The day before the EDA financial corruption story began dominating last week’s news cycle several citizens confronted the Front Royal Town Council on the proposed solution of a 3.9-cent real estate tax hike to make up a capital improvements annual debt service revenue shortfall.
And surprise – another EDA-enabled loan, this time to tax-exempt, high executive-salaried Valley Health, made its way into the discussion. With support from Krista Adanitsch, Melanie Salins took the point in urging council to explore the use of a PILOT (Payment In Lieu Of Taxes) fee on Valley Health to place at least some of the proposed tax burden to cover a steadily climbing annual debt service to pay for the new police headquarters on the regional medical goliath.
“You have given the gift of a free pass to Valley Health up until now. But seeing the state of crisis this community is currently in – NOW is the time to ask Valley Health to finally step up and start paying their fair share,” Salins told the town’s elected officials of their support of EDA-enabled financing of up to $60 million to help fund construction of a physically-new but services-reduced hospital.
“Valley Health has ignored the needs of this community by shrinking the new hospital to a mere 36 beds and getting rid of women’s care and the ICU, thereby placing further burden and expense upon the citizens of this town. The EDA, comprised of three people working with Valley Health (Baker, Patteson and indirectly Llewellyn prior to his resignation), gifted away millions of dollars in bond fees – and most of you voted to allow them to do it,” Salins told council.
Speaking initially during the public correspondence portion of the council meeting, Salins noted, “This untapped revenue source could bring in hundreds of thousands of dollars annually. Money that could help ease the burden of tax increases on the citizens of this town… Valley Health has been paying Winchester a PILOT in the amount of $750,000 per year. As I stand here today, Valley Health pays Front Royal, zero dollars in PILOT payments… As our taxpaying citizens are facing being hit with another increase in their tax payments, I ask HOW IS THIS FAIR?”
Salins noted that the Town, County and EDA’s bending to the economic will of its largest and tax-exempt medical provider has put, not only an added tax burden on citizens and small businesses, but has positioned Valley Health favorably in the medical services marketplace.
“Valley Health occupies large amounts of property: the old hospital, the new hundred-million-dollar hospital, doctors’ offices, urgent cares, and the many other future items they say they plan to build – properties that would otherwise provide our community with income from taxes.” Of those Valley Health-owned properties and business housed on or planned for them, Salins observed, “Future buildings, which by the way, will be in direct competition with other local tax-paying businesses.”
In fact one of the councilmen listening to her, Valley Health-employed Jacob Meza, once told local media outlet the Northern Virginia Daily of his role in the decision to obtain the North Corridor Riverton Commons parcel Valley Health moved its in-town Urgent Care Center to, as a move to block potential health care competitors from building there.
In later comments during the tax rate public hearing Salins was critical, not only of Meza for his decision not to recuse himself from the June 11, 2018 vote on the Valley Health bond issue as he had at times earlier in the process, but again toward council as a whole.
“I begged all of you guys to look at this bum deal that the EDA was giving you on this hospital bond, waiving millions of dollars in fees. And if you already knew the EDA wasn’t being truthful, why was I ignored?” Salins asked before turning her attention toward Meza.
“Why did you not recuse yourself for the first time all year and make that tiebreaking vote in their (Valley Health’s) favor when you knew that the EDA couldn’t be trusted for weeks leading up to that vote?” Salins asked the Valley Health-employed councilman.
“Morale in this town is pretty low right now because we’re being punished after we didn’t make the mistakes; we weren’t listened to; and we’re left footing the bill here.
“I ask you to delay any decisions to raise taxes until you investigate the PILOT,” Salins reiterated of earlier comments. She noted that when she first brought the Valley Health PILOT fee idea to council and staff she was told, “There’s a surplus, there’s plenty there, we don’t need to do that.”
But even in recent weeks after the believed surplus evaporated and as the FRPD construction debt service estimates continued climbing due to a council majority’s ongoing 2018 faith in the New Market Tax Credit gamble, Salins said the lack of enthusiasm for the PILOT fee charge to Valley Health has continued.
“I thought you would have been excited about that; and it seems like, ‘Oh maybe we’ll just take the easy way and raise everybody’s taxes instead because it might be a little work and it might be hard to make Valley Health pay their fair share’ after they have just trampled upon this town over and over and over again for the last year,” Salins asserted.
