FRONT ROYAL – A town councilman criticized the Front Royal-Warren County Economic Development Authority on Monday in reaction to ongoing civil and criminal cases involving the agency and its former executive director.

The town has been told “lies” about more than one EDA-related project, Councilman Eugene R. Tewalt said at a work session. Tewalt told members he wants the council to discuss the workforce housing project once spearheaded by the EDA. Tewalt said he wants the council to revoke the permit the town issued to the EDA to build the project on Royal Lane property and undo any changes made to local development regulations.

“(We) were led to believe that this was gonna be an EDA project, that they were going to build it, they were going to maintain it for five years and then it would be sold into the public sector,” Tewalt said. “We found out later that that was not the truth, and we issued a special-use permit and superseded our ordinances on issues such as the amount of feet that homes can be built on a dead-end street, and we gave a waiver for that ...

“I would like to see us consider to rescind this particular permit, special-use permit, due to the fact that we were told lies and it was done bogusly, and it was never intended to be built by the EDA; it was gonna be built by a private contractor, and we were lied to on numerous occasions,” Tewalt added.

Jennifer McDonald, the former EDA executive director, remains held without bond at Rappahannock-Shenandoah-Warren Regional Jail on charges of embezzling from the agency. The EDA has sued McDonald and other defendants over claims she defrauded the agency out of $17.6 million related to various projects she pushed.

Tewalt did not mention McDonald or any current or past members of the EDA board of directors in his comments.

Interim Mayor Matthew Tederick supported Tewalt’s suggestion that council members discuss the matter at a future work session.

“There’s a lot of those discussions we’re gonna have,” Tederick said.

Tederick went on to say that he thinks that they should talk about “the EDA situation” in closed session under the “legal matters” exemption of the Virginia Freedom of Information Act. The exemption gives public bodies the option to discuss any general legal matters with their attorney behind closed doors.

The EDA began pursuing the workforce housing project several years ago as a place professionals such as teachers and police officers could live in within town limits. Some council members in the proposal’s early stages raised questions about the project. Neighbors of the Royal Lane site also expressed concerns about the location of the proposed apartment complex.

But even as one councilwoman, Bebhinn Egger, raised questions then about the workforce housing project and other EDA initiatives, most of her colleagues expressed unwavering support for McDonald and the agency’s work.

Eventually, McDonald revealed that her aunt and uncle owned the property being considered for the workforce housing project. Then-Mayor Hollis Tharpe later disclosed in a public meeting that he was related to McDonald.

At a recent hearing on motions in the EDA lawsuit, evidence showed that McDonald worked a side job as a real estate agent and broker for her aunt and uncle and would have received a commission by selling the Royal Lane property to the prospective developer.

Tederick also told council he wanted to discuss at the next work session the fate of the former Afton Inn property on East Main Street. Council approved a deal several years ago in which the town traded the former town hall building to the owner of the long-vacant Afton Inn. The deal then called for the EDA to market the Afton Inn building for commercial development. Opponents of the swap agreement warned the town would give up an historic building in exchange for a dilapidated structure while supporters said the deal would result in the development of two downtown properties. Restoration work on the Afton Inn ceased when the EDA filed its lawsuit. The initial owners of the former town hall did little to no work on the inside of the historic building before handing the property to another real estate firm to sell.

“We need to figure out what the plan is for (the Afton Inn),” Tederick said. “It’s just not acceptable.

“We’ve been left holding the bag because of bad decisions from a person or people as it relates to the EDA scandal, and it’s just not acceptable,” Tederick added. “I also want to have a clear understanding and direction of what’s taking place with the ... former town hall that’s deteriorating before our eyes.”

Vice Mayor William Sealock and council members Letasha T. Thompson and Chris W. Hollaway also attended the work session. Councilmen Jacob Meza and Gary Gillispie did not attend the work session.

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Correction: An earlier version of this story should have stated that former Mayor Hollis Tharpe had disclosed he was related to Jennifer McDonald.

– Contact Alex Bridges at abridges@nvdaily.com