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EDA in Focus

I’ll see your $12 million dollars, and raise you another $1.5 million

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Truc ‘Curt’ Tran during Dec. 20, 2018 visit to the ITFederal construction site. At the time he expressed distress at the potential departure of Jennifer McDonald under increased scrutiny by her board and auditors. Royal Examiner File Photos/Roger Bianchini

On October 9, attorneys for ITFederal and its principal Truc “Curt” Tran filed a $13.5 million countersuit in response to the Front Royal-Warren County Economic Development Authority’s $21.3 million dollar civil litigation in which Tran and his company are named as two defendants liable for the return of over half of the EDA assets being sought for recovery.

Tran claims “substantial damages and reputational harm” to him and his company “from wrongful and deceitful acts that the Warren EDA – through its former Executive Director, Jennifer McDonald – committed against them”.

Tran also seeks a declaratory judgment that the $10 million dollar bank loan he and ITFederal received through the EDA “is a validly authorized transaction by the EDA” and “is not in default”. Tran notes in his countersuit that he is current on his monthly loan payments of $42,160 on a 30-year payback term beginning in January 2016.

Tran’s civil litigation counter attack on the EDA came five days after the EDA filed an amended complaint, adding detail of alleged fraudulent representations made by and/or on behalf of Tran/ITFederal in enabling his acquisition of the single largest amount of EDA assets being sought for recovery in its embezzlement and financial fraud scandal.

Those assets include the balance of the $10 million bank loan achieved by the EDA on Tran’s behalf in early 2016 and related vendor (minimum of $392,249) and direct payments (minimum of $1.43 million) to the company adding at least another $1.82 million dollars to the ITFederal portion of the EDA lawsuit.

So in claiming he was the one defrauded by the EDA and its former executive director, Tran has upped the EDA ante of about $12 million dollars filed against him by $1.5 million dollars – talk about high stakes gambling.

In January 2018 Jennifer McDonald attempted to explain her use of large amounts of cash in real estate transactions as a consequence of a three-year lucky streak at the Hollywood Casino slot machines in Charles Town. State Police have since said McDonald lost $750,000 gambling, including what she won. Some have asserted her losses may have been even greater based on playing with and without more easily traceable ‘tickets’.

The amended EDA complaint cites Tran as in default on the $10 million dollar EDA/First Bank & Trust loan despite past admitted renegotiations on its terms.

“To date, ITFederal has not satisfied the Construction Targets for either the $2 Million Deed of Trust or the $10 Million ITFederal Borrower Note,” the Amended EDA complaint states, citing the absence of an occupancy permit at this point.

“On information and belief, little to no proceeds of the ITFederal loan have been applied to the ITFederal Project. On information and belief, Defendant Tran has converted a substantial portion of the proceeds of the ITFederal loan to his personal benefit.”

The EDA’s Amended Complaint notes that on October 4, the day it was filed, “the Warren EDA provided notice of default to ITFederal as required by both the $2 Million Promissory Note and the $10 Million ITFederal Borrower Note,” and adds that it believes ITFederal “cannot cure the default within the time allotted by the $10 Million ITFederal Borrower Note.”

What was originally presented by ITFederal – a three building complex including an approximate 26,000 s.f. office building above; and below a two-building IT tech center, including a cloud center to upper left.

As one can see, the amended EDA litigation and Tran’s countersuit paint distinctly contrasting portraits of what the dueling litigations contend happened in Tran’s acquisition of the estimated $12 million dollars in EDA assets.

The Tran/ITFederal Countersuit contends, “The Warren EDA – through Ms. McDonald, who had apparent, actual and/or implied authority to act on its behalf – materially misled Mr. Tran and ITFederal through both affirmative misrepresentations and concealment.”

However the EDA’s Amended Complaint repeatedly references actions by “Defendant Tran and Defendant McDonald” alleged to have been made in concert, falsely presenting Tran, his company and its potential to the EDA Board of Directors and Town and County officials.

“Defendant Tran and Defendant McDonald represented to the Town, the County and the Warren EDA multiple times that (a) Defendant Tran was a high-net worth individual, (b) he did not need any financial assistance from the Town, County and the Warren EDA to make the ITFederal Project financially viable, (c) ITFederal/VDN Systems had procured a $140 million contract with the Nuclear Regulatory Commission to provide information technology services on a long-term basis and (d) Defendant Tran had the endorsement and support of the U.S. Congressional Representative Robert Goodlatte (Rep. Goodlatte) in connection with the ITFederal Project,” the amended EDA lawsuit asserts.

