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Staff briefs board on how tax-increment reinvestment zones (tiers) work and Amarillo's Center City goals
Summary
Tiers staff gave a state-and-local overview of tax increment financing: how captured value is funneled into a TIF fund, statewide zone statistics, and the Center City tiers’ goals, progress and long-term commitments, including projections and debt obligations.
Drew, a tiers staff member, told the Center City Tax Increment Reinvestment Zone No. 1 board that tax increment reinvestment zones — referred to locally as "tiers" — capture increases in property appraised value inside a defined area and funnel the increment into a tax increment fund intended to spur further investment.
Using a simplified property example, Drew showed how a base-year appraised value is preserved for taxing entities while post-improvement value growth is captured as increment and directed to the TIF. He emphasized that the approach is not an additional tax but a timing mechanism: most taxing entities delay captured increment to the TIF rather than losing revenue, though school districts typically do not participate financially in these zones.
Drew cited 2023 state comptroller data showing 477 active zones in roughly 250 Texas cities and described the most common public projects (road work, water/sewer/drainage) and the largest categories of expenditures. For Center City tiers specifically, he noted the zone was created in 2006 with a $139 million base value and that the city extended participation terms in 2022 so that the zone now runs through 2056 with a stepped participation rate beginning in 2037 for some taxing entities.
The presentation included the board’s project and financing plan goals — a 1,200-room hotel target, residential-unit targets, and several investment goals — and progress toward those goals as of early 2025 (for example, roughly 821 residential units achieved of a 2,100-unit goal). Drew also reviewed outstanding obligations tied to certificates of obligation and loan agreements and presented ten-year revenue projections assuming 3.5% annual growth.
Drew concluded by saying the board’s existing agreements are largely performance- and time-bound, and he invited questions about how the tiers have been used historically and options for updating the project and financing plan to reflect the extension to 2056.
