Council OKs corridor deal

FRONT ROYAL – Town Council approved a deal with Warren County Monday to share revenue from businesses in the U.S. 340-522 corridor.

Council voted 5-1 to approve a memorandum of agreement with the Board of Supervisors under which the county would give the town the equivalent of 30 percent of the meals taxes and 5 percent of the lodging taxes collected from the corridor businesses. In exchange, the town agrees to provide water and sewer service to the area known as Crooked Run West, up to a certain amount, as development occurs. The deal also restricts the town from trying to annex the corridor and from reinstating the collection of the meals and lodging tax component of the Payment in Lieu of Taxes program through which Front Royal receives money from businesses outside corporate limits.

Vice Mayor Hollis Tharpe and Councilmen John Connolly, Bret Hrbek, Daryl Funk and Eugene Tewalt voted in favor of the motion to approve the deal. Connolly made the motion. Supporters said the agreement helps the town realize some, but not all, of the revenue it lost through a court battle.

However, Hrbek said he voted in favor of the motion only so he could reserve his right as a member of the majority to bring the matter back before council later.

Councilwoman Bébhinn Egger voted against the motion to approve the agreement. Egger and Hrbek tried unsuccessfully to delay action on the matter and to remove from the agreement the conditions pertaining to Crooked Run West, at least until council could discuss that part of the deal further.

Egger warned that such action would repeat a mistake made by council years ago with the original 1998 agreement with the county.

Funk said the town would have recourses in case the county decides not to uphold its end of the agreement.

Hrbek pointed out that by approving the agreement the county likely will have to increase the real estate tax rate by a half cent. Town residents also pay county taxes. Meals and lodging taxes collected from the corridor must go to pay for schools so the county can’t give the percentages of the revenue as stated in the agreement to the town. The county must find another way to remit those amounts to the town.

An effort to delay action on the agreement until after council receives a final report from an attorney hired by the town to investigate the matter also failed. The town hired Carter Glass to the tune of $100,000. Tewalt sided with Egger and Hrbek, causing a tie vote. Mayor Timothy Darr broke the tie by voting against the motion to wait until council received the report. Darr said that council could bow out of the agreement once they receive the report.

Hrbek sought to have council reinstate the meals and lodging portions of the PILOT fees but lost by 4-2. Hrbek argued that businesses that signed contracts to receive utility service from the town are aware that Front Royal could collect such revenue considered a pass-through tax paid by customers. Funk said he wouldn’t support increasing taxes on residents – a promise he made during his campaign.

A majority of council wouldn’t commit to earmarking the extra revenue for economic development in the town as requested by Hrbek and Egger.

A majority of council also blocked Hrbek’s efforts to hold a public hearing on a motion to repeal the town’s code section pertaining to supplying utilities to the corridor. Hrbek and Egger argued that approval of the agreement and the condition that the town provides utilities to Crooked Run West violates the town’s own code and policy. Council voted 4-2 against the motion. Egger called some members “hypocritical” for voting for the agreement that she contends violates code yet does not support an effort to repeal the code.

Council voted 4-2 at the beginning of the meeting to block Hrbek’s effort to move the motion to schedule a public hearing on the agreement earlier on the agenda. Hrbek said he wanted the hearing to serve as an official invite to the public to speak. Council allows the public to speak at its meetings and, in Monday night’s case, two people spoke on corridor issues during the comment section. Edward Murphy, who represents the developers of Crooked Run West, urged members to act on the agreement because prospective businesses are waiting to move forward.

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