Chapter 311 of the Texas Tax Code, known as the Tax Increment Financing Act, requires municipalities with tax increment reinvestment zones to provide an annual report each fiscal year to the State Comptroller and the chief executive officer of taxing entities within the zone that levy a property tax. The report includes detail on FY17 revenue, expenditures, debt, tax increment base, appraised value and captured value, as referenced in the state law.

For reference, TIRZs are created over underdeveloped land to help spur higher quality development not possible by private investment alone.  Through a TIRZ, taxing entities can choose, for a select number of years, to forego a certain percentage of the increased value of an enhanced development to fund public improvements without which the enhanced development would not have been possible.  Essentially, TIRZs are an investment where the public may benefit from significantly higher tax values throughout the life of the TIRZ and especially once the TIRZ expires – as well as through the impact of higher sales and hotel occupancy taxes generated from the enhanced development.  Additionally, school districts do not participate in TIRZs in Sugar Land – meaning students throughout the City receive the full benefit of increased tax dollars on higher quality developments from day one.

Specifically, Tax Increment Reinvestment Zone Number Three (TIRZ No. 3) was created in 2007 to aid in the development of the 839-acre area encompassing the former Imperial Sugar site and the state-owned property known as Tract 3. The Zone is home to Constellation Field and features single-family housing, a senior living facility, and the Imperial Lofts. The Zone also has plans for mixed-use development, including the historical Imperial Market at the former Imperial Sugar site, as well as office and retail development.

The report was recommended to City Council for approval by the TIRZ No. Three Board on December 14, 2017. Staff recommends City Council approval, pursuant to the requirements of the Texas Tax Code. Upon approval, the report will be disseminated to the necessary taxing entities and the Comptroller.