Workforce housing ‘gift’ is no more – EDA plans purchase instead

Following a closed session on Friday (April 28), the Front Royal-Warren County Economic Development Authority announced a radical change to its Workforce Housing Project.

Rather than building on a 3-1/2 acre parcel that had been GIFTED to the EDA by relatives of Executive Director Jennifer McDonald, the EDA will now have to purchase that parcel.  Also announced was a reduction in the scope of the project, from three buildings and 36 units, to two building and 24 units.  That cutback is necessary to balance the unexpected cost of buying the property.

Artist’s rendition of workforce housing apartment building – pending purchase there will now be two, not three of these initially constructed. Below, under the watchful eye of his Executive Director Jennifer McDonald, EDA Vice Chairman Greg Drescher reads motion to pursue purchase of workforce housing project 3-1/2 acre parcel that is no longer gifted to the EDA. Photo/Roger Bianchini

That cost will be determined by an appraisal to be done by First Bank and Trust, holder of the EDA’s pending $3.2 million construction loan, McDonald explained.

Following a 6-0 vote to approve the purchase (Jim Eastham was absent) and adjournment of the 8 a.m. Friday morning meeting at 9:03 a.m., McDonald and board Chair Patty Wines addressed the reasons for the changes.  They explained that a March 1, 2017 deadline had not been met that would facilitate Mr. and Mrs. Walter L. Campbell’s eligibility for a tax credit based on their gift of the parcel to the EDA.

Responding to a question, McDonald elaborated that the deadline was part of confidential agreement between the Campbells and the EDA on the exchange of the property.  In the wake of the unmet deadline the EDA’s options were to deed the land back to the Campbells, who are her aunt and uncle, or purchase it.

McDonald said the EDA has already spent a half-million dollars in preparatory work, including site planning, engineering, town and state DEQ permitting fees, so the board decision was that it would be best to proceed with the transaction as a purchase, rather than abandon the project and site at this point – “We’re frugal,” Wines said.

Above, shot down Royal Lane toward its dead end at the boundary of the EDA’s workforce housing project. Photo/Roger Bianchini; below aerial graphic of the 3-1/2 acre workforce housing parcel at the end of Royal Lane.

The EDA voted to proceed with the workforce housing project and land transfer with the Campbells on September 26, 2014.  McDonald and Wines attributed the delays leading to this situation to a number of factors, including the necessity of acquiring a special use permit to allow the commercially-zoned property to be developed for residential use; development of an engineering plan; DEQ and town permitting – “Everything takes time,” they noted.

McDonald explained the result of the First Bank appraisal could impact the board’s decision to proceed with the sale.  Currently the Campbells would expect to be paid the price listed on the deed of transfer, $445,000. – “If the appraisal comes in lower we’ll have to decide how to proceed; if it comes in higher we got a great deal,” McDonald said.

EDA board member Brendan Arbuckle, right, appears to be praying for good economic news Friday morning – the addition of a purchase price for the EDA’s workforce housing land was NOT that good news. Photo/Roger Bianchini

Asked where the price listed on the deed came from, McDonald said, “It was an agreed-upon price.”  How was that agreed upon price reached, we asked?

“We did comparables on other commercial properties,” McDonald explained.

Appraisal, no appraisal

That information on the price attached to the gifted deed, recorded on June 6, 2016, appears to contradict information given to the Front Royal Town Council on November 14, 2016.  That information came from McDonald prior to a final vote on special exceptions requested by the EDA on road construction on Royal Lane for the workforce housing project.

At the time, Councilwoman Bébhinn Egger noted that that recorded price of $445,000 on the deed was $140,000 higher than the currently assessed value put on the property.  McDonald later said her records indicated the Campbells had purchased the property in 2005 at a price of $345,000; and that the current appraised price of $304,800 on the property was made in 2015.

Jennifer McDonald and Bébhinn Egger were eye to eye last November – they are NOT seeing eye to eye today. Royal Examiner File Photo

Told of the changes announced Friday and the revelation the pending purchase price placed on the deed was an “agreed upon” price as part of a confidential agreement, Egger reacted angrily.

“I feel extremely manipulated, not only as a councilman, but also as a town citizen.  We were told by Jennifer at our public meeting in November that the $445,000 price was from an appraisal.  That was false.  I even pointed out that the ASSESSED value was much, much lower.

“We were told that we had to abandon all logical planning practices to build on THIS particular lot, because the land was being donated.  That is now also false.

“Are we supposed to believe that the EDA is so incompetent that they can’t meet a deadline two and a half years later?  I don’t believe that for one second.  Why is the agreement between the EDA and the Campbells confidential?  What other commercial properties were used by the EDA as comparables to (come up with) the ‘appraised’ value of $445,000?  Why is the EDA continually hiding behind confidential agreements and permitting processes?

“It gives me little hope for the future of our town, knowing that the council blindly went along with approving this project, even though the numbers didn’t add up; it will create a planning nightmare, and the information provided to us was lacking.  The EDA can pass the buck all they’d like, but those of us with our eyes open see this for what it is: another botched project where none of the numbers make sense, all of the pertinent information is confidential, and the council and public are given false information which is never retracted and never apologized for.”

(Norma Jean Shaw contributed to this story)

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