EDA to buy land once gifted for housing project

FRONT ROYAL – The town’s first workforce housing development faces a scale-back after the project missed a deadline.

The Board of Directors for the Front Royal-Warren County Economic Development Authority voted at its meeting Friday to approve the purchase of property on Royal Lane intended for the workforce housing project. The board took action after meeting in closed session to discuss the purchase.

The project aims to make apartments available to workers in the area such as teachers who neither qualify for low-income housing nor can afford more expensive homes. The project is not intended as subsidized housing. County school officials have said the division loses teachers because they can’t find affordable housing in the area.

The motion approved by the board also calls for EDA Executive Director Jennifer McDonald to seek an appraisal of the property ahead of the purchase. McDonald said she is related to the property owners but doesn’t have a vote or any financial interest in the transaction.

“Also, this is an EDA project, not a town or county project, so no taxpayer dollars are involved,” McDonald said before the board took action.

The property owners gifted the land to the EDA on the condition that the authority moves forward on the project within a certain time frame. The EDA had a March 1 deadline so the project could qualify for tax credits, McDonald said after the meeting.

“We did not meet that deadline,” McDonald said. “Our options were, if we did not meet that deadline, to deed the land back or to purchase the property.”

Asked why the EDA missed the deadline, McDonald pointed out that it needed to go through the town planning review process. The Planning Commission and Town Council held hearings and discussed the project in work sessions before signing off on the required permit. Board Chairwoman Patricia Wines commented on the long process.

“It just seems like every time you turned around something was happening to cause it not to start,” Wines said.

The town’s zoning ordinance required that the EDA obtain a special-use permit in order to build the apartment complex on the property zoned for commercial use.

“Now not all of the delays were because of just that process,” McDonald said. “It seems like any permitting process you have to go through seems to take forever.”

The authority began working on the project in September 2014. Engineering and drawing up the plans for the apartments took time. The Town Council didn’t approve the special-use permit to allow the project to move forward until recently.

“Everything takes time and, until you have certain things in place, it can’t go to the town for approval, so there were multiple delays,” McDonald said.

The EDA awaits comments on the project from the Virginia Department of Environmental Quality. The delays pushed the project start date to late this summer or fall, roughly a year later than anticipated, McDonald said.

“We’re not blaming anyone for it,” McDonald said. “It’s just the process that seems to be on every single project.”

The EDA had spent about $500,000 on site preparation work for the project site, McDonald said. So rather than lose the money invested, the EDA board chose to buy the property.

“We’re frugal,” Wines said.

The $500,000 spent on site work covered engineering costs, creation of the plans for the apartments as well as fees for state and local permits. Some of the costs will be reimbursed by $360,000 in grants awarded for the project once construction begins, McDonald said. The EDA received the $3.2 million as a construction loan through First Bank and Trust.

The EDA’s contract for the property places the value on the land at $445,000. The EDA compared other commercial properties to derive the value of the Royal Lane site, McDonald said. Now the EDA plans to seek a formal appraisal for the property.

“If the appraisal comes back in lower than the $445,000, the board will meet again to discuss our options,” McDonald said. “If it comes in above, then we got a great deal and we’re moving forward.”

The EDA acquired the 3.5-acre property on June 6 from Walter Campbell, et al, for $445,000, Warren County real estate records show. The 2015 real estate assessment valued the property at $304,300 – $140,700 less than the sale price.

However, purchasing the property now affects the budget and scale of the project, McDonald said. The EDA budgeted $3.2 million for the project originally designed as 36 apartments divided into three buildings. The EDA now can build only two buildings with 12 apartments each for a total of 24, McDonald said, given that the authority can expect to spend up to $445,000 of the project budget on the land purchase.

The EDA plans to keep the option open to construct the third apartment building on the site in the future when money becomes available, McDonald said. The site plan reflecting the original design will remain in effect, she added.

Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or abridges@nvdaily.com