Increased property values from investments in downtown - including a proposed $12 million downtown loft development on the old King Chevrolet property - soon will be captured into a fund for other projects to help the area revitalize.
After more than a year of discussion, a proposed downtown reinvestment zone will soon be re-established.
Reinvestment zones involve snapshotting the property tax value on an area and capturing money from any increased value above that threshold into a fund, which can be used for improvement to the area or to help spur development in an underdeveloped or blighted area.
The downtown reinvestment zone includes 574 acres, from Front Street to Gentry Parkway, and from Palace Avenue to Beckham Avenue.
There are three agencies that can participate in the reinvestment zone - Tyler, Smith County and Tyler Junior College.
The city of Tyler is participating by contributing 100 percent of its property value increase over the set baseline for the entire 20 years.
Smith County Commissioners approved a different level of participation. The county will participate with 50 percent of increased value for years one through five, and 75 percent in years six through 20.
TJC has been offered the same deal as the county, which is set to go before the college’s board of trustees in late May, said City Manager Ed Broussard.
It will then go before the Tyler City Council for final approval in June, he said.
This is the second reinvestment zone in the downtown area.
The first was created in 2008, just before the Great Recession. Since then, many properties in the area went nonprofit and off the tax rolls, causing values to go below the established baseline. No money, therefore, was captured from growth.
In April 2016, the city hired a firm to delete that low-performing reinvestment zone and start over, which would create a new baseline for growth.
The city has not released what that baseline valuation is as of the current tax year. The fund generated from the zone would be managed by its own board.
An agreement was taken to the county in June 2016, but the county had reservations about its level of participation.
Since then, former County Judge Joel Baker resigned, and the Commissioners Court was in limbo until it appointed Nathaniel Moran to fill the spot.
Broussard said the city held off on discussions and negotiating new terms until Moran had time to get comfortable in his new role.
The previous agreement, which was not re-approved, included 100 percent participation over a 30-year term. The participation and length were negotiated down, and the county was given an extra person on the zone’s board of directors.
“We had a transition there,” Broussard said. “It hasn’t affected anything other than pushing back the timeline of the reinvestment zone. We haven’t had any major changes to downtown in regard to appraisals or new property going back on the tax rolls.”
But, now is a good time, Broussard said.
The city is working to close a deal to sell a portion of the old King Chevrolet property, at the intersection of Erwin Street and Bonner, to a private developer that plans to put in condos with some retail space. That is a $12 million project, according to its developers.
There also are parties interested in other parcels of the King Chevrolet property for a small hotel, but that deal is still in negotiations and few details have been released.
Smith County recently hired a firm to market and potentially sell the old Carlton hotel, at the intersection of Elm Street and Broadway Avenue.
If sold, the deal would add millions of dollars of property value back to the tax rolls.
Other notable changes since the 2008 agreement includes the city’s addition of a parking garage and the city selling the Fair and Lindsey buildings, all of which is at the intersection of Broadway and Elm, across from the Carlton building.
On Oakwood Street, on the east side of downtown, Tyler renovated an aging building into the Innovation Pipeline, a makerspace and place for collaboration and mentoring among the business and entrepreneurial community.