support the interim town manager’s assertion was forwarded to the Town’s outside counsel, Damiani & Damiani, handling its civil claims against the EDA with no further communications.

However, EDA Board Treasurer Jorie Martin interjected by phone hook up that she had one initial communication from Damiani & Damiani stating that they “would get back to us” after which there were no further communications.

In that December 19 email to Napier forwarded to the Town’s outside counsel, Harold wrote, “I have read the MOA, and I am not able to find any subordination clause or other languages that strips Front Royal of this requirement (of funding),” adding, “Contrarily, there are 2 paragraphs which explicitly detail and reaffirm the town’s commitment.”

One of those paragraphs from the MOU dated June 23, 2014, is quoted stating, “The Town agrees that during ownership of the Afton Inn property by the EDA, the Town shall not require the EDA to perform any repairs, maintenance or demolition of any part of the Afton Inn building unless the Town agrees to bear the costs of such repairs, maintenance or demolition.”

The following paragraph describes the Afton Inn’s close proximity to Town Hall at the head of the East Main Street Historic Downtown Business District, observing, “The Town has clearly identifiable interests in the use to be made and in the appearance, of the Afton Inn property … As such, the Town has an appropriate, identifiable interest in keeping the Afton Inn property in both a viable safe physical condition and an aesthetically pleasing condition.”

I guess it depends on how you define ‘Safe’ and ‘Pleasing’ – gets harder the closer you get.

It was again noted that 2 East Main Street LLC continues to express hope of maintaining its interest in the Afton renovation project now stalled by the EDA’s financial dilemma tied to the financial scandal asserted in the County-EDA funded Cherry Bekaert forensic audit of EDA business in recent years.

And put up a parking lot?

However, it would appear in this season of the interim town manager and a new council majority committed to cost and tax reductions despite $29 million in capital improvement funding needs in the coming budget year, those steering the ship of Front Royal Town government have simply decided the Afton Inn’s appearance, condition and redevelopment are no longer fiscal priorities.

As the discussion moved to the collection of bad debts, EDA Board Vice Chairman Jeff Browne noted that since the involvement of the EDA’s contracted attorney, the first check from a debtor had been received – “We just have to pick it up … so, we’re already starting to see results,” Browne told the Asset Committee, leading Board Chairman Ed Daley to quip, “Was this a large check from a municipal corporation that owes us a very significant amount of money?”

Harold displays documentation on referenced EDA assets, as from left, Jeff Browne, Doug Parsons, Ed Daley, Cheryl Cullers and others invisible by phone link, listen.

“The answer would be no,” Browne replied, dashing the hope the Town had decided to make good on at least a portion of its undisputed $8.4 million debt to the EDA on the principal for the Town Police Department construction project, if not on Afton Inn winterization costs.

See this discussion just past the 38-minute mark of the linked Royal Examiner video, as well as other topics in the entire meeting video. Among topics discussed were bids received on removal of the solar panels on the EDA’s Kendrick Lane office complex; a pending closing date of February 28 on the Stokes Mart property sale; and re-acquisition of the Workforce Housing parcel, hopefully, at the same $10 price, it was inexplicably transferred to the Cornerstone LLC branch of the Aikens Group in late November 2018 for.

After initially being “gifted” to the EDA for $10, due to unmet, publicly undisclosed deadlines not being met, the EDA acquired the property at a cost of $445,000, with additional resources allegedly being committed to the project leading to the property being written off as a $600,000-plus loss.

In addition to Harold, Daley, Browne, and Martin, the latter by phone hookup, present at Friday’s Asset Committee meeting were EDA attorney Sharon Pandak, also by phone connection, EDA Executive Director Doug Parsons and South River Supervisor Cheryl Cullers.