Pointing to multiple economic variables facing citizens from a proposed six-cent County real estate tax hike, a significant jump in Town electric rates in the past year and the 3.9-cent hike on the table, Salins wondered at council’s seeming preference for the tax-exempt medical monolith over the citizens who elected them.
“I am asking you to please stop allowing our town to be taken advantage of. Each of you sitting in front of me today has the opportunity to be a hero – place some burden on the goliath and remove some of the burden from us little guys… Let’s start a new chapter in Front Royal – a time where we no longer allow our community to be taken advantage of; a time where our local government doesn’t greet citizen’s concern with deaf ears or patronizing responses. It is a time for action. Can we count on each of you to do what needs to be done to get a PILOT in place?” Salins asked.
As previously reported, by a 4-3 vote council approved the first reading of a 2.9-cent real estate tax hike following the March 25 public hearing. See Related Story:
The mayor also assured those present that staff was now exploring the PILOT fee idea as it might apply to Valley Health.
FR-WC EDA moves to guarantee records protection during transition to County IT oversight, goes to Closed Session on litigation, business matters
The Front Royal-Warren County EDA held a special meeting on Wednesday, February 1, 2023, at 3:00 PM at the EDA Office on Kendrick Lane. All five Board members, legal counsel, and the County Director of Economic Development were present.
The meeting began with the discussion of moving the February Regular Meeting from Friday, February 24, to Tuesday, February 28 at 8:00 AM. The schedule change was unanimously approved.
Following the schedule discussion, the Board requested legal counsel to draft an agreement to protect EDA records in order to move forward with the information technology transition with the County.
The Board concluded the meeting with a closed session to discuss potential disposition of real property to business prospects, the small business loan committee applications, and legal consultation regarding active litigation. There was no new business following the closed session.
As noted above, the next regular monthly Board meeting will be held on Tuesday, February 28, 2023, at 8:00 AM at the Warren County Government Center.
County overseen FR-WC EDA reviews Conservancy Park status, Small Business Loan Committee applications, future property marketing options
The Front Royal Warren County EDA held its monthly meeting on Friday, January 27, 2023, at 8:00 AM at the Warren County Government Center. Four Board members, legal counsel, and the County Director of Economic Development were present. Chairman Jeff Browne participated remotely.
The regular meeting began with a discussion regarding a potential utility easement through the EDA’s Happy Creek Technology Park property to a neighboring parcel. The proposed development is in its early stages although the utilities could create a loop through the business park while also accommodating any potential future development on adjacent properties. The Board of Directors has concerns with any easements that may encumber any EDA owned property, however, they are open to future discussions if it can create an overall cohesive development area.
As part of the Committee Reports, Jorie Martin and Joe Petty provided an update regarding the Avtex Conservancy Property and recent presentations to the Board of Supervisors and Town Council. Mrs. Martin mentioned the interest in issuing an RFI (Request For Information) for the remaining property, and a work session may be scheduled to review the document.
Treasurer, Jim Wolfe, and the Director of Economic Development Joe Petty provided an update on the financial statements and the Board of Supervisors will soon begin having meetings regarding the Fiscal Year 2023-24 budget.
Staff from the Virginia Economic Development Partnership (VEDP) provided a presentation regarding the Virginia Business Ready Site Program (VBRSP) and ways the EDA can position its available properties. The discussion gave the Board better insight into the types of businesses interested in locating in Virginia and types of assets they look for in property.
The FR-WC EDA is still looking for applicants to take part in the Small Business Loan Committee. The EDA approved four (4) certificates of satisfactions for previous loans that have been successfully paid off. The Board also approved two amendments to existing leases for C-CAP and the Happy Creek Technology Park Grazing Lease.
The Board concluded the meeting with a closed session to discuss potential disposition of real property to business prospects, the small business loan committee applications, and legal consultation. No new business followed the closed session.
The next regular monthly Board meeting will be held on Friday, February 24, 2023, at 8:00 AM at the Warren County Government Center.
WC EDA release describes history, intent, and timing of Avtex Conservancy Park initiative
Front Royal-Warren County EDA representatives presented to the Warren County Board of Supervisors on Tuesday, January 10, 2023. The Avtex Ad Hoc Committee members, Jorie Martin and Scott Jenkins, along with the County Director of Economic Development, were in attendance to discuss the Former Avtex Fibers Conservancy Parcel. The FR-WC EDA recommends conveying the Conservancy Parcel, consisting of 240 acres, from the EDA to the County.
