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 Four (TIRZ No. 4) was created in 2009 and encompasses approximately 698 acres surrounding the intersection of University Boulevard and U.S. 59, including the southern Telfair commercial tracts and the University of Houston at Sugar Land. The Zone is home to the Smart Financial Centre at Sugar Land and also features residential housing, the Telfair Lofts, Costco and the University Commons center, office space, and retail space. The Zone also has plans for an office-entertainment centric mixed-used development surrounding the Smart Financial Centre, which will also provide a home to the City's future hotel / conference center project.

The report was recommended to City Council for approval by the TIRZ No. Four Board on December 18, 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.