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Commission hears first reading of Tax Increment Reinvestment Zone No. 3 project and financing plan
Summary
Consultant Natalie Ayala presented the project and financing plan for TIRS (Tax Increment Reinvestment Zone) No. 3 covering roughly 200 acres in southern Kingsville; the zone has a 30-year term and the city’s participation rate is 50% of real property increments. The item was introduced for formal consideration on Feb. 10.
The Kingsville City Commission received a first reading of the project and financing plan for Tax Increment Reinvestment Zone (TIRS) No. 3 on Monday.
Natalie Ayala of Pettit and Ayala Consulting told the commission the zone covers approximately 200 acres, is noncontiguous and includes the South Wastewater Treatment Facility. She said the zone was created in December 2024 with Jan. 1, 2024 as the base year and a 30-year term. The city’s participation rate, Ms. Ayala said, is 50 percent of any real property tax increment generated above the 2024 base.
Ayala presented a projection of anticipated development within the zone — a mix of retail and hotel uses — estimating roughly $68 million in new taxable real property value over the 30-year life of the zone, which she said would produce about $11.7 million that could be directed into a TIRS fund under chapter 311 of the Texas Tax Code. She emphasized that only real property increments (not sales or business personal property taxes) are eligible for TIRS deposits and that projects within the zone must apply for reimbursement or development agreements; inclusion in the zone does not by itself guarantee public funding.
Commissioners asked how average property owners would learn they were within the zone. Staff replied that public hearings and notices have been held and that property owners would generally contact the city if they wished to pursue a development incentive. Staff clarified that an owner’s tax liability does not change as a result of inclusion in the zone; the mechanism changes how incremental taxes are accounted for, not the amount owed by the owner.
The TIRS board recommended approval earlier the same day; city staff and the consultant said the commission would consider a related ordinance at its Feb. 10 meeting for further action.