Shortly after the final work shift concluded at the Avtex Fibers Plant in 1989, the community began to wonder about the future of the Avtex Property. In 1993, the Parks and Recreation Department released the document Front Royal’s Plan for Parks, Trails, Bike-paths, and Greenways. While the plan addressed the entire community, it was one of the first local plans that stated, “The Avtex property on the West side of Front Royal may be amenable to eventual Park use, following the resolution of issues concerning the EPA project to modify the land and ponds … retention of the area as an open-space/wildlife preserve is the most desirable use of this land following the completion of its cleanup in the following 10-20 years.”
Another document published in 2000, The Avtex Fibers Conservancy Park Master Plan Report, was the culmination of work by stakeholders and the community that focused specifically on the Avtex Property and stated, “The Master Plan recommends restoration of the basin area into a conservancy park that combines ecological restoration and conservation of native habitats with passive recreation opportunities for local residents and visitors.”
Remediation of the Superfund site began in 2000 and continues today, as the EPA and FMC consistently monitor the property to ensure it is currently safe and in the future. The FR-WC EDA recognizes that now is the time to fulfill the community’s vision by implementing the 2000 Master Plan. Nationally there is an increase in the public’s interest in accessible green space and passive recreation. Additionally, the Avtex Trail would provide more opportunities to experience Front Royal’s location along the Shenandoah River.
“Moving forward with implementing the Conservancy Master Plan is just the beginning of a process to revitalize the site,” said Ad Hoc Committee Member Jorie Martin. “Avtex Fibers was once an economic engine of Front Royal, and the new trail will begin to change the perception of the property and create a fresh outlook for redevelopment on the remaining parcels.”
The FR-WC EDA will continue to work with Warren County, the Town of Front Royal, EPA, and FMC to ensure that the development of conservancy property and, ultimately, the redevelopment of the entire Avtex Property is a top priority for our community.
For more information regarding the FR-WC EDA’s vision for the Former Avtex Fibers Conservancy Parcel, contact the Avtex Ad Hoc Committee Members Jorie Martin at email@example.com and Scott Jenkins at firstname.lastname@example.org, and the presentation can be found at wceda.com. Information regarding the EPA’s cleanup efforts and reports can be found at www.epa.gov.
About the Front Royal-Warren County Economic Development Authority:
The mission of the Front Royal-Warren County Economic Development Authority (FR-WC EDA) is to strengthen the economic growth of our community by fostering a friendly business environment and providing services to create and retain quality jobs in Warren County. The Authority also supports community tourism, recreation, and arts & cultural initiatives to provide a better quality of life for the County’s residents, workers, and visitors. Coordination with the Board of Supervisors, County staff, the Town of Front Royal, and State agencies are integral to promoting economic development and tourism throughout Warren County.
For more information, contact Jeffrey Browne, FR-WC EDA Board of Directors Chair, at 540-635-2182, email@example.com
WC EDA proposes County takeover of Avtex Conservancy Park’s 240 in-town acres; Supervisors approve six of seven Airport Lease Agreements
At a January 10th work session the Warren County Board of Supervisors received four staff reports beginning with members of the now unilaterally County-overseen but still legally named Front Royal-Warren County Economic Development Authority (Avtex Conservancy property proposal), and proceeding with Deputy County Administrator Taryn Logan (FY 2023 thru 2028 Draft Capital Improvement Plan), Finance Director Alisa Scott (Fiscal Policy Guidelines for Capital Asset Replacement Program), and Human Resources Director Jane Meadows (Department Updates and Position Reclassifications).
The board then convened a Special Meeting called to hold public hearings on seven lease agreements at the County-overseen Front Royal Airport (FRR), including with drone manufacturer and new FRR Fixed Base Operator Silent Falcon (for the “airport house”), new hangar maintenance contractor Aero Services LLC (for the “maintenance repair facility”), as well as Randolph-Macon Academy and four individual hangar tenants. All but one of those lease agreements was unanimously approved.
At the request of Finance Director Alisa Scott, item H-4, the hangar lease agreement with Michael W. Christensen was held – there were no speakers at any of the seven public hearings – but a vote on the Christensen lease was tabled at Scott’s request until the board had a chance to review and discuss with staff a note inserted from Christensen regarding terms in his lease.