Contrasting portrait: what is of ITFederal as of dueling legal filings in October 2019 – an unfinished 10,000 s.f. office building accessed by Phase One of the West Main St. connector road.

That is followed by eight more paragraphs alleging coordinated efforts by Tran and McDonald to misrepresent the financial and business potential of ITFederal and its CEO to local officials. Among those allegations was that Tran didn’t need the $10 million dollar loan but would accept it at the behest of Rep. Goodlatte, who it has been represented by EDA officials wanted the loan to help attract further redevelopment clients to the Avtex Brownfield site in his Sixth Congressional District; that Tran would actually pay the $10 million loan back in 60 to 90 days; and that federal EB-5 Visa Program financing was coming to the project.

Tran attorneys are sure to point out that those “Defendant Tran and Defendant McDonald represented” assertions most often continue to elaborate “through Defendant McDonald”.

As Royal Examiner observed as the ITFederal scenario was developing from our launch in October 2016 through 2018, the elusive Tran generally let the EDA executive director take the point in responding to questions from municipal officials or the press about his project at the EDA controlled Brownfield site.

Tran’s Countersuit filing asserts that McDonald forged his signature at least twice to give the impression he was the “secret investor” in the Criminal Justice Training Academy Project; and at least one other time to indicate his involvement “related to real estate deals in which he had no involvement”.

The suit also alleges McDonald “falsely misrepresenting” that the EDA had received a State grant for the ITFederal construction project at the Avtex site; and that McDonald misled Tran about the environmental suitability of the Royal Phoenix Business Park site at the former Avtex Superfund site to the point of telling him the soil was “so clean you could eat off it.”

It’s a nice view toward the mountains but I don’t know that I’d eat off that turned dirt at the former Federal Superfund site. EDA civil case hearing testimony has indicated that Congressman Goodlatte’s endorsement contributed to the EDA board’s lack of due diligence in verifying assertions believed forwarded by ITFederal’s own ‘Three Amigos’ – McDonald, Tran and Goodlatte.

“These fraudulent actions have unnecessarily entangled Mr. Tran and ITFederal in this matter, resulting in the Warren EDA frivolously suing this respectable businessman and his company where they are victims of the Warren EDA’s and its Executive Director’s wrongdoing,” the Tran Countersuit states.

However Tran was singing a different tune to the press during an on-site visit December 20, 2018. During a lengthy EDA board closed session after which it was announced McDonald had resigned by email earlier that day, Tran was asked about the possibility McDonald might be terminated or asked to resign following the closed session.

“I heard about this and it’s blowing my mind. Oh that would be sad. She’s done so much for this area of the county and the town to redevelop, and even me – I was just about to move on and she,” Tran hesitated before adding of the prospect of a turnover at the top of the EDA, “So, so, we have to go do this with the next guy’s ideas or something?”

How things have changed in the wake of several “next guy’s” ideas – one civil suit filing in which Tran and his company have been cited as liable for around $12 million dollars in restitution to the EDA and McDonald somewhere considerably over $3 million; not to mention 28 felony financial criminal indictments against the former EDA executive director Tran once put so much faith into to present his development plans to local officials.

Sheriff, ITFed principal Tran, Donnie Poe named with McDonald in EDA civil suit

UPDATE: McDonald family members, business associates added as defendants in EDA civil suit

Tran credited McDonald with saving ITFederal project – but what was saved?

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EDA in Focus

Economic Development Authority Board of Directors Meeting – January 24, 2019

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The Economic Development Authority held their monthly Board of Directors meeting on January 24, 2020.

One of the topics was the sale of the Stokes Market (most recent the Main Street Market) to William Huck, owner of C&C Frozen Treats on Main Street in Front Royal. Huck has been trying to remodel the property he owns adjacent to C&C but because of costs higher than anticipated and issues with zoning and permitting, he has been exploring other options to open his newest business known as My Lagniappe – it’s a Louisiana expression that means ‘An extra or unexpected gift or benefit, such as that given to customers when they purchase something.’ If you know Huck, you know he always offers his customers a little lagniappe.

