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EDA in Focus

A ‘Perfect Storm’ of silence raises questions about 1st Avtex client



Egger confronts McDonald over potential fraud related to foreign funding stream

An otherwise routine monthly report by Front Royal-Warren County Economic Development Director Jennifer McDonald, took an unexpected turn when Front Royal Councilwoman Bébhinn Egger asked about funding to ITFederal LLC through a federal immigration and economic investment program that grants EB-5 visas to family members of wealthy foreigners.

Raising the issue of financing of the first company the EDA has contracted to build at the former Avtex Superfund site, Egger asked if the Immigrant Investor Program and EB-5 visas issued through the United States Citizenship and Immigration Services (USCIS) could be a danger sign of potential financial fraud.

EDA Executive Director Jennifer McDonald, at podium, and Councilwoman Bébhinn Egger squared off on exactly what ITFederal LLC is; and what it is planning here, during the Oc-tober 24 Town Council Meeting.

EDA Executive Director Jennifer McDonald, at podium, and Councilwoman Bébhinn Egger squared off on exactly what ITFederal LLC is; and what it is planning here, during the October 24 Town Council Meeting.

There have been some things in the media about certain politicians using EB-5 companies as a front, where the companies don’t actually produce anything,” Egger pressed of the ITFederal connection to a federally-controlled foreign funding stream.

Egger pointed to a “politician” she identified only as “high profile” under investigation for touting an EB-5 company to manufacture cars through the EB-5 visa program, “And they haven’t produced a single car,” Egger said. “So, I guess if there’s any way you could give Council some concrete evidence that ITFederal is not a money laundering system for this EB-5 visa program – maybe money laundering is the wrong term – but you know what I mean: there is a front so that they invest in a company and get their visa.”

McDonald explained that EB-5 visas were not acquired directly by the involved company, rather, “What happens is If someone from China, wants to educate their child in the United States, they put $500,000 to a million dollars in this investment fund; their child gets a two-year visa to be educated in the United States. That’s where that money comes from,” McDonald explained, adding, “No one’s trying to get a visa; someone is trying to get educated. That’s the only thing these visas are for; they are two-year education visas, not for someone to get a visa to come over here and live. The EB-5 funding program has been around for years. They have to create jobs – American jobs have to be created with the EB-5 financing,” McDonald explained of the impetus for the program.

The EB-5 discussion began as Egger asked McDonald about a website for the “American Commonwealth Regional Center”. McDonald explained, “That is part of the regional financing that is part of the EB-5 financing – the Regional Center is the one that finances the projects.”

That website states that “America Commonwealth Regional Center, LLC (ACRC) is an approved EB-5 regional center (located in Tyson’s Corner) under the USCIS’s Immigrant Investor Program … ACRC objectives include the promotion of economic growth, improved regional productivity, job creation, and increased domestic capital investment … ACRC is approved by the USCIS to promote economic growth, and offer capital investment opportunities …”

One of two building designs being considered for ITFederal building one at Royal Phoenix. This one is titled “Training Academy”.

One of two building designs being considered for ITFederal building one at Royal Phoenix. This one is titled “Training Academy”.

Egger had built up a head of steam before dropping potential “money laundering system” into the equation. The query came near the end of a series of questions about the IT solutions company poised to make what McDonald has said will be a $40-million investment at a portion of the former federal Superfund site now known as the Royal Phoenix Business Park. That investment on 30 acres at the site is projected to bring 400 to 600 jobs to the planned business park situated on 147 acres. Royal Phoenix is part of the former 467-acre Avtex synthetic fibers manufacturing plant and federal Superfund site, off Kendrick Lane in the Town of Front Royal.

Perfect Storm’ of silence

Egger said she was simply trying “to clear the air” about questions that have arisen in a vacuum of information over the past year. Egger and her Council colleagues have a vested interest in seeing commercial redevelopment occur at the former Synthetics Fibers manufacturing site that for decades after its 1940 opening was the largest private-sector employer (and polluter) inside the Town limits.

I know you said we can’t talk about their contracts, but it seems to have created this perfect storm that they do work that we can’t see or talk about; and with one hand they are doing this and with their other hand they are doing this. So, it creates an atmosphere of confusion,” Egger observed.


