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Posted March 12, 2013 | Leave a comment
Future of Kratos' Front Royal project unclear
By Sally Voth
Whether the town of Front Royal will continue a relationship with Kratos Infrastructure following the Town Council's rejection of a letter of intent on Monday is unclear.
Equally opaque is what exactly the McLean firm run by former Town Manager Michael Graham -- fired by the town in September 2010 -- actually planned to do in Front Royal.
Former Town Councilman Tom Conkey -- who didn't seek re-election last May -- and developer William Lauterbach, who was involved in a proposed deal to build a solar energy farm in Front Royal, are also part of Kratos.
Late last month, Councilman Bret Hrbek publicly pitched partnering with Kratos to come up with a redevelopment project with the council. He asked for a vote on the project to come in two weeks.
In his Feb. 25 statement, Hrbek said the outcome would be a long-term vision and business plan that would be independent of state subsidies, rebuild local infrastructure and bring good jobs to the area.
He asked his fellow Town Council members to sign a letter of intent that further outlined some of that vision -- a solar field, a hospital and wellness center, restaurants, a hotel, housing and a medical office park were all potentials.
At Monday's Town Council meeting, members voted unanimously to not sign the letter of intent.
In a Tuesday interview, Hrbek said he voted against it partly because state law required that guidelines be in place before the letter of intent could be signed, and also because going along with the majority vote may allow him to bring back the matter before the council without waiting a year.
"I would expect that economic development for the town needs to still continue to be on the front burner and we need to continue to look for other opportunities in order to move forward with something," he said. "I would expect that we will need to take up another plan of some sort. Whether it's with Kratos or whether it's another opportunity, who's to say?"
Hrbek said the town should put out a request for proposals to help with a vision and business plan.
Kratos approached Front Royal-Warren County Economic Development Authority Executive Director Jennifer McDonald to discuss their proposal, Hrbek said. He said Kratos then met with Town Council in closed session.
After a couple of closed sessions, the idea "kind of just lay dormant," Hrbek said.
"So, was it an unsolicited proposal?" he asked. "It was an unsolicited proposal, perhaps."
Hrbek said the letter of intent was necessary before any action could take place.
"We can't do anything at work sessions," he said. "All we do is talk, and talk, and talk. The meeting is where we actually do something."
He said Kratos would've partnered with the town at no cost.
"There wasn't any fast-tracking," Hrbek said. "I was asking the council to make a statement that we were going to put economic development on the front burner."
He said he could understand why some critics cited the appearance of cronyism in the project.
"Stepping back, I can see where the perception might be there because the relationships some of the principals had with the town in the past," Hrbek said. "They approached us through the Economic Development Authority. They weren't seeking any kind of favorable treatment. Believe me, they don't need us. They've got bigger projects than this going on."
The possible enormity of the project is what alarmed Councilman Daryl Funk, who led opposition to it Monday night. He cited Kratos' partnership with Seat Pleasant, Md., officials.
According to seatpleasantcitycenter.org, the $60 million City Center project will include a City Hall building, recreation center, community center, health and wellness clinic and senior housing.
Funk said he was also concerned with how the Front Royal project would be funded.
"Theoretically, I assume the assets will be secured by the debts used to build it," he said.
That could lead to buildings being subject to confiscation if the debt wasn't paid back, Funk said.
"It's the sort of risk that private enterprise, when you go into business, that's the sort of liability that you take on," he said. "I don't think that's what the town should be doing."
Funk said he also was concerned about a section of the letter of intent which states, "the Town will convey all of its right, title and interest in and to the Properties controlled by the Town to the Master Developer pursuant to a sale or lease agreement between Town and the Master Developer, as necessary and mutually agreed."
Funk said, "That's another whole issue all together. Why would we be transferring assets that we're taking on liability for to a third party?"
Even he seemed unclear on what the project would entail.
"This project seems to radically change from presentation to presentation," Funk said. "We don't even know what projects are being proposed."
He said Kratos asked for a list of items the councilmen might be interested in, and then returned, asking for them to further commit to the project.
"For me, it boils down to...this strikes me as a radical expansion of government," Funk said. "My concern is that when you talk about thinking outside the box, we're looking at bigger government, encroaching on civil liberties, property rights and potentially more spending, higher taxes."
Furthermore, he said the council was hearing that if it didn't act Monday, the project was done, but then Hrbek unsuccessfully tried to have it taken off the agenda, and then tried and failed to get the vote tabled, according to Funk.
"Was time of the essence, or wasn't it?" he asked. "Are they just pushing us into it?"
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