Sugar Land uses TIRZ to improve area infrastructure
By S. Barot
For The Star
The City of Sugar Land recently approved Fiscal Year 2016 budgets for Tax Increment Reinvestment Zones (TIRZ) #3 and #4. Total anticipated FY16 revenue with interest for TIRZ #3 and #4 are $179,772 and $492,131, respectively.
In addition, Council approved of several new appointments to the TIRZ Board of Directors for all three zones.
But what are Tax Increment Reinvestment Zones and how do they benefit the community?
A TIRZ is a method of financing created by the City and other taxing agencies (county, MUD, etc.) that use any increases in the property tax value of what is within the boundaries of the zone to fund public improvements or public expenditures. TIRZ can fund improvements for roads, bridges, utilities and structured parking. The City appoints TIRZ board members for two-year terms.
“A TIRZ is a special district that encourages a higher value and quality of development than would otherwise be possible through the creation of a dedicated funding source to be used for the necessary public improvements within the boundaries of the district,” said Jennifer May, director of Economic Development.
TIRZs are not just a Sugar Land or Fort Bend County entity– even the City of Houston has designed TIRZs for areas. Most recently, Houston City Council voted to create a TIRZ for the Montrose area. Houston now has 27 TIRZ areas.
In other words, through TIRZs, higher quality public infrastructure developments are possible for the general public. This in turn makes the area attractive to business employers, retailers and entertainment.
But a caveat in TIRZ financing is that the designated dollars can only be used within the boundaries of the TIRZ – and cannot be used anywhere else. Some critics believe that equitably distributing tax dollars across the city would be more beneficial to the entire populace. But the revenue generated from the tax increments is used for the betterment of the area only.
“We believe that TIRZs are beneficial to the community – these developments would not be what they are, especially Sugar Land Town Square or have a bright future like the Imperial development if it wasn’t for TIRZ,” said Sugar Land City Councilman Himesh Gandhi.
Three main TIRZs are part of city – Sugar Land Town Square, the Imperial Development and the Telfair Commercial District. Though the latter two are still in development phases, Sugar Land Town Square, or TIRZ #1 is the city’s most matured and developed TIRZ.
As preciously reported by The Star, Sugar Land Town Square was created by a public-private partnership that included Planned Community Developers, the City of Sugar Land, Fort Bend County, Levee Improvement District 2, the Sugar Land Development Corporation, the Sugar Land 4B Corporation, the Sugar Land Town Square TIRZ #1 and the Sugar Land Town Square Development Authority.