County creates tax zone for Toll 49

Published on Tuesday, 2 December 2014 20:04 - Written by ADAM RUSSELL,

Smith County commissioners approved a resolution Tuesday creating a Transportation Reinvestment Zone to capture property tax revenue from growth along Toll 49.

The Transportation Reinvestment Zone would collect property valuation increases from development within a two-mile corridor (one mile in each direction from the center line) along the toll road.

Toll 49 is controlled and maintained by the Northeast Texas Regional Mobility Authority.

Initial plans for the zone would have had Smith County and the mobility authority divvy up captured funds. But commissioners have not decided how the revenues would be split, if at all.

The zone was estimated to create $31 million to $41 million in revenue during an initially proposed 25-year lifespan, based on the county’s current tax rate.

A percentage of revenue could go to the mobility authority, which would leverage the tax money to borrow and build additional Toll 49 segments.

There was discussion about the TRZ in 2013. The county held five public hearings regarding the zone but officials put off action indefinitely on Dec. 30 after public backlash against a rush to create it.

“We’re going to continue to study the matter and get input from citizens, and maybe we’ll see some more hearings in the summer,” said County Judge Joel Baker at the time. “But for now, we’re not doing anything with it.”

There weren’t any more meetings. The court discussed the zone briefly in late October this year and no studies have been presented.

“It’s been a year and nothing,” Commissioner Terry Phillips noted Tuesday before the vote. “I just think you have to know and let taxpayers know how it’s going to affect the bottom line before you approve it.”

The next segment slated would connect Interstate 20 to U.S. Highway 69 north of Lindale — the Lindale Relief Route.

County commissioners have said they would dedicate a portion of the revenue to county road projects.

Commissioner Jeff Warr said those details could be worked out and that the most important thing was moving the zone’s creation forward.

The zone is a “win-win for the project and the community,” Warr said. “We can settle the percentages and term later but we wanted to establish the zone before Dec. 31 to start capturing money.”

The county tax rolls are predicated by what is on the books as of Jan. 1, said Smith County Appraisal District Chief Appraiser Mike Barnett. Which means that any new construction, such as within the multi-million dollar Village at Cumberland Park development, since Jan. 1, 2014 would be captured. If commissioners had waited until Jan. 2, 2015 to approve the zone, only revenue from new construction beyond Jan. 1, 2015 would be captured.

The approved site plan for the development includes 12 buildings containing about 500,000 square feet of retail space, 75,000 square feet for restaurants, 58,000 square feet for indoor entertainment and 42,000 square feet for a cinema.

When county officials first began discussing the zone, a 50-50 revenue split between Smith County and the mobility authority for 25 years was proposed.

But a majority of commissioners wanted to reduce the mobility authority’s share to 25 percent or lower and shorten the term of the agreement.

Warr said he would prefer more money go toward expansion of Toll 49. He believes it to be the “most important transportation project in the region” in decades. Warr said the zone would benefit everyone in the county, whether they ever use Toll 49, because development along the toll road would increase revenues for county priorities, including county roads.

Phillips disagrees with dedicating Smith County tax dollars to Toll 49. He said he might be in favor of creating the zone if he had the details, such as how much projected tax revenue Smith County would forgo within various splits with the mobility authority but that no numbers were available.

“I don’t like the idea of passing something without knowing what the percentages will be,” he said. “We need details. Maybe it would change where I stand or where the public stands or maybe it would build a case against it.”

Phillips said the Lindale Relief Route and expansion of Toll 49 would continue without the zone. He cast the lone vote against the resolution.

NET RMA Interim Executive Director Everett Owen said the zone represents “an important piece of the puzzle” and that dedicated revenue could impact future projects’ timeline and financing, but that the Lindale Relief Route does not hinge on the court’s decision.

Owen said the mobility authority would have needed it without a $55 million state grant received in July.

“It’s our intent to move forward with or without it,” he said.

Warr and Commissioners Cary Nix and JoAnn Hampton voted for creating the zone. Baker was not present.

Nix said constituents who have contacted him have been overwhelmingly in favor of assisting Toll 49 expansion. Though he did note that many would rather see Toll 49 expand east to connect Texas Highway 110 to Interstate 20.

“I can see Phillips’ point,” Nix said, regarding the lack of details. “But we’ve got to do something about transportation in Smith County and sometimes you’ve got to give up something to get something.”

Mrs. Hampton recalled how long transportation projects have taken to move from concept to reality. She served on the Tyler city council for seven years before joining the Commissioners Court in 2003.

“We were talking about (some city road projects such as the Grande expansion) when I was on the council. They take forever,” she said.

Mrs. Hampton said approving the resolution just opens up discussions regarding the Transportation Reinvestment Zone and how the captured tax revenue would be divided.