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Arlington (Texas) Highlands, an 80-acre retail and residential development, is a prime example of how tax-based incentive financing can pay off — and then some, says Richard Greene, a former Arlington mayor.
The city had 320 acres of mostly vacant land that, without publicly funded infrastructure development, was destined to stay that way, Greene notes in an op-ed piece in the Star-Telegram. So in 2005 the city voted to create a tax-increment reinvestment zone, whereby property tax revenues were used for such things as widening a road or building a bridge across a nearby highway.
Arlington (Texas) Highlands The 80-acre retail-residential development increased the site's taxable value from zero to $230 million a year
City officials predicted the development would increase the site’s taxable value to upwards of $130 million. In the event, this has boosted the taxable value to $230 million. “That’s an increase of 1,250 percent over what it was worth when the enterprise zone was created,” writes Greene. “Meanwhile, the Highlands kept adding more shops, stores, restaurants and entertainment venues as the project expanded, generating greater tax revenues and jobs.”
“Without the ability to incentivize this development by temporarily using property tax revenues generated by the project to support its public improvements, there’s little reason to believe the land would be more than a field of Texas weeds”
In fact, the project has been so successful, the City Council voted to end the arrangement seven years early. That tax revenue is now going into the city’s general fund, paying for city services and infrastructure maintenance.
“Without the ability to incentivize this development by temporarily using property tax revenues generated by the project to support its public improvements, there’s little reason to believe the land would be more than a field of Texas weeds,” Greene says. Such tax incentives are a valuable tool in the hands of local authorities, he argues.
By Edmund Mander
Director, Editor-In-Chief/SCT