FRONT ROYAL – Royal Examiner has learned, through a Freedom of Information Act (FOIA) request that, acting on the advice of then-EDA Executive Director Jennifer McDonald the Warren County Board of Supervisors discussed the purchase of an empty warehouse from Westrock LLC at 426 Baugh Drive in Stephens Industrial Park in closed session on Nov.8 2017 and signed a resolution of support for the purchase of the 13.9393 tract of land and warehouse for $5.3 million on Jan. 16, 2018.
On Monday, March 18, this reporter contacted Supervisor Archie Fox by telephone to ask him about the particulars of the deal on the property. Asked if he remembered discussing the property or the proposed deal, Fox said he couldn’t recall. Asked if the board passed a resolution–and told that I had an electronic copy of the resolution that had been sent via email from County Administrator Doug Stanley’s email account–Fox said, “I don’t recall. If Doug said we did, we did.”
The resolution, brought forth on a motion from Dan Murray, seconded by Archie Fox and signed by then-Chairman Tony Carter put county taxpayers on the hook for funding of the debt service for the purchase, pursuant to an agreement between the County and the EDA. So, what exactly does that mean for Warren County citizens?
The loan, held by United Bank, according to the emails, had a balance of $5,313, 305.84. The monthly payments on that note alone, according to an email dated between Jennifer McDonald and County Administrator Doug Stanley total $25,113.67. (Payment + Insurance + Real Estate Taxes)
A series of emails between Stanley and McDonald indicated that even in a best-case scenario, where the warehouse—which has remained vacant since it was purchased—would be leased at the rate of $3.50 per square foot, the County would lose $2,947 each month.
The agreement between the County and the EDA states that “The County could be responsible for the cost of the debt service if property not fully leased. However, the EDA plans for the lease payments to fully cover the debt service.”
Royal Examiner also obtained documents that show the EDA offered $100,000 additional in earnest money to extend the closing date of the property to May 15, 2018 because “The Buyer and Lender require more time to complete the appraisal required by the Lender. The Seller agrees to an extension of the Closing Date to May 15, 2018 as requested by the Buyer for an additional $100,000 non-refundable earnest money deposit.”
While the Board of Supervisors seemed ready to distance itself from the EDA after the filing last week of a 199-point civil suit seeking embezzled or misdirected assets in excess of $17 million, they certainly will have a great deal to explain to Warren County taxpayers about why they were so willing to enter into a contract that could, over the life of the loan, cost local residents roughly $10 million.
So far, based on the County’s numbers of $100,000 earnest money and $25,113.67 per month, about $350,000 has been spent.
Now that is going to take some serious explaining!
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