As with any city project, how it is funded is of utmost concern to all residents. The plan we established for redevelopment will not put the citizen’s taxes at risk. Should you have further questions about how
the funding process works, please contact officials at City Hall.
| Will Nassau Bay homeowners be required to cover the costs of redevelopment? |
A: No. Homeowners’ property taxes will not be used for redevelopment efforts.
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| How will the City fund the new development if it does not use homeowners’ property taxes? |
A: The City formed a Tax Increment Reinvestment Zone (TIRZ) over the commercial areas of Nassau Bay to cover public improvement costs. Funding for the development’s public facilities and infrastructure will come from the TIRZ and does not involve homeowners’ property tax dollars. The end result is reduced homeowners’ tax rates, not increased taxes. In anticipation of increased values due to redevelopment, City Council reduced the tax rate for the City by 2.445 cents in 2007.
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| What is a Tax Increment Reinvestment Zone (TIRZ)? |
A: Authorized by Chapter 311 of the Texas Tax Code, a TIRZ is an economic development tool to help finance public capital improvements to promote development or redevelopment in a specific geographic area. The improved tax revenue of a TIRZ is separated from the City’s required property tax revenue base, and is used to pay for the cost of public improvements within the TIRZ, or to reimburse a developer for the cost of public projects that are funded by the developer.
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 TIRZ Area |
| What is the benefit of a TIRZ? |
A: The City will only fund improvements if the developer accomplishes his work and his property values grow to produce the necessary tax increase. The TIRZ is entirely performance driven. The upfront costs are incurred by the developer. At the end of the agreed-upon TIRZ period, all tax revenue goes to the city.
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| Is a TIRZ a gift to the developer, and is the developer required to pay taxes if the city is giving the developer tax money? |
A: No. A TIRZ is not a gift. It requires the developer to front all the costs of developing the infrastructure. The developer must pay the required property taxes and is only repaid from new tax income in excess of the baseline. At the end of the TIRZ contract, all future tax revenue reverts to the City.
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| What are the developer’s requirements as part of the Nassau Bay TIRZ? |
A: The developer must create enough taxable value on the ground in the TIRZ to generate the increased tax revenue to repay the developer’s out-of-pocket public improvement costs.
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| Is my home in this TIRZ? |
A: There are no single-family homes, town homes or condominiums in the TIRZ. The Nassau Bay TIRZ covers the same area as the NASA Area Management District and includes all of the city’s commercial areas, churches, apartment complexes, and some parks and conservation areas.
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| Who administers the TIRZ? |
A: The TIRZ is administered by a Board of Directors appointed by the City Council. The Board drafts a Project and Financing Plan for recommendation to Council, evaluates projects in compliance with the plan, and recommends development financing agreements and debt to Council. The City Council has the final say on the approval of financial agreements.
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