Title
HOLD a public hearing and consider amendments to the Tax Increment Reinvestment Zone Number Two (TIRZ #2) ordinance by amending the project and financing plan, expanding the TIRZ #2 boundary, and extending the duration of the TIRZ #2.
Summary
DATE: December 6, 2022
TO: Kent Cagle, City Manager
FROM: Edwin Revell, Executive Director of Development Services
SUBJECT: HOLD A PUBLIC HEARING AND CONSIDER AMENDMENTS TO THE TAX INCREMENT REINVESTMENT ZONE #2 (TIRZ #2) ORDINANCE
BACKGROUND AND FINDINGS:
A Tax Increment Reinvestment Zone, also known as “TIRZ”, is an economic development tool authorized by Chapter 311 of the Texas Tax Code, through which governments can designate a portion of tax increment to finance improvements to promote the development of a defined area, called a “Reinvestment Zone.”
Killeen’s TIRZ #2 was established on November 4, 2008. Termination of the operation of the Zone will occur on December 31, 2028, unless otherwise amended.
The Project and Reinvestment Zone Financing Plan was adopted on August 25, 2009. In 2015, the boundaries of TIRZ #2 were amended to include thirty-two (32) acres on the southwest corner of Rancier Ave. and 38th Street. The Project Financing Plan was also updated to account for the boundary expansion.
In 2017, the TIRZ boundary was again amended to include Rancier Avenue from Fort Hood Street to Root Avenue (Ordinance No. 17-012). The Project Financing Plan was also amended at that time.
At this time, staff is recommending the following changes to the TIRZ ordinance:
• Amending the Project and Financing Plan.
TIRZ funds can be used to pay for any permitted “Project Cost” in the Project Plan. Staff recommends updating the list of projects as listed in the attached ordinance. The proposed project plan totals $113,500,000, and includes the following proposed projects:
|
Project |
Estimated Cost |
|
Streetscaping improvements in Downtown Killeen |
$14M |
|
Rancier Avenue replacement and streetscaping improvements |
$15M |
|
Rancier Avenue undergrounding overhead utilities |
$9M |
|
Downtown land acquisition and development of park space |
$8M |
|
Avenue D - Street and sidewalk rehabilitation |
$2.5M |
|
City Hall in the downtown |
$10M |
|
Land acquisition & development for expansion of Killeen Business Park |
$30M |
|
Economic development and public infrastructure reimbursements |
$14M |
|
Downtown land acquisition and redevelopment |
$8M |
|
Administrative /Professional Services |
$3M |
|
Total |
$113.5M |
• Amending the TIRZ boundary.
Staff recommends amending the boundary of the TIRZ #2 to include approximately 332 acres on the east side of N. Roy Reynolds Drive for expansion of the Killeen Business Park.
• Extending the duration of the TIRZ.
The current TIRZ was established with a 20-year term and will expire on December 31, 2028, unless otherwise amended. Staff recommends extending the duration of the TIRZ by 20 years to expire in 2048.
THE ALTERNATIVES CONSIDERED:
The City Council has three (3) alternatives:
• Do not approve the ordinance;
• Approve the ordinance with amendments; or
• Approve the ordinance as presented.
Which alternative is recommended? Why?
Staff recommends approval of the ordinance as presented. If approved, the proposed ordinance will update the project and financing plan for the TIRZ to provide a funding mechanism for needed projects within the TIRZ Boundary including Downtown Killeen. It will also extend the duration of the TIRZ to 2048 and expand the boundary to include an additional 332 acres for expansion of the Killeen Business Park.
CONFORMITY TO CITY POLICY:
The proposed ordinance conforms to all City policy and requirements of State law.
FINANCIAL IMPACT:
What is the amount of the expenditure in the current fiscal year? For future years?
This is not applicable.
Is this a one-time or recurring expenditure?
This is not applicable.
Is this expenditure budgeted?
This is not applicable.
If not, where will the money come from?
This is not applicable.
Is there a sufficient amount in the budgeted line-item for this expenditure?
This is not applicable.
RECOMMENDATION:
Staff recommends approval of the ordinance as presented.
DEPARTMENTAL CLEARANCES:
This item has been reviewed by Development Services, Finance, and Legal staff.
ATTACHED SUPPORTING DOCUMENTS:
Ordinance