By AMANDA KIMBLE
STEPHENVILLE (November 19, 2016) – Stephenville Economic Development Authority (SEDA) Executive Director John Hubbard has plans for the current fiscal year. They are plans aimed at bringing new businesses and additional jobs to the city.
Hubbard introduced two items to the SEDA board of directors at a public meeting Thursday, and the board supported further pursuit of the establishment of a Tax Increment Reinvestment Zone (TIRZ) and Foreign Trade Zone (FTZ).
TIRZs vary in size. They can span a single city block, share borders with a business or industrial parks or span several acres. The location and size of such zones are determined by local officials and business leaders. Identifying the base area in one in a three-step process that Hubbard said would take up to eight months to complete.
The process also includes determining the area’s base property tax valuation and identifying potential projects and their cost.
Explaining the program to The Flash, Hubbard said a TIRZ does not create a new tax and explained that it all starts with the base tax value.
“As properties within the zone develop and increase in value, property taxes collected over and above the defined base tax value go into a fund that can used for infrastructure, façade improvement programs, landscaping, street-scaping and an array of other improvements, but only within the TIRZ,” he said.
“You take the valuation of the property, which you know generates a certain amount of tax revenue, and promote that area, inviting businesses into the TIRZ,” Hubbard explained. “When new businesses are established, property and business personal property valuations in the area increase. The same area that provided $1,000 in property tax revenue before the creation of the zone then provides $2,000. The additional $1,000 is put back into the zone for improvements.”
Due to the fact that all property within the city is also in Erath County’s jurisdiction, Hubbard said the county’s participation in the program is needed to receive the full benefit of the TIRZ.
Hubbard also said a TIRZ can include any type of businesses, while the establishment of a FTZ would be most beneficial for manufacturers that could avoid certain duties and taxes.
“A foreign trade zone would allow manufacturers to avoid taxes on what’s being built (at their facilities) within the zone,” Hubbard said.
Board member Wendell Hollingsworth, vice president of operations for Fibergrate Composite Structures, said divisions of the company utilize a FTZ, which has a large and positive financial impact.
“These are dedicated areas where goods can land, be repackaged, modified, manipulated, re-labeled, manufactured further and re-exported without the involvement of customs authorities,” Hubbard explained. “They are a benefit to businesses that import components to manufacture finished products for export. We can apply to become an extension of the Dallas/Fort Worth foreign trade zone or create our own.”
Hubbard also said one potential area for the establishment of a FTZ is the area around Clark Field Municipal Airport and the creation of the zone would take a year or longer.