Board sends new corridor offer to town

The volley of offers and counter offers between Warren County and Front Royal leaders over the U.S. 340-522 corridor continues.

The Board of Supervisors last week approved a revised counter proposal that includes an offer to pay the town the equivalent of 30 percent of the meals taxes collected in the corridor from businesses that have utility contracts with Front Royal. This marks the fourth offer put on the table.

Chairman Richard Traczyk said Friday the board hopes this is the final offer.

“We’re looking forward to a smooth transition to cooperation between the town and the county as far as the corridor goes,” Traczyk said. “Hopefully it’ll smooth over the business where we can go ahead and tell people that we have a working agreement with town and we’d like to entertain you’re coming into Warren County.”

The supervisor said that Marriott is considering building a hotel in the corridor but “are a little bit concerned about the relationship [between the town and county] and some of the fees.”

But the county would need to sacrifice some of the revenue it collects from the corridor under the agreement.

“Initially, we’re gonna have to find a way to pay for it,” Traczyk said. “Obviously we’ve dedicated that money to the schools, the capital projects.

“It’s gonna affect us,” he added. “Hopefully we don’t have to raise taxes to pay for it.”

The board’s offer is the latest in the ongoing efforts by county and town leaders to strike a deal. In late January, Town Council asked the board to consider a compromise under which the county would pay Front Royal the equivalent of 25 percent of the meals tax and 50 percent of the lodging tax collected from all existing, commercial utility customers under the original contract. Council’s proposal called for the county to pay the equivalent of 50 percent of both meals and lodging taxes collected from existing and future customers under the updated utility contract.

The board countered the offer earlier this month with a proposal to pay the town the equivalent of 25 percent of the meals and lodging taxes. Town Council countered the board’s counter offer that proposed the county pay the equivalent of 37 percent of the taxes collected.

Traczyk states in a letter to Front Royal officials that “We continue to feel that this will be beneficial to both the Town and County; providing additional potential PILOT fee revenue given that it is one of the most developable commercially zoned parcels in the County.”

The board asked that the town provide water and sewer service to the property identified as the future Crooked Run West under the same utility deal as other businesses covered under the Route 340-522 Corridor agreement.

“As projected by the developer, the site has the potential for over $90 million in investment generating significant sales and meals tax revenue while only requiring an estimated 30,000 [gallons per day] of water and sewer service,” Traczyk adds in the letter.

The PILOT fee system allows the town to collect the equivalent of taxes the commercial utility customers would pay if they were located in Front Royal. The system also allowed businesses to pay close to the same amount toward in-town utilities. The town stopped collecting the meals and lodging tax component of the PILOT fees from certain utility users in the corridor after it lost a lawsuit in 2009 filed by several businesses against Front Royal that challenged the legality of the collection of the levies.

The latest version of the memorandum of agreement states that the town would agree to not resume collection of the meals and lodging tax component of the PILOT fees from businesses in the “Annexation Immunity Area” as identified in the 1999 Amended Corridor Agreement. The town would maintain and set up utility contracts with businesses in that area and continue to collect PILOT fees excluding the meals and lodging tax component.

Under the agreement, the county would provide funding to the town in the equivalent of 30 percent of the meals tax collected from all existing and future utility customers.

All PILOT agreements will continue unless invalidated by a court. The town could amend any agreements invalidated by a court as long as such a deal does not increase the businesses’ payments.

The memorandum of agreement would prohibit Town Council from voting on or filing for annexation of the “Annexation Immunity Area” unless requested by the county.

The memorandum also calls for the addition of Crooked Run West to be included in the “Annexation Immunity Area” and to require that the future development receive the same utility provision benefits.

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