The approval—in a 3-2 vote with Jim Engel, Ann Martin and Brian Taylor voting for the measure, and Adam Schiestel and Chris Drew opposing—comes with the creation of a board of directors and establishment of a tax increment fund for the zone.
A TIRZ is an economic development tool that can be used by municipalities and counties to finance infrastructure costs in specific geographic areas, according to the council agenda.
The background
The new TIRZ is the second for the town, as Flower Mound's first TIRZ was established in September 2005 to provide funds for public infrastructure within the FM 2499 corridor. It consists of approximately 1,465 acres and "continues to accomplish the goals under which it was created," according to a council agenda memo.
The second TIRZ was proposed in western Flower Mound, generally north and south of the intersection of FM 1171 and US 377, expanding west to property located adjacent to I-35W and east to Whites Branch. The property contains approximately 3,962 acres, which are wholly located within the corporate limits of the town. The TIRZ takes effect immediately and will terminate Dec. 31, 2053, unless otherwise terminated in accordance with the ordinance. Town officials have the right to terminate the TIRZ before that termination date if all the project costs have been paid in full, the memo stated.
A TIRZ obligates future tax revenues from each participating taxing unit to pay for project costs, with town leaders determining a list of projects eligible.
P3Works LLC is a firm specializing in helping cities and counties create and administer TIRZs, according to town information. Town officials began working with the company after it began consideration of a second TIRZ last year.
The total TIRZ costs are $380 million—in 2023 dollars—and Mary Petty, co-founder and managing partner of P3Works, showed how numbers are broken down into different costs, such as $88.4 million for streets and storm sewer, and $21 million for public open space improvements. A timeline of estimated costs was also provided, with those costs extending to 2053.
Petty pointed to several reasons why TIRZs are desirable, such as how the town can match up the TIRZ revenue source with the infrastructure costs without burdening taxpayers and the rest of town.
"Creation of the TIRZ tonight does not obligate any current taxpayers' dollars because they're not in the zone," Petty said.
She said future tax dollars of anyone who lives in the zone would be eligible for use. She said she didn't think many residents lived in the proposed zone now.
Resident Fred Vincent told council the second TIRZ was a "bad idea" because the town has challenges meeting the various needs of 80,000 people. He said he wonders how the town would meet the needs of 30,000 more people in addition to the 30,000 who are already expected to move to town.
"I think this needs to be put off until more people see it and more people know about it," he said.
What they're saying
Martin said this TIRZ would be a funding mechanism for the future of projects in that area as they develop. She said it was not a tax incentive for a developer. Half of the monies generated would stay in that area to fund obligations for infrastructure, and 50% would go into the general fund, as the town does get some benefit for the future tax dollars without waiting for the 30 years to expire, she said.
Schiestel differed in his view, although he said he liked the terms of this TIRZ more than the previous one in town. He discussed how TIRZs were used in Frisco, including the city having higher tax rates and home values as well as rapid, intense urbanization. He said he didn't think his constituents would want this TIRZ and that a vote in favor of it would support more intense, faster developments.
What's next
At some point in the future, council can approve and adopt a final project and finance plan, Petty said.
