Rayzor Investments has asked the city for a special taxing district — a tax-increment reinvestment zone — on about 700 acres of industrially zoned land on Denton’s west side.
The City Council received a briefing on the request during a work session Tuesday. The matter has been discussed by the city’s Economic Development Partnership Board almost monthly since January.
Rayzor Investments has told the city it plans to spend about $10 million building roads and utilities in order to begin developing more of the land as an industrial park, according to Linda Ratliff, the city’s economic development director.
Rayzor would like the city to issue a bond to reimburse that investment after property values increase and the city is collecting more property tax in the district. Rayzor also has requested that the county participate in the district, which means both city and county property taxes could be used to repay a reimbursement bond.
Ratliff told the council that without the road and utility improvements the city may have a harder time attracting new businesses. Some cities offer not only land with roads and utilities, but also “certified sites,” with permits ready to go.
“We are running out of land in the industrial areas that we can offer to prospects,” Ratliff said.
If negotiations lead to an agreement, Ratliff said, the city could establish the district in December and use the property values that month as the base. Any increase in property values after December would go partially to the district and repay the reimbursement bond.
Ratliff told the council that Rayzor would be taking a risk by building the roads and utilities and waiting for reimbursement.
“But that also gives them encouragement to market the property,” Ratliff said.
Some of the companies that could build or relocate there could become customers of the city’s proposed new power plant in that area, Ratliff said. City leaders sought and received legislation granting the authority to build the limited-purpose utility last year.
If formed, it would be the city’s second tax-increment finance district. The city formed one to spur downtown development in December 2010. The city placed about 400 properties in and around the Square and central business district and appointed a seven-member advisory board to help decide the projects that will receive funding from the district. The downtown district was expected to capture about $25 million over 30 years.
The district at the industrial park could capture between $13 million and $14 million over 25 years, Ratliff said.
In a separate written report to the council, Ratliff cautioned the council to examine any additional incentives it might offer to attract certain companies to the area, since it could affect the amount of tax money going to the district.
Manufacturers, for example, could be better candidates than other kinds of businesses because they bring jobs and can bring more taxable value in personal property, she said.
Council members told city staff that they were comfortable with them continuing discussions with Rayzor Investments about the district, with some caveats.
“I may contend with the terms as this was originally presented,” council member Chris Watts said.
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