The request for an altered motion to table the vote from the approval motion included in the agenda packet on all seven requests seemed to collectively confuse the board for about five minutes after North River District Supervisor Delores Oates observed Scott’s requested Christensen lease motion differed from the one in her agenda packet. But with some guidance from the county administrator and assistant county attorney, the adjusted motion to table a vote on the Christensen lease was eventually made and approved without dissent.
Want a 200-plus acre, riverside walking, biking trails park?
The work session opened with a presentation from the now more-commonly referenced Warren County EDA’s Board of Director members Jorie Martin and Scott Jenkins, with support from County in-house EDA Executive Director Joe Petty. Beginning with Martin, they explained a proposal to have the County take over possession and management of the Conservancy area, a total of 240 acres at the former 467-acre Avtex synthetic fibers manufacturing plant opened in 1940 as the American Viscose subsidiary of British Viscose. The plant was built as a war materials production facility out of the range of German bombers as World War II was engulfing Europe. In the late 1980s the plant was closed by state and federal regulators after byproducts of the plant’s manufacturing processes were linked to the production of carcinogenic materials being released into the environment on multiple levels. On the brighter side, Martin noted the property’s history, not only in the production of war materials for the battle against European fascism, but also materials used in NASA’s U.S. space program.
Walking trails on preserved land, including riverside acreage, connecting various portions of in-town properties including some schools, has been determined to be an optimal future use of the EDA overseen property due to more restrictive developmental restrictions placed on that area due to past uses. Portions of the Conservancy area were where the synthetic fibers manufacturing plant’s cleaning basins were located. The Conservancy area of the former federal Superfund site has been ruled unsuitable for development with buildings or any use requiring digging much below the surface. And it was explained that certain portions of the property will not be included in the proposed public access park area.
So, with the more restrictive developmental parameters WC EDA officials believe that County ownership under the umbrella of its Parks and Recreation Department would be a viable future direction for the property, the county, and the community. Would the supervisors agree after exploring operational dynamics, EDA officials are seeking to know.
“Is there a budget for this grand plan?” Delores Oates asked, perhaps drawing a green line in the sand on direct County involvement. “I see we have money available, it looks like $93,000 – $93,000 doesn’t go very far in government programs – So Joe, do we have a budget to maintain
this as a park for the county because I want to understand what it’s going to cost the County taxpayers should we accept this conveyance and what we’re getting ourselves into.”
Petty noted that the EDA was currently maintaining some trails in the Conservancy area and pointed to cost estimates done in 2017 when a plan for the park was being developed. “This is going to be a process. We know it’s going to take some time,” Petty began, pointing to available (ARCA) funding that might open the path to other state or federal grant funding for Conservancy area redevelopment. “I think the discussion tonight is if even the County board has the appetite to take this initiative on,” he told the county’s elected officials.
At this point County Administrator Ed Daley chimed in. “I might add to that, there is nothing anticipated with this that would require a capital investment by the County. So, this would be done when State or Federal money becomes available. If that takes two years, three years, five years, etcetera. What we’re looking at right now is there is a particular opportunity with lots of federal money available. But we’re not looking to add this on to the County budget or anything of that kind. There will be a maintenance cost, but quite frankly that’s going to be minimal,” Daley assured the supervisors.
“So, you said it would be minimal but this is 240 acres of maintenance,” Oates countered, estimating a cost to cover two additional employees “at least” for that job “on a regular basis.”
“No, mam,” Daley countered, pointing to a minimal amount of those 240 acres requiring actual maintenance, within the limited developmental guidelines for the property. “This is all going to be natural state,” Daley said of the the Conservancy parkland that will be available to the public.
“There is a Consent Decree for most of this property,” Petty pointed out, adding, “Even though we or anybody who owns this – the EDA currently does not maintain this. This is ARCA funding by (surviving former plant owner) FMC and they contract with a company called Parsons,” Petty explained, indicating that the EDA or any future owner’s maintenance responsibility would be limited to any new trail development, and that the Consent Decree would maintain FMC’s maintenance of existing areas requiring continued maintenance.
“Thank you for that clarification. I wasn’t aware that FMC had a Consent Decree arrangement with us,” Oates responded.
