PRESENTER: Presenter
Jeff Jewell, Economic and Community Development Director
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SUBJECT: Title
Public hearing, discussion, and possible action approving the first reading of an ordinance designating a geographic area within the City of New Braunfels as a reinvestment zone for tax increment financing purposes pursuant to Chapter 311 of the Texas Tax Code to be known as Tax Increment Reinvestment Zone Number Five - West End (“TIRZ 5: West End”), City of New Braunfels, describing the property parcels included in the zone, containing findings and provisions related to the creation of the zone, providing a termination date, providing the zone take effect immediately upon passage of the ordinance, providing a severability clause, providing for publication, and declaring an effective date.
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DEPARTMENT: Economic and Community Development
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COUNCIL DISTRICTS IMPACTED: 1
BACKGROUND INFORMATION:
The proposed ordinance would create a Tax Increment Reinvestment Zone (TIRZ) Number 5 in the West End area for a 25-year period. The TIRZ would allow the City to use the incremental increase in property taxes above the base (2025) year collections for designated improvements in the zone area. A TIRZ captures a portion (85%) of the new property tax revenue occurring within the defined zone and making this “Tax Increment Fund” available to assist in financing identified projects. The project categories are identified in the Preliminary Project and Financing Plan (Exhibit C on attached Ordinance). The proposed TIRZ #5 will cover approximately 156.45 acres (including right of way). The 2025 baseline taxable property value of the TIRZ #5 footprint is approximately $91,970,582 and a map is included in the Preliminary Project and Financing Plan (Exhibit B on attached Ordinance). The boundaries as proposed include a majority of the commercially zoned property and less than 20% of the included area is zoned as residential property. Statutory constraints limit the amount of residential property within a TIRZ boundaries to be less than thirty percent (30%) of the acreage.
The Plan fulfills the legal requirements of designating a TIRZ as identified in Chapter 311 of the Texas Tax Code. Notice of the public hearing was published on October 4-5, 2025 in the Herald-Zeitung - at least seven days prior to today’s public hearing.
The recently completed West End Area Plan focused on pedestrian connectivity, public improvements, placemaking, infrastructure upgrades, and the implementation of goals/action items identified in the City’s 2024-2029 Strategic Plan. The TIRZ #5 provides a future source of revenue that can be utilized to address and undertake items identified in the Area Plan like: parks & streetscape enhancements, public infrastructure improvements, parking improvements, and economic development incentives and grants.
The Preliminary Project and Financing Plan calls for 85% of the City’s property tax to be directed into the Tax Increment Fund for a period of 25-years. No other taxing entities are contributing a portion of their tax increment into the fund and no sales tax is proposed to be directed into the fund.
The TIRZ #5 boundaries, increment percentages, and Plan details can be amended with action by the (yet to be created) TIRZ #5 Board and City Council. The City Council, after adopting the Preliminary Project and Financing Plan (detailed in the attached Ordinance as Exhibit C), will consider the adoption of a Final Project and Financing Plan and appoint seven (7) members to the mandated TIRZ #5 Board.
The City Council’s action will establish the TIRZ #5 boundaries, establish the initial incremental percentages to the fund, and forecast the anticipated revenues and project expenditures. No commitments or obligations to expend funding or address projects/initiatives are being considered with the first reading of the ordinance. Future project expenditures would be recommended by the future board and approved by City Council.
ISSUE:
Public hearing and first reading of an ordinance establishing TIRZ #5 - West End.
STRATEGIC PLAN REFERENCE:
☒Economic Mobility ☐Enhanced Connectivity ☐Community Identity
☐Organizational Excellence ☐Community Well-Being ☐N/A
FISCAL IMPACT:
Over a 25-year term, TIRZ #5 is anticipated to generate approximately $4,181,265 in increment for the fund; providing funding to projects as specified in the Preliminary Project and Financing Plan.
Recommendation
RECOMMENDATION:
Staff recommends approval of the first reading of the ordinance to establish TIRZ #5.