William Huck of C&C Frozen Treats say he’s invested in Front Royal 110% – now better place on earth. Supervisors Delores Oates and Cheryl Cullers seem to agree. Photos and video by Mark Williams, Royal Examiner.

The solar panels on the roof of the EDA office building was also a point of discussions. The EDA is advertising for any party interested in purchasing the solar electric system currently stationed on top of the EDA Building at 400 Kendrick Lane, Front Royal.

County Administrator Doug Stanley thanks EDA Board for offer of solar panels to RSW Jail, but no thanks.

The RSW Jail has said they are not interested in the solar panels. The cost of installation and unknown purchase price makes the project not cost effective.

Discussion also included workforce housing, the 2018 audit, Afton Inn renovations and the big one, running out of money by March.

Watch the EDA Board at work in this exclusive Royal Examiner video:

Disposition of Solar Panels

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EDA in Focus

Town given okay to amend its civil suit against EDA, with some explanation

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Following a conference call with involved attorneys at their respective offices at 8:45 a.m., Friday morning, January 24, Judge Bruce D. Albertson granted the Town of Front Royal leave to amend its current $15 million civil filing against the Front Royal-Warren County Economic Development Authority. The Town has 30 days to file an amended suit and the EDA will have the option of filing a demur to dismiss the amended suit as not factually supported legally.

The Town initially filed its suit seeking the return of $3 million of its assets believed to have been misappropriated as part of the EDA financial scandal, on June 21, 2019. That filing was described by Town Attorney Doug Napier at the time as largely precautionary to prevent any statute of limitations deadlines from being passed on yet-to-be-determined fraudulent EDA transactions utilizing Town assets.

Just over three weeks later on July 12, the suit was amended to $15 million, as previously reported, still without any elaboration on the sources of that number.

The Warren County Courthouse, a familiar sight for EDA-involved principals – Royal Examiner File Photos

Of the January 24 judicial okay to again amend its suit, Town Attorney Napier said any coming amendment would “have to be legally cognizable” – or accompanied by legally supportable documentation. Napier said the Town had a scheduled meeting with its contracted auditor, Mitchell and Company, next week. That meeting may shed light on which direction, and how far in either, the Town’s amended civil suit against the EDA will next go.

The EDA’s civil litigation against what has grown to a total of 14 human and business entity defendants currently stands at $21.3 million. And despite his being dropped from the list of EDA civil case defendants in the wake of his death last spring from a possibly self-inflicted gunshot wound, electronic computer and phone records of former Sheriff Daniel McEathron have recently been subpoenaed from his estate in the EDA civil suit.

The initial amendment to the original Town claim against the EDA coincided with the Town’s pulling back from participation in the “EDA Reform Committee” and three-way EDA-Town-County joint meeting efforts geared toward fixing what had gone wrong to allow the alleged misappropriations and embezzlements circling the former EDA executive director, Jennifer McDonald, to happen over a number of years.

At the helm of the EDA for a decade prior to her December 20, 2018 resignation, McDonald has been the central figure in both the civil and criminal cases brought as a result of the Cherry Bekaert investigation of EDA finances begun in September 2018. She currently faces 34 financial felony charges brought by the special grand jury empaneled to investigate potential criminality tied to EDA finances in recent years.

But she promised us – Jennifer McDonald at a May 2017 Town work session, as Town Manager Joe Waltz and Interim Police Chief Bruce Hite listen

Stated justification for one publicly voiced Town financial dispute with the EDA, the 4% bond interest rate the Town has been asked to cover on construction of the new Front Royal Police Department headquarters, has pointed heavily at “promises” made by McDonald. Those promises revolved around anticipation the FRPD project would qualify for the New Market Tax Credit Program offered municipalities for economic growth capital improvement projects.

However, as a non-job creating project the FRPD construction did not qualify for what would have been a 1.5% interest rate over the 30-year life of the bond issue with funding through the NMTC Program. As that dispute festers on the edge of Town-EDA litigation, the Town has refused to pay what appears to be an undisputed $8.4-million in principal payments bill the EDA has submitted to the Town on the FRPD project.

