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Op-Ed: County, EDA officials cited for failed oversight – why not the Town?

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The status of the ITFederal project and the $10 million loan that facilitated it is likely to be under increasing scrutiny by EDA civil attorneys contending that loan was acquired under false pretenses. Royal Examiner File Photos/Roger Bianchini

 

Many have wondered when or even if prosecutors and state investigators guiding the Warren County Special Grand Jury’s look into criminality tied to the Economic Development Authority financial fraud investigation would expand its focus beyond a tightly knit circle surrounding former EDA Executive Director Jennifer McDonald.

On Tuesday, September 24, they got an answer, if not precisely the one many citizens critical of the political and economic status quo here were hoping for.

That answer was a total of 42 indictments, three each against 14 new players, including the entire elected Warren County Board of Supervisors, the top county administrative official and recently departed County and EDA attorney, as well as a mix of former and sitting EDA Board of Director members.

The disappointment for some was that those indictments were all misdemeanor charges related to an absence of due diligent oversight of EDA affairs, specifically over the last four months of 2018 regarding the continued administrative authority of Jennifer McDonald. (See linked story below)

The bookings at the Magistrate’s Office of the Rappahannock-Shenandoah-Warren County Regional Jail (RSW Jail) didn’t even generate the orange jail jumpsuit mug shots many social media denizens would have likely framed for posterity.

No mug shots today – County and EDA officials charged with misdemeanor failures of due diligence in the conduct of their office were not booked into the jail, as any defendant in similar circumstances released on their own recognizance would not be RSW Superintendent Gilkison has explained.

 

But while County officials rightfully face scrutiny for their failed due diligence, the Town of Front Royal governmental apparatus has thus far escaped unscathed, at least regarding criminal liability and even the level of public criticism aimed its way.

No Front Royal Town official has yet been indicted for criminal negligence regarding financial oversight of EDA operations; and to our knowledge there is no “recall them all” petition being circulated against the Town Council.

Why?

Three years ago, it was an overwhelming majority of Council that threw a defensive and protective shield around both McDonald and two of the more implausible projects she was instrumental in bringing forward.

This mid-2016 photo perhaps shows varying levels of disinterest expressed by all of Bébhinn Egger’s Town Council colleagues over her claims about ITFederal at the time.

 

In fact, those two projects, ITFederal and Workforce Housing, account for nearly $11 million, $10 million and $650,000 respectively, of the $21 million in EDA assets alleged to have been either misdirected by McDonald or moved under false pretenses during her executive oversight.

But some Town officials have claimed Front Royal has nothing to do with EDA operations since the County took over the Town’s portion of the EDA’s annual operational funding in 2012.

But as Royal Examiner has reported previously, that notion is questionable at best with much of the EDA’s work being done on behalf of the Town on projects inside the town limits. ITFederal, Workforce Housing, the Afton Inn and new police headquarters construction project come to mind.

If that wasn’t the case how do Town officials explain filing suit against the EDA to recover as much as $15 million in Town assets they contend were misdirected, lost or acquired under false pretenses? Do they think McDonald snuck into a secret town vault to pick the lock or hacked into Town bank accounts and sent their $15 million to a secret offshore location?

No, if experience tells us anything chances are that if McDonald had asked the Town Council for $15 million they would have just given it to her with a pat on the back.

In fact, that’s exactly what Council did in 2015 when McDonald came and asked for a $10 million “bridge” loan to help prop up the EDA’s case with First Bank & Trust to finance a $10 million loan to ITFederal through the EDA. Council was even kind enough to extend that initial one-month loan taken out of an investment account generating nearly $4,000 of monthly interest for two additional months without fee compensation for lost interest revenue beyond the first month.

It seems very possible that without that three-month Town handover of the desired ITFederal loan amount the bank loan for ITFederal would never have been achieved, reducing the EDA’s claimed losses by almost half.

But when Councilwoman Bébhinn Egger warned her colleagues that ITFederal did not appear to be what it was purported to be financially or from a business standpoint by McDonald, Congressman Robert Goodlatte and the company’s CEO Truc “Curt” Tran the reaction was not one of cautious due diligent verification.

