The Perfect Storm of Silence, Part 2: a cattle ranch, $10-mil & …

McDonald responds to questions about first Royal Phoenix commercial client

In our first “Perfect Storm of Silence” installment on the exchange about ITFederal LLC between Front Royal Councilwoman Bébhinn Egger and Front Royal-Warren County Economic Development Executive Director Jennifer McDonald, we reported on Egger’s questions about:

1. a funding stream to ITFederal through a federal economic-development program run under the auspices of the United States Citizenship and Immigration Services;
2. what kind of federal contracts the company has to support the promised $40-million investment and job creation here;
3. the timeframe between the June 2015 announcement of the ITFederal project and the start of construction at the site, now projected for Spring 2017.

That doesn’t look like the Avtex-Royal Phoenix site – because it’s not, it’s the former Millennium Lotus property purchased by ITFederal CEO Curt Tran. The 70+ acre site is slated to house an agricultural training center and cattle ranch and personal residence. The parcel runs just west (below in photo) of the FRLP property and Mary’s Shady Lane, the long dirt road across the upper-center section of photo.

In this “episode” we will cover discussion of why the Town loaned ITFederal $10-million in September 2015; peripheral investments by the company’s CEO in the area; and websites listed under several variations of the company’s name.

Egger’s curiosity about ITFederal LLC expressed at final October meeting of the Front Royal Town Council is understandable.  She and her Council colleagues have a vested interest in seeing commercial redevelopment occur at the former synthetics fibers manufacturing site that, beginning in 1940, was for decades the largest private-sector employer (and polluter) inside the Town limits.

And while McDonald assured Egger and her colleagues that everything about ITFederal is legitimate, as we pointed out in Part One, it is not surprising that in a vacuum of information about the company over a year with no visible sign of progress at ITFederal’s 30-acre parcel at the Royal Phoenix Business Park, confusion exists and rumors abound:

• Do they or don’t they have a website?
• Are they or aren’t they a subsidiary of VDN Systems?
• Do they have millions of dollars in active federal defense contracts or an estimated annual income of “$33,499 and workforce of approximately 1 people”, as cited on the one website, created this year, which McDonald verified was the company’s (see below sub-section “Websites & Partnerships” for detail).

Peripheral investments

During her questions about ITFederal LLC, Egger asked about a company named “Front Royal Farms”.  McDonald replied, “The owner of ITFederal (Curt Tran) owns Front Royal Farms.  He purchased that on Happy Creek Road; that is his property where he is going to live.”

“From going to their website it sounds like they have a full business going at that site,” Egger observed.

“They don’t,” McDonald replied, adding, “They’re going to start one there; but that is where he is going to have his personal residence.”

A visit to the “Front Royal Farms” website states that it is “under construction”, listing an address of 934 Happy Creek Road (McDonald later explained to us the site is the former Millennium Lotus property, just west of Mary’s Shady Lane and the Front Royal Limited Partnership property, north of Happy Creek Road).  A companion “About Us” link states, “Front Royal Farms, a Virginia Limited Liability Company, is a multidimensional organization that believes in educating tomorrow’s future employees through a wide range of trade and agricultural training programs.  In addition to the training programs, Front Royal Farms operates a fully integrated cattle farm which is used for both training future cattle ranchers and meat processors but also as a revenue generating business focusing on producing only the highest quality beef products.”

Another view of the “Training Academy” design at the ITFederal site at Royal Phoenix. The ITFederal site is just to the west of the old Avtex Administration Building where the EDA and other offices are now located.

McDonald told us she believed Tran, a second-generation Vietnamese-American in his 50s, had been involved in similar operations in other locations previously.  She said that project lies outside the parameters of Tran’s ITFederal LLC business.

As for any suspicion Tran might have used funds earmarked for Royal Phoenix redevelopment, McDonald later explained to this reporter that the EDA must sign off on every release of funds from the bank construction loan to ITFederal for its Royal Phoenix project, before First Bank & Trust will release it to the company.  So, she assured us no funds from that loan had been used for any purpose other than the investment plan for the Royal Phoenix site.