Written references in a Memorandum of Agreement and Resolutions of support of the NMTC funding cite “anticipation” of the program’s funding and support of that funding being pursued.

Despite late 2017, early 2018 recommendations of then Town Manager Joe Waltz, Finance Director B. J. Wilson and People Inc. NMTC Program Administrator Bryan Phipps that a guaranteed bank-offered 2.65%, 30-year interest rate would be preferable to competing with multiple municipalities for limited NMTC funds, a council majority chose to hold out for the NMTC financing the FRPD project ultimately did not qualify for.

But 1.5% will save us millions over 30 years … if we get it – that is still a fuzzy picture

However, some Town officials have pointed to verbal promises made by McDonald that the funding was in place, as a basis for the Town claim it should not pay more than 1.5% interest rate tied to those promises.

A “legally cognizable” argument on one Town claim against the EDA?

Time will tell.

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EDA in Focus

EDA sells 404 Fairgrounds Road property

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404 Fairgrounds Road

The Front Royal/Warren County Economic Development Authority (EDA) has announced the sale of its 404 Fairground Road property to Excelsior Enterprises.

Warren County businessmen Jack Donohue and Dan Beller are the new owners and will immediately begin converting it into state-of-the-art rental office space, complete with a kitchenette, printer, conference room, WiFi, coffee, and other amenities. This renovated space will be available by spring for small businesses and entrepreneurs. All parties interested in renting office space at this location are encouraged to call 540-692-0697.

The additional acreage at the site will also be developed into a new facility for Timber Works, Mr. Donohue’s expanding Warren County company. For nearly a decade, they have been serving the Shenandoah Valley and Northern Virginia regions, offering tree trimming and removal, land clearing, stump grinding and forestry mulching. Timber Works prides itself on quality, safety, and customer service. The company is highly rated on Google and Yelp and has received the Angie’s List Super Service Award 3 years in a row. Their website is https://timberworksva.com and they can be found on all major social media platforms. Timberworks has five employees and plans to add another crew in 2020.

“We’re excited to sell this property to Excelsior Enterprises and look forward to seeing this property develop into new space for start-up and small business and expanded operations for Timber Works”, said Doug Parsons, Executive Director of the WCEDA. “We’re working hard to sell our properties and shore up our financial situation”, Parsons said. “On behalf of the EDA’s Board of Directors, we want to thank Mr. Donohue and Mr. Beller for their investment in this property and in Warren County.”

All proceeds of this sale will go toward paying down the EDA’s debt.

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EDA in Focus

Supervisors ponder EDA financial needs as the ‘Ides of March’ approaches

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The full Front Royal-Warren County Economic Development Board of Directors was present Tuesday night, January 14, in support of its officers’ presentation of its financial status to four of five Warren County Supervisors, Tony Carter absent. That status, as reported during the EDA’s January 10 Board meeting, is the likelihood of an inability to continue meeting monthly debt service payments and operational expenses at some point in March.

Might that date be the mid-month “Ides of March” that laid Caesar low in 44 B.C.? It would be fitting as online research indicated that March 15 “Ides” date was also notable as the ancient Roman calendar “deadline for settling debts”.

EDA Board Chairman Ed Daley, speaking, introduced Vice Chairman Jeff Browne who made the ‘Future of the FR-WC EDA’ presentation to the County Supervisors. Interested spectators included Councilman Gillespie, second row far left, Mayor Tewalt, green shirt third row, and the rest of the EDA board and their executive director, second row to Gillespie’s left. Royal Examiner Photos/Roger Bianchini. Video by Mark Williams, Royal Examiner.

However, legal variables impacting EDA operations and debt service obligations cited by County Attorney Jason Ham indicated that EDA’s cannot declare bankruptcy and must remain operational until their bond issues and debts are resolved. Other information presented at the Tuesday Supervisors work session indicated that were the EDA to remain unfunded when it hits its financial wall in March, the debt service obligation would fall to its controlling municipality, in this case, primarily at least, Warren County. The total EDA debt on past loans and credit lines on projects for the Town and County was cited at $41 million.

Parsons later told Royal Examiner that the County has already been subsidizing the EDA’s debt service payment on the Baugh Drive warehouse property. And as reported Tuesday, Truc “Curt” Tran continues to cover $42,160 monthly on the EDA’s $10 million ITFederal bank loan.

