Tyler

By GREG JUNEK
And ADRIENNE GRAHAM
Staff Writers

In the Tyler 21 plan, city officials dedicated an entire chapter to a downtown master plan, in hopes that the tools sketched out within its pages will bring a more vibrant, well-developed downtown atmosphere.

Next month, the city will ask other taxing entities in the area to participate in a tax increment finance (TIF) reinvestment zone, a tool that will capture the revenue from future growth in the downtown area and reinvest it in public improvements.

"This will be a tool to jumpstart an area that may never jumpstart itself," Deputy City Manager Mark McDaniel said.

A Tax Increment Financing district is a creation that will freeze the amount of property taxes paid to the Smith County tax collector's office. As increases in valuation in that area boost revenue - and if tax rates in that area increase over the years - the extra revenue will be put into a special reinvestment fund, instead of going to the city, Smith County and Tyler Junior College, if all three taxing entities opt in to the zone.

Residents and business owners in the TIF zone do not pay any more or less than they would outside the TIF zone; but, as property values rise in that area, more tax money is set aside to reinvest.

McDaniel used the example of the old King Chevrolet building on West Erwin Street and Bonner Avenue.

"If someone put a three-story apartment building there, they would still pay the same amount of taxes to the county as they do now on the empty building. The amount of tax paid on the increased value set by the tax appraiser will go into the downtown reinvestment fund," he said.

The proposed zone would also capture the growth in sales tax revenue. In fact, the sales tax is projected to generate more revenue than the ad-valorem tax.

A TIF district already exists in the West Loop 323 area, near the Tyler Junior College west campus.

"You only need to look at how successful that TIF has been to know this will work," McDaniel said.

The city of Lindale also created a TIF several years ago to boost development in the area around the Tyler Distribution Center near Interstate 20, he said.

McDaniel said city officials are trying to create a more comfortable environment for local and out-of-town investors.

"We (the city) are not looking to become property investors with this revenue. We are looking to provide incentives for investors to build downtown," he said.

McDaniel said money collected in the special fund can be used to improve streets and other public areas downtown.

"We could change the streetscape, put up antiqued signals, build a parking garage or a second square downtown," McDaniel said. "Depending on the plans of potential investors, we can work together to relocate utility lines and improve building facades."

McDaniel said that if the TIF is approved, an improvement plan task force will be appointed to make recommendations to the City Council.

Since the reinvestment fund is being created with the increased value of downtown properties, it will be several years before funds are available for improvements.

"We would not capture anything in 2008, but at the end of the 30-year period we could capture as much as $29 million, based on the growth trends over the last five years," he said.

Two property owners and a person with an interest in downtown both came out in support of a TIF.

"I'm all in favor of it. Having the city behind improvements of downtown is a major step. Property owners cannot do it by themselves," said Allen Bell, president of Allen Bell Property Services, a property management and general commercial brokerage company.

Bell said the reinvestment zone and the TIF-funded projects would be an incentive for developers who would want good public amenities to go along with their property improvements.

David Traff, who co-owns Plaza Tower, noted the funding method is revenue-specific.

"Our taxes will basically go to support what is done in downtown, and as property owners we should see the benefits of that," he said. "We're in favor of it; we're supporters. We encouraged it, and we think it's a good thing."

Martin Heines, who owns seven properties in the proposed reinvestment zone, said he does not see a downside to a TIF.

"I think it's going to be important to spur economic development downtown to have some sort of public investment," Heines said.

He noted establishment of a zone will not amount to new taxation, just a redirection of the revenue generated. And reinvestment of those funds will spur private development.

Also, the city would be funding improvements in a developed area, as opposed to an undeveloped area that has no infrastructure, Heines said.

"It's really more bang for the investment," he said. "That's why it's important to revitalize downtown from a planning standpoint."

The downtown TIF, if approved, would not be the first such district in Smith County.

The Target Distribution Center in Lindale was funded through a loan repaid from revenue from a tax increment refinancing zone created for the center.

Since 1997, the center has helped the city of Lindale's property tax base quadruple, growing at an average annual rate of 14.8 percent, according to information from the Tyler Economic Development Council. The Lindale Independent School District saw its tax base triple, growing at an average annual rate of 11.4 percent during that period.

The Skills Training Center was a joint project of the Tyler Independent School District, Tyler Junior College and Smith County. It provides technical training courses to high school, college and continuing education students in 14 counties.

Since 2000, revenue from the reinvestment zone has surpassed projections each year. The center was completed in 2002.

Erwin Street, which leads into downtown, is set for a lot of improvements. Tyler 21 is packaging a tax proposal to look at pumping money into the downtown area of Tyler. The plan includes new traffic signals, sidewalks, a possible second square and other public areas.
((Staff Photo by Tom Turner))