Whitten resigns as EDA counsel on workforce housing project

On Wednesday, May 31, Warren County Attorney Dan Whitten confirmed that, effective Friday, May 26, he has withdrawn as Economic Development Authority counsel regarding the workforce housing project.  Whitten explained that since questions about the project have arisen from several supervisors, he decided to withdraw from EDA representation to avoid any conflict of interest.

Whitten noted that as county attorney, representation of the county and its interests as determined by its elected board is his primary legal responsibility.  The county attorney has generally also served as the EDA’s attorney on legal matters.

County Attorney Dan Whitten explains his legal advisory predicament at May 16 supervisors meeting. Photo/Roger Bianchini

At the May 16 board of supervisors meeting, Whitten invoked attorney-client privilege in declining to answer questions from Shenandoah District Supervisor Tom Sayre about the workforce housing project.  Sayre asked Whitten if he or his predecessor Blair Mitchell had been aware of a March 1, 2017 deadline attached to a previously undisclosed confidential agreement regarding the project.  Mitchell retired last year as the workforce housing project was being developed.

That start-of-construction deadline and the confidential agreement it was part of was first publicly revealed following an April 28 EDA board closed session and unanimous vote to proceed with a purchase of the 3-1/2-acre parcel that had previously been “gifted” to the EDA by Mr. and Mrs. Walter L. Campbell.  The necessity to now purchase the property in order to proceed at the site due to the unmet deadline no town or county officials were aware of, has added a $445,000 purchase price to the project.

That additional cost has already led the EDA to propose cutting developmental costs by reducing the project from three buildings and 36 units, to two buildings and 24 units.  The EDA must commission an appraisal prior to finalizing a purchase of the property.

Two out of three, ain’t bad – the added purchase price of the EDA’s workforce housing parcel has reduced the project plan by a third, from three buildings and 36 units to two buildings and 24 units. Courtesy Photo/EDA

Following the 6-0 April 28 EDA board vote to proceed with a purchase, Executive Director Jennifer McDonald said if the appraisal comes in under the “agreed-upon” $445,000 price attached to the deed of transfer, the EDA will have to consider how to proceed.  She indicated that to purchase the EDA is bound by the price on the deed of transfer, as is the seller.  Discussion following the April 28 vote indicated that with a significantly lower appraisal the EDA board has the option to return the property to the Campbells and abandon development of the project at that site.  However, were the appraisal to come in higher, as McDonald said, “Then we got a heck of a deal.”

Following Sayre’s question about his knowledge of the deadline, Whitten explained that EDA Executive Director McDonald “has not given me permission to violate attorney-client privilege” on the matter.  Without such a waiver, Whitten indicated he could not legally respond to questions about the EDA’s workforce housing project.

June 6, 2017: D-Day

Exactly how far he can now go in responding to workforce housing questions may be determined at a work session scheduled following the board of supervisors’ 9 a.m. meeting of June 6.  EDA officials are scheduled to appear at that work session, and one would expect they will face questions from Sayre, and perhaps other board members, concerning the rationale for a confidential agreement with a secret deadline adding nearly a half-million dollar cost to the project.

During our conversation, Whitten confirmed that as described in a press release attached to the May 19 release of a 383-page information packet on the project, the EDA was not a principal in the confidential agreement, but rather “a witness” to it.  Whitten added that he believed the confidential agreement was between the seller (the Campbells) and the entity that would have given them a tax credit for the gift of the 3-1/2 acre parcel to the EDA.  Royal Examiner’s research into the project indicates the federal Department of Housing and Urban Development (HUD) as a likely candidate as maker of that now-abandoned tax credit on the now-aborted “gift”.

Asked Thursday, June 1, Whitten said he did not believe he could answer more specific questions about the project.  Those questions included whether he had ever seen the confidential agreement? And if conditions of an agreement the EDA was not party to, nor was part of the deed of transfer recorded at the courthouse, could legally require the EDA to return the “gift”?

Perhaps ironically, the June 6 County-EDA work session marks the one-year anniversary of the date that “gifted” deed of transfer was recorded at the Warren County Circuit Court Clerk’s Office – June 6, 2016.