Terrell moves to annex Fairfield MUD area, creates Tax Increment Reinvestment Zone to fund future roads and utilities

Terrell, Texas — The Terrell City Council on April 8 advanced a package of measures to bring large tracts of the Fairfield Municipal Utility District (MUD) into the city and to create a tax increment reinvestment zone (TIRZ, called Reinvestment Zone No. 5) to finance future public infrastructure.

Why it matters: The actions together set the legal and financial framework the city expects to use to support major industrial and distribution development along Airport Road and the east side of town without issuing general-obligation debt. The developer and the MUD would construct roads, drainage, water and sewer; a portion of the incremental property tax revenue from the area (the tax increment) will be used to repay those public improvements over time.

What the council did: Council approved multiple related items during the meeting: - Ordinance 3091: Established light-industrial zoning for 282.42 acres that will be annexed into the city contingent on execution of a development agreement. The vote was 4–1 in favor. - Ordinance 3103: Formally designated Reinvestment Zone No. 5 (the TIRZ) with the boundaries, board and project/finance plan. The council appointed the same TIRZ board that oversees existing zones and set the proposed term and percentage capture in the plan. The vote was unanimous. - Resolution 2217: Authorized the city’s consent to annexation of the 276.6-acre inland portion of the MUD and related findings; the resolution passed unanimously. - Ordinance 3102: Expanded the city’s extraterritorial jurisdiction in a small area so the entire TIRZ boundary is either in city limits or the ETJ. That ordinance passed unanimously.

Developer presentation and staff analysis: City staff and the developer presented maps, a draft project and finance plan and a spreadsheet showing taxable-value projections. City staff said the full project cost estimate included roughly $400 million in potential public improvements within the zone; the plan assumes incremental property-value growth of about $2 billion across the TIRZ area and proposed TIRZ captures and percentages to repay infrastructure over a defined period.

Public comment and discussion: The council held a public hearing on the TIRZ. Supporters, including representatives of the development firm, said voluntary annexation and a TIRZ are tools to ensure infrastructure is built to city standards and to keep development inside the city’s regulatory framework. Tyler Lowe, a representative of a prospective tenant or owner, said the designation matches the city’s future land-use plan and helps deliver necessary materials and capacity.

Opponents did not mount a campaign at this hearing, though council members asked to see detailed traffic and phasing analyses before construction plan approvals. Several council members emphasized that the thoroughfare plan and a future alignment to connect 429, Airport Road and Wilson Road will be long-range projects and not immediately built; the TIRZ is designed to fund infrastructure as the district develops.

Next steps: Staff will finalize the project finance plan and the TIRZ board will meet to consider next steps; developers will work with city staff on annexation steps and subsequent construction plan and permitting items, including traffic impact analyses and drainage studies. The MUD will remain in place as a financing and maintenance vehicle for certain improvements, while water and sewer infrastructure will be conveyed to the city.

Ending: The package gives the city a financing pathway to support significant east‑side growth while keeping critical infrastructure under municipal standards and oversight. Council members asked staff to track environmental, traffic and public‑safety impacts as development proceeds.