The agreement, which allows town dollars from the Tax Increment Reinvestment Zone No. 2 fund to be awarded as grants to prospective businesses, was unanimously approved by Flower Mound Town Council with one condition at a May 14 special meeting. The condition outlines that no building permit shall be issued for any structure that does not conform with standards laid out in the ordinance for Furst Ranch.
“The Economic Development Program serves to attract new business and commercial activity for the purpose of providing long-term economic benefits to the town,” Director of Economic Development Ray Watson said in an email. “It needs to be in place to serve as a recruitment tool.”
In a nutshell
The Chapter 380 Agreement will allow a portion of property tax dollars collected within the TIRZ to finance economic development incentives for a select list of companies.
A tax increment reinvestment zone is allowed through the Texas Tax Code and is typically used for public improvements in an area. Flower Mound TIRZ No. 2 was established in 2023 before it was amended last December, Watson said.
When a TIRZ is created, a baseline taxable value for the zone is created. For TIRZ No. 2 the baseline value is around $9.14 million, according to town documents. The participating taxing entities, Flower Mound and Denton County, keep all property taxes collected up to the baseline amount, but have committed 80% of the taxable value’s growth to help fund public improvements.
The approved Chapter 380 Agreement for Furst Ranch will deposit up to 30% of the captured growth into a subaccount earmarked for economic development in the area. Denton County’s 80% contribution is not eligible to be used for economic development and will be used for public improvements, Watson said.
Zooming in
To receive an economic development incentive from the town, the developer or end user is required to do the following:
- Construct public infrastructure such as water, sewer and drainage
- Build private infrastructure to support the use
- Receive a certificate of occupancy from the town
According to town documents, eligible economic development program projects include:
- Upscale specialty retailers, such as Crate and Barrel or an Apple Store
- Special and gourmet grocers, such as Trader Joe’s and H-E-B
- Quality wholesale and lifestyle essential stores, such as a Costco or Target
- Upscale restaurants, such as Truluck’s or Texas de Brazil
- Super retail stores, such as a Bass Pro Shop or IKEA
- A shopping center of at least 250,000 square feet and being 50% occupied by tenants from other economic development program project categories
- Class A office space
- Upscale hospitality, such as a full-service hotel
- An entertainment district
- Recreation facilities
Furst said he is looking to spend the rest of 2025 and 2026 to begin drawing building permits and start construction.
“The dream at Furst Ranch is 1 million square feet of retail or more,” Furst said. “With the grocer we have planned, we’re really excited about what could transpire in [2026] from a planning standpoint.”
