EDA seeks information on proposal

By Alex Bridges

The Warren County Economic Development Authority wants more details about a plan to draw money from some U.S. 340-522 corridor businesses.

Town Manager Steve Burke sent the authority board a letter stating the intent to revisit the idea of collecting revenue from certain businesses in the commercial-rich corridor. Town Council, which decided to ask for the EDA’s input, plans to consider a resolution pertaining to contracts Front Royal has with some restaurant and motel/hotel utility customers in the corridor. The town would seek to collect payments in lieu of taxes, or PILOT fees, in amounts equivalent to levies on meals or hotel stays.

The authority board discussed the Sept. 17 letter at its regular meeting Friday. Executive Director Jennifer McDonald said later on Friday that the board needs more information from the town.

“From the letter we received we really don’t know much about what they’re trying to do,” McDonald said. “So we’re going to set up a meeting with them to try and find out — because if it’s going to have a negative impact on the businesses, we’re not willing to get involved in something like that.

“We can’t make a decision based on what we have,” McDonald added.

The EDA hasn’t heard from business owners in the corridor about the proposal, McDonald said.

“We’re here to make sure this does not have a negative impact on the businesses,” McDonald added.

Meals and lodging taxes are often referred to as pass-through taxes — levies charged by the businesses to the customers, collected and remitted to the local or state government. But McDonald said it was not yet clear if collecting such PILOT fees would hurt the businesses.

“That’s what we don’t understand; how does this work?” McDonald said. “No one seems to understand how it would work and if it can work.”

At a work session last month, Town Council agreed to send the letter to the EDA indicating members’ desire to talk to the authority about the idea of reinstating PILOT fee collections from certain businesses. At the work session, Councilman Thomas Sayre voted against sending the letter to the EDA.

The letter states that the town is looking for options to recover revenue lost as a result of council deciding to stop collecting meals and lodging taxes as part of the Route 522 Corridor PILOT agreements with certain businesses in that area. Without an alternative, the town is seeking to resume collection of these fees beginning Jan. 1.

In the letter, Burke states the town plans to notify each of the businesses whose agreement specifically cites the collection of the PILOT fees. The town also would hold a public information meeting Oct. 16 to discuss the matter.

Restaurants operating under older contracts would not be affected by the change should council adopt the resolution to resume collections.

The town intends to use the money collected to fund economic incentive programs that would attract and retain businesses in Front Royal, the letter states.

The topic came up at the Town-County Liaison Committee meeting last month. Town Mayor Timothy Darr said at the committee meeting that he has some concerns with the idea.

Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or abridges@nvdaily.com

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