Websites & Partnerships

During the exchange with Egger about an ITFederal website <www.itfederal.com/> and listing as a subsidiary of VDN Systems, McDonald repeated what she has long asserted of that website bearing the company’s name, “Our ITFederal does not have a website.”  Asked if ITFederal was a subsidiary of VDN Systems, McDonald replied, “They are completely separate LLCs.”

The website in question’s Home Page lists ITFederal and VDN Systems with identical (202) phone numbers; identical McLean addresses on Spring Hill Road, Suite 100; and a sole contact person, Curt Tran.  Tran’s contact phone number is the same one listed for both companies, with the addition of an extension.

A second site found last year under the company’s name listed an address of 1101 Pennsylvania Avenue in D.C.; again, with Curt Tran as the sole contact at the same (202) area code phone and e-mail listed on the ITFed/VDN site – “It’s not his phone number,” McDonald assured Egger, who replied, “That’s odd.”

McDonald later told us the website confusion stems from the fact the company did not have a <dot-com> domain in June 2015 when the Royal Phoenix project was announced.  Consequently, it appears, some Internet-savvy person created the <ITFederal.com> domain with available information, some outdated, on the company; attempted to sell it to Tran, who declined the offer.

An architect’s drawing of another ITFederal building option at the Royal Phoenix site.

BINGO!!!  A more recent search of ITFederal websites found a third one identified as ITFederal LLC, this one with two less capital letters, <Itfederal, LLC>.  It lists an address of 404 Fairground Road, Front Royal, VA 22630; and Truc Tran as sole contact, this time at a (703) number.  This <Itfederal> website states, “This organization has been operating for approximately a year. Itfederal is estimated to generate $33,499 in annual revenues, and employs approximately 1 people at this single location.”

McDonald said this site was created this year and that the Fairground Road address was used by ITFederal to conduct interviews.  She also told us that unlike phone numbers on the other alleged ITFederal websites, the one listed here actually is Tran’s.  McDonald had no explanation of the inverted first name, which sounds more like an actual Vietnamese heritage name than Curt.

Bridge loan … to where?

Egger asked McDonald about the reason for a $10-million “bridge loan” – the “bridge” being to approval of the bank’s construction loan – from the Town to ITFederal in late September 2015.  That loan was suggested by the EDA within days of the announcement ITFederal and the EDA had reached terms on the 30-acre land purchase at the former Avtex site.

“That was for them to start construction when we thought we had EPA; thought we had everything we needed.  They have used that for some of their engineering services.  But they still have the bulk of that in the account that we have access to,” McDonald replied.

We later asked McDonald about EDA access to the $10-million First Bank & Trust Company loan to ITFederal.  “We’re not stupid about $10 million – losing $10-million of taxpayer money, including my family’s taxes, would not work out well for me,” McDonald laughed.  She added that while the EDA has write-off authority on the loan, it is not responsible were ITFederal to default on the loan, something she did not seem concerned would occur.

And while the EDA might have taken care on the issuance of funds from the bank loan for the project, as well as protecting taxpayer interests on liability on that loan, it seems the Town was less so in protecting its interest – literally – in the September 2015 bridge loan.

According to then Front Royal Finance Director Kim Gilkey-Breeden the Town initially approved that bridge loan for one month and included a $4,000 interest and fee payment to the Town as part of the deal.  However, with delays in approval of the First Bank & Trust loan, the Town bridge loan was twice extended, for one month each time.  According to Gilkey-Breeden those extensions came without additional fees or interest added to the deal.  She said that $4,000 about equaled the monthly interest the Town had been getting on that $10 million in an investment account.

Ask again this spring

Discussing Egger’s questions and the suspicion she described bringing them to her, McDonald told us, “Come see me this spring when ground is being broken, and see if you have the same questions then.”