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EDA in Focus

Town skirts EDA request for FRPD construction back payments

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The Front Royal Town Council passed a series of four motions Monday, November 25, authorizing expenditures totaling $1.02 million dollars related to its civil litigation against the Economic Development Authority, as well as payments to contractors regarding construction of the new Front Royal Police headquarters across Kendrick Lane from the EDA office complex.

Of that million dollars plus total, $527,800 approved in a series of three motions is for legal and auditing fees related to the Town’s civil suit against the EDA. The $492,284.34 approved in the last of the four motions is for vendor (contractor) payments recently come due on the FRPD construction project.

The motions were all approved by 5-0 votes, with Mayor-Elect Gene Tewalt not voting as Mayor Pro Tempore as he was declared at the meeting’s outset. As noted above, over half of the authorized payments are for attorney and auditing fees for services related to the Town’s attempt to recover “as much as $15 million” from the EDA. The $492,284 was approved to cover direct payments to contractors on the Front Royal Police Headquarters construction project.

The motions were all approved by 5-0 votes, with Mayor-Elect Gene Tewalt not voting as Mayor Pro Tempore as he was declared at the meeting’s outset. Photos and video by Mark Williams, Royal Examiner.

However with its litigation still pending as the EDA struggles to right its financial situation, the Town did not make good on an EDA request for back payments totaling over $8 million dollars for vendor/contractor payments it has made on the FRPD headquarters project on behalf of the Town.

In a letter from EDA Board of Directors Chairman Ed Daley to Town Finance Director B. J. Wilson dated November 15, 2019, included in the agenda packet on the final of the four EDA-related payment authorization requests, the EDA appears to attempt to force the Town’s hand on making up those back payments to the EDA.

After informing Wilson of the EDA’s receipt of FRPD project Requisition (invoice) “# 45” dated October 22, 2019, Daley wrote, “After speaking with our Board of Directors, I write to advise the Town that we will hold this pay requisition without paying until the Town of Front Royal pays the principal and interest due on this project.

“The principal, legal fees and draw fees paid by the EDA for the Town to date is $8,440,797.17,” Daley continues, adding, “The interest amount is $291,856.21 which covers interest on the previous 44 pay requisitions, up to October 31, 2019.” The recently-installed EDA Board Chairman closes by informing the Town, “Once we receive the past amount due on this project, we will process pay requisition # 45 accordingly.”

The Daley letter seeking reimbursement on the $8.44 million in police headquarter construction payments indicates an FRPD project payment and interest accrued history attached. But in the council motion on authorization of vendor payments there is no amount attached to Requisition # 45. However, in the “Revised Item # 15 motion made by Jacob Meza, seconded by Chris Holloway, an amount of $492,284.34 is cited to cover payments directly “to vendors Dustin Construction, Mosley Architects and JTS LLC for construction of the Police Department Project.”

The motion continues to cite the use of money “previously budgeted for the Police Department Project” and notes the Dustin Construction payment will be released “after signed waiver of lien is obtained.”

Contacted by phone on Tuesday, EDA Administrative Assistant Gretchen Henderson said that Dustin Construction ($243,843.48) and JTS LLC ($893.84) were included in payment Requisition # 45, but not the Mosley payment which may be from a separate invoice.

So it appears that the Front Royal Town Council has decided to respond to the EDA’s most recent request it make good on its $8.4-million FRPD project payment debt to the EDA by bypassing the EDA on that debt as the Town’s civil suit against the EDA moves forward; while simply making future invoice Requisition payments directly to the vendors.

The first EDA-related Council payment authorization of Monday’s meeting was $282,800 for “attorney fees and auditing services related to the Town’s civil suit against the Front Royal-Warren County Economic Development Authority (EDA)”.

