DEPARTMENT: Planning and Community Development
DEPARTMENT HEAD: John Dugan
COUNCIL DISTRICTS IMPACTED: District 10
SUBJECT:
Northeast Corridor Tax Increment Reinvestment Zone in City Council District 10
SUMMARY:
This is a Resolution of Intent by City Council authorizing Tax Increment Finance (TIF) staff to conduct a feasibility analysis and develop preliminary documents for a Northeast Corridor Tax Increment Reinvestment Zone (TIRZ) in City Council District 10. The creation of the TIRZ was proposed by former City Councilman Carlton Soules through a Council Consideration Request (CCR) on January 15, 2014 and subsequently supported by his successor Mike Gallagher, current District 10 City Councilman.
Approval of the resolution initiates the process for consideration of designation of a Tax Increment Reinvestment Zone. This action does not, in any way, obligate the City to designate the proposed TIRZ, nor does it financially obligate the City or other taxing entities. The resolution would allow staff to identify potential TIRZ partners, engage other city departments to continue the analysis of the proposed TIRZ and to develop TIRZ documents as required by state statute.
BACKGROUND INFORMATION:
As articulated in the CCR, the District 10 Council Office is focused on the revitalization of the Northeast Corridor (NEC), which encompasses Perrin Beitel and Nacogdoches from Loop 410 to O'Conner Road. To date revitalization efforts have included the hiring of a North East Corridor Revitalization Manager, inclusion of the NEC area in the Inner City Reinvestment Infill Policy (ICRIP), the creation of the NEC Steering Committee and most recently, in October of 2013, the completion of a market study and business inventory conducted by Wendell Davis and Associates.
One of the major recommendations of the market study was the creation of a Tax Increment Reinvestment Zone to "help finance the cost of redevelopment and encourage development in areas that would otherwise not attract sufficient market development in a timely manner" (Northeast Corridor Market Study, October 2013, p.63.)
Chapter 311 of the Texas Tax Code (the "TIF Act") allows a municipality to designate a geographic area as a TIRZ to promote development or redevelopment of the area if the governing body determines that development or redevelopment would not occur solely through private investment in the reasonably foreseeable future.
City-initiated TIRZ are designed to assist revitalization and reinvestment initiatives to achieve the goals of existing City programs and City-adopted plans. City-initiated TIRZ maximize the benefits of public-private collaboration by focusing on areas of the City that have been targeted for redevelopment. NEC has been targeted for redevelopment through both the ICRIP and the North Sector Plan.
Through the use of this economic development tool, the City hopes to capitalize on new development to revitalize these declining commercial corridors by investing in public improvements that will encourage additional reinvestment.
The goals and objectives of the TIF program include, assisting revitalization, maximizing public private collaboration and targeted revitalization in areas identified in city adopted plans. These goals and objectives will be further articulated in the updated TIF policies which are currently being drafted by TIF staff. It is the intention to have these policies in place prior to the proposed designation of the NEC TIRZ.
ISSUE:
City Council is being asked to consider a Resolution of Intent that will allow staff to further analyze the feasibility of a City-initiated Northeast Corridor TIRZ and develop preliminary TIRZ documents. The resolution authorizes staff to notify other taxing entities of a potential new TIRZ and request their participation in the TIRZ if deemed appropriate. In addition, the resolution will enable staff to employ other city departments to conduct appropriate due diligence to ensure the feasibility of the proposed TIRZ. This will include engaging the Finance Department to create the preliminary finance plan and TIF staff to develop the preliminary project plan both documents required by state statute.
Staff anticipates returning to City Council for consideration of TIRZ designation prior to December 31, 2014. After a public hearing in accordance with TIF Act requirements, staff will present preliminary project and finance plans, including any commitments by other taxing entities and proposed participation levels, a proposed TIRZ boundary, the recommended term and a name for the new TIRZ. In addition, TIF staff will provide recommendations for a TIRZ Board of Directors to be appointed by City Council.
ALTERNATIVES:
The alternative is to not proceed with consideration of the creation of this TIRZ; however, consideration of this alternative is only the first step in the process and does not obligate the City in any way.
FISCAL IMPACT:
Approval of the proposed resolution will initiate the TIF consideration process and will not have a direct financial impact to the General Fund. However, it should be understood that, if the Northeast Corridor TIRZ is designated, taxes collected on improvements and increases in property tax value within the TIRZ boundary after designation will be deposited into a Northeast Corridor TIRZ fund to be used specifically for public improvements within the zone.
RECOMMENDATION:
Staff recommends approval of the Resolution of Intent authorizing staff to notify participating taxing entities of a potential new TIRZ, and to begin conducting the additional analysis and preparation of required TIRZ documents for potential consideration by City Council.