The city of Palmview will soon be equipped with a new tool to help fund economic growth in the city.
The Palmview City Council unanimously approved an ordinance March 21 to establish a Tax Increment Reinvestment Zone, or TIRZ, for the city.
During the meeting, the city council voted to allow staff to receive proposals from companies or individuals that would handle the process of creating the TIRZ.
Michael Leo, director of Hidalgo County Economic Development, explained to the board how a TIRZ is a designated zone within the city that will collect the taxes generated in the zone. Those funds will be reinvested for economic development projects without the money going into the city’s general fund.
“The TIRZ will freeze the value of the zone so more businesses will feel incentivized to develop in the area,” Leo said.
As more development takes place, the taxes on the increased property values go into the TIRZ account, while the city does not give up any existing taxes.
At the meeting, Palmview City Manager Ramon Segovia explained to the council they will need to determine who will control the TIRZ, the city or the Municipal Development District (MDD.)
“Whoever will pay for it will be the one who oversees it so my recommendation is to let the MDD oversee it,” Segovia said. “Even if the MDD controlled it, it’d still be under the umbrella of the city, we’re hoping to get proposals from three or four different companies.”
Segovia told the board the TIRZ would ultimately provide the city with more flexibility in providing incentives for new development to come in, creating more business and revenue for the city.
According to Leo, the TIRZ would be able to fund “quality of life” projects such as street, drainage, sewage and water improvements. The TIRZ can also fund parks and new public buildings such as a library and a new city hall.
“It all depends on whether or not you have the development to create it,” Leo told the board. “It’s a valuable resource that’s really for areas that wouldn’t otherwise get developed so it’s really more fitting in rural areas.”
During the meeting, Leo brought up the TIRZ for the neighboring cities of Mission and Peñitas. According to Leo, the Peñitas TIRZ is so successful that the city is in the process of going out to sell bonds. The Mission TIRZ meanwhile has been used to fund several drainage and road expansion projects as well as several buildings such as the fire and police substation on 4500 S. Glasscock Road.
“When you have a place like Palmview with the potential for growth, it just needs a tool or resource to help that growth be successful,” Leo said.