City establishes Tax Increment Fund

By ABBEY KUNKLE
Special to the PRESS

January 15, 2015

This week the South Padre Island City Council held two special meetings to approved Ordinance No. 15-01 amending Ordinance No. 11-19 to clarify boundaries and rename the city’s Tax Increment Reinvestment Zone, more commonly referred to as the “South Padre Island Development Project,” as “Reinvestment Zone Number One City of South Padre Island” and to establish a Tax Increment Fund.

The fund will be used to support the development and redevelopment of the City supporting financing of costs associated with the construction of public improvements which will include Convention Centre improvements, Entertainment District improvements, and infrastructure improvements on Padre Boulevard. The original Tax Increment Reinvestment Zone was created by Ordinance 10-34 in December of 2010 and has since been amended for minor changes. The previous zone was determined too small to define the area, so the council approved a new map that covers a larger scale to more clearly define the boundaries that were deemed appropriate.

Areas encompassed in the Zone include the Entertainment District, the Convention Centre, the Padre Boulevard right-of-way, and vacant properties on the Island with less than 30 percent in residential areas. Asst. City Manager Darla Jones noted the reason for including the vacant properties and Padre Boulevard right-of-way is that taxes collected within the Zone can only be spent within the same Zone. The change will allow the city to use those funds toward sidewalks, medians, and other various infrastructure improvements. Mayor Patel added, “The sole purpose of this whole exercise is to provide infrastructure that will then prompt future development. That’s the whole idea.”

The ordinance requires a board of directors for the Zone to consist of eight members including six appointees from the City, one from the Laguna Madre Water District, and one from Cameron County—each for a two year term. The Zone was enacted in September of 2011, and will terminate on Dec. 31, 2026.

The Zone was selected because it is predominantly open or undeveloped land, and because of obsolete platting, deterioration of structures or site improvements substantially impair the sound growth of the municipality. This will be the second amendment to the original ordinance and the city finds that improvements in the Zone will significantly enhance the value of all the taxable property in the Zone and will be of general benefit to the city. The council passed the ordinance at a special meeting on Jan. 13th.

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