Tax Increment Reinvestment Zone #1 : City Of Southlake

Tax Increment Reinvestment Zone #1

Tax Increment Financing (TIF) is a tool to finance public improvements within a defined area. The improvements should enhance the environment and attract new investment. The statutes governing tax increment financing are in Chapter 311 of the Texas Tax Code.

A municipality makes an area eligible for tax increment financing by designating a “reinvestment zone,” also called a “tax increment reinvestment zone (TIRZ)” or a “tax increment financing (TIF)” zone. Costs of selected public improvements outlined in the zone’s project and financing plan may be paid by current or future tax revenue flowing from redeveloped or appreciated real property valued in the zone. The additional tax dollars generated by growth of real property value in the zone are called the tax increment. These dollars flow to a fund for a specified number of years. Money flowing into the fund each year is spent according to an approved plan and in accordance with agreements in place with participating governmental units.

The City of Southlake has one active zone - Tax Increment Reinvestment Zone #1 which was established to provide a financing mechanism to facilitate high quality development in the southeast area of the city. The Southlake City Council created Southlake's TIRZ #1 in September 1997 (Ordinance No. 682) and established a Board of Directors to oversee the Project and Financing Plan. TIRZ #1 is set to expire on December 31, 2018.

Click on map at left to enlarge.

The TIRZ’s base year taxable value (1998) for the City of Southlake was $23,475,366. Taxable property value appreciation in the zone since that time is captured for investment in the zone. The current Project & Financing Plan approved in August 1999 outlines the strategies used to encourage development in the zone. The Plan also includes value projections for the zone as a benchmark to track performance. Since its creation, TIRZ #1 has generated $49,167,883 in revenue for investment to further the economic development goals of the zone.

TIRZ #1 Expenditures

Developer agreements are the mechanism by which the City of Southlake and its partners fund infrastructure improvements using revenue generated by the TIRZ #1. The agreements outline the responsibilities of the TIRZ partners. In January 1998, the City Council entered into the first commercial developer agreement with Southlake Venture West LP and Southlake Venture East LP for Southlake Town Square, Phase I. Since that time, the Council has entered into developer agreements for additional phases of Southlake Town Square:

The developer completed both public and private improvements on the site and the agreements provide for 40% reimbursement of the cost for general public infrastructure (roads, water, sewer, parking, etc.), and 100% reimbursement for the cost of public parks in Town Square, up to predetermined caps outlined in each developer's agreement. Through September 30, 2011, the developer has been reimbursed a total of $11,025,136 through TIRZ #1 for eligible project costs.

Public buildings and facilities were also included in the project and financing plan. A joint City/County facility was built and opened in late 2000, parking facilities were purchased by the City in 2008, and the plan includes a number of school facilities and school operating expenses as well.

City of Southlake

Tax Increment Reinvestment Zone #1

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Economic Development Dept.