At the outset of her questions to McDonald, Egger asked about the contract base upon which ITFederal’s business is based, and the value of those contracts. “I can’t give you a total,” McDonald replied, leading Egger to ask if the information was available to be retrieved.

They have contracts with ‘the Nuclear Defense Department’; these contracts we’ll never see because they probably have stuff in there we can’t see,” McDonald said of classified aspects of the company’s work.

An alternate ITFederal building design under consideration for the Royal Phoenix site.

An alternate ITFederal building design under consideration for the Royal Phoenix site.

Of course Egger did not ask to see details of ITFederal’s work on Nuclear Defense computers, just their contractual value to the company. So, McDonald added, “I do know the first contract they had was a $140-million contract with the Defense Department. They have received several contracts since then. They have been working on those out of a satellite office while, one, waiting for the EPA approval, and now to see if VDOT is going to come through with that funding. So, they have been working on these contracts while we’ve been waiting on that. So, that’s who their contracts are with, the Nuclear Defense Department.”

Queried later after online searches turned up no such US Defense agency, McDonald corrected the ITFederal contracting agency’s name to the “Defense Special Weapons Agency”. A quick online check revealed DSWA as a subsidiary of the Department of Defense (DoD). To summarize from the Federal Register, the DSWA was established in 1971 as DoD’s “center for nuclear and advanced weapons effects expertise and performs essential missions in the areas of nuclear weapons stockpile support, nuclear effects research and operational support and nuclear threat reduction to include arms control verification technology development. The functions of DSWA were absorbed into the Defense Threat Reduction Agency (DTRA) by DoD Directive 5105.62 of September 30, 1998.

Shhh …

Okay, we get it – if we, the public or Councilwoman Egger saw details of the information within the DSWA computer system that ITFederal may work on, “they’d” have to kill, or at least disappear, us. But that’s NOT what’s being asked. What IS being asked is the monetary value of the federal contracting base upon which ITFederal’s promised $40-million investment here will be built.

Of course, if the history of this decade, century and millennium has taught us anything, it is how aggressive government officials and agencies can be in the protection of national security, from threats both real and imagined. The vagaries around ITFederal’s business model and contractual value may simply be an indication that private contractors on the federal payroll have fallen into the same pattern of a perhaps overbroad veil of secrecy.

However, when that secrecy surrounds a company that the EDA and the Town of Front Royal have pinned their hopes on – and invested, if temporarily, $10-million in – to launch an economic renaissance at the long-dormant former Avtex site, it would appear that silence is not always golden.

Egger observed that with a large amount of money having changed hands, initially through the Town and EDA, with no result for over a year, people had questions they wanted answered – “These are things I’ve heard,” the Councilwoman told McDonald of her questions about ITFederal, its CEO and peripheral investments he has recently made in this community.

And as I told you this morning, people seem to talk without having the knowledge of what they are talking about,” McDonald said of the line of questioning Egger was pursuing.

Asked later about the year-plus delay between the ceremonial groundbreaking of October 26, 2015 and the now projected Spring 2017 start of construction at the former federal Superfund site, McDonald pointed out, “It’s a little over a year delay in a very complicated 27-year process – it doesn’t look so long if you look at it that way.”

Everyone will be happy to see economic redevelopment begin at the Royal Phoenix Busi-ness Park portion of the former Avtex Superfund site. A preliminary drawing indicates the initial ITFederal building will go just west of (below) the EDA Headquarters in the old Ad-ministration Building at center left. The photo is looking east toward south-central Front Royal.

Everyone will be happy to see economic redevelopment begin at the Royal Phoenix Business Park portion of the former Avtex Superfund site. A preliminary drawing indicates the initial ITFederal building will go just west of (below) the EDA Headquarters in the old Ad-ministration Building at center left. The photo is looking east toward south-central Front Royal.

