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Zoning for the future: Council approves TIRZ tax rate, board
The Sunnyvale Town Council approved the Tax Increment Reinvestment Zone (TIRZ) tax implementation and board selection during Monday nights council meeting.
The council is ready to commit 50 percent of ad valorem and 50 percent of sales tax to the incremental value of the TIRZ zone. The council also created a board with five members who represent the taxing entities funding the TIRZ.
The board consists of two members from the council, Ronnie Henderson and Karen Hill; two from 4A, Bill Metzger and David Carlisle and one from 4B, Mark DeWitt.
TIRZ is an economic development tool that can be used by towns and cities to target certain areas for economic growth. By placing money from taxes collected and other funds into the TIRZ the town would be able issue money from it, much like bonds, to build and improve infrastructure in the set zones to attract business capitol.
Sunnyvale decided the area surrounding US-80 and Collins area as the TIRZ boundary and approved it in December of 2011.
The way the area works is the taxing entities agree to supply portion of the taxes they receive to the zone in an effort to either fund infrastructure projects for commercial growth of the area or to attract lenders so the town can buy debt to fund those projects. The value determined is based on the value of incremental change the land value has in its established year, in this case 2011, and the value this year.
Town Manager Scott Campbell said they will always receive the full tax value of the area selected which is near $67 million in value, with little sales tax at this point in time. He said should the value of the land increase by $1 million by next year than the town gets the full $67 million worth of taxes and then puts 50 percent of that incremental value, the $1 million increase, into the TIRZ.
"This was a big economic step," Campbell said. "The council basically said they have other things that need to be watched so it is easier to adopt the 50 percent now and if the board comes back and says they need more than we can change the amount that goes into the TIRZ at that point."
Henderson said that was something he hopes the council considers as he believes the TIRZ will be an excellent way to support growth in Sunnyvale.
"I wanted to see more of that money stay in the TIRZ," Henderson said. "We focused on staying at the 50 percent sales and 50 percent ad valorem and until we get some money built in there we are not going to see a lot of money put in the zone at the 50 percent level. "If we raised it from 50 percent to 80 percent that is another $2.5 million of lending power we can go get and cut back the pay times by 7 to 8 years. If this is going to be the engine to help drive the growth of Sunnyvale not funding it does not make sense."