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Town, ITFed’s Tran remain at odds over drainage system costs

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An October 19 photo of West Main extended road work just east of the first of three planned ITFederal buildings at the former Superfund site – a drainage line cap is visible at right-center in front of the building, see below/insert for closer view.

An impasse between the Town of Front Royal and ITFederal principal Truc “Curt” Tran over financial responsibility for installation of a drainage line through Tran’s Royal Phoenix Business Park site continues.

“It is at a standstill – Mr. Tran is holding true to his contention that it is not his responsibility,” Front Royal Town Manager Joe Waltz said in response to question from Town-County Liaison Committee and county board Chairman Tony Carter on Thursday, October 18.

The dispute related to the West Main Street site connector road project first publicly surfaced during a September 17 town council work session.  Waltz and Town Engineer Robert Brown briefed council on the disagreement related to drainage issues across the ITFederal phase one pad site where the first commercial structure is under construction at the former Avtex Superfund site (1989-2012) off Kendrick Lane. Related story here: – Town draws ‘line in the mud’ with ITFederal on stormwater drainage costs

Brown said Tran was referencing a December 2015 engineering drawing that was never completed or submitted to prove his point that the Town had agreed to pay for the drainage line across his property.  The referenced and incomplete 2015 plan was one of several engineering plans, including those completed and submitted between 2013 and 2018, that Brown presented to contradict Tran’s contention the Town had agreed to foot a bill now estimated between $120,873 and as much as $170,000-plus depending on the length extended across ITFederal’s 30-acre parcel.

Brown said that no additional documentation could be located to support Tran’s contention any town official had agreed to fund that peripheral aspect of the West Main Street connector road project.

Brown described the disputed project as a 500-foot stretch of 42-inch stormwater drain pipe at the initial $120,000 cost estimate, with an additional 700-foot channel that could add another $50,000 to costs.

Liaison committee minus one – from left around the table: Town Manager Joe Waltz, Mayor Hollis Tharpe, County Board and Committee Chair Tony Carter, Supervisor Tom Sayre and County Administrator Doug Stanley. Councilman Jacob Meza was absent. Photos/Roger Bianchini

No further details were discussed at the October 18 liaison committee meeting.  However, on September 17 council was told the drainage issues relate to natural flow across the property and a change in elevation to phase one of the West Main Street connector project.  Phase one goes from a Kendrick Lane entrance point past the ITFederal building now under construction behind the old Administration building housing EDA headquarters and the first rental properties at the site.

Brown was asked by Councilman John Connolly if the drainage issues related to a lowering of the connector road project’s elevation.  Brown replied in the affirmative, adding that a lowering of the road level was “driven by the developer (Tran’s)” desire to reduce the amount of fill dirt necessary to make his first lot buildable.

One of two huge piles of fill dirt further west on ITFederal’s 30-acre parcel near the planned phase two and three structure locations.

Two huge piles of fill dirt sit on ITFederal’s phase two and three pads west of current construction; however, it appears little, if any of that dirt was moved to elevate ITFederal’s phase one construction site.

After receiving a “get the former Superfund site redevelopment ball rolling” purchase price of one dollar for his 30-acre Royal Phoenix parcel, Tran committed $150,000 to infrastructure development at Royal Phoenix. However, according to Town Engineer Brown, that money was earmarked for the wastewater pumping station, rather than road-related infrastructure.

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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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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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