Rather, the unanimous consensus of Egger’s colleagues was to either ignore or berate her, not to mention your then newly created online news source, for telling them things they didn’t want to hear – even if as it turned out, they were verifiably true at the time – as in no $140 million government contract basis upon which to create 600 high paying tech industry jobs as part of a $40 million ITFederal investment in this community.

From left on Nov. 28, 2016, Councilmen John Connolly, Hollis Tharpe, Bébhinn Egger, Gene Tewalt, Bret Hrbek, Mayor Tim Darr, and Jacob Meza at far right, bid farewell to Town Manager Steve Burke, second from right. Only one of this group, you know who she is, performed due diligent oversight of EDA affairs. It was a majority state of affairs that lasted on council for another year and a half.

Revisionist History?

The day after the County and EDA misfeasance and nonfeasance misdemeanor bookings the Town of Front Royal issued a pat-us-on-the-back press release in which Interim Mayor Matt Tederick lauded the town government’s role in launching the Virginia State Police investigation into EDA finances.

“Due to the watchful eyes of the Town Government, potential financial irregularities involving the EDA were discovered in the late spring and early summer of 2018. The Town Council swiftly turned their findings and suspicions over to the Virginia State Police, who in turn immediately commenced an investigation,” Tederick states, adding, “The citizens need to rest assured that the Front Royal Town Council will continue to pursue its lawsuit against the EDA and any others in order to hold those responsible for the Town’s losses accountable. The public’s continuing confidence in Town government is greatly appreciated and I might add, warranted.”

Pals – then EDA Executive Director Jennifer McDonald and private citizen Matt Tederick pose before start of Sept. 25, 2017 Town Council meeting. It was a meeting at which Council voted against a Board of Architectural Review recommendation to deny the EDA request to allow demolition of the Afton Inn to facilitate redevelopment at the site.

As far as ascertaining responsibility for any Town losses, both current and past councilmen and mayors over the past five years might begin by looking in the mirror.

As for “continued confidence”, as mentioned near the end of our story on a Council initiative to explore creation of its own EDA, if Tederick is referencing the work of town staff, as opposed to all but one of its elected officials (Egger) in recent years, he may be on to something.

After all, in June 2017 Town Police investigators began to develop suspicions that some reported criminal actions targeting the EDA offices and its then executive director had been staged from the inside.

And about a year later Town Finance Director B. J. Wilson did discover an eight-year history of over $291,000 in Town debt service overpayments to the EDA that finally set the process of EDA financial scrutiny in motion.

But that scrutiny was a long time coming, about 2-1/2 years after council was warned by one of its own that things appeared horribly amiss in some EDA projects. And the scrutiny of 2018 did not generate from any Town Council initiative targeting the EDA, but as noted above from staff discoveries while exploring Town finances that landed a “smoking gun” of precise evidence on Council’s lap.

It was Wilson, Town-contracted auditors and the Town Attorney who took the point in confronting McDonald, EDA Board Chairman Greg Drescher and EDA Attorney Dan Whitten over those debt service overpayments of nearly $300,000 on August 23, 2018. It was at that meeting during which the term “fraud” may have been first broached regarding EDA finances.

Greg Drescher and Jennifer McDonald appeared grumpy at times under questioning by Tom Sayre and Archie Fox at June 2017 joint work session on the EDA’s Workforce Housing Project.

 

That mid-2018 meeting between Town and EDA officials led to Drescher’s resignation as EDA board chairman the following day. It was also likely a driving factor in the County’s hiring, on behalf of the EDA, an investigative public accounting firm, Cherry Bekaert, to begin a probe into irregularities within EDA finances.

It was also a meeting that, as Tederick observed, led to the launching of a State Police investigation. But by that point, not to forward staff’s information on EDA financial irregularities to law enforcement for scrutiny might have eventually been seen as indictable as a more serious felony charge of complicity in a cover up of financial fraud.

