The Arlington city council, by unanimous vote, has just terminated the so called “tax break” for the expansive Arlington Highlands retail development on Interstate 20.
It was set to expire in another seven years but they decided to end it prematurely and put its property taxes into the city’s general fund instead of investing in the enterprise zone created for the project.
Rescinding or gutting the legislation that allows cities to use economic development tools such as enterprise zones is already promised by some lawmakers who want to deny cities and counties the popular public-private means to spur business investment and create jobs.
So, did Arlington leaders decide to abandon the Highlands project to appease these anti-business forces?
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The answer to that question produces what should be Exhibit One in the efforts by cities across the state to save their powers to grow their communities for the everlasting benefit to their citizens.
A little background on this project will explain just how valuable the current provisions of state law are to local governments and why they should be protected and not weakened or eliminated.
The city recognized that 320 acres of mostly vacant land at the intersection of the Interstate Highway and Matlock Road had the potential of being a location for significant economic benefits if developed.
However, the lack of public infrastructure to support such development meant it would just sit there on the tax rolls as prairie grassland.
Instead, working with a national developer of retail centers in 2005, the city turned the property into what is technically known as a tax increment reinvestment zone, and projected an increase in the taxable value of more than $130 million.
During the 20-year period established for the project, property tax revenues were to be used to pay to develop public facilities in the area.
Capital improvements such as widening a section of Matlock Road to six lanes and building the long-needed extension of Center Street via a bridge over I-20 were made possible.
Meanwhile, the Highlands kept adding more shops, stores, restaurants and entertainment venues as the project expanded generating greater tax revenues and jobs.
Transforming the undeveloped land into an economic engine has resulted in a taxable value approaching $230 million, far exceeding its original projections.
That’s an increase of 1,250 percent over what it was worth when the enterprise zone was created.
So, the city council has terminated the arrangement seven years early, not because the project didn’t produce the results bargained for but because it was so successful.
Now the tax revenue goes into the general fund to pay for public services and physical improvements to the entirety of the city.
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.
An argument is made by some in the legislature that projects such as this would happen without the inducement of an enterprise zone to spark its growth.
What those voices can’t explain is why it didn’t in all the years that the land just sat there.
Until those who want to step backward can answer that question, their best course of action would be to leave the power in the hands of local governments.
The result — clearly demonstrated across the state — they can continue to enjoy the kinds of successes like Arlington Highlands, that has made Texas one of the nation’s most thriving economies.
Richard Greene is a former Arlington mayor, Environmental Protection Agency regional administrator and UT Arlington lecturer.