FRONT ROYAL – The Front Royal-Warren County Economic Development Authority held a special meeting Wednesday after contractors working on the new Front Royal Police Department headquarters complained that they did not get paid.

EDA Attorney Dan Whitten explained that the board needed to pass a resolution allowing Treasurer Tom Patteson and Interim Executive Director John Anzivino to negotiate loans and make draws on loans from United Bank.

The EDA has a total of $27.9 million in loans from United Bank for construction of the police building, the West Main Street extension and Happy Creek Road improvements. The loans also encompass the refinancing of projects including construction on Avtex infrastructure, Leach Run Parkway and Ressie Jeffries Elementary School.

Town councilman William Sealock explained that about $1.1 million is needed to pay off 20 invoices, which included non-payments or underpayments. Sealock noted that if the payments are over a month late, there could be interest fees anywhere from 1 to 18 percent.

Now that the resolution is passed, Whitten said the county could submit all the needed draws to United Bank and pay the invoices. He added that the EDA has not paid any invoices for work on the police department since December because it was unknown that such a resolution was needed.

Whitten said that United Bank asked for the resolution because Jennifer McDonald, former EDA executive director, was the only person authorized to make draws from the loans.

Sealock said the town and the EDA need to “close the loop” and that when a check is signed by the EDA, town Finance Director B.J. Wilson should receive a copy of the check and an email confirmation.

Town officials were previously under the impression that the police station would be funded through a New Markets Tax Credit loan, which provides private investors tax breaks for investing in economically distressed areas.

For that loan, the EDA would have funded work on the police headquarters through a line of credit and acted as an intermediary between the firm administering the loan and the town.

The EDA has been funding the project through the United Bank credit line, but the town has learned that the New Markets Tax Credit loan was never closed and the project likely does not qualify. The town is now seeking alternative funding options, such as loans through the Virginia Municipal League and Virginia Association of Counties.

Whitten explained that if the town gets another loan for the project, the EDA’s line of credit with United Bank for the project would be taken over by the new entity administering the loan.

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