Specifically, council members passed an agenda item, first introduced by at-large Council Member Sallie Alcorn, to re-evaluate the life expectancy of TIRZs and their permanency in the city. This marks the city’s first such policy on the tax zones.
What’s happening?
The Mayor’s Office of Economic Development, or MOED, will manage TIRZs according to TIRZ Administrative Procedures, developed in 2023, and the new section of policies approved Aug. 30.
According to the city, the creation of TIRZs will only be considered when the area proposed clearly demonstrates a nexus between the proposed eligible TIRZ projects and economic growth spurred by new investment within the proposed geographic boundary. This includes being able to demonstrate at least 50% projected increase value from development during the initial TIRZ term life.
Under this new set of policies, life extensions of existing TIRZs may be evaluated at any time for reasons that can include the TIRZ’s ability to secure financing for approved projects that help expedite construction.
TIRZs can now be recommended for termination if the TIRZ has met the objectives defined in its plan or if it has underperformed the objectives in its plan 15 years after creation.
The new TIRZ policy also allows for annexations of TIRZs and the evaluation of noncontiguous TIRZs.
Notable quote
“I think with so many questions surrounding TIRZs, and the purpose of TIRZs, and how they should come into existence—where TIRZs should exist, how long they should remain in existence—I don't think you can talk about it just verbally,” Mayor Sylvester Turner said. “I think there has to be something that people can look to and assess and evaluate.”
The impact
These policies will allow officials to monitor the life of TIRZs in the city as well as their budgets and geographical boundaries.
According to the agenda item, MOED will be required to submit TIRZ compliance on performance to the Economic Development Committee annually. MOED will be checking in with TIRZs and monitoring TIRZ performance on a regular basis.
