Friendswood cites lack of infrastructure, future roadways for creating tax increment reinvestment zone

Friendswood city officials said a tax increment reinvestment zone, or TIRZ, west of FM 528 is necessary to develop the area and prepare for transportation projects that will be needed to accommodate population growth in the area.

The gist

On June 3, Friendswood City Council voted 5-2 to create a TIRZ for 326 acres of land along FM 528, despite opposition from several nearby residents who attended the meeting.

A TIRZ is an economic development tool cities can use to help fund development using new taxable value from an area. It does this by freezing property values and reinvesting new value into the site for development, according to agenda documents.

Council members who supported the TIRZ said it is needed to develop a part of the city that several developers declined to pursue due to the area’s lack of infrastructure.

With upcoming transportation projects, such as the expansion of Grand Parkway in the coming years, those in favor said a TIRZ could help prepare for increased traffic as the area grows.

Those opposed

Community Impact previously reported council members John Ellisor and Brent Erenwert voted against the motion, and several residents spoke in opposition of the decision to create the TIRZ.

Some residents opposed creating the TIRZ due to an expected loss in property value if a significant roadway is built nearby, while others cited their safety concerns about increased traffic in the area.

“I was going to stay in my home until I learned from the National Association of Realtors that that cut-through traffic can decrease the value of my home up to 20%,” Friendswood resident Katherine Hill said. “Maybe I should have sold it last year when I had a really nice view.”

What you need to know

Several prospective developers and buyers, including Walmart, Kroger and Hines, have considered the property in recent years but ultimately passed on developing it due to a lack of infrastructure, according to agenda documents.

“There is a reason that this piece of property has not been developed previously,” Tannos Development President Louis Tannos said in an undated letter to City Council.

Tannos’ letter alleged the area in question was at capacity for both water and sewer, and lacked utilities, which would make the cost of design, drainage and utilities so high that developers would not consider developing the land profitable.

“According to the current cost estimates for civil infrastructure, design and needs of the city, even at a 100% sell out—at prices pushing the top of the market—this project would lose more than $6 million,” Tannos said in the letter.

According to a city staff presentation, other factors cited for the inability to develop the site included:

• Absence of an adequate roadway network
• Absence of a regional lift station
• Insufficient existing force main and water lines, which cause water pressure issues during peak demand

By 2040, League City’s population is estimated to increase by 155%, and Pearland’s population is expected to increase by 240%, which could make travel time along FM 518 in Friendswood up to 45 minutes, according to the presentation.

To ease traffic congestion, Friendswood has planned for the past 35 years to extend Friendswood Parkway as a parallel roadway from FM 528 to Dixie Farm Road, City Manager Morad Kabiri said.

The details

A TIRZ obligates future increment tax revenue received from properties built in the zone to pay for project costs described in the project plan and reinvestment zone financing plan, according to a city staff presentation.

“Only the properties bound within the TIRZ are going to pay for these regional infrastructures,” Kabiri said. “So it’s not going to be done on the backs of existing Friendswood taxpayers.”

A TIRZ cannot fund projects that do not directly benefit the TIRZ, according to the presentation.

What else?

The zone became effective when City Council approved the ordinance on June 3, and it will end on Dec. 31, 2054.