How a pair of management tools could help fulfill Medical District vision
You have probably heard about the city’s efforts in recent years to partner with our hospitals and other property owners to develop the Medical District. Centered around the intersection of State Highway 6 and Rock Prairie Road, the district offers a unique economic opportunity.
After nearly two years of work involving hundreds of property owners, stakeholders, health care providers and others, the College Station City Council approved the Medical District Master Plan in October. While this nearly 1,700-acre area offers significant opportunities, its potential is limited by the lack of basic services and infrastructure. Without a strategic approach to managing change in the area, those abundant opportunities may be minimized.
To help overcome these challenges, the city is considering the creation of two tools — Tax Increment Reinvestment Zone (TIRZ) and a Municipal Management District (MMD). On Thursday, the city council will hear a presentation from staff and conduct a public hearing on both tools during its 7 p.m. regular meeting.
Tax Increment Reinvestment Zones (TIRZ) have been used sparingly in College Station but are fairly common across the country. A TIRZ can provide funding for needed infrastructure in areas that won’t likely develop without adequate streets, sewer lines and water lines. In the Medical District, the TIRZ could help pay for about $60 million in needed infrastructure over the next 20 years.
Under a TIRZ, tax revenue from new development in the area would help cover or reimburse the cost of constructing the infrastructure. Properties within the zone would continue to pay property taxes, including those destined for the school district. The additional tax revenue captured under the TIRZ is based on terms agreed upon by the city council and the Board of County Commissioners.
Municipal Management District
Texas law permits a city to form a Municipal Management District (MMD) in areas that would benefit from a management structure that promotes an area and provides specialized services supplementing city services. In the Medical District, the city is actually considering two MMDs — one for the portion of the Medical District that’s already developed and the other for the portion that will be developed.
The MMD for the developed area would focus on marketing, promotion and enhanced services such as landscaping or wayfinding. The MMD for the undeveloped area would address the same issues but also would focus on the delivery of necessary infrastructure. Under the MMDs, the city would retain its current authority and powers and would craft legislation to determine the MMD’s authority and powers.
The way a Municipal Management Districts functions is similar to a homeowner’s or property owner’s association. A board selected from among MMD members is charged with setting direction. The board runs the MMD’s day-to-day business and solicits ideas for projects from its members. Though the council creates the MMD and selects its board members, the types and costs of projects — and the form of assessments — are determined through the board by the MMD members. In the case of the developed MMD, these projects might include targeted marketing or enhanced landscaping.
If approved, the MMDs would have the authority to identify projects and establish assessments on the properties that benefit from them. Only in the undeveloped MMD is an additional ad valorem tax being considered. This tax, which must be approved by voters, would only apply to properties in the undeveloped MMD and would be used to compliment the TIRZ funding of infrastructure needed to enable development.
What happens next?
In the past two years, stakeholder and task force meetings have been held, public hearings on the master plan were conducted, and the council recently conducted a workshop. On Thursday, the council will hear a presentation from staff and conduct public hearings. Even if the council takes expected action on the TIRZ, much more work will be needed in the coming year before it’s finalized. The council is not expected to take action on forwarding the draft legislation on the MMDs until its Jan. 10 meeting. As with the TIRZ, the MMD will require many more steps, including approval by the Texas Legislature.
Along with projects already funded by city taxpayers such as the upgrading of the Rock Prairie Road Bridge, right-of-way purchases along Rock Prairie Road, design of the Barron Road extension, design of the Lick Creek Greenway Trail, and others, these tools could help make the vision of a Medical District soon become a reality.
For more information about the College Station Medical District, go to cstx.gov/medicaldistrict.
Let us know what you think.
- More decisions coming on the new CS Medical District (WTAW, Dec. 6, 2012)
- College Station Council split on medical district plans (The Eagle, Dec. 5, 2012)
- College Station inches toward development of medical district (The Eagle, Nov. 9, 2012)