New Braunfels Downtown Improvements May Be Spurred By New Funding Source | Community alert


New Braunfels City Council members this week gave their initial approval to a proposal creating a 25-year reinvestment zone for tax increases in the city center.

The Tax Increase Reinvestment Zone, or TIRZ, captures part of the new tax revenue generated in the zone and then makes a fund available to help finance identified projects.

“Tax increase funding is an economic development tool used by local governments to fund improvements needed in a defined area,” Jeff Jewell, the city’s director of economic and community development, told council members.

The reinvestment zones of tax increases do not establish a new tax, Jewell pointed out.

“It’s basically an allocation of the gradual increase in property taxes that goes into a fund that is designated for certain improvements in an area,” he said.

Cem Dooley enjoys Scoop Street gelato on San Antonio Street in downtown New Braunfels on Thursday, September 16, 2021. Businesses on San Antonio Street in downtown New Braunfels may soon be part of the Reinvestment Zone for New Braunfels. downtown taxes (TIRZ) which will fund improvements in the city center.

He said TIRZ would provide funding for the mandates outlined in the Envision New Braunfels Comprehensive Plan, the City of New Braunfels Strategic Economic Development Plan and the City Center Implementation Plan, as well as a tool additional economic incentive for potential new redevelopment projects in the area.

Jewell added that city staff worked with the Downtown Board, the New Braunfels Downtown Association and other stakeholders to develop a preliminary draft and fundraising plan for the proposed TIRZ.

The proposed TIRZ would cover approximately 182.91 acres and would include San Antonio Avenue from Union Avenue to Guenther Avenue, Seguin Avenue from Garden Street to Zink Street, Bridge Street from the Comal River to Castell Avenue, Mill Street from the Comal River to Guenther Avenue and various small streets within the boundary.

The 2021 benchmark taxable property value of the proposed ZIRT is approximately $ 168 million.

Over a 25-year term, city officials predict that TIRZ will generate approximately $ 14.8 million in total municipal property taxes for downtown improvements. According to Jewell, this forecast assumes 5% annual appreciation growth with no new construction.

The majority of TIRZ’s potential revenue, around $ 7.5 million, would be used to modernize and improve public infrastructure such as roads, utilities, sidewalks and other pedestrian and cycling facilities.

The TIRZ draft and financing plan also allocates potential income to economic development activities such as historic preservation facade grants, environmental remediation, fire safety improvements and parking improvements.

“We have a number of buildings in the downtown area that face real redevelopment challenges for the second and third floors,” Jewell said. “They cannot follow modern codes. It is financially and economically impractical. Being able to have potential compensation for homeowners to redevelop and install items such as sprinkler systems or to be able to meet modern building electrical safety codes is another area that has been identified (in the plan ).

TIRZ city center

Businesses on San Antonio Street in downtown New Braunfels may soon be part of the Downtown Tax Increase Reinvestment Zone (TIRZ). Downtown TIRZ will fund public improvements in the downtown area.

Administration costs, including reasonable charges for time spent by city employees, would be eligible for reimbursement as project costs. Administration costs are estimated at $ 40,000 per year.

The draft and the financing plan foresee that 85% of the city’s property tax revenues will be paid into the TIRZ fund for a period of 25 years. No other entity pays part of its tax increase into the fund, and no sales tax is offered to be directed to the fund.

When the TIRZ dissolves in 2046, all revenues will go to the general city fund.

Nathan Manlove, president of AMMO, a full-service marketing agency in New Braunfels, chairman of the board of directors of the Greater New Braunfels Chamber of Commerce and a member of the Downtown Stakeholders Group, said individuals and organizations over years have collaborated and drawn up lists of projects. and ideas to improve and develop the city center, but there was no funding to carry out these projects.

“There has never been a permanent source of funding (for projects) for the downtown area,” Manlove told council members. “What excites me about the potential of a TIRZ – it would be a permanent source of funding that we really need. And I encourage you all to remember that investing in downtown is investing in our past and the future of this city.

If the zone is established this year, the first tranche would be deposited into the TIRZ income fund in 2022.

Council members are expected to consider a second and final reading of the TIRZ proposal on September 27.

The downtown board recommended approval to create the zone on Jan.19.

Council members in July adopted a Tax Increase Funding Policy, also known as TIF, which officials say establishes a framework and processes to assess the creation of reinvestment zones for tax increases. tax in the city and applications for funding of potential economic development projects.

The policy describes the objectives of the deployment of the TIF and establishes the expectations and requirements for the level of due diligence that would be undertaken.

The purpose of such due diligence, Jewell said at this July meeting, is to provide reasonable assurance that no project requiring TIF assistance would happen without the incentive and that the proposed improvements will be built into. a reasonable time.

Jewell added that a TIF should focus on capturing desired real estate projects with infrastructure support or gap funding with four main conditions: the project must contribute to public policy goals, is economically feasible and has a chance. reasonable success and is profitable through the income generated. or justify the investment with economic and community impacts.

“We are planning an application process for private entities looking to get, for example, some of these reimbursements for improvements to their buildings,” Jewell said.

Two reinvestment zones currently exist within the city.

TIRZ No. 1, also known as Creekside TIRZ, was established in 2007 to fund capital improvements associated with real estate development near Interstate 35 and Farm-to-Market Road 306. These improvements include drainage, water, wastewater and pavement projects needed to service the development.

In 2019, the city established TIRZ No. 2, also known as the River Mill TIRZ, to fund a portion of the infrastructure and maintenance costs associated with the development of the former Mission Valley Mill complex located on the St. Carry. This site is planned for future mixed-use development.

The limits of the TIRZ, the percentages of increase and the project and financing plans can be modified by the action of the TIRZ board of directors and the city council.

After adopting the preliminary draft and the financing plan and the ordinance creating the zone, the council members will consider adopting a final project plan and appoint seven members to the mandated board of directors of TIRZ no. 3, probably before the end of the calendar year.

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