FRONT ROYAL – Several Town Council members during a recent work session expressed wariness about working with the Front Royal-Warren County Economic Development Authority in the future.
Discussions in recent meetings of the EDA Reform Committee, which is composed of town and county representatives, have focused on the future makeup of the EDA. The county appoints the authority's board members and provides operating funds while the town opted to cease doing so several years ago.
Still, the town has worked with the EDA to finance projects such as the Front Royal Police Department's new headquarters. Additionally, some of the authority's stalled projects, including the construction of workforce housing, Afton Inn renovations and ITFederal, are within town limits.
All three of those projects are cited in the EDA's multi-million lawsuit against nine individuals and companies as avenues that Jennifer McDonald, the authority's former executive director, is accused of using to embezzle money. Meanwhile, the town has filed a multi-million lawsuit against the EDA for money lost as a result of the alleged fraudulent activity.
Interim Mayor Matt Tederick said the town's civil lawsuit against the EDA, which is seeking $15 million in damages stemming from the alleged embezzlement, is a good reason the town may want to pursue its own economic development efforts. Tederick added he learned during a conversation with an unidentified EDA board member that "the EDA is insolvent" and the situation is going to get worse before it gets better.
EDA Executive Director Douglas Parsons said over the phone that the authority is meeting its debt obligations and "doing the best we can to try and fix things financially and otherwise." In the long-term, however, he said the EDA must sell its properties and receive settlement money from its lawsuit to continue meeting those debt obligations.
Councilman Gary Gillispie said he no longer wants to see the town being the "second fiddle" to the county in EDA-related matters. He cited the desire of wanting to prevent the town from assuming any of the EDA's debt as a reason for no further involvement with the authority.
Councilman Chris Holloway said the town has always been "second fiddle" and he would like the town "staying as far away from [the EDA] as possible."
Councilwoman Letasha Thompson said that the EDA's troubles may not be sorted out within the next decade and perhaps the town could revisit its relationship with the authority in the future.
Tederick said it is "sad" that the EDA is spending most of its time dealing with "past sins" instead of focusing on economic development. Parsons disagreed, saying that he is focusing "the best that I can on current-day projects." He added that there are several prospects interested in purchasing EDA properties.
"Of course, we do have to address the issues of the past but at the same time, we're trying to concentrate on current-day operations and all the projects and programs that we have. So I would disagree with that comment," Parsons said.
He added that the EDA is "vetting projects very carefully these days to make sure that the deals we would enter into are good deals" for both the authority and the community.
Councilman Eugene Tewalt said the town has made too many spur-of-the-moment decisions and he would like to "ride it out a little" before reaching any conclusions.
Councilman William Sealock noted that the town does indeed have ongoing projects with the EDA and agreed that he would like to know how the authority prioritizes the town in its "pecking order." He added that even with the authority's mismanagement, it may not be wise to create the town's own economic development department.
If the town wishes to form its own economic development authority, Tederick said state politicians should be approached so the matter could be approved by the General Assembly.
The town's discussions regarding its future with the EDA were held Monday, a day before the entire Board of Supervisors along with current and past members of the EDA were indicted on misdemeanor counts of misfeasance and nonfeasance relating to lack of oversight regarding the EDA's financial activity.