Asked for a timeline on a decision by Board Chair Vicky Cook, EDA board member Scott Jenkins replied, “We’d like to get that decision here in the first half of the year, so this fiscal year. We’d like to have the conveyance completed by June.” Petty added that the ARCA funding (referenced available $93,000) was done by the calendar year, and was already in the EDA’s possession for the coming year.
So, by June we should know if the county supervisors have bought into the idea of incorporating a portion of the base 240 acres designated to be a naturally maintained walking and biking trail park with riverfront aspects into the County’s Parks & Recreation Department system along the east side of the South Fork of the Shenandoah River. One might guess that a looming question to be answered is how deep did Superfund cleanup and remediation work on this section of the old Avtex property go, assuring potential users that they won’t be exposed to any lingering hazardous materials seeping up through the Conservancy park soil. Royal Examiner later posed that question to WC EDA Executive Director Petty, who noted it wasn’t the first time he’d heard it.
“I think that all parties will have the public’s health and safety as a number one priority if the trail moves forward. There will be continued conversations with the EPA to ensure it is safe to use for walking/biking trails, as we are not planning for any other public use on the site other than passive recreation.
“I’d also like to share this link to the EPA that refers to human exposure at the Avtex Site.”
Watch the County video of both the work session and special meeting. The EDA Conservancy Park Conveyance discussion begins 30 seconds into the video.
Judge notifies involved parties of denial of all defense motions to overturn jury verdicts in EDA civil liability cases
According to Front Royal-Warren County Economic Development Authority Board of Directors Chairman Jeff Browne, the now County overseen EDA has received notice from civil case Judge Bruce D. Albertson on his ruling in the five defense motions to overturn jury verdicts of liability in the EDA financial scandal civil litigations. That ruling on five civil cases totaling over $14 million dollars of liability is denial of those motions to overturn.
“We understand all motions were denied, which is a great victory for Warren County residents and the Warren County EDA,” Browne told Royal Examiner Tuesday afternoon by phone. Browne’s understanding is based on a December 13th letter from 26th Judicial District Judge Albertson to plaintiff and defense counsels in the five personal liability cases at issue. There are also two associated business liabilities.
“This matter was before me on November 30, 2022, for hearing on Motion(s) to Set Aside filed by Defendants. I deny each motion for reasons cited by Plaintiff,” Judge Albertson wrote involved counsel, citing preparation of a Final Order by plaintiff counsel and the noting of any defense objections to that order. It is possible defendants could appeal the court’s ruling to higher state courts.
The liabilities found by five Warren County Circuit Court civil case juries, four in July, and one in October, include:
- Truc “Curt” Tran ($1,821,192.01 compensatory, interest liabilities), Tran’s ITFederal company ($10,419,327.38 compensatory);
- Donald Poe ($604,973.12 compensatory, punitive, interest), Poe’s Earth Right Energy company ($948,646.25 in compensatory, punitive, interest);
- Samuel North (approximately $893,000 compensatory, punitive, interest, & statutory conspiracy);
- William Lambert ($296,555.34 compensatory, punitive, & interest);
- April Petty ($125,000 compensatory judgment liability).
See story on these motions hearings (Judge ponders rulings in multiple defense motions to overturn civil case jury finding of liability in EDA financial scandal cases) as well as other related trial stories on the Royal Examiner website under “News” category, subcategories “EDA in Focus” or “Crime & Courts”.
Judge ponders rulings in multiple defense motions to overturn civil case jury finding of liability in EDA financial scandal cases
After over five hours of arguments surrounding five EDA civil case defendants’ motions to overturn jury liability verdicts totaling over $14-million, Judge Bruce D. Albertson took those arguments under advisement Wednesday afternoon, November 30th. Some court officials anticipate rulings at some point in the coming week in the cases of April Petty ($125,000 compensatory judgement liability); William Lambert ($296,555.34 compensatory, punitive, & interest liabilities); Donald “Donnie” Poe ($604,973.12 compensatory, punitive, interest); Truc “Curt” Tran ($1,821,192.01 compensatory, interest); and Samuel “Sammy” North (approximately $893,000 compensatory, punitive, interest, & statutory conspiracy).