The 10,000 s.f. ITFederal building and Phase 1 of the West Main St. connector road behind EDA headquarters is currently a gated and unoccupied ‘community’ – ‘money well spent or a $10-million boondoggle, that is the question’ to maintain a Shakespearean theme.

So, it would appear the County will end up paying much of that EDA debt one way or the other. EDA Executive Director Doug Parsons later verified those net monthly expenses at $90,038.27 in unsubsidized debt service payments and approximately $40,000 in operational costs, for a total pending monthly EDA budget need of just over $130,000.

Of course, as EDA Board Vice Chairman Jeff Browne told the supervisors Tuesday evening, the above “Ides of March” EDA insolvency scenario will occur “if nothing changes” in the EDA’s financial situation.

Things that could push that financial wall back are the sale of a number of properties the EDA is currently marketing – some prospects have been cited – or the Town of Front Royal beginning to settle its unpaid and undisputed debt of nearly $8.8 million to the EDA for construction of the Front Royal Police Headquarters.

Several EDA board members, primarily Asset Committee Chairman Greg Harold, have publicly accused the Town government of acting in bad faith in withholding scheduled FRPD construction invoice payments from the EDA which oversaw and financed that project. The Town is disputing the interest rate on the FRPD project but not the amount due in principal.

In the audience Tuesday night were three Town officials, Mayor Eugene Tewalt, Councilman Gary Gillespie and Interim Town Manager Matt Tederick. Tewalt has publicly called for good faith negotiations on the Town-EDA financial situation rather than the increasingly hostile and expensive litigation the Town Council has turned to in recent months.

Mayor Eugene Tewalt chimes in during EDA discussion – Tewalt, among others, disputed Kristie Atwood’s (on cell phone behind Tewalt) assertion county public schools were being held as collateral on EDA project loans. Photo by Mark Williams, Royal Examiner.

While the Town of Front Royal withdrew from EDA board appointment authority when the County assumed its share of Town operational funding several years ago as part of its North Corridor Agreement compensation arrangement with the Town, Front Royal continues to share in debt service payment obligations regarding its EDA projects.

However, in its current budget and projected in the FY 2021 budget summary presented to the town council on Monday, annual debt service payments of about $141,000 to the EDA have been re-budgeted to pay for Town legal and auditing fees regarding its civil litigation against the EDA.

Town officials have yet to provide any documentation on the Town’s civil claim of “up to $15 million” in alleged assets lost or misdirected as part of the EDA financial scandal under previous EDA executive and board leadership.

If the Town Council’s intent toward the EDA remains hostile and litigious, newly-elected Shenandoah District Supervisor and newly-appointed Board Chairman Walter Mabe gave a glimpse into his perspective when he said, “To turn our backs on our EDA is ludicrous.”

Following the first of its newly-scheduled second Tuesday work sessions, the Board of Supervisors took the looming EDA funding needs, as well as a request for reimbursement of $36,827 in legal fees to several past and two remaining (Blanton and Patteson) EDA board members regarding dismissed misdemeanor charges related to the special grand jury investigation into the EDA financial scandal.

Flanked by his colleagues, save absent Tony Carter, and with three Town officials present Board Chair Walter Mabe said, ‘To turn our backs on our EDA is ludicrous’. Newly-elected Supervisors Mabe, Cheryl Cullers and Delores Oates have been regular attendees at recent EDA board meetings.

Several board members said they were torn on how to approach the request. It was noted that EDA board members serve without compensation. And it was observed that a precedent was indicated when the board agreed to compensate its own members served on the same now-dismissed misdemeanor misfeasance and nonfeasance charges.

Several options were discussed, including covering a portion of the request or making the County’s contribution to those EDA legal fees a loan, that the EDA would pay back when able.

See these discussions and public comments about the EDA in the exclusive Royal Examiner video:

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Crime/Court

McDonald has bad day in civil court – how bad remains to be seen

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Former Front Royal-Warren County Economic Development Director Jennifer McDonald remains free on bond.

On Friday afternoon, January 10, former Front Royal-Warren County Economic Development Director Jennifer McDonald was found guilty of civil contempt regarding the movement of a piece of property frozen by the court during earlier EDA civil litigation hearings; and had a default judgment regarding a failure to respond to civil court orders for information on her two real estate companies, go against her as well.

