Officials prepared to talk corridor

View larger image Timothy W. Darr

Darr suggests new agreement needed for U.S. 340-522

By Ben Orcutt - borcutt@nvdaily.com

FRONT ROYAL -- Town and county officials appear to be open to talks on the possibility of formulating a new U.S. 340-522 corridor agreement.

"This is an issue that needs to be addressed," Mayor Timothy W. Darr said during Thursday's town-county liaison committee meeting at the county government center.

Darr, who was elected as mayor in May, offered the idea of a committee being formed to study fashioning a new agreement in light of a judge's ruling that the town does not have the authority to collect a meals tax in the U.S. 340-522 corridor north of Interstate 66.

"We need to revisit this so that we actually do have an agreement," Darr said.

On Nov. 30, Warren County Circuit Court Judge Dennis L. Hupp granted a motion for summary judgment in favor of the three restaurants that challenged Front Royal's collection of a meals tax in the corridor, which is outside the town limits. William L.S. "Sandy" Rowe, of the Richmond law firm of Hunton & Williams, filed suit on behalf of the restaurants in a January 2009.

In his Nov. 30 decision, Hupp agreed with Rowe that based on the town's 1998 corridor agreement with Warren County, the town does not have authority to collect a meals tax in the corridor because the levy is not one restaurants themselves would pay if they were located within the town limits, but rather a tax the eateries would collect from customers.

The payments in lieu of taxes, sometimes referred to as "pilot fees," were established to help pay the cost of extending water and sewer service to businesses located in the corridor. They include the value of real estate and property taxes the businesses would have paid if located inside the town.

Based on Hupp's Nov. 30 decision, the Town Council voted in March to adopt a resolution that eliminates all corridor restaurants and motels from paying meals or lodging taxes.

Board of Supervisors Chairman Archie A. Fox, of the Fork District, said that the supervisors could put the idea of revisiting the corridor agreement on a future work session. Darr said the Town Council would wait to hear from the county before following suit.

The mayor said the town is suffering financially because of lost revenue from the corridor and would like to discuss ways with the county to come up with alternative sources of money that would be beneficial to both entities. The county currently collects a 4 percent meals tax from corridor restaurants.

"At the end of the day, there might not be a way" to come up with a new agreement, Darr said, adding that it is worth pursuing.

Fox said the town has been cooperative in assisting the county with water needs in the corridor, such as the new regional jail, and therefore the county would be willing to explore the concept of a new corridor agreement.

"Basically it's just trying to break the ice," Darr said. "It's tough for the town to survive right now. ... At the end of the day, I think we'll end up with a good effort [between the town and the county]."

Said Fox: "I think we have a good direction to go in."

The town was also represented at Wednesday's meeting by Councilman Carson C. Lauder Jr., Town Manager J. Michael Graham, Town Attorney Thomas R. Robinett and Steven M. Burke, director of environmental services.

Warren County was also represented by South River Supervisor Linda P. Glavis, County Administrator Douglas P. Stanley and Board of Supervisors Clerk Janice Dearaway.