FRONT ROYAL – The town and the Front Royal-Warren County Economic Development Authority cannot find much to agree about these days.
The two bodies’ most recent dispute centers around the dilapidated Afton Inn on the corner of Royal Avenue and Main Street. The building was supposed to be renovated but work stalled when the EDA filed a $21.3 million civil lawsuit, part of which details how the authority’s former executive director allegedly doctored invoices for the project to pay her personal credit card.
The sidewalk near the structure has closed as pieces of the building have fallen and the town in January requested that the building be winterized. While the town is responsible for the building’s maintenance, a dispute has arisen over how work should be completed.
Town Attorney Doug Napier explained over the phone that the EDA wants about $15,000 to be spent on winterization while the town feels it could accomplish the work for much less using its workforce.
Napier said the town is still willing to winterize the building and that negotiations have not stalled.
Meanwhile, EDA board member Greg Harold explained over the phone that the authority has already paid for an engineering report regarding the winterization, which he said “was a show of good faith.” He supplied a string of emails in which town officials express interest in moving forward with the project, but said progress has stalled.
“It’s very difficult to conduct business with the Town of Front Royal when we are continually getting mixed messages and mixed signals from the entire administration,” Harold said.
While it has been a mild winter, he noted it can snow in March “so all we need is a big storm…and it could have an impact.”
“It’s a gamble and it really all depends on how serious the town is as it relates to protecting the public safety as they have conveyed and reiterated multiple times in their emails to me,” Harold said.
EDA board member Jeff Browne said over the phone that the town’s actions have been “unfortunate.”
“We had an agreement with Napier as to what was going to get done…then [Interim Town Manger Matt] Tederick came along,” Browne said. “We’ve been trying to make that go forward and they just didn’t follow through on it.”
The town and EDA also disagree what interest rate should be paid for the Front Royal Police Department’s new $8.4 million headquarters, which was funded with money from an EDA credit line that the town is supposed to pay back.
While the town believes the interest rate should be 1.5 percent, the EDA has been paying 3 percent. Town officials have claimed they were promised the low interest rate as part of the New Markets Tax Credit Program for which the project never qualified.
The EDA offered to split the difference at a 2.25 interest rate, which the town has declined.
“It is a bargain for anybody,” Harold said.
Napier explained that the town wants to figure out the town-EDA finances as “a package deal” and not do it in a “piecemeal” fashion. He said the town “is not willing to give the $8 million-plus when the town may never recover money from other alleged damages.”
“We might be throwing good taxpayer money after bad taxpayer money that we would never recover,” he said.
Tederick noted that “the reality” of the situation is that “we’re going to wait until a judge decides how much money the EDA owes the town…and at that point we will get a resolution on the Police Department.”
The town has filed a $15 million civil suit against the EDA for alleged monetary losses. Napier explained that figure is likely to go up and a detailed complaint listing allegations should be filed soon.
Regarding the lawsuit, Harold lamented that the town’s complaint does not having any detailed allegations, which leaves the EDA unaware of “what the town is thinking.”
With that “over ambiguous” complaint, he said the EDA does not know what accusations to defend against. All the EDA knows, he said, is that the town is claiming $15 million in losses, but how that figure was reached is a mystery.
Tederick noted that the EDA will soon be able to read the amended complaint, which will be “tremendously detailed.” He added that Harold is “spinning it” and “his version of reality is not the facts.”
“He’s doing what he has to do to try and make the EDA look better than it really is,” Tederick said.
While the EDA has worked to reform its checks and balances, Harold asked: “What has the town done since this scandal has broke to make sure that they’ve instituted the proper policies and procedures to make sure that they don’t overpay another organization or another entity?”
“How do you overpay for so many years? How do you get through your audit process for so many years and then realize that ‘oh my gosh, we’ve overpaid’…How does that happen?” he asked.
Tederick said he does not really know how to respond to that “because the fact of the matter is that our audits have been very clean” and “their records are a disaster.”
“We have checks and balances in place but when someone is committing acts of fraud and committing acts of embezzlement, and when there’s a complete lack of oversight from the EDA board, I mean, there’s only so much you can do to catch someone who is manipulating information and documents,” Tederick said.
Tederick added that doesn’t “know specifically” what Harold is “getting at” but said “hopefully in the future the EDA’s not committing fraudulent acts and criminal activity by presenting false invoices to the town.”
Harold noted that the EDA may eventually grow tired of “being on the defensive.” If or when the EDA “goes on offense” he noted that it will unfortunately just be more tax dollars used to fund lawsuits.