Item Coversheet


Meeting Date: 8/29/2023

Item Creation Date:

Alcorn Financial Policies Amendment

Agenda Item#: 54.


WRITTEN Motion by Council Member Alcorn to amend Item 55 below as follows:

NOTE: The following Item may be moot contingent upon passage of Item 55 below

N. Tax Increment Reinvestment Zone (TIRZ) Policies

The Mayor’s Office of Economic Development (MOED) will manage, administer and govern the City of Houston’s Tax Increment Reinvestment Zone (TIRZ) Program in accordance with the guidelines defined in the TIRZ Administrative Procedures developed in 2023 and in alignment with the TIRZ Policies reflected in this section. The MOED will be required to present the compliance of items #1-#5 below to the Economic Development Committee on an annual basis if any actions were approved by council in the prior year. For any council-approved action that is noncompliant, the MOED must provide the rationale for noncompliance.

1. Creation: Tax Increment Reinvestment Zones will be considered only when the area proposed clearly demonstrates a nexus between the proposed eligible TIRZ projects and economic growth spurred by new investment within the proposed geographic boundary.  Evidence must demonstrate:

a.   at least 50% projected increase in the Assessed Value from development during the initial TIRZ term life (30 years or as defined in the TIRZ creation document);

b.   clearly defined goals, defined projects and a plan for attracting private investment;

c.   immediate or near term “committed or known” private investment within year one and;

d.   ability to meet stated development and revenue goals reflected in an Economic  Impact Study.

2.   Life Extensions: The life extension of an existing TIRZ will be evaluated and considered for any of the following scenarios:

a.   is required to secure financing for an approved project to expedite construction;

b.   will provide for additional time to complete an approved project;

c.   will generate revenue for projects reflected in a project plan if supported by a planned new investment or;

d.   is needed to leverage new local, state, federal or philanthropic funding.

3.   Termination: Termination will be recommended if:

a.   a TIRZ has either met the objectives defined in the zone’s project plan, or

b.   a TIRZ has “underperformed” and has been unsuccessful at meeting the objectives defined in the Zone’s project plan after 15 years from its creation.

4.   Boundary Adjustments:

a.   Annexations into existing Zones will be evaluated and considered for any of the following scenarios:

                          i.further the objectives of the TIRZ’s project plan;

                          ii.will attract private investment in the proposed area;

                an application to the state or federal housing agency for the development and construction of low-income housing or;

                an application for state, federal, or philanthropic funding for transportation, park or other infrastructure.

b.   De-annexations will be evaluated and considered if the reduction in the boundary will either:

                           i.increase the revenue generated in the area remaining after the reduction, or;

                          ii.increase the City’s capacity to designate other areas for Tax Increment Financing considering the 25% statutory limitation.

5.   Non-Contiguous TIRZ: Non-Contiguous TIRZs will be evaluated and considered on a case-by-case basis where the criteria in Chapter 311 are met. Additional considerations must include an alignment between the area proposed for annexation with the existing TIRZ and the existing TIRZ’s capacity to generate revenue sufficient to meet its project plan objectives and to fund public capital infrastructure in the proposed area that is likely to encourage private investment or spur economic development.

6.   TIRZ Performance: Mayor’s Office of Economic Development Division will engage regularly with each TIRZ Board to assess and evaluate the TIRZ’s performance relative to the goals, revenue generation, and timeline for the delivery of capital projects stated in the project plan.

TIRZs that are either not performing or underperforming to the project plan will be required to provide an action plan that will encourage and attract private investment ultimately increasing the revenue generated within the Zone to construct projects as defined in the project plan.

7.   TIRZ Budgets and Capital Improvement Plans: The Annual Budget and CIP will be presented to City Council for approval only after the operating budget and capital projects have been reviewed and approved by the Mayor or designee, Finance, Houston Public Works, and the TIRZ/Redevelopment Authority Boards.

The budget will only reflect projects with identified funding sources (including existing funding sources or approved future funding sources) and contain a minimal capital reserve as established by the Finance Department.

8.   Debt Authorization and Issuance: The City’s Finance Department and the TIRZ Bond Team will work cooperatively on all bond related matters including “pre-issuance” meetings, appointment of bond-related providers to ensure governance and to benefit from the City’s providers which may have lower issuance cost options.