Tax Increment Reinvestment Zones (TIRZ)

WHAT IS A TIRZ?

Chapter 311 of the Texas Tax Code governs the use of Tax Increment Reinvestment Zones (TIRZ). Tax increment financing is a financing method local governments can use to pay for improvements that will draw private investment to an area.  Tax increment financing isn’t a new tax; instead, it redirects some of the ad valorem tax from property in a geographic area designated as a Tax Increment Reinvestment Zone (TIRZ) to pay for improvements in the zone.

When a municipality creates a TIRZ, it records the total taxable value of all real property within the zone.  It’s like a snapshot in time of what the property values are at that specific moment.  That snapshot is the zone’s based value.

Each year, property taxes collected in the zone on base value continued to go into the City’s general fund. But as property in the TIRZ develops and becomes more valuable, a portion of the taxes collected on property above the base value is deposited into a tax increment fund.  Revenue deposited in the tax increment fund can be only used to finance projects within the zone, including infrastructure, façade programs, landscaping, streetscaping or practically any type of public enhancement consistent with the Chapter 311 and the zone project plan and financing plan.

A TIF project jumpstarts development to get things moving a bit faster and, ultimately, to generate new tax revenue.

BENEFITS OF A TIRZ

The benefits of a TIRZ include:

  • Builds needed public infrastructure in areas lacking adequate development to attract businesses.
  • Encourages development, thereby increasing property values and long-term property tax collections
  • Reduces the cost of private development by providing reimbursement for eligible public improvements.

TIRZ Benefits (texas.gov) | All TIRZ Map

TIRZ No. 1 

Created in 1999 | Base Value $69,847,791 | Tax Year 2021 Value $250,857,766

TIRZ No. 1’s objectives are to provide for the design and construction of:

  • Water, wastewater, and drainage facilities;
  • Transportation and access improvements;
  • Other specific project costs in order to facilitate the development of new residential and commercial properties; and
  • Redevelopment of public facilities and commercial properties where infrastructure was absent and where residential and commercial development and redevelopment would not occur “but for” the creation of the zone.

Participants: City of Missouri City, Fort Bend County

TIRZ No. 2

Created in 1999 | Base Value $2,114,010 | Tax Year 2021 Value  $363,954,198

TIRZ No. 2’s objectives are to provide for the design and construction of :

  • Regional water, wastewater, and drainage facilities; and
  • Other specific public improvement project costs in order to facilitate the development of new commercial properties where such infrastructure is absent and where commercial development would not occur “but for” the creation of the zone.

Participants: City of Missouri City, Fort Bend County

TIRZ No. 3

Created in 1999  Base Value $28,704,500 Tax Year 2021 Value  $184,452,208

TIRZ No. 3’s objective is to finance reimbursements for costs associated with infrastructure and drainage necessary to develop the site for commercial use.

Participants: City of Missouri City, Fort Bend County, Sienna LID

HOW DO I APPLY FOR TIRZ FUNDING?

As a matter of policy the City of Missouri City will consider using Tax Increment Financing to assist private development in those circumstances where the proposed private project will have a demonstrated substantial and significant public benefit to the community.  This benefit may include eliminating blight, strengthening the economic and employment base of the City, positively impacting surrounding neighborhoods, increasing property values and the tax base, creating new and retaining existing jobs, and implementing the Comprehensive Plan.

The fundamental criteria for the use of Tax Increment Financing – and that which the City must satisfy – is that the project would not occur “but for” the assistance provided through TIF.  The burden is on the developer to make this case to the City, and not the reverse.   Should the “but for” determination not be made, Tax Increment Financing for the project cannot be provided.

The policy and process found at the below link was approved by each TIRZ Board (TIRZ No. 1 and No. 3 on June 16, 2022 and TIRZ No. 2 on June 23, 2022) and the Missouri City Development Authority (July 18, 2022).

TIRZ Policy and Application Process Document

All applications for TIF funding shall be submitted to the following:

  • The City’s TIRZ Administrator - Municap, Inc. at: 
    Municap, Inc.
    Attn: Abdi Yassin
    600 East John Carpenter Freeway Suite 150
    Irving, Texas 75062

    Electronic Submission: txpid@municap.com

  • With a copy to the City Manager’s Office at:
    City of Missouri City
    Attn: City Manager – TIRZ Application
    1522 Texas Parkway
    Missouri City, TX 77489