FRONT ROYAL – Town officials want to know how much was spent on the Front Royal Police Department’s new headquarters so a loan can be obtained to pay off construction costs that were incurred by the Front Royal-Warren County Economic Development Authority.
Town Finance Director B.J. Wilson said over the phone Tuesday that while money has been budgeted for construction, the town has not “paid a penny.” Construction costs for the headquarters, which the department moved into in April, were paid by the EDA through credit lines.
The EDA paid for construction because the town believed the headquarters would be funded through the New Markets Tax Credit program, which the authority would have administered. The program provides low-interest loans for projects providing jobs in economically distressed areas. But the police headquarters project never qualified for the tax credit program even though officials have said they were told otherwise.
Upon the realization that the tax credit program would not come to fruition, the town passed a resolution in April stating that it would seek to pay off the EDA’s credit line by obtaining a 30-year bond.
The town, however, cannot apply for a bond until it knows how much was spent on construction.
Wilson explained that in February 2019, the EDA provided the town documentation stating that about $8.7 million was spent on construction. He contends, however, that amount should have been about $6.7 million. He added that the EDA has not provided an updated total since February.
To the best of his knowledge, Wilson said he believes about $8.4 million was spent in total.
“There’s a lot of different things that are going on here...Long story short is what they sent over I don’t feel is accurate...or not the town’s responsibility,” he said.
In January 2019, Wilson noted that the EDA made two nearly identical draws of $2 million on lines of credit for the police headquarters. Wilson said he does not know the exact amount of those two draws but the town believes only one draw should have been made.
Although Wilson does not know the exact dates on which those two draws occurred, they were executed in January 2019, which was a month after Jennifer McDonald, former EDA executive director, resigned. She was subsequently accused by the EDA of stealing money in a $17.6 million civil lawsuit and she has since been charged on several counts of embezzlement and obtaining money by false pretenses.
Wilson said the “double draw” could have been a simple mistake but he does not know what transpired. He added that he attempted to obtain construction invoices for the headquarters during construction but his requests went unanswered.
“It’s just another one of those things that we’re working through,” he said.
Wilson said on Aug. 2 he provided the EDA with documentation stating how much the town believes it owes for the headquarters — about $8.4 million — and that he is awaiting a reply.
He noted during a Monday Town Council work session that the town and EDA must agree on what is owed for the town to obtain a loan. He said during the work session that banks want documentation of draws as “this has been a highly publicized issue” that is “being followed by many different entities.”
Interim Mayor Matt Tederick said during the work session that there are two types of problems: “My problem and everyone else’s.”
He noted that the EDA made the payments thus far for the headquarters and the EDA will not provide information that would enable the town to obtain a loan. He said the town should not discuss funding the headquarters until the EDA provides the needed documentation.
Councilman William Sealock suggested Monday that the town make note of the issue during a Tuesday joint meeting with the Board of Supervisors, which was held after press time Tuesday.
During the Monday work session, Tederick told council members that he and Chairman Dan Murray had difficulties determining what exactly would be on the agenda for that joint meeting. He said the county wanted the meeting to consist of only a presentation by EDA Executive Douglas Parsons while the town would like to ask specific questions.