A tale of two authorities

Published August 29, 2020 by James Heffernan

The town of Front Royal is moving forward with its own economic development authority independent from its cooperative EDA with Warren County, which is still reeling under the weight of a high-profile embezzlement scandal.

Front Royal is the only locality in the state with two EDAs. The move was granted earlier this year in legislation passed by the General Assembly. The Town Council passed a December resolution saying Front Royal needed to “forge its own path forward in the future, unencumbered by the tremendous financial, legal and reputational burdens” saddling the Front Royal-Warren County EDA.

The town is suing the town-county EDA for $15 million and no longer funds the joint authority or appoints members to its board of directors.

The joint authority’s former director, Jennifer McDonald, was indicted last year on more than 30 felony counts of misappropriation of EDA and town funds, $21.3 million in all,  but the charges were dropped in April. However, the special prosecutor said charges could be refiled later, and McDonald and others face civil actions. The FBI and Virginia State Police removed records from the joint EDA in April, indicating a federal investigation.

Meanwhile, the Town Council voted 4-1 to approve its new town EDA in July and interim Town Manager Matt Tederick expects to see a new EDA board of directors named by late September.

Front Royal had used the joint EDA to assist in seeking funding for a number of government projects, including the extension of West Main Street, a new police department headquarters and a parkway along which a new middle school and hospital will be constructed.

The scandal, which went public in 2019, has made promoting the town’s economic development assets through the existing EDA “next to impossible,” Tederick says. “The brand is tarnished.”

Douglas Parsons, the new executive director of the town-county EDA, has made some changes, creating several layers of financial oversight and paying off $1.9 million in debt, as well as setting up a small business loan program in the wake of the COVID-19 pandemic. But the lawsuit, he noted during a presentation to the county Board of Supervisors in July, makes it difficult to attract business.

Tederick said town officials harbor no ill will toward the joint EDA’s current members, and that there is room for cooperation between the town and county on economic development projects in the future.

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