The funds for that payment were requested to be transferred from scheduled FY 2019 and FY 2020 Town debt service payments to the EDA on a number of projects. Those projects and transferred amounts were cited as Success Farm ($10,370), Baugh Drive Extension ($6,535), Happy Creek ($6,845), Stephens Industrial Park ($11,725), Leach Run Parkway ($105,925), and “Appropriated Funds Forward ($141,400), totaling the $282,800 authorized for attorney and audit fees related to the Town lawsuit against the EDA.

The now $21.3-million EDA financial scandal revolving around former EDA Executive Director Jennifer McDonald began unraveling in late spring to early summer of 2018 when Town Finance Director Wilson discovered about eight years of Town debt service overpayments to the EDA. EDA officials told Royal Examiner they have not yet seen a number on those believed Town overpayments.

Might one take a guess based on that $282,800 transfer of future scheduled debt service payments to the EDA; or might one look at the fact that transfer comes within $9,056 of the disputed FRPD interest payments of $291,856.21?

Hey, guessing is always a gamble, isn’t it?

As those keeping a scorecard on the now multi-faceted EDA financial scandal and related civil and criminal litigation know, the Town Council authorized its legal department to file the aforementioned civil action against the EDA seeking recovery of “as much as $15 million dollars” of allegedly misdirected Town assets as a precaution against unknown variables, including possible statute of limitation issues. Included in the Town’s suit for recovered assets is exactly what interest rate the Town should be paying on the FRPD construction project.

The EDA is paying 3% interest on the FRPD construction project. However, the Town is holding out for a 1% rate that would coincide with what it contends was promised to it by the EDA, or at least by its then Executive Director McDonald, as part of the New Market Tax Credit Program for which the project did not qualify because it was not a job-creating economic development project.
In fact as Royal Examiner has previously reported, then Town Manager Joe Waltz and Finance Director Wilson, as well as People Inc. regional administrator of the NMTC Program Brian Phipps all advised Council against “gambling” on competing for the NMTC funding versus accepting a guaranteed, 30-year fixed 2.65% interest rate offered to the Town in late 2017 through a private sector bank.

Town Attorney Doug Napier and Interim Town Manager Matt Tederick.

Contacted Tuesday, Town Attorney Doug Napier said that after Phipps’ early January 2018 work session appearance before council, Town officials contacted McDonald, who assured them Phipps “didn’t know what he was talking about” and that the NMTC bond issue had been achieved to include the FRPD project.

Consequently a council majority decided to take that gamble on the best case scenario of nine years of interest-free payments significantly reducing the total interest due on a project bond issue.
The other two EDA-related payment authorizations unanimously approved by council Monday evening were “up to $45,000 to Mitchell & Company PC for auditing services to support litigation in the Town’s civil suit against … (the EDA)” and “payment not to exceed $200,000 to Damiani & Damiani for legal services related to the Town’s civil suit against the …(EDA).”

Contacted Tuesday for a reaction to the Town Council’s response to the EDA board’s request the Town make good on its FRPD payment debt, current EDA Executive Director Doug Parsons said,
“What the Town does is their business, what they chose to pay, what they chose not to pay it’s entirely up to them. We feel confident in the figures we provided on the invoice for the Front Royal Police Department. We would love to work out this difference of opinion with them; and we’re always ready to work with them on other projects while we work out our differences.”

Watch the entire Front Royal Town Council meeting of November 25th here:

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EDA in Focus

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

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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

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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 https://timberworksva.com 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

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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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Crime/Court

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

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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

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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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Crime/Court