McDonald was fined $375 to cover County-EDA legal costs pursuing the civil contempt judgement, and ordered not to repeat what she and her sister Gail Addison into whose name the frozen real estate parcel was moved, testified was a simple mistake. Those two sanctions were all EDA attorneys were seeking in the way of punishment on the civil contempt ruling.

As for the default judgement for failing to heed court-requested documentation on her two real estate companies, DaBoyz and MoveOn8 named along with her as three of 14 defendants in the amended EDA civil litigation, a date of April 17 was set for attorneys to argue McDonald’s liability on that ruling.

Judge Bruce D. Albertson will hear, not only those civil case arguments on April 17, but further motions arguments from a number of EDA-related criminal case defendants who were in court on the 1 p.m. docket.

On Friday afternoon Judge Albertson also granted the Commonwealth’s request to nolle prossed (drop) all current EDA-related criminal charges against Earth Right Energy principal Donald F. Poe.

Prosecutor Michael Parker restated the reasons cited in his written submission of the previous day, regarding the amount of material recently received concerning the Poe prosecutions and gaps in that material and a lack of time available with Poe’s first criminal trial on a count of perjury slated to begin January 22.

Poe attorney William Ashwell did not object to the prosecution’s request.

“We could jump up and down and say we want (the charges) out altogether now … but functionally this is a great example of the State acting as gatekeeper (of legal processes),” Ashwell told the court.

The amount of material involved in the EDA civil and criminal litigation – cited as approaching a million pages – played into many of the motions arguments heard Friday. Like Special Prosecutor Parker of the Harrisonburg Commonwealth’s Attorney’s Office before him, EDA civil counsel Cullen Seltzer told the court that the amount of involved material and documentation was in issue in their respective cases.

Seltzer said the volume of material made it impractical and prohibitive cost-wise to reproduce traditionally in hard copy. He said a data base was being created with portions flagged to different defendants’ names to ease the online search process.

In arguing against the civil contempt charge against his client, McDonald attorney Peter Greenspun, pushed into dual criminal and civil case duties due to McDonald’s financial problems that led her initial civil case attorneys to withdraw, pointed out once the real estate movement mistake was discovered, the sisters’ corrected their mistake.

“When the attorney said, ‘wait, can we do this,’ she did everything to restore the situation without court intervention,” Greenspun told the court.

Greenspun argued that the involvement of local attorney David Crump in the transaction indicated it was, in fact, a mistake rather than an act of contempt of a court order installed by initial EDA Judge Clifford “Clay” Athey Jr.

“This was not done in a parking lot or a jail cell – her conduct was not contemptuous; it was a mistake that was corrected,” Greenspun told the court.

However, EDA co-counsel Lee Byrd pointed to Addison’s own testimony to argue that deceit was a motivation in the transfer. Addison said the move was made so she, a former real estate agent, could market the parcel in her name rather than her sister’s due to “the bad name” McDonald had developed as a result of the EDA litigation.

And while Greenspun pointed out the jailed McDonald was not present for any of the three-day hearing at the end of which Athey froze some McDonald real estate assets, EDA counsel pointed to the courthouse documentation on the court order freezing McDonald assets and scoffed at the idea the experienced real estate agent wouldn’t know how to find out which of her assets had been frozen by the court.

“Their only excuse is ‘I wasn’t aware’ – they can’t say the order didn’t exist,” Byrd told the court.

And it was the plaintiff argument that held sway with the judge.

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EDA faces looming cash-flow crisis as Town treads water on $8-million debt

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A summary of the Front Royal-Warren County Economic Development Authority’s financial situation was presented by its Finance Committee Chairman Marjorie “Jorie” Martin at the Authority’s Friday, January 10, board meeting.

That situation includes a net of $481,995 in cash assets in banks when coming debt service and operating payments are deducted, with five months left in Fiscal Year 2019/2020. Martin told her board the EDA’s monthly operating expenses was $45,000 – a number she called “not bad”.

However, with all debt service variables considered Martin said the EDA faced running “out of money in the middle of March”. That projection would appear to assume the Town of Front Royal will not have paid the $8.77 million dollars it owes the EDA in undisputed, but thus far withheld principal payments on construction of the Front Royal Police Headquarters now in use across Kendrick Lane from EDA headquarters.