As for that State Police investigation, one might contend it was begun a year earlier by the Front Royal Town Police. But that investigation was allowed to be shut down in 2017 at the request of EDA Board Chairman Drescher to allow, first the EDA board, then its executive director to control the investigation of alleged crimes targeting the EDA and its chief executive through a hired private investigator.

It was a request and decision that allowed the alleged EDA financial subterfuge, whatever its source, to go unchecked for an additional year and a half.

Accountability – where?

But beyond an honest self appraisal of its past complicity in throwing a protective shield up against scrutiny of EDA projects and its executive director’s assertions about them, should town officials be vigilant about past EDA activities that may have targeted more of its assets versus those of the County? – Certainly.

But why not continue the joint reform process the interim mayor and council propelled forward, rather than just withdraw from it? After all, new EDA Executive Director Doug Parsons has promised full cooperation in determining an accurate appraisal of the Town’s losses within those EDA losses financial fraud investigators have reported being misdirected through EDA operations over a number of years.

And we would suggest the interim mayor and council not continue a course of self-delusional praise and finger-pointing that tries to minimize the Town Council’s own long-term lapsed due diligence regarding EDA affairs it was directly involved in facilitating.

In mid-2016 Bret Hrbek, left, was Jennifer McDonald’s staunchest defender among many, when Bébhinn Egger, right, raised concerns about assertions about EDA projects, particularly ITFederal.

 

And speaking of that involvement, the media asked former EDA/County Attorney Whitten why the $10 million ITFederal loan the Town was so instrumental in helping achieve was included in the EDA civil litigation for recovery even though it is current on its rather lax terms.

“Because it was acquired under false pretenses,” Whitten replied following an EDA board meeting three months ago.

Whitten’s response echoed the above-referenced, ignored and even vilified warnings three years earlier that something appeared amiss in the EDA’s representations about ITFederal.

So “warranted continued confidence” may be a stretch, at least as it applies to elected Town officials over the past three to five years.

Nonetheless it appears Town officials may avoid the embarrassment of criminal charges, not to mention a high degree of public anger, for their long pattern of failed due diligence regarding oversight in their dealings with the EDA.

Why?

The answer we believe is two pronged legally: first, a statue of limitations on misdemeanor offenses; and second what we would contend was an unnecessary relinquishment of the Town’s authority to appoint two of the seven EDA board members based on the EDA’s fair funding formula split on Town-County investment in EDA operations.

As for a potential third prong in the Town’s escaping the extreme level of public scrutiny and recall petitioning aimed the County’s way, a primary social media purveyor of that public anger has not threatened to sue the Town for millions of dollars, so a public shaming there may have less interest.

But back on the legal side, note that the three indictments filed on the 14 County and EDA officials on September 20 for which they were booked on September 24 and 25, all involved EDA transactions between September and December 2018. Those charges involve only $309,000 of the allegedly misdirected or embezzled $21.3 million being sought for recovery by the EDA in civil litigation.

What about liability for a lack of due diligent oversight during the movement of the other $20.99 million, particularly that $10 million ITFederal loan the EDA now claims was acquired under false pretenses?

There is likely to be none – because misfeasance, nonfeasance and even malfeasance in the conduct of public office are misdemeanor criminal offenses. And there is a one-year statute of limitations on misdemeanor offenses. Also in the September to December 2018 timeframe, the Front Royal Town Council did not have appointment authority of EDA board members.

That is because when the County assumed responsibility for the Town’s 34% portion of the EDA’s annual operating budget in 2012, the Town Council allowed its appointment authority of two of the seven EDA board members to be withdrawn.

Was it a necessary condition? – We would contend not.

Because that County assumption of full annual operational funding from the previous 66%-34% County-Town split was made as part of the long and ongoing negotiations on two fronts: double taxation of Town citizens on certain services provided countywide; and compensation to the Town for its extension of central water-sewer utilities into the North Commercial-Industrial Corridor outside the town limits without annexation.

