As apartment complexes, Austin Community College and St. David’s HealthCare fill the space in the north Leander transit-oriented development district, or TOD, city leaders are considering another area for development.
The city of Leander is in the initial phases of exploring a second tax increment reinvestment zone, or TIRZ, in the area around Ronald Reagan Boulevard and Hero Way, Economic Development Director Mark Willis said.
In Texas, cities or counties can use a TIRZ as an economic development tool to spur growth in a specific area. Public entities or a private developer invest in public infrastructure, such as water and electric utilities, inside the TIRZ. Portions of the future property tax revenue from within that area are used to pay off development costs.
In 2006, Leander and Williamson County created the city’s first TIRZ, a 2,475-acre space around the Capital Metro train station. That TIRZ is known as a TOD, or an area where residents can live within walking distance of activities, such as shops, schools and transit stops.
“We’re starting to see the TOD fill up pretty quick with apartment complexes, ACC and the hospital,” Willis said. “Once those things really get in the mix, then we’ll start seeing [a future TIRZ]fill in pretty rapidly.”
For a second TIRZ, Willis said the city is looking at a roughly 280-acre space off the southwest corner of Ronald Reagan and Hero. City officials hope big-box stores, movie theaters, and other entertainment and shopping options will move in along Ronald Reagan at the front of the property. A business park with technology, biotechnology or insurance companies is anticipated for the back of the property.
Leander City Council Member Shanan Shepherd is also a Realtor with Shepherd Nelson Realty. She said residents tell her about their desire for the businesses that the city hopes will fill the second proposed TIRZ. She said establishing a business park will likely cause a ripple effect—if more employers move to the area, more restaurants and retail shops tend to follow.
“The biggest thing people are looking for when they move to a new community is the convenience to shop, to go to restaurants and if it’s close to where they work,” she said. “That’s where, as a Realtor, I think [the TIRZ]is going to bring value to residents and value to future homeowners.”
In the spring, City Council approved a $3 million general obligation bond to install roadways and utilities in the front of the TIRZ off Reagan. Willis said about $5 million would be needed for the second phase of infrastructure installations on the rest of the property, and the city could spend up to $15 million total on infrastructure in the TIRZ.
In return the owner of the property would sell about 30 acres of the land at a discount to certain businesses as an incentive, Willis said.
Seventy-five percent of the property tax revenue generated on the land inside the TIRZ would be set into a tax increment fund, which could pay off the initial $3 million bond or fund other reimbursements for infrastructure and major projects in the TIRZ. Willis said the city plans to pay off its investment in 15 years.
“So the city is taking a $3 million risk, but it’s not a horribly tough risk—things are developing along Reagan pretty fast,” he said.
Willis said cities usually partner with a developer before moving forward on a TIRZ, and he said Leander is still in negotiations.
Per state tax code, the city must set up a finance plan, notify affected property owners and hold a public hearing prior to forming a TIRZ. Willis said City Council would vote to create the TIRZ and appoint a board of directors, and both the board and council would need to approve the project and finance plan.
Willis said city staff has nearly finished the finance plan and is in discussions with surrounding landowners. A public hearing could happen in the fall, he said.
City Council could vote to form the TIRZ by the end of November, and Willis said he hopes the city would break ground on the infrastructure work by end of summer 2017.