Denton Development Districts
Denton uses tools various economic development and financial districts to improve and enhance infrastructure and encourage private investment in specific areas of the city. These development districts support development and revitalization and are commonly known as public improvement districts, tax increment reinvestment zones, or municipal management districts. Denton currently has two active development districts:
- Downtown Denton Tax Increment Reinvestment Zone Number 1
- Westpark Tax Increment Reinvestment Zone Number 2
Tax Increment Reinvestment Zones
A tax increment reinvestment Zone (TIRZ) is a tool used to fund public improvements, stimulate development or redevelopment, and enhance infrastructure within a defined area. A TIRZ operates by capturing increases in tax revenue from the defined area and using the revenue on projects within the same area. When a TIRZ is created, a base taxable value of the property in the zone is established. In following years, the increment of increased valuation between the base year and the following years goes to the TIRZ fund for use in the development district. This is a process known as tax increment financing (TIF). The length of time a TIRZ exists can vary, but they typically last for a period of 20 to 30 years. Chapter 311 of the Texas Tax Code statute, the section of state law that regulates TIRZ creation and operation, is also known as the Tax Increment Financing Act.
Each TIRZ has a board of directors, appointed by the City Council. The boards adopt the TIRZ finance and project plans, review projects, and make recommendations to the City Council. In addition, each TIRZ is required to submit an annual report to the Texas Comptroller of Public Accounts detailing the previous years activities and financial performance.
TIRZ Number One (Downtown TIRZ)
On December 7, 2010, the Denton City Council adopted Ordinance 2010-316, designating and describing the boundaries of Tax Increment Reinvestment Zone Number One (Downtown TIRZ) to provide the public infrastructure necessary to encourage redevelopment in downtown.
The Downtown TIRZ took effect on January 1, 2011, and will terminate on December 31, 2041, or when the budget of $24.8 million has been reached. The City of Denton is the sole participating jurisdiction.
The City's participation is as follows:
- Years 1 to 5 100%
- Years 6 to 10 95%
- Years 11 to 20 90%
- Years 21 to 30 85%
TIRZ Number Two (Westpark TIRZ)
On December 17, 2012, the Denton City Council adopted Ordinance 2012-366 designating and describing the boundaries of Tax Increment Reinvestment Zone Number Two for an industrial district of Denton, Texas; establishing the duration of the Zone; establishing a Tax Increment Fund; and establishing a Board of Directors for the Tax Increment Reinvestment Zone. The City's second TIRZ consists of approximately 800 acres and is located north of Airport Road. This industrial area (Westpark) lacks the public infrastructure necessary to encourage development.
The Westpark TIRZ took effect on January 1, 2013, and will terminate on December 31, 2036, or the date when all project costs are paid and any debt is retired, whichever comes first. It is estimated that the TIRZ would generate approximately $14.3 million over a 25-year period for infrastructure improvements. The City and Denton County will contribute $10 million and $4.2 million into the TIRZ fund, respectively.
According to the Finance Plan, the City would retain $43.9 million and the County would retain $18.8 million of real and business personal property revenue over the life of the TIRZ.