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

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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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Sat
11:00 am Goldilocks and the Three Bears @ Samuels Public Library
Goldilocks and the Three Bears @ Samuels Public Library
Jan 25 @ 11:00 am – 12:00 pm
Goldilocks and the Three Bears @ Samuels Public Library
A Story Ballet. Join us in a celebration of classic literature through dance! The whole family will enjoy this ballet performance, presented by the Northern Virginia Academy of Ballet.
1:00 pm Moving Mindfully: Finding and ke... @ Ruby Yoga
Moving Mindfully: Finding and ke... @ Ruby Yoga
Jan 25 @ 1:00 pm – 3:00 pm
Moving Mindfully: Finding and keeping your footing @ Ruby Yoga
Join Ruby Yoga and Deborah Romero of Optimal Posture LLC for a series of workshops on moving more mindfully through life using the principles of yoga and the Alexander Technique. Slated for Saturday, Jan. 25,[...]
2:00 pm Aspiring Artists @ Samuels Public Library
Aspiring Artists @ Samuels Public Library
Jan 25 @ 2:00 pm – 3:00 pm
Aspiring Artists @ Samuels Public Library
Are you aged 7 or older? Do you enjoy art? If so, please join us for our children’s art class. Using the classic scissor cutting art of Scherenschnitte, we will make silhouettes in a nature[...]
Jan
29
Wed
10:15 am Toddler and Preschool Story Time @ Samuels Public Library
Toddler and Preschool Story Time @ Samuels Public Library
Jan 29 @ 10:15 am – 12:00 pm
Toddler and Preschool Story Time @ Samuels Public Library
10:15 Toddler story time | 11:00 Preschool story time Wednesday, January 29 and Thursday, January 30: Puppies are cuddly! Puppies are cute! Our stories, songs, and craft will be about our friends, the puppies! Siblings[...]
Jan
30
Thu
10:15 am Toddler and Preschool Story Time @ Samuels Public Library
Toddler and Preschool Story Time @ Samuels Public Library
Jan 30 @ 10:15 am – 12:00 pm
Toddler and Preschool Story Time @ Samuels Public Library
10:15 Toddler story time | 11:00 Preschool story time Wednesday, January 29 and Thursday, January 30: Puppies are cuddly! Puppies are cute! Our stories, songs, and craft will be about our friends, the puppies! Siblings[...]
Jan
31
Fri
7:00 pm Love Revival – FREE Monthly Comm... @ Love Revival Ministry Center
Love Revival – FREE Monthly Comm... @ Love Revival Ministry Center
Jan 31 @ 7:00 pm – 9:00 pm
Love Revival - FREE Monthly Community Dinner @ Love Revival Ministry Center
Free Community Dinner for everyone! Come enjoy a hot meal on the last Friday of every month at Love Revival Ministry Center.
Feb
1
Sat
10:00 am Books and Barks @ Samuels Public Library
Books and Barks @ Samuels Public Library
Feb 1 @ 10:00 am – 11:30 am
Books and Barks @ Samuels Public Library
Come to our extremely popular monthly program that gives developing readers the chance to read and relax with a trained therapy dog.  For beginning readers and up.  Choose a time slot at registration, which begins[...]
11:00 am HSWC Polar Plunge @ Northern Virginia 4-H Center
HSWC Polar Plunge @ Northern Virginia 4-H Center
Feb 1 @ 11:00 am – 3:00 pm
HSWC Polar Plunge @ Northern Virginia 4-H Center
The Humane Society of Warren County will hold their 1st annual Polar Plunge event on February 1st at the Culpeper Lake, located at the Northern Virginia 4-H Center in Harmony Hollow. “Plungers” are asked to[...]
2:00 pm World of Lego @ Samuels Public Library
World of Lego @ Samuels Public Library
Feb 1 @ 2:00 pm – 3:30 pm
World of Lego @ Samuels Public Library
Children ages 5 and up are invited to explore all the amazing things you can do with Legos.  Registration begins January 1.
Feb
4
Tue
10:15 am Toddler and Preschool Story Time @ Samuels Public Library
Toddler and Preschool Story Time @ Samuels Public Library
Feb 4 @ 10:15 am – 12:00 pm
Toddler and Preschool Story Time @ Samuels Public Library
10:15 Toddler story time | 11:00 Preschool story time Wednesday, January 29 and Thursday, January 30: Puppies are cuddly! Puppies are cute! Our stories, songs, and craft will be about our friends, the puppies! Siblings[...]