FRONT ROYAL – The Town Council recently took preliminary steps necessary to secure funding for the Front Royal Police Department’s $10 million new headquarters, which officers began operating out of last week as a substantial completion was recently reached.

During a regular meeting this week, the council unanimously approved a resolution stating that the town intends to refinance a Front Royal-Warren County Economic Development Authority loan that was used to pay for construction. Town Finance Director B.J. Wilson explained over the phone that, so far, about $7.9 million has been spent on construction using a credit the EDA obtained from a bank.

He said the authority got that credit line because the town believed it was going to fund construction with the New Markets Tax Credit Program through the EDA. The program – which is meant for projects in low-income areas that will facilitate job growth — would have allowed the town to pay just interest on the loan for seven years, then refinance for the remaining costs.

Wilson previously explained that the tax credit program would have allowed the town to make $180,000 payments for seven years compared to the estimated annual $564,000 payments on a 30-year the town is expected to pursue.

After the town realized that the credit program was not a plausible funding option, Wilson said: “we then realized that it is in the town’s best interest to obtain our own financing.”

The resolution also states that the town “expects to issue a general obligation bond or bonds” not to exceed $10 million that Wilson said will be used to pay off the EDA’s credit line. He added that the town expects to pay off the bond over 30 years.

After approving the resolution, Councilman Eugene Tewalt noted the bond the town will obtain will be from the Virginia Municipal League and it will have “nothing to do with the EDA, period.”

“We have nothing to with the EDA, we don’t finance them, we have no say in the EDA whatsoever,” he said.

Tewalt said the only relationship between the town and EDA is that the authority borrowed money for the town.

Wilson said the resolution is “more or less a piece of housekeeping” because the council previously passed a resolution stating it would pay for the police station through the tax credit program.

The town stated in a previous resolution that former EDA executive director Jennifer McDonald falsely told town officials that the authority closed on the tax credit loan.

Wilson said the recent EDA controversy, which includes a $17 million lawsuit filed against nine defendants for a series of alleged embezzlement, will not affect the town’s bond rating. He said the only way the EDA situation may affect the town in respect to the police station is that the bank providing the credit line may want to see proof of withdrawals for construction and perhaps have an inspector certify the work done at the site.

Projects the county hoped to fund through the New Markets Tax Credit Program include the completed renovations costing $5.3 million at Ressie Jeffries Elementary School and $2.6 million at the Health and Human Services Complex. Like the police station, work done for those projects was funded through EDA credit lines. The county also hoped to fund construction of the $7 million new Rivermont Volunteer Fire Department station using the program. The county has since approved a 25-year loan from Capital One Bank to fund those projects.

Unlike the town, County Administrator Doug Stanley previously has said the county thought the tax credit program was merely a possibility and not done a deal.

– Contact Josh Gully at