Johnson County approves amended TERS agreement with Cleburne, excludes county participation on residential parcels

Johnson County commissioners unanimously approved an amended joint participation agreement with the City of Cleburne to extend and reshape Tax Increment Reinvestment Zone (TERS) No. 1 into a revised TERS 1A, with the county limiting participation to parcels inside the city limits and excluding county participation on residential properties.

The county judge framed the vote as a step toward managed industrial and commercial growth in the Cleburne area, saying the proposal was “a kind of big visionary kind of idea” from the city that opens substantial area for future development. The agreement before the court removes county participation on residential parcels and staggers county and city contributions across a tiered schedule, officials said.

Natalie Ayala, a consultant with Pettit and Ayala, presented the amended map and financial projections, saying the blue TERS 1A boundary will have an estimated 1,688 acres and a 30-year term to 12/31/2055. “The county participation what we are proposing with this amended participation agreement is that within the city limits, the county would initially participate at a 100% of real property, but outside of the city limits, the county would not be participating,” Ayala said.

Ayala provided financial projections the consultant said were based on anticipated industrial, retail, office and multifamily development. She identified an estimated new development taxable value in 2041 of about $996,000,000 and showed anticipated total tax generation of roughly $726,000,000 across taxing entities; the consultant estimated about $64 million of that increment attributable to Johnson County under the proposed structure.

The amended financing plan uses a tiered approach to participation: each entity would contribute 100% of increment up to $25,000,000, step down to 75% at higher tiers, then 50% and 25% as values increase, with the county’s contribution limited to properties inside city limits and excluding ETJ and unincorporated parcels until they are annexed by the city. Project categories and approximate allocations were identified (streets and intersections, utilities, pedestrian enhancements, open space and economic development grants). Ayala noted the county’s money cannot be used for city-only economic development grants “by statute.”

County legal staff confirmed the amended joint participation agreement complies with Chapter 311 (TERS law) and counsel did not object to approval. Commissioners discussed how the change will focus TERS investments on the areas expected to generate significant development and infrastructure needs.

The court moved, seconded and approved the agreement and authorized the county judge to sign. Motion: approve the amended joint participation agreement for TERS 1A with the City of Cleburne; Mover: Commissioner Bailey; Second: Commissioner Woolley. Vote: unanimous (approved).

The agreement and amended project and financing plan will next go to the TERS board and Cleburne city council for action in December as scheduled; only after those approvals will projects be eligible to seek TERS funding.