Denison sets hearings for new TIRZ districts
In an effort to fund future public infrastructure improvements, the city of Denison took steps this week to form two new Tax Increment Reinvestment Zones.
The city council approved a resolution Monday setting a public hearing on Dec. 7 for the creation of TIRZ no. 4 and no. 5, which will cover areas straddling the U.S. Highway 75 corridor.
A TIRZ is a tool that municipalities can use to fund projects by setting aside a portion of future tax revenue for projects within the zone.
"Basically the need on the city's side is for a funding mechanism for infrastructure improvements that will help bring development," City Manager Jud Rex said Monday.
The two districts would cover much of the U.S. 75 corridor from Texoma Medical Center north to just south of Morton Street.
TIRZ no. 4 would cover areas generally near the Loy Lake area between U.S. Hwy. 75, FM 131, Morton Street and FM 691. The TIRZ will encompass nearly 1,817 acres of land across 603 parcels with an initial value of $89 million based on 2019's tax valuations.
Meanwhile, TIRZ no. 5 would cover about 3,275 acres across 2,010 parcels of land with a value of $138 million. The zone, will cover areas that fall east of US. 75, west of State Highway 91 and include the Washington Heights area and the former TMC campus.
The city has previously used three other TIRZ districts to raise funds for improvements. The first two cover the ongoing Gateway Village development and the proposed Preston Harbor development to the city's north. Zone #3, the most recent, encompasses much of downtown and has been used by the city to fund the ongoing D3 street improvements along Main Street.
A TIRZ raises money by effectively setting aside additional tax revenue above the amount that would be collected when the zone was created. As the district grows in value, more funds are set aside specifically for improvements in the district.
The mentality behind the TIRZ is that as more improvements are made, the value of the district will increase, effectively creating more funds for future improvements.
"This does not increase property tax in an area," Rex said. "It simply redirects new tax revenue in the area to a specific need."
The TIRZ is useful to the city in that it allows entities like the county to also set aside their portion of taxes for these improvements. Also, it dedicates these funds specifically for this district.
"Essentially it is not just the city's money that is being leveraged, but it is also the county's money that is being used to leverage new growth in the area," Rex said, adding he believes Grayson County will participate as it had with previous projects.
Previously, city officials said a TIRZ is a long-term tool to set a long goal for the city that isn't shifted across multiple councils.
With these two TIRZ districts, Rex said that the funds would primarily be focused on residential development. TIRZ no. 5 includes areas that are already developed, and these funds would be used to help encourage infill development in lots that may have challenging topography or other issues hindering development.
"The developments in TIRZ four and five are likely going to be more residential, so they are more similar to TIRZ three, which is the downtown reinvestment zone," Rex said.
Thus far, the city's efforts to use TIRZ districts as funding streams has proven useful, Rex said, citing the increased value in downtown as an example.