The purpose of the inner-city district known as a tax-increment financing zone is to create a growing snowball of money to get redevelopment rolling.

So far, it seems to be working.

In just the past four years, development in the zone has swelled the TIF zone’s annual tax revenues to $4.2 million, up $2 million or 92 percent since 2005. In that time, the TIF zone has spent millions on public improvements and incentives to keep it coming.

Elm Street is part of the downtown TIF zone but has missed out on the redevelopment in the area in recent years. The tax district has funded some public projects at the former Paul Quinn College campus, but TIF board members say they would partner with investors. (Duane A. Laverty photo, file)

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The TIF zone captures all the property taxes from downtown, the Elm Street area and the Brazos River Corridor on value created since 1982. Then it reinvests the money in public improvements in those areas with an eye to inviting more private investment into the area — and more tax base to boost the TIF zone’s coffers.

But when it comes to its goals and its funding criteria, the TIF zone seems stuck in a previous decade, when downtown Waco was a blighted area and city leaders used the fund mainly as an incentive fund for trees and sidewalks around new businesses.

Now the TIF zone board that oversees the fund is looking to change its goals to reflect a new reality. Members say it’s time to use the fund for more ambitious public investments, from public transit to plazas and parking garages.

“We need to think bigger and try to get more bang for our buck,” TIF board chairman Mike Harder said at a board retreat Thursday. He estimated that the TIF zone may have $120 million to $180 million in public money to spend before the district expires in 2022.

The city is well into a yearlong public process, called Imagine Waco, to create a 40-year road map for redeveloping “Greater Downtown” to accommodate tens of thousands of new residents and hundreds of new businesses.

Already, developers have been at work on big projects such as the $80 million Town Square redevelopment and the renovations of the Hilton Hotel and the Roosevelt Tower. Developer Rick Sheldon has unveiled a $500 million proposal to redevelop the west side of the Brazos River for retail, restaurants, hotels, offices and homes.

City Manager Larry Groth told the board Thursday that once the Greater Downtown master plan is completed in early summer, “there’s going to be a huge call for public funds” to help fund its recommendations. He said the TIF board should try to build up its funds for big, strategic investments. The TIF zone already has reserves of about $7 million.

Groth said the TIF board should begin to think of funding its own major public amenities instead of just incentives to property owners that approach the board.

“I would encourage you to be more proactive than reactive,” he said.

Harder said that until the Greater Downtown plan is finished, it would be premature to identify those big projects. But the board appointed a subcommittee led by accountant Robert Sheehy Jr. to revise and update the board’s goals and objectives.

The existing goals and objectives still appear to focus on Brazos River Corridor development, even though the TIF zone was expanded years ago to include downtown and much of East Waco.

City planning director Bill Falco suggested adding several new criteria for the TIF board:

* Support job creation.

* Encourage the development of outdoor gathering places, such as plazas and pocket parks.

* Support the visual and performing arts.

* Encourage a varied transportation system to accommodate pedestrians, cyclists, public transit, cars and watercraft.

Board members seemed to embrace those additions. They also agreed with Groth on the importance of developing the east side of the Brazos, including Elm Street, though the solution remained unclear. Groth said the TIF fund could provide plazas, transportation infrastructure, parks and walkways for the east side but that private developers also need to step forward.

“We need someone to be a real pioneer,” Groth said. “Something has to happen on Elm. The timing may be perfect now. I think what everybody is starting to see is that the potential is so great. Where else can you find land not far from the interstate and the river?”

Board member Dannie Archie suggested spending TIF money on marketing East Waco’s development opportunities.

“What if you had someone who woke up every morning, and all they did all day was eat, drink and breathe development on the east side?” he said. “Downtown is going to take care of itself. But we have to do more to attract development in this area.”

Board member David Sterling said the board should wait until the Greater Downtown master plan is complete before committing to funding a marketing strategy.

jbsmith@wacotrib.com

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