FRONT ROYAL – The Front Royal-Warren County Economic Development Authority during its Friday meeting discussed potentially selling properties, including a Main Street building that is the center of one of the many embezzlement allegations outlined against former EDA Executive Director Jennifer McDonald.
Located at 506 E. Main St., the building now houses the Main Street Market and has been the center of discussions by the EDA board since January when it was discovered that it needed a $50,000 new roof and a $14,000 new HVAC system.
According to previous reports, the building was purchased by the EDA from Bernard Stokes in 2014 for about $398,000. That purchase included the nearby building at 514 E. Main St., which houses four one-bedroom apartments.
EDA Executive Director Douglas Parsons explained that on June 12 a tenant crashed into the apartment building due to brake failure, which resulted in an estimated $20,850 in damages.
Parsons added that the structure has been declared unsafe and the EDA is now paying for the building’s three residents to stay in a hotel, which he justified from a "humanitarian" and not "legal" standpoint. He added that the driver’s insurance company has stated in writing that it will reimburse the EDA for the relocation costs.
Board member Ed Daley noted that the matter is further complicated because state code prevents EDAs from renting out residential spaces.
Dan Whitten, EDA attorney, said owners of Main Street Market, Jeff and Ginny Lesser, collect rent from the apartments so the residents are “not our tenants.” Still, he added that “it’s a deal that should have never happened.” He said the Lessers have not paid rent on its building since January.
Parsons noted that the EDA not being allowed to collect rent from residential properties is “yet another reason why we need to get that on the market.”
According to previous reports, the Main Street Market building previously housed B&G Goods, which opened in April 2015 and closed in November 2016. When the store closed, a report detailing alleged embezzlement at the organization states that McDonald and Missy Henry, the authority’s former administrative assistant, sold the store’s inventory and kept the proceeds for personal use instead of paying off $39,900 in loans the EDA granted the store.
When asked who the tenants were paying rent during the two years between B&G Goods’ closing and Main Street Market’s opening, both Daley and Parsons responded: “That’s a good question.”
The EDA also went into a nearly four-hour closed session to discuss: property located on Main Street and Fairground Road; businesses to be located on the Stephens Industrial Park, Main Street, the Happy Creek Area and Fairground Road; the EDA’s lawsuit against McDonald and eight other defendants; the town’s lawsuit against the EDA; and issues surrounding loans, accounting and debt service.
Both McDonald and Henry have recently been indicted and arrested, with dates of certain allegations aligning with the suspected embezzlement at B&G Goods.
After coming out of a nearly four-hour closed session, the EDA discussed putting several other authority-owned buildings on the market including those located at 426 Baugh Drive - which is sitting empty and costing the EDA $22,450 per month in monthly payments - and 404 Fairground Road.
The EDA also approved resolutions regarding housekeeping issues such as who can sign invoices and how to keep a better historical record detailing transactions.