Perhaps contributing to the sense of delay is the fact the ITFederal announcement came about three months before the company and the EDA actually reached an agreement on the 30-acre land purchase at Royal Phoenix. Late last year as delays in post-ceremonial work at the site drug on, McDonald admitted to this reporter that the June 2015 announcement of the ITFederal deal was somewhat premature, but pushed forward by US 6th District Congressman Bob Goodlatte. McDonald credited Goodlatte with bringing ITFederal to the EDA as a potential economic development opportunity. And in the flush of excitement at was potentially the first commercial investor in the Royal Phoenix site after the above-mentioned 27-year cleanup, remediation and marketing process, conceding to a slightly premature announcement may not be that hard to understand.

The sale agreement between the EDA and ITFederal was announced as a done deal in September 2015. The subsequent delay of over a year was due to the length of time it took Superfund site overseer the EPA to approve removal of the 30-acre ITFederal parcel from a $2,060,000 lien on the property, so it could be given to ITFederal for one dollar as an up-front economic incentive to begin positive movement at the site.

(Part 2 of our coverage of the exchange between Bébhinn Egger and Jennifer McDonald will include the rationale for the Town’s $10-million “bridge loan” to ITFederal in September 2015; confusion over websites with the ITFederal name attached; a peripheral land purchase made by ITFederal CEO Curt Tran on a 70+ acre parcel off Happy Creek Road, as well as the business plan for that property that includes on-site cattle ranching and a wide range of trade and agricultural training programs.”.)

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EDA in Focus

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



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



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 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



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



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 in Focus

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



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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Donnie Poe EDA criminal charges dropped – but could be re-filed



On Thursday, January 9, Rockingham County Assistant Commonwealth’s Attorney Michael Parker filed a motion to nule prossed (drop) charges brought by a Warren County Special Grand Jury against Earth Right Energy principal Donald F. Poe, at least for the time being.

The Special Grand Jury was empanneled to investigate potential criminality tied to the $21.3 million Economic Development Authority (EDA) financial scandal. Parker was appointed special prosecutor for EDA criminal cases in December following the announced recusal of incoming Warren County Commonwealth Attorney John Bell and his staff and the withdrawal of Acting Commonwealth’s Attorney Bryan Layton as his tenure in the department drew to a close.

Earth Right Energy principal Donald Poe outside the Warren County Courthouse following a recent hearing – Royal Examiner File Photos/Roger Bianchini

During previous hearings related to the EDA civil and criminal litigations it has been noted that the EDA financial scandal and consequent investigations has generated an unusually large amount of documentation, cited at between 700,000 and one-million pages.

In the prosecutor’s motion to drop the charges at this point Parker wrote, “The Commonwealth received its portion of discovery, purportedly containing all evidence that has been considered by the special grand jury to date, via hard drive on 12/30/2019. Initial review of that hard drive indicates that it may be missing a substantial number of exhibits considered by the grand jury.

“It would be imprudent for the Commonwealth to prosecute any criminal matter for which the investigation has not concluded.

“Even if the ongoing investigation reveals nothing further with respect to Defendant, the Commonwealth cannot prepare for trial when its existing evidence remains unclear.”

Of the decision not move forward with the Poe prosecutions with a motions hearing and possible three-day trial on the perjury charge against Poe looming on January 22, Parker told Royal Examiner in a Thursday afternoon email, “This decision was not made lightly. As the gatekeeper of criminal charges, it is my responsibility to determine whether to prosecute and how to prosecute. Making those decisions requires a thorough grasp of the evidence supporting any allegation. Unfortunately, I am not fully caught up with the ongoing special grand jury investigation, thus I do not have a thorough grasp of the evidence that might pertain to Mr. Poe’s charges. I believe it would be unethical to attempt a prosecution under these circumstances.”

Motions hearings for Poe and other EDA criminal and civil defendants are scheduled for Friday afternoon, January 10. Parker said the motion for the nolle prosequi dropping of the charges against Poe will be heard during those hearings on the 1 p.m. Warren County Circuit Court docket.

“If the motion is granted by the Court, the charges will be dropped without prejudice to the Commonwealth. This would not prevent the Commonwealth from prosecuting the same charges in the future,” Parker explained in a Thursday afternoon email.

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Toddler and Preschool Story Time @ Samuels Public Library
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10:15 am Toddler and Preschool Story Time @ Samuels Public Library
Toddler and Preschool Story Time @ Samuels Public Library
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