In a nutshell
Lewisville City Council members approved an agreement with the county for its participation in Tax Increment Reinvestment Zone No. 4 during a Dec. 16 meeting. The zone was established in 2019 and encompasses more than 276 acres of land though that total could increase before the end of 2024, according to a staff memo.
Under the agreement, Denton County will allocate 80% of taxes collected on increased property values for financing public improvements. The city of Lewisville already allocates 80% of taxes to public improvements in the area.
Denton County Commissioners Court approved the agreement during a Dec. 17 meeting.
Breaking it down
The agreement runs through December 2040 when TIRZ No. 4 is expected to expire, according to the staff memo. Denton County will start contributing to the zone’s tax increment fund on Jan. 1, 2024.
All funds will be used for improvements to Lewisville Lake Park and the surrounding area, according to the staff memo. The lake area is not currently part of TIRZ No. 4 though council members are expected to consider expanding its boundaries Dec. 31.
A map of the proposed expansion can be seen on the Dec. 16 City Council agenda.
Redevelopment plans for the area are being finalized by city staff and before being presented to the TIRZ No. 4’s board of directors at a future date.
How it works
Lewisville has four tax increment reinvestment zones across the city, according to its website. The first zone, TIRZ No. 1, was established in 2001 and the latest zone, TIRZ No. 4 was established in 2019.
A tax increment reinvestment zone is a financing tool established by Chapter 311 of the Texas Tax Code. When a zone is established, the property tax value within that zone is established as a baseline the year it was created.
Taxes up to the zone’s baseline value collected by the public entities remain with those entities. As the zone’s property values increase though, participating entities can allocate the growth in taxes to a tax increment fund for public improvements, according to the Texas Comptroller’s website.
Also of note
Officials from Denton County and Lewisville also approved an extension for the county’s participation in TIRZ No. 1. The amendment guarantees the county’s participation through 2038, according to a staff memo.
Denton County will continue allocating 75% of tax funds collected from new development towards public improvements within the zone. Lewisville currently allocates 100% of taxes collected on new developments to the zone’s tax increment fund.
The amendment came after council members expanded the zone boundaries to include an additional 166 acres in 2020. At the time, city officials also extended the TIRZ No. 1’s lifespan from 2028 to 2038.
After the action taken in December, Denton County is slated to participate through 2038, according to the staff memo.
