Title
Consider approval of Ordinance 2022-70, on the second of two readings, amending the project plan and reinvestment zone financing plan for Tax Increment Reinvestment Zone No. 5, also known as the “Downtown TIRZ” to allocate funding in support of an annual downtown operations plan and approved project plans submitted via an application process; authorizing the City Manager, or her designee, to execute such amendments on behalf of the City; including procedural provisions; and declaring an effective date.
Body
Meeting date: September 6, 2022
Department: Finance
Amount & Source of Funding
Funds Required: Proposed Annual Cost FY23 - $268,860
Account Number: 14063256.56180
Funds Available: $2,120,000
Account Name: Downtown Planning and Development
Fiscal Note:
Prior Council Action: Click or tap here to enter text.
City Council Strategic Initiative: [Please select from the dropdown menu below]
Downtown Vitality
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Comprehensive Plan Element (s): [Please select the Plan element(s) and Goal # from dropdown menu below]
☐ Economic Development - Diverse Local Economic Environment
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☐ Land Use - Choose an item.
☐ Neighborhoods & Housing - Choose an item.
☐ Parks, Public Spaces & Facilities - Choose an item.
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☐ Core Services
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Master Plan: [Please select the corresponding Master Plan from the dropdown menu below (if applicable)]
Downtown Master Plan
Background Information:
A tax increment reinvestment zone (“TIRZ”) is a financing tool created by the State Legislature to assist cities and counties in developing or redeveloping unproductive, underdeveloped, or blighted areas. Cities may create a TIRZ where conditions exist that substantially impair an area’s sound growth plan and where development or enhancements financed by the TIRZ significantly enhance the value of all taxable real property in a TIRZ.
Prior to creation of a zone, the statute requires preparation of a preliminary project and financing plan identifying the specific projects and means to finance the projects.
Upon creation, the total appraised value of real property located in a TIRZ is established for the year in which it was created. This is referred to as the base value. The additional value above the base is referred to as the “tax increment.” This increment usually pays for the project improvements, including public infrastructure.
Once the improvements are completed and paid for, each jurisdiction receives their share of the collected tax.
This TIRZ consists of approximately 244 acres in the San Marcos TX downtown core. The history includes, but is not limited to: rewriting the zoning standards enabling a pedestrian-oriented mixed-use environment and updating the Development Code identifying the downtown core as a Character District 5 Downtown.
Under this proposed plan, the City and Hays County will participate equally in the reinvestment zone to generate approximately $17.7 million over the life of the Zone. These revenues will be dedicated to parking enhancements, acquisition of land, streetscaping, sidewalks, improved lighting and overall mobility improvements to the downtown area.
The true value of the tax increment tool is to build economic development, increasing the tax base and possible job creation.
The geographic boundaries of the zone are from Texas State University to the North to IH-35 to the South, CM Allen and McKie on the East and several blocks to the West.
The term of the TIRZ #5 is scheduled to terminate on December 31, 2027.
Council Committee, Board/Commission Action:
The TIRZ 5 Board met on June 23rd and unanimously approved the amendments to the Project and Financing Plans.
Alternatives:
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Recommendation:
Hold the Public Hearing and adopt the Ordinance for the first reading.