Town Manager Joe Waltz records the Town Council’s goals for what should be done with the Afton Inn during a council work session Monday.

FRONT ROYAL – The Town Council during a Monday work session discussed the possibility of reclaiming ownership of the Afton Inn, a response to stalled attempts to redevelop and renovate the building amid embezzlement allegations plaguing the Front Royal-Warren County Economic Development Authority.

In 2014, the town traded its former Town Hall for the Afton Inn, a dilapidated structure located at the corner of Royal Avenue and East Main Street. The town then turned over ownership of the Afton Inn to the EDA with requirements that the authority market and develop the building.

In April 2018, the EDA announced that developer 2 East Main St. would oversee the redevelopment and take ownership of the building upon the project’s completion.

According to previous reports, the EDA was supposed to obtain a construction loan to fund the project but an unauthorized credit line was used instead. To date, Interim Mayor Matt Tederick said the EDA has spent about $500,000 on the project. EDA Attorney Dan Whitten previously explained that the plan was for the developer to pay back the EDA for expenses.

Other financial irregularities relating to the Afton Inn are detailed in the EDA’s $17.6 million civil lawsuit, which alleges that Jennifer McDonald, the authority’s former executive director, doctored invoices from the developer to make a series of payments on her personal credit cards. Assistant Commonwealth’s Attorney Bryan Layton previously indicated in court that two felony counts of embezzlement and two felony counts of obtaining money by false pretenses — four out of 14 felony charges levied against McDonald stemming from her time at the EDA — relate to credit card payments.

Vice Mayor William Sealock noted that the developer believed a low-interest loan was being obtained for the project. Since that is not the case, he said the company may not be able to pay for the project.

Town Manager Joe Waltz said the town is in discussions with the EDA regarding a possible deal in which the town would reclaim ownership of the building and take control of its redevelopment. He added that the EDA is not interested, however, if the town will not make an obligation to cover the $500,000 spent on the project.

If the town does take ownership of the building, Tederick noted that the developer “still needs financing so we have to come up with financing.”

He added that “there’s very bad situations, there’s bad situations, there’s not-so-bad situations and barely good situations” and the Afton Inn is a “barely good” situation as the town “is not in the business of lending developers money to do a project.”

Tederick added that the “status quo is not acceptable” and “left the way it is...that building is going to sit like that for three to five years.”

He said the other option is for the town to get the property and tear it down.

Councilman Chris Holloway said if the town takes the building back and cannot afford or find a way to finish the project “then I say let’s just take it down.”

“If not, it’s going to sit there for years,” he said.

Councilman Jacob Meza said the town needs to find a solution and either turn over the property to the developer or “turn it into a parking lot.”

“It seems like this council has been on the same page of this is our last-ditch effort to get this done and we want to move toward resolution. If not, I’m not sure what our other options are,” he said.

Councilman Eugene Tewalt said he does not want to take ownership of the building if the town is obligated to cover the $500,000.

Tederick said Town Attorney Doug Napier is drafting a memorandum of understanding to present to the developers to see if they are amenable to the town taking ownership.

The council settled on developing an action plan by Sept. 15 to redevelop the Afton Inn.

2 E. Main St. developer Jim Burton did not respond to a request for comment.

– Contact Josh Gully at jgully@nvdaily.com