North Corridor commercial development was enabled by the Town’s extension of central water sewer outside the town limits without annexation. Many believe the Town continues to suffer from lost commercial tax revenue after a judicial striking down of agreed upon PILOT fees tied to utility bills as the Town’s major compensation for that lost tax revenue. Photo Roger Bianchini/Courtesy CassAviation

So if the County is essentially saying either, “We are going to stop the double taxation of Town citizens for countywide services” or “We owe you more compensation for your lost commercial tax revenue due in large part to a Town-County North Corridor compensation arrangement struck down by a Circuit Court judge, and this is part of how we’ll do it,” why would the Town Council agree to withdraw or reduce its past oversight of EDA operations it remained deeply involved in?

Whatever the reason, in 2012 the Town Council did agree to relinquish its EDA board appointment authority, and thus direct supervisory authority over EDA operations. In fact, that relinquishment is referenced in motions filings surrounding the EDA’s claim of sovereign immunity in response to the Town’s $15 million civil action against it.

“That the Town of Front Royal voluntarily waived its right to control the EDA, contrary to the statutory mandate, does not create an actionable fiduciary duty to (the Town’s) benefit,” EDA attorneys wrote in reply to the Town’s opposition filing on the EDA claim of institutional sovereign immunity.

However those arguments play out at a November 8 motions hearing and whether that “voluntary” waiver of its EDA oversight right was a bad decision or not, it has paid off for Town officials in an unexpected way.

Because by allowing the County to assume full EDA board appointment authority, that 2012 Council may have saved its 2015 to 2018 successors from legal liability for the absence of Council’s own due diligence in its oversight of its EDA affairs. And while like the County and EDA officials who were indicted, that misdemeanor liability would have only extended back a year and involve an estimated $309,000, it was a long-term failing the Town itself alleges led to the misdirection of up to $15 million in Town assets.

Regardless, unlike County and EDA officials, in the absence of direct authority to limit the EDA executive director’s conduct of her office over those last four months of 2018, the Front Royal Town Council appears poised to skate home free of any legal liability for its own lapses of judgment regarding its business dealings with the EDA in recent years.

And without “smoking gun” evidence of payoffs to look the other way or shared profiteering from the alleged EDA financial fraud under legal and civil scrutiny, it would appear the worst offense those not indicted for illegally moving or receiving EDA assets can be charged with is failed due diligent oversight, and that within that one-year misdemeanor statute of limitations. And for the above cited reasons it would appear that such charges could only come on the County and EDA sides of the equation, as it did on September 24.

So more than any proactive due diligence by elected Town officials generating “continued confidence”, legally on the failed municipal oversight front you might say it just pays to be lucky timing wise; not to mention have a voluntary withdrawal of EDA board appointment authority in your pocket. I guess you could also say that County generated initiative to acquire additional control of EDA board appointments for its added operational financial contribution kind of backfired long term – because misery loves company, right?

Criminal and non-criminal dereliction of public duty: Where might they apply in the EDA financial scandal?

Grand Jury indicts 14 County and EDA officials for lack of EDA oversight

Council divided on move toward second, Town-controlled EDA

 

Defense attorneys move to quash grand jury misdemeanor indictments

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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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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.


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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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EDA in Focus

Town, County, EDA join forces with commercial realty community

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EDA Board Vice-Chairman Jeff Browne launches the joint Town-County-EDA Commercial Property Open House with local commercial realtor representatives. Photos by Roger Bianchini, Royal Examiner.

 

At 8 a.m. Wednesday morning, February 19, members of the local real estate brokers community gathered at the Kendrick Lane Front Royal-Warren County Economic Development office for a “Commercial Property Open House.

After some breakfast snacks provided by the EDA through the Shenandoah Valley Golf Club’s catering service and a briefing by EDA Executive Director Doug Parsons on economic incentives available locally and through the state economic development partnership, the group representing 10 realty companies, accompanied by EDA, Town and County officials began the tour close by.

First to be viewed of 28 properties were two vacant offices in the EDA office complex at 400 Kendrick Lane. Then it was on to the Town Trolley for a foray into the adjacent Royal Phoenix Business Park’s 117 vacant acres before heading into the Route 522/340 North Commercial and Industrial Corridor.

