Uptown Kyle, part of Phase 2 of the Plum Creek development, has “been projected as an idea for a number of years,” Mitchell said in an interview on Aug. 6, but “the TIF is the missing ingredient to help transform Uptown from a good idea to a reality.”
Mitchell said he has recently visited cities across the state and the U.S. that have successfully used TIFs to help incentivize planned mixed-use developments.
Once the TIF is established, it will work by capturing all future property tax revenue within its borders, which the city will then invest into Uptown.
It puts the future tax revenue, basically, “in a bank account,” Mitchell said, and that includes county tax revenue. “We double our money in that area,” Mitchell said. “It really does make an impact.”
The Uptown TIF will be much different than Kyle’s first TIF, Mitchell said. The first one was created after voters approved a bond to construct FM 1626. Knowing the road would lead to commercial development along I-35, the city created a TIF to capture the revenue that would be generated. But the general fund was still part of the road project and is still being used to subsidize payments on FM 1626.
"We're going to take much more of a silo-ed approach," Mitchell said of the new proposed TIF. It will not be subsidized, it will capture only growth in property tax revenue, it will not be used for infrastructure, and it can only be used for public improvements designed to benefit the whole city.
The council may receive and vote on the proposal as soon as October but likely not later than December, Mitchell said. The county will also need to vote on it as will any other jurisdiction that plans to participate.
A TIF board will then be created—usually, it consists of elected officials—and the board will devise a detailed financial plan. Mitchell said he expects it to be two or three years before the area will see significant development. As it is not subsidized by the general fund, development will start modestly.
“The projects that we might incentivize initially may be small,” Mitchell said. “But as the district grows, we will gain in our ability to pay for public amenities in that area."