In addition to the above personal liabilities, Poe’s EarthRight Energy (ERE) company ($948,646.25 in compensatory, punitive, interest) and Tran’s ITFederal ($10,419,327.38 compensatory) were also handed down by Warren County Circuit Court civil case juries in recent months.
All but North’s trial were heard in July. North’s, also originally scheduled for July, was delayed to October by a later withdrawn bankruptcy filing. This week on the final day of November, attorneys for the defendants echoed arguments sometimes heard at trial during earlier motions for dismissal of cases or claims against their clients due to what defense attorneys asserted both then and now, was a lack of substantive evidence of collusion with EDA financial scandal central figure and former Front Royal-Warren County Economic Development Director Jennifer McDonald. Rather, some defense attorneys claimed their clients were unwitting victims of McDonald’s from various business or personal connections.
Those personal connections include North’s marriage to McDonald; Lambert’s former personal relationship with McDonald’s sister; what attorney William Schmidheiser called Petty’s casual acquaintance McDonald, acting as his client’s real estate agent in the sale of her home. On the business side, Poe’s ERE company was contracted through McDonald to perform various solar energy and energy maintenance projects for the EDA under what plaintiff EDA attorneys contended were false pretenses McDonald presented to her board of directors; and Tran’s ITFederal was recruited through the joint effort of McDonald and then Virginia Sixth District U.S. House Representative Bob Goodlatte to become the first commercial redevelopment client at the former Avtex Superfund site, also with what plaintiff counsel said were false contractual and asset information concerning ITFederal alleged to have been presented to the EDA board.
Several attorneys, most prominently Tran attorney David Jones Jr., also argued that several claims categories should not have applied to their clients at trial. Prominent among those were the “ultra vires” claim of profiting off the actions of an official acting outside the range of their legal authority, and associated claims of “conversion” and “unjust enrichment” being applied to their clients for actions of then EDA Executive Director McDonald. Consequently, Jones for Tran particularly and other defense attorneys argued that some jury instructions submitted were improper, creating an incorrect evidentiary scenario for those juries to deliberate on. So, procedural errors on bench rulings on evidence admissibility or jury instructions were claimed as grounds to overturn jury verdicts.
In Poe and ERE’s case, defense counsel William Ashwell also noted that some of the contracted work had been successfully completed by Poe’s company. He told the court that when payments were made by the EDA board to his client’s company: “The EDA eventually adopts her (McDonald’s) actions by their actions” and consequently his client is not the one who should be held liable for the return of money for work accomplished. Ashwell also sought to overturn any personal liability of Poe for payments made to his company.
In opening his arguments to overturn or limit Tran and ITFederal’s liability, Jones noted that he was “in the somewhat unenviable position of not being the trial attorney – Am I in the position of fresh eyes or of where fools rush in where angels fear to tread,” Jones wondered as he launched what would be an approximate hour of argument on his client’s behalf. During that hour Jones questioned the liability finding on a number of grounds and questioned whether ITFederal was, in fact, in breach of contract as claimed by the EDA in seeking recovery of the balance of the $10-million loan the EDA gave ITFederal for development at the former Avtex site.
Plaintiff counsel Cullen Seltzer and Karissa Kaseorg countered, as they had at trial, that McDonald’s assertions to her board about the source of funding for the ERE energy and electrical work being through grants that would compensate the EDA for its payments to ERE; or alleged government contracts held by Tran’s ITFederal company that were non-existent created the path for those payments, and a $10-million loan in ITFederal’s case, substantiating the juries findings of liability on ultra vires, conversion, and unjust enrichment, among other plaintiff claims.
In response to some of Jones’ arguments for reduction or dismissal of his clients’ liability, Kaseorg told Judge Albertson that the motions to overturn hearings should not be an opportunity for defense counsel to retry the case with a “what we wish we had done” at trial. Of Jones’ argument to dismiss based on the inclusion of the plaintiff’s “conversion” jury instruction, plaintiff counsel noted that the defense had agreed to the conversion jury instruction at trial.
In conclusion plaintiff EDA counsel asserted the judicial decisions from the bench at trial had been proper as to both evidence admissibility and jury instructions, and that those jury verdicts of financial liability based on both sides cases as presented at trial should stand as handed down by those five juries. And now we are awaiting a decision on how the court will rate its own performance at those trials based on the defendants’ challenges and the plaintiff’s counter-arguments in support of the judicial rulings made at trial.