 

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6:00 pm FRCS Spring Musical: Thoroughly ... @ Front Royal Christian School
FRCS Spring Musical: Thoroughly ... @ Front Royal Christian School
Apr 4 @ 6:00 pm – 8:00 pm
FRCS Spring Musical: Thoroughly Modern Millie @ Front Royal Christian School
3 exciting shows: APRIL 2 – 6pm, April 3 – 7pm, April 4 – 6pm. Bring the family! Filled with fun flappers and a villainess that audiences will love to hate, Thoroughly Modern Millie JR.[...]
Apr
7
Tue
10:00 am Focus on Health Employment & Edu... @ LFCC | Science and Health Professions Building
Focus on Health Employment & Edu... @ LFCC | Science and Health Professions Building
Apr 7 @ 10:00 am – 5:00 pm
Focus on Health Employment & Education Fair @ LFCC | Science and Health Professions Building
Two sessions: 10 a.m. – 1 p.m. and 2 p.m. – 5 p.m. Different vendors at each session. Held in the Science and Health Professions Building at LFCC’s Middletown Campus. Contact Taylor Luther for more[...]
4:30 pm Novel Ideas @ Samuels Public Library
Novel Ideas @ Samuels Public Library
Apr 7 @ 4:30 pm – 5:30 pm
Novel Ideas @ Samuels Public Library
Children will explore popular books and book series through S.T.E.M. activities, games, food, and more! Tuesday, March 17 –  Children will explore popular books and book series through S.T.E.M. activities, games, food, and more! This[...]
Apr
8
Wed
10:15 am Toddler and Preschool Story Time @ Samuels Public Library
Toddler and Preschool Story Time @ Samuels Public Library
Apr 8 @ 10:15 am – 12:00 pm
Toddler and Preschool Story Time @ Samuels Public Library
10:15 Toddler story time | 11:00 Preschool story time Wednesday, March 18 and Thursday, March 19: Our stories, songs, and craft this week will be about friends! Come to story time and see your friends,[...]
Apr
9
Thu
10:15 am Toddler and Preschool Story Time @ Samuels Public Library
Toddler and Preschool Story Time @ Samuels Public Library
Apr 9 @ 10:15 am – 12:00 pm
Toddler and Preschool Story Time @ Samuels Public Library
10:15 Toddler story time | 11:00 Preschool story time Wednesday, March 18 and Thursday, March 19: Our stories, songs, and craft this week will be about friends! Come to story time and see your friends,[...]
Apr
10
Fri
6:00 pm Fire Pit Fridays @ Shenandoah Valley Golf Club
Fire Pit Fridays @ Shenandoah Valley Golf Club
Apr 10 @ 6:00 pm – 9:00 pm
Fire Pit Fridays @ Shenandoah Valley Golf Club
Apr
14
Tue
4:30 pm Novel Ideas @ Samuels Public Library
Novel Ideas @ Samuels Public Library
Apr 14 @ 4:30 pm – 5:30 pm
Novel Ideas @ Samuels Public Library
Children will explore popular books and book series through S.T.E.M. activities, games, food, and more! Tuesday, March 17 –  Children will explore popular books and book series through S.T.E.M. activities, games, food, and more! This[...]
Apr
15
Wed
10:15 am Toddler and Preschool Story Time @ Samuels Public Library
Toddler and Preschool Story Time @ Samuels Public Library
Apr 15 @ 10:15 am – 12:00 pm
Toddler and Preschool Story Time @ Samuels Public Library
10:15 Toddler story time | 11:00 Preschool story time Wednesday, March 18 and Thursday, March 19: Our stories, songs, and craft this week will be about friends! Come to story time and see your friends,[...]
Apr
16
Thu
10:15 am Toddler and Preschool Story Time @ Samuels Public Library
Toddler and Preschool Story Time @ Samuels Public Library
Apr 16 @ 10:15 am – 12:00 pm
Toddler and Preschool Story Time @ Samuels Public Library
10:15 Toddler story time | 11:00 Preschool story time Wednesday, March 18 and Thursday, March 19: Our stories, songs, and craft this week will be about friends! Come to story time and see your friends,[...]
Apr
17
Fri
6:00 pm Fire Pit Fridays @ Shenandoah Valley Golf Club
Fire Pit Fridays @ Shenandoah Valley Golf Club
Apr 17 @ 6:00 pm – 9:00 pm
Fire Pit Fridays @ Shenandoah Valley Golf Club