Marjorie “Jorie” Martin said the EDA faced running “out of money in the middle of March”Photos and video by Mark Williams, Royal Examiner.

A copy of a letter sent to Town Finance Director B. J. Wilson detailing that Town debt to the EDA was also included in Martin’s Finance Committee Report.

“I would have thought the police department situation would have been settled long before now, but at the rate we’re going I left it in (as bad debt) till they (the Town of Front Royal) figure out what they’re doing,” Martin explained during her presentation of an FY 2020/2021 draft EDA budget to the board.

Interested observers at Friday morning’s meeting were newly-installed Warren County Board of Supervisors Chairman Walt Mabe and North River District Supervisor Delores Oates. No one from the Town of Front Royal was present.

The EDA adjourned to closed session after an hour-and-10-minute open meeting. Mabe and Oates were invited to stay and remained to attend the closed session. EDA staff said the only anticipated action after the closed session was approval of a motion to present a summary of the EDA’s financial situation and proposed FY 2021 Budget to the full County Board at the Supervisors’ upcoming, January 21 meeting.

While the County and Town pay their respective shares of the EDA’s debt service accumulated on their behalf, the County alone now funds the EDA’s operational budget. That arrangement was reached several years ago as part of the County’s continued negotiation on compensation to the Town for central water sewer extension into the Route 522/340 North Corridor.

BOS Chairman Walt Mabe listens to the discussion.

So, it appears the operational fate of the existing Town-County EDA after March will rest in the board of supervisors’ fiscal hands. Unless the Front Royal Town Council agrees to make good on at least portions of its $8.77-million debt to the EDA on the FRPD construction project.

Other EDA-Town finances
Two interesting asides to EDA-Town finances were also discussed during Friday’s meeting. One was the discovery that the EDA has been billed and paid for Town sewer service to its building at 404 Fairgrounds Road since 2002. EDA Executive Director Doug Parsons told the board during his Executive Director’s Update that it has been discovered the building is not, and apparently has never been connected to the Town sewer system extension into the North Corridor. A $4,000 adjustment to a pending purchase contract on the building was suggested to account for the condition and anticipated repairs to the property’s septic system.

During discussion of what the EDA has paid for that unprovided sewer service it was not receiving over an 18-year period, Harold asked, “Does anyone know what the (banking) interest rate was during those years?” to which it was replied, “Pretty high,” drawing some laughter. The question-answer appeared to be a reference to the Town claim it was promised a 1.5% interest rate on construction of the FRPD headquarters, a rate never achieved. The EDA is currently paying 4%, down from an initial 4.75% rate.

During discussion of what the EDA has paid for that unprovided sewer service it was not receiving over an 18-year period, Harold asked, “Does anyone know what the (banking) interest rate was during those years?” to which it was replied, “Pretty high,” drawing some laughter.

Afton winterization
And the EDA has informed the Town of winterization costs for the Afton Inn building as a resolution to that redevelopment situation is explored. Harold told his board that the Memorandum of Understanding (MOU) between the EDA and Town of Front Royal on the EDA marketing and redevelopment of the Afton Inn property for the Town includes the Town’s agreement to be responsible for such necessary expenses. Harold told the board the winterization bid was $15,700.

It was also noted during the Asset Committee Report that a response from Afton Inn developer 2 East Main Street LLC was expected within days on whether it hopes to continue with the project or file a Notice of Intent to Terminate its redevelopment agreement with the EDA, current owner of the property on behalf of the Town.

The Afton Inn, across Crescent St. from Town Hall, is awaiting ‘winterization’ and a determinization on its redevelopment future or demolition. Royal Examiner File Photo/Roger Bianchini.

Workforce Housing parcel
A positive Asset Committee development is a scheduled meeting with the Cornerstone LLC group which somehow purchased the 3.5-acre Royal Lane Workforce Housing property from the EDA in late November 2018 for $10. The property was originally “gifted” to the EDA for $10 by former EDA Executive Director Jennifer McDonald’s aunt and uncle, Mr. and Mrs. Walter Campbell in 2014-15. However, due to unmet developmental deadlines qualifying the Campbells for tax credits for their gift, the parcel was eventually purchased from them by the EDA at a cost of $445,000 in 2017. Due to forensic audit questioned post-purchase expenditures it is written off as a $640,000 loss in the Cherry Bekaert Report on EDA finances during McDonald’s executive tenure.

