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PROPOSED TAX INCREMENT REINVESTMENT ZONE NO. 1 2 TEXARKANA, TEXAS

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PROPOSED TAX INCREMENT REINVESTMENT ZONE NO. 1 2 TEXARKANA, TEXAS

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    1. PROPOSED TAX INCREMENT REINVESTMENT ZONE NO. 1 & 2 TEXARKANA, TEXAS November 2009

    2. TIF and TIRZ To utilize tax increment financing (“TIF”) in Texas, a tax increment reinvestment zone (“TIRZ”) must be created over the specific geographic area where the public improvements will be constructed.

    3. Tax Increment Financing Created to help finance the cost of public improvements needed to promote developing or redeveloping a specific geographic area that would otherwise not attract significant private investment “but for” the Zone. Regulated and monitored by the City, Chapter 311 of the Tax Code

    4. How TIRZ works…

    5. The TIRZ Track Record… TIRZ are “tools” and as such are neither inherently good nor inherently bad Successful TIRZ usually have clearly identified needs and focused solutions, i.e. programs and development partners to fill need TIRZ are focused capital improvement programs, paying for needed infrastructure based on likelihood of redevelopment TIRZ are usually performance based public/private partnerships TIRZ are usually long term in nature And many more…

    6. What a TIRZ Is Not… Not a gift or windfall to developers Not a tax abatement or rebate of taxes; anyone owning property in the TIRZ pays property taxes, including the developers Not a “freezing” of taxes or tax rates Not a mechanism for skirting city regulatory process or codes Cannot trigger a tax increase

    7. Criteria for TIRZ… Chapter 311 of Tax Code Requires: 311.005 (1) Substantially arrest or impair the sound growth of the municipality… due to the presence of: (A) Substantial number of substandard, slum, deteriorated, or deteriorating structures; (B) Predominance of defective or inadequate sidewalk or street layout; (C) Faulty lot layout in relation to size, adequacy, accessibility or usefulness; (D) Unsanitary or unsafe conditions; (E) Deterioration of site or other improvements; (F) Tax or special assessment delinquency exceeding fair value of the land (G) Defective or unusual conditions of title; or (H) Conditions that endanger life or property by fire or other cause. 311.005 (2) Be predominantly open and, because of obsolete platting, deterioration of structures or site improvements, or other factors, substantially impair or arrest the sound growth of the municipality

    8. Performance Based TIRZ Structure Developer assumes all the risk: Developer pays all cost of design, construction of public improvements Developer must put enough taxable value on the ground to get paid back

    9. Protecting The City’s Interest… City Council Approves the final Project and Financing Plan, which contains the Vision Appoints Board of Directors Approves Development Financing Agreements Approves the Issuance of Debt

    10. Why TIRZ for Texarkana, Texas ? Performance driven Pro-active Plan in sync with Vision, puts developers on notice of what City will do Financing structure that is well-understood by the private sector and protects the City by shifting risk Ability to influence developer plans and projects over a long term

    11. Public improvements scheduled …. Public improvements scheduled for the Zones include, but are not limited to, the construction of:   (i) sidewalks, cross walks and pedestrian crossing systems (ii) storm sewers and drainage ponds, (iii) sanitary sewers, (iv) landscaping, streetscape, fountains, works of art, and benches, (v) plazas, squares, pedestrian malls, trails, and other public spaces, (vi) parking lots and roadways, (vii) utility line relocation and installation, (viii) water system improvements (ix) parks, and outdoor performance spaces, (x) bicycle routes and facilities, (xi) public transportation projects, (xii) signage, and (xiii) other related necessary or convenient public improvements (collectively, the “Project Costs”).

    12. Proposed TIRZ Districts

    13. Estimated General Impact on Tax Revenues

    14. Estimated General Impact on Tax Revenues

    15. Summary

    16. THANK YOU FOR YOUR TIME Questions ?

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