EDA in Focus
Missing appraisal raises workforce housing questions
Prior to a November second vote of approval on road exceptions to the Front Royal-Warren County Economic Development Authority’s workforce housing project at Royal Lane, Front Royal Councilwoman Bébhinn Egger questioned Jennifer McDonald about the listed “price” attached to the deed transfer. Egger explained her confusion stemmed from the fact there was a price attached to the land when council was told the 3-1/2 acre parcel was a gift to the EDA.
“It says the EDA purchased the property for $445,000, so I’m wondering if I’m reading that wrong,” Egger asked. Her question was initially posed to Town Planning Director Jeremy Camp about the transaction’s documentation presented to Council by the planning department.
Camp verified his understanding that the 3-1/2 acre parcel had been donated to the EDA by Mr. and Mrs. Walter L. Campbell; and referenced a project funding stream “through the Home Consortium that the Regional Commission (Northern Shenandoah Valley Regional Commission) manages.” Research into that funding stream indicated it is regionally-administered money originating in a federal Housing and Urban Development (HUD) program.
An aerial schematic of the 3-1/2 acre parcel in question (outlined in aqua-blue), slated for development as an EDA-managed workforce housing apartment complex. The project is designed to achieve workforce retention. The major intersection at top left is Commerce Ave. (Rt. 522 S) & John Marshall Highway/South St. (Rt. 55 E) Courtesy Graphic
However with the EDA’s executive director present, Camp suggested the person at the center of the transaction could best respond to Egger’s questions.
Chairing the meeting for absent Mayor Tim Darr, then Vice-Mayor Hollis Tharpe asked McDonald to the podium.
“So there was a price of $445-(thousand) put on that (deed) – that was the appraisal price,” McDonald explained, elaborating that, “The funding we are getting from Home Funds, you have to list a price to use for construction cost or acquisition cost, and that is the amount we are getting from Home Funds; and that is the amount that is on the Deed of Trust as the sale price.”
Egger then asked about the difference between the appraised value of $445,000 listed on the Deed of Sale versus the current assessed value of about $305,000.
“That’s the amount of our Home Fund,” McDonald repeated of the $445,000 price listed on the Deed of Sale, “It’s not actual money we ever had our hands on; that’s Home Funds that go directly from the DHCD to the property owner, so it’s never money that we see.”
Pressed by Egger for further clarification, McDonald elaborated that the former owners get a tax credit based on the price listed on the Deed of Sale – “So it’s not actual cash that’s being exchanged,” she reiterated.
The EDA’s Jennifer McDonald and …
McDonald later told us the Campbells will receive a tax credit based on the $445,000 appraised value of their gift to the EDA. Research into such tax credits indicate that they are based on a third of the gifted value of the property. McDonald said her records indicated the parcel assessment of $304,300 was made in 2015; and that the Campbells purchased the property in 2005 for $345,000.
… Bébhinn Egger, center, are at odds over how the EDA’s workforce housing project has been presented and justified for town zoning and code exceptions.
The special exceptions on road construction were necessary because Royal Lane is a dead end street (see related story). The request was made to cut expenses to facilitate the EDA’s planned development of a three-building, 36-unit apartment complex designed to provide housing to young professionals employed locally.
The rationale for the local town-county economic development authority building and management of an apartment complex is an effort to decrease a relatively high turnover rate among entry-level teachers, law enforcement and emergency services personnel. For years the community has dealt annually with the consequences of such young professionals leaving Warren County for employment in other jurisdictions with higher pay scales and more attractive housing options. One justification for such HUD loans is workforce retention.
Artist’s rendering of a planned Royal Lane workforce housing apartment building. Courtesy Graphic
The workforce housing project is slated for construction on that 3-1/2-acre parcel Egger and McDonald discussed prior to the final vote of approval on the road exceptions. After that discussion Royal Examiner inquired of the EDA director about the source of the appraisal.
Who done it?
McDonald said the EDA did not have a copy of the appraisal, but that she would check with the Campbells about its source. At the time McDonald noted the Campbells were her aunt and uncle. She called that relationship a consequence of doing business in a small town in which one’s family has resided for generations. It was a fact she said had been disclosed to the EDA board early in the negotiating process. She later gave Royal Examiner minutes indicating that disclosure was made following a September 26, 2014 closed session after which the EDA board voted to proceed with the workforce housing project and acquisition of the Campbell property as a gift.
However, McDonald was unable to forward any information on the appraisal or its source to us. So, on April 2 Royal Examiner contacted Walter Campbell about the appraisal and asked if it would be possible to get a copy. He replied that he thought Lang Appraisal had done it, adding, “They do most of my work.”
Aerial graphic of the proposed workforce housing property – Courtesy Graphic
After checking her company’s database, Kelly Lang, of Lang Appraisal Service, LLC said her office had not performed an appraisal on that property. Informed of that response, Campbell initially suggested a call back the following day. However, he did not respond to subsequent messages. A further check with Mae Lang Appraisals verified that they did not do the appraisal either.
Asked about his recollection about the price placed on the deed transfer of the gifted parcel, EDA Vice-Chairman Greg Drescher recalled on April 25, “I think it was an agreed-upon price.”
Following the inability of the EDA or Campbell to provide verification of the appraisal, Royal Examiner filed a Freedom of Information Request seeking a copy of the appraisal with County Administrative staff since then county attorney Blair Mitchell’s name was on the deed transfer – the county attorney also serves as counsel to the EDA.
The April 18 response from the county administrative staff stated, “Jennifer McDonald, Director of the Economic Development Authority, stated that there was no appraisal done for this sale; as such, there is no documentation related to an appraisal.”
Following the FOIA request to the county, an e-mail from McDonald to Royal Examiner on April 24 elaborated, “As a side note our contract and settlement sheet both show that if we do not do what we said we were going to do we will owe them (the Campbells) money because at that point they would not qualify for a tax break. At that point we would require an appraisal.”
Asked on April 26 about the appraisal the Campbells were believed to have had done on the property, McDonald said, “I don’t know if they did one or not.”
