FRONT ROYAL – Confusion has arisen over whether or not the Front Royal-Warren County Economic Development Authority board ever formally approved the sale of a piece of land that it bought for $577,000 but was sold for $10, according to a deed.
The 3.5-acre parcel at the end of Royal Lane was sold by the EDA to Cornerstone L.P. on Nov. 28, 2018, for $10. It was supposed to be the site of a workforce housing complex on which construction has yet to begin.
The board in 2017 approved the purchase of the land for $445,000 from former director Jennifer McDonald’s aunt and uncle after previously being told it would be gifted to the EDA. An EDA civil lawsuit alleges that McDonald continuously said the Winchester-based construction company, the Aikens Group, would reimburse the EDA for the purchase. Cornerstone L.P. is an entity of the Aikens Group. No company representatives have responded to three phone inquiries.
The lawsuit alleges that McDonald was involved in the misappropriation of more than $17 million including the $577,000 expenditure - which she directed be spent despite the authorized $445,000 purchase price - for the land using credit lines reserved for town and county projects.
Interim EDA director John Anzivino said over the phone that he looked for a resolution showing that the sale was approved, but “if there is one, I haven’t been able to find it.”
The deed for the $10 sale was signed by EDA Chairman Gray Blanton on Nov. 28, 2018, more than two months after the EDA hired a financial consultant to perform a forensic audit of the authority’s finances. While that forensic audit was underway, Blanton said he did not have a reason to mistrust anyone, noting that the authority's regular annual audit did not show any irregularities.
Blanton said he remembers McDonald asking him to sign the deed but that he only saw the document's last page and it “was not a bound copy.”
“I was told this is the way it’s going to be done...at that time, we pretty much trusted Jennifer,” he said.
Although Blanton signed the last page of the deed, he said he does not “specifically remember” McDonald telling him the sale price for the land.
“When we look back on it, there’s a lot of strange things happening. The only reason they were allowed to happen is because we trusted Jennifer, and she always had an explanation for everything; a good explanation for everything,” Blanton said.
Joseph Silek Jr. was the lawyer who handled the sale. He began representing the authority on the workforce housing project after EDA and County Attorney Dan Whitten recused himself from the matter.
Silek is also the registered agent of MoveOn8 LLC, one of the nine defendants in the EDA’s lawsuit. The lawsuit alleges that MoveOn8 LLC owns land that McDonald purchased using stolen EDA funds.
Silek recently said that he had no comment on any matters relating to the workforce housing project as it is a part of ongoing litigation.
Blanton said he remembers being told that Silek was handling the deal, and “I know Joe Silek; I know he’s honest, so I thought it must be on the up and up.”
Former EDA board member Ron Llewellyn said over the phone that the attorney handling the deal should have checked previous EDA board minutes to ensure that the sale was approved.
Asked if the EDA approved the $10 sale, EDA Board member Bruce Drummond said over the phone: “No way, absolutely not.” He asked: "Why in the world would the EDA sell land it bought for $445,000 for $10?"
Blanton said that he does not remember a resolution regarding the purchase or the purchase being approved by the EDA board.
“I can’t say that I specifically remember approving it. I don’t think it ever came up in a meeting,” he said.
Llewellyn said that while he does not “recall the actual vote” that would have approved the sale, he said that it surely took place if the land was sold. He added that he is sure the board discussed selling it $445,000.
“I think at this stage, anything’s possible,” he added.
Asked whether or not the sale was approved, EDA board member Mark Baker said over the phone: “I can’t comment on that.”
EDA board member Edwin Daley noted over the phone that the sale took place before his first meeting. Former EDA board member and Warren County Public Schools Superintendent Greg Drescher has declined to comment on any matters related to the EDA's lawsuit.
Drummond noted that while the board was not verifying projects very well, “the EDA has nothing to hide.”
“It’s just been a rough ride, and we’ll see how we get through it. We’ve turned the corner and are heading in the right direction,” he said.