Terrell council approves three tax-increment reinvestment zones and annexes 712-acre Terra Nova parcel

The Terrell City Council on Oct. 21 approved three tax‑increment reinvestment zones (TIRZs), known in the city as TIRSes, linked to planned subdivisions and development agreements, and voted to annex 712.20 acres that the developer offered to bring into the city.

Council members approved ordinances creating Reinvestment Zone No. 6 (Ordinance No. 3156), Reinvestment Zone No. 7 (Ordinance No. 3157) and Reinvestment Zone No. 8 (Ordinance No. 3158), and later passed an ordinance to annex 712.2 acres associated with the Terra Nova project (Ordinance No. 3155). The actions passed in separate votes: 3156 and 3157 passed unanimously, 3158 passed 3–1, and the annexation ordinance passed unanimously.

City staff described TIRSes as a financing tool that captures tax revenue generated by new development (the “increment”) and re‑invests that increment in infrastructure inside the zone so current taxpayers do not fund new development infrastructure. Raylan Smith, city staff planner, explained that the TIRSes under consideration are paired with development agreements and public improvement districts (PIDs) and are intended to fund roads, water, sewer and drainage needed before houses are built.

Why it matters: Council members and residents framed the votes as a tradeoff between control and capacity. Approving the TIRSes and the voluntary annexation would give Terrell regulatory oversight and a share of future tax revenue from the developments; declining would leave the land outside the city’s control and yield no tax revenue for municipal services. Several residents urged caution about long terms and environmental questions tied to the Terra Nova area.

Key details: - TIRZ/TIRS terms and shares: Staff said most phases are structured as 30‑year terms per phase; some overall TIRSes cover multiple phases and therefore extend longer in total. Hillside (TIRZ/TIRS No. 6) was described as a 30‑year TIRS; another zone described as a 44‑year term (TIRZ/TIRS No. 7); the Terra Nova zone (TIRZ/TIRS No. 8) was presented as a 60‑year aggregate term but with 30‑year treatment per phase. For all three zones staff reported 50% of the city’s M&O (maintenance and operations) increment would be deposited into the TIRS fund for the zone (the remainder of M&O and the base value remain in city funds). Staff said the INcrease in assessed value (the “I” in increment) treatment varies by statute and plan details. - Projected scale: City staff gave order‑of‑magnitude figures in public presentation: TIRZ/TIRS No. 6 (Hillside) was tied to roughly $40–45 million in project costs and roughly $40 million in new taxable value; TIRZ/TIRS No. 7 was described as roughly 505 acres with nearly $190 million in new tax revenue over its term; TIRZ/TIRS No. 8 (Terra Nova) was described as roughly 2,061.61 acres and staff estimated approximately $1.9 billion in revenues and roughly $6 billion of incremental value over the full build‑out projections discussed with the developer. - Annexation: The vote to annex approximately 712.20 acres (Ordinance No. 3155) was a voluntary petition from the property owner(s) associated with Terra Nova. City staff and council emphasized that voluntary annexation brings property into municipal regulation (zoning, building standards and public safety oversight) and supplies tax revenue that the city otherwise would not receive if the land remained outside city limits.

Public comments and concerns: During the public hearings several residents raised health and environmental questions about Terra Nova and nearby agricultural or historical military‑site contamination, and asked for EPA testing and full disclosure before buildout. Gail Surratt urged the council to prioritize emergency medical access and health protections; other residents, including Beto Meza and community groups, said they worried about the development’s effects on neighborhood character and resources. City staff and councilors repeatedly responded that many terms had been negotiated and that the developer had agreed to voluntary annexation as part of the package.

Council debate and vote: Council members engaged staff extensively about the appropriate length of TIRS terms and the proportion of M&O the city would forgo into a TIRS fund. Multiple councilors said they prefer shorter terms; staff and finance advisers said the longer effective terms reflected phased buildout timing across many years and that each phase’s increment would revert to the city after its 30‑year phase concluded. Councilors also discussed connectivity, traffic impacts and the city’s limited tools following recent state land‑use legislation.

Votes at a glance: - Ordinance No. 3156 (create Reinvestment Zone No. 6, Hillside): Motion by Stephanie Holmes Thomas; second Donna Renee Anderson; result: approved, unanimous (yes 4, no 0). (Ordinance text: 3156.) - Ordinance No. 3157 (create Reinvestment Zone No. 7): Motion by Mayor Ronnie Velasquez; second by Stephanie Holmes Thomas; result: approved, unanimous (yes 4, no 0). (Ordinance text: 3157.) - Ordinance No. 3158 (create Reinvestment Zone No. 8, Terra Nova): Motion by Donna Renee Anderson; second by Mayor Ronnie Velasquez; result: approved, 3–1 (yes 3, no 1). (Ordinance text: 3158.) - Ordinance No. 3155 (voluntary annexation of 712.20 acres related to Terra Nova): Motion by Donna Renee Anderson; second by Phil Robinson; result: approved, unanimous (yes 4, no 0). (Ordinance text: 3155.)

What’s next: Staff said any construction plats, PID final plans or development‑agreement amendments would return to council for approval before building permits are issued. Several councilors asked staff to return with additional details about unit counts, financing scenarios and traffic mitigation before construction plats come forward.

Ending: Councilors thanked staff and members of the public for robust debate; staff said they would continue to refine financing plans and report back. The ordinances take effect on passage per the texts presented to council.