In This Issue
TEXpansion:
Longview lands food service center
Outdoor grants bolster cities’ parks
Friendswood’s grants guide growth.
Partnering for Impact:
Funding sources bring businesses downtown
Texas boasts highest job growth in the nation.
Web Exclusive
Cities cooperate to bring beauty along Interstate
This month: A look at funding downtown improvement projects
Partnering for Impact
Sales, hotel occupancy taxes help cities fund development.
The Comptroller’s office empowers local governments and communities across the state with the information and tools they need to support economic development and create new jobs for Texans. Look for our special “Partnering for Impact” section in each edition, featuring timely, important information and tips for local governments and economic development corporations.
Funding Downtown
Improvements
Cities can use the following tools and resources to help secure funding for downtown revitalization projects:
- Section 4A or 4B EDCs. An EDC can fund targeted infrastructure to improve streets, provide drainage and bury utility lines. Section 4B EDCs may fund affordable housing, public parks and open-space improvements.
- City hotel occupancy tax. Cities can use hotel occupancy tax revenues to promote their downtowns and preserve historic buildings and landmarks.
- The Texas Capital Fund. The program’s two major municipal grant programs, Downtown Revitalization Grants (DRG) and Infrastructure Development Grants (IDG), may be used for sidewalk construction, utility infrastructure improvements and traffic signals and signs. DRG grant awards range from $50,000 to $150,000, while IDGs are funded in amounts up to $1 million.
As Texas has transitioned away from its rural roots, the once thriving downtown areas of many small- and medium-sized communities have fallen into disrepair as their businesses follow residents to the suburbs. To reverse this trend, community leaders are looking for solutions to beautify and restore cities to their former glory and bring private investment back downtown.
Most successful revitalization programs draw funding from a variety of sources, including city-sponsored economic development corporations, hotel occupancy taxes and state grant programs.
Many cities turn to their Section 4A or 4B economic development corporation (EDC) to provide initial funding for downtown enhancements. Supported by dedicated sales tax revenues, an EDC can fund targeted infrastructure to improve streets, provide drainage and bury utility lines. Section 4B EDCs may also fund affordable housing, public parks and open-space improvements, common components of downtown revitalization programs.
Another local source of revenue is the city hotel occupancy tax. More than 500 Texas cities collect a tax of up to 7 percent of the cost of occupying a hotel room to fund tourism-related programs. Restricted to funding programs that attract out-of-town visitors, cities often use hotel occupancy tax revenues to promote their downtowns and preserve historic buildings and landmarks.
The Texas Capital Fund is a key source of state grants for downtown redevelopment and revitalization. Administered by the Texas Department of Agriculture, the program has two major municipal grant programs: Downtown Revitalization Grants (DRG) and Infrastructure Development Grants (IDG). Both may be used for sidewalk construction, utility infrastructure improvements, traffic signals and signs, and purchasing land needed for public facilities. DRG grant awards range from $50,000 to $150,000, while IDGs are funded in amounts up to $1 million.
For more information on the Texas Capital Fund, contact the Texas Department of Agriculture at www.tda.state.tx.us. For information on funding revitalization programs to spur economic development, visit the Comptroller’s Local Government Assistance and Economic Development Division at http://www.TexasAhead.org/lga or call (800) 531-5441, ext. 3-4679. TR