Construction is booming in Southlake.
A Trader Joe’s is nearing completion in Town Square and a block away, the walls are going up Park Village, a huge retail center that will include such upscale stores as REI, Orvis and The Fresh Market grocer.
Southlake Development Director Ken Baker said the growth is comparable to the 1990s and mid-2000s, when all of Tarrant County saw huge jumps in property values.
And now those numbers are back — in Southlake and across Tarrant County.
Net taxable property values in Tarrant County increased 5.3 percent from last year, the largest year-over-year gain since the economic downturn in 2008.
With only a few exceptions, almost every city and school district in the county saw a healthy increase thanks to new construction and residential and commercial properties selling for higher prices.
Besides Southlake, big gains were seen in Crowley, Haslet, Keller, Mansfield, Forest Hill and the Hurst-Euless-Bedford, Eagle Mountain-Saginaw and Northwest school districts.
“I think it goes to show that there’s an established trend, that this economy is growing faster than just about anywhere else in the United States,” said Tarrant County Administrator G.K. Maenius.
Overall, Tarrant County’s net taxable value, which takes exemptions into account, rose by nearly $6.8 billion, according to certified tax rolls released by the Tarrant Appraisal District.
“We just follow what the economy does. As buyers and sellers and investors began to operate this year, we follow what they do and we adjust values according to what the market is indicating,” said Jeff Law, the Tarrant Appraisal District’s chief appraiser. “I was expecting us to do OK, but I had no specific expectations about what the percentages would be.”
In Southlake, values increased 6.1 percent while the Carroll school district went up 7.9 percent.
“The certified values don’t alter any of our projections but it’s a good, solid number,” Southlake’s Chief Financial Officer Sharen Jackson said. “Over 40 percent of the growth was due to new construction in the city.”
Good news for budgets
The appraisal district released the certified tax rolls to cities, schools and other taxing entities on July 23 . The data is used to help the local governments plan their budgets for the upcoming fiscal year.
“It should ease some of the burdens on their budgets, which will mean a little more revenue to the taxing entities themselves,” Law said. “Some of them may be considering lowering the tax rate.”
Though the official deadline has passed for people to protest their property values, Law said the certified taxable values could drop slightly pending a few outstanding protests.
After three years of modest value increases ranging from 1 to 2.4 percent, Tarrant County’s overall economic recovery appears to be picking up the pace. Part of that is new construction, with the addition of 5,534 residential and 201 commercial accounts. Even existing properties are largely seeing a boost. Home values, for instance, are up about 8 percent countywide.
“We are seeing sales prices in the residential market on the rise. If you talk to local realtors, you will find houses are not staying on the market very long. The demand is exceeding supply. It’s causing a very strong residential real estate market,” Law said.
Houses aren’t the only properties experiencing an upswing in value. Fewer commercial properties are standing empty and rental prices for office and retail space appear to be on the rise, Law said.
“We are seeing retail spaces that were once vacant filling up again. That’s an indicator entrepreneurs are opening businesses. We are seeing warehouse spaces being occupied that had once been vacant,” Law said. “We are seeing rents go back up. Owners had made some concessions trying to keep tenants in buildings when the economy went bad but now rents are going up. That’s a sign that there is demand for office and retail properties.”
The county’s mineral values are still nowhere near their peak value of about $5 billion when natural gas prices were higher, Law said, but they have increased from $2.4 billion last year to $2.9 billion this year.
Big boost for Fort Worth
Fort Worth’s value grew 5.8 percent to $45.9 billion, a number that will help as officials set the 2015 budget.
Kate Beck, assistant director of financial management services for the city, said their new revenue projection after receiving the final appraisal districts’ reports is an increase over what the city had originally budgeted.
For 2015, Fort Worth should bring in about $22 million more in property taxes compared to the previous year, Beck said. In 2014, the increase was only $2.5 million.
She said officials do not intend to increase the tax rate, which has been at 85.5 cents per $100 of assessed value for several years. That amounts to $1,282.50 in property taxes for a home appraised at $150,000.
“What we would really like to focus on is decreasing our use of one-time revenue to balance the budget and the increase will help in that regard,” Beck said.
The city is scheduled to present the budget to City Council on Aug. 12, and Beck said it will be balanced.
Although property valuations are up this year, the city has also seen substantial growth, with a 31 percent increase in new accounts, according to the Tarrant Appraisal District report.
Randle Harwood, the city’s planning and development director, said the increase in building permits being issued are promising for continued growth.
Harwood said they are seeing the most growth in far north Fort Worth in the still-booming Alliance Corridor. Growth is also expected to be substantial in south Fort Worth, with the recent opening of Chisholm Trail Parkway. A Canadian developer, Walton Group of Companies, announced in June and mid-July that it bought about 2,000 acres straddling the parkway, about half in Fort Worth city limits.
What goes up ...
“Fort Worth, unlike further east, we still have a lot of available land at fair market prices,” Presswood said. Areas like Alliance “are going bananas” and he doesn’t see that growth tapering off anytime soon, especially with the expansion of Interstate 35W.
Still, he cautioned that the increase in property values could slow development as property owners recover from paying more in taxes.
“Growth is always good. It typically … leads to more opportunities. But those opportunities also get expensive and so it sometimes also levels the playing field,” Presswood said.
“You get the big tax bill and you have to make that up somehow … So that can actually slow down some development, because you have to catch up and build the capital before you can move to other projects,” Presswood said.
North Tarrant County
Haslet, which has roughly doubled in size to 1,600 in the past 20 years, saw the greatest growth in Tarrant County, with values going up 27.23 percent.
Mayor Bob Golden said the spike in values can be tied to last year’s opening of an Amazon fullfillment center.
He also said it doesn’t take much to shoot up the values in the semi-rural city, which sits west of Interstate 35W in the Alliance Corridor.
“Haslet, much like most of the cities in the Metroplex, is seeing the upturn in the economy,” he aid. “From a residential standpoint, to build 15 or so homes in a year that’s big news for us.”
The Keller school district saw had a 7.6 percent growth in taxable values, from $12 billion to $12.9 billion.
Mark Youngs, chief financial officer, said the increase came from both new construction and a boost in existing property values.
District officials had factored most of that growth into their planning for the 2014-15 budget but would have about $250,000 in additional funds. Youngs said they plan to use the extra money to help pay for the federal health care program.
Unlike other municipalities, school districts do not see big boosts in daily operating budgets from tax growth. The state determines district funding on a per student amount for maintenance and operations. While the growth does not have a major effect on daily operations, it does help on the bond side, Youngs said.
“It helps pay debts more quickly or it can create more capacity within a bond,” he said.
The Northwest school district, which is still one of the fastest growing in North Texas and which will open its third high school this year, had a dramatic increase in taxable values of 10.5 percent in Tarrant County (from $4.4 billion to almost $4.9 billion) and by more than 15 percent in Denton County (from $4.9 billion to almost $5.7 billion).
Arlington saw a 4.2 percent increase, or nearly $776 million rise, in net taxable value.
However, a portion of that growth was in four of the city’s tax increment reinvestment zones — the entertainment district, downtown, the Arlington Highlands shopping center and the Viridian master planned community — meaning increased tax revenue will go toward infrastructure projects for those special districts and not the general fund.
Even without the money going into the reinvestment districts, Finance Director Mike Finley said Arlington still expects the property tax revenue increase to be close to the 3.4 percent projected for the upcoming budget year.