Above, tour started close to home as realtors view one of the vacant office spaces at the EDA’s Kendrick Ln. complex in old American Viscose/FMC/Avtex Admin building; and then it was on the trolley to view 27 more available commercial properties around the town and county.

 

 

 

Royal Examiner caught up with Parsons and Administrative Assistant Gretchen Henderson shortly after noon following the Open House tour’s conclusion back in Front Royal. In fact, Parsons noted that of the 28 EDA overseen properties on the tour, all but seven were in the town limits.

On the Town side, Community Development Director Felicia Hart had taken the point, working with EDA Board Vice-Chairman Jeff Browne to propel the Commercial Property Open House forward. Following Hart’s January 29 termination with several other Town staff and department heads as part of the interim town manager’s Fiscal Year 2021 budget proposal, Browne worked with Interim Town Manager Matt Tederick to see things moved forward on the logistical side.

Planning Director Taryn Logan represented Warren County and Chris Brock, who identified himself as Interim Planning and Zoning Director, was present for Front Royal. Parsons and Henderson acknowledged the contribution of town staff in preparation of a properties’ booklet for the open house and the provision of the trolley for the tour.

As Interim Town Planning & Zoning Director Chris Brock listens at right, Doug Parsons briefs realtors on some economic development financial incentives that might help close some deals.

 

“Everybody’s working together,” we observed to Parsons of the joint EDA-Town-County driven interaction with local commercial realtors.

“Yes, as always,” the EDA executive director replied.

“Or at least ‘almost’ always,” we suggested of certain litigious efforts of one participating municipal partner. However, Parsons declined to take the bait, preferring to accentuate the positives of the day. So, we asked for his assessment of the day and its impetus.

“The idea behind the event was to bring together the Blue Ridge Association of Realtors members and take them on a tour of 28 properties here in Front Royal and Warren County that we think are good, viable properties for both commercial and industrial development. So, we looked at 21 properties in town and seven outside of town.

“I think we saw a good variety of buildings, vacant ground that could be used for a variety of purposes. I think the realtors appreciated the information, and I think it was a good partnership effort between the Town and the EDA. I want to thank Chris Brock and Alfredo Velasquez for their help in collating and binding the materials. And Chris’s expertise was a big part of the day as he was able to talk to the group about planning and zoning and certain properties in town.

The Open House tour turns off Kelley Drive near the Dominion Power Plant and a Rappahannock Electric Cooperative office/warehouse.

 

“Taryn Logan was also a very valuable asset to help explain the planning and zoning in the county and some of the history of the properties.

“And a lot of the realtors that were on the tour, they knew a great deal about some of these properties because they’d either bought or sold them before; or had dealt with them in the past, so knew the history. There was a lot of knowledge on the bus which was shared amongst the group and hopefully, it’ll lead to some sales for some of the properties here in town – and out in the county,” Parsons concluded what he believes was a morning well spent.

Apparently the private sector participants agreed. A sign out sheet was punctuated with “Comments” including “Great Event”, “Good Idea”, “Thank you so much!!”, “Wonderful – very informative” and “Next Year?”

We asked Parsons about his pre-tour briefing on some financial incentives available through the Town, EDA and the Virginia Economic Development Partnership (VEDP).

“I know a lot of times the real estate community in states across the nation may not be as in tune with the local and state incentives that these job developers’ programs have to offer. So, I was hoping to make them aware of what is out there for them in that regard … Because if you’re a realtor and you are dealing with someone and maybe there’s a ten or twenty thousand dollar gap in being able to close the deal, if you can bring the Virginia Jobs Investment Program incentive to the table, or the tech zone incentive here locally to the table, it could be a deal closer for someone,” Parsons observed.

And deal closings on some commercial properties are what the EDA, its municipal partners, and private sector realtors are all looking to make happen.

There appears to be some action at a portion of this warehouse property as the Commercial Property Open House pulls in.

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