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Chapter 7. Concluding Remarks

A TRZ is a value capture technique that relies on increases in property values, business activity, and economic growth linked to transportation infrastructure to help pay for the transportation project. TRZs allow local governments with taxing authority in Texas and Utah to pledge local funds that help close transportation funding gaps and accelerate the delivery of critical mobility projects. Transportation investment in turn enhances mobility and promotes economic development through land development and value increases not only within the zone but well beyond its boundaries, benefiting the community at large.

This primer provides an overview of basic TRZ concepts and a step-by-step description of their implementation process based on the current legal frameworks in Texas and Utah. In Texas, the law allows municipalities, counties, and port authorities to create TRZs to fund transportation improvements for all modes, including roads and bridges, passenger or freight rail facilities, certain airport facilities, pedestrian and bicycle facilities, parking garages, transit systems, ferries, and port facilities. Utah legislation authorizes the creation of TRZs by two or more public agencies, at least one of which must have land use authority over the area where the TRZ will be created. Utah law is very flexible in that it allows the local governments to define the transportation need and proposed improvement that will be funded through the TRZ mechanism.

Finally, like other transportation funding and financing techniques, TRZs offer opportunities that local governments can takek advantage of and challenges they may need to overcome. This primer identifies four main areas of opportunity for local governments using TRZs:

1. Generation of funding without increasing tax rates or creating a new tax
2. The ability to accelerate, or even enable, the delivery of critical projects
3. Enhanced interagency collaboration to leverage different sources of funds
4. Promotion of equity and economic efficiency in project funding through the “beneficiary pays principle.”

There are also three main areas where challenges may emerge:

1. Public concerns about diverting resources needed to sustain other public services, which may be assuaged by demonstrating the development potential of the project.
2. The uncertainty associated with real estate markets, which may increase the cost of borrowing from private capital markets but that may be mitigated by borrowing instead from a State infrastructure bank (if available).
3. For Texas counties, potential legal challenges to their ability to use TRZ revenues to repay debt acquired to fund a transportation project.

TRZs offer clear opportunities for local governments seeking new tools to promote mobility and economic development in their community. While there may be challenges to implementing a TRZ for the first time, the growing number of communities already using TRZs can offer valuable lessons on how to overcome such challenges. This primer attempts to document some of the most notable strategies and experiences of communities that have successfully used TRZs to develop their transportation systems.

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