Asset Committee Chairman Greg Harold told his board he was optimistic about the upcoming meeting with Cornerstone LLC representatives to determine an equitable resolution to the Royal Lane property situation. That situation arose when the Deed of Sale was sent to Cornerstone as the buyer with no price on it after then-Chairman Gray Blanton’s signature was acquired on the deed’s signature page. Local Real Estate attorney Joe Silek Jr. was filling in on the transaction for then-EDA attorney Dan Whitten. Whitten had recused himself from the transaction due to a perceived conflict of interest as County Attorney.

See details of these EDA Board discussions and all Friday’s business in this exclusive Royal Examiner video:

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Jan 29 @ 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, January 29 and Thursday, January 30: Puppies are cuddly! Puppies are cute! Our stories, songs, and craft will be about our friends, the puppies! Siblings[...]
Jan
30
Thu
10:15 am Toddler and Preschool Story Time @ Samuels Public Library
Toddler and Preschool Story Time @ Samuels Public Library
Jan 30 @ 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, January 29 and Thursday, January 30: Puppies are cuddly! Puppies are cute! Our stories, songs, and craft will be about our friends, the puppies! Siblings[...]
Jan
31
Fri
7:00 pm Love Revival – FREE Monthly Comm... @ Love Revival Ministry Center
Love Revival – FREE Monthly Comm... @ Love Revival Ministry Center
Jan 31 @ 7:00 pm – 9:00 pm
Love Revival - FREE Monthly Community Dinner @ Love Revival Ministry Center
Free Community Dinner for everyone! Come enjoy a hot meal on the last Friday of every month at Love Revival Ministry Center.
Feb
1
Sat
10:00 am Books and Barks @ Samuels Public Library
Books and Barks @ Samuels Public Library
Feb 1 @ 10:00 am – 11:30 am
Books and Barks @ Samuels Public Library
Come to our extremely popular monthly program that gives developing readers the chance to read and relax with a trained therapy dog.  For beginning readers and up.  Choose a time slot at registration, which begins[...]
11:00 am HSWC Polar Plunge @ Northern Virginia 4-H Center
HSWC Polar Plunge @ Northern Virginia 4-H Center
Feb 1 @ 11:00 am – 3:00 pm
HSWC Polar Plunge @ Northern Virginia 4-H Center
The Humane Society of Warren County will hold their 1st annual Polar Plunge event on February 1st at the Culpeper Lake, located at the Northern Virginia 4-H Center in Harmony Hollow. “Plungers” are asked to[...]
2:00 pm World of Lego @ Samuels Public Library
World of Lego @ Samuels Public Library
Feb 1 @ 2:00 pm – 3:30 pm
World of Lego @ Samuels Public Library
Children ages 5 and up are invited to explore all the amazing things you can do with Legos.  Registration begins January 1.
Feb
4
Tue
10:15 am Toddler and Preschool Story Time @ Samuels Public Library
Toddler and Preschool Story Time @ Samuels Public Library
Feb 4 @ 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, January 29 and Thursday, January 30: Puppies are cuddly! Puppies are cute! Our stories, songs, and craft will be about our friends, the puppies! Siblings[...]
4:30 pm Novel Ideas @ Samuels Public Library
Novel Ideas @ Samuels Public Library
Feb 4 @ 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, February 4 – Children will explore popular books and book series through S.T.E.M. activities, games, food, and more! After[...]
Feb
5
Wed
10:15 am Toddler and Preschool Story Time @ Samuels Public Library
Toddler and Preschool Story Time @ Samuels Public Library
Feb 5 @ 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, January 29 and Thursday, January 30: Puppies are cuddly! Puppies are cute! Our stories, songs, and craft will be about our friends, the puppies! Siblings[...]
Feb
6
Thu
10:15 am Toddler and Preschool Story Time @ Samuels Public Library
Toddler and Preschool Story Time @ Samuels Public Library
Feb 6 @ 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, January 29 and Thursday, January 30: Puppies are cuddly! Puppies are cute! Our stories, songs, and craft will be about our friends, the puppies! Siblings[...]