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Maryland company will be getting back-tax bill for $89,951

July 26, 2012|By MATTHEW UMSTEAD | matthew.umstead@herald-mail.com

MARTINSBURG, W.Va. — A Maryland company will be ordered to pay nearly $90,000 in back taxes after Berkeley County officials discovered the company has been mistakenly exempt from having to pay them since 2007.

Panhandle Real Estate Trust LLC of Cumberland, Md., will receive a $89,581 supplemental tax bill for property taxes owed for the former Ralph Lauren clothing distribution center it owns, but it can not be asked to pay taxes for the 2007 tax year, officials said Thursday.

The bill does not include interest that also must be paid on the unpaid taxes, according to Berkeley County Assessor Gearl Raynes.

Berkeley County can not ask the company to pay the 2007 taxes because state law only allows the county to seek collection of up to five years in unpaid taxes on property, according to Berkeley County legal counsel Norwood Bentley III.

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The county would have had the opportunity to collect in full had it discovered the error before the 2012 tax bills were mailed earlier this month, according to Bentley. 

Taxes were collected from the company on behalf of Berkeley County Schools because the school system was not part of a tax agreement, which initially exempted the 187,000-square-foot building along Novak Drive in the John D. Rockefeller IV Science and Technology Center business park, according to Bentley.

The payment in lieu of taxes (PILOT) agreement became null and void in September 2005 when the title of the building was transferred from the West Virginia Economic Development Authority (WVEDA) to the company, according to Bentley.

The land is owned by the Eastern West Virginia Regional Airport Authority and leased to the company, according to Berkeley County Development Authority Executive Director Stephen Christian.

S. Schwab Co.’s plans for a $7 million warehouse distribution facility for children’s clothing were approved by the Berkeley County Commission in June 1998 and the building was dedicated in May 1999, according to Herald-Mail archives.

To be exempt from paying the taxes under the PILOT, the title of the building was transferred from the company to the WVEDA, which is a public, nontaxable entity, according to Christian.

Berkeley County Council President William L. “Bill” Stubblefield said Thursday that the state did not notify the county of the 2005 title transfer and had assumed the PILOT was still in effect.

The county only discovered otherwise after recently learning there was a possible tenant for the now vacant building.

Polo Ralph Lauren Corp. ended distribution operations at the facility within months after announcing in November 2009 that it was moving them to North Carolina.

“It was not a good PILOT for the county,” Stubblefield said of the agreement that was in place.

Stubblefield said at Thursday’s County Council meeting that given the oversight, the county will now begin an annual review of PILOT agreements that the county still has with other large employers. 

 

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