TIRZs are laying the cornerstone to Dayton’s future prosperity

By Dayton City Manager Theo Melancon

Over the last several months, many of you have asked about the City’s recently adopted Tax Increment Reinvestment Zone around the Gulf Inland Logistics Park. The first question is:  “What is a Tax Increment Reinvestment Zone?” The second question asked is: “How will this help bring jobs to Dayton?” The best way to tackle these questions is to answer the second one first.  

With many developers coming forward with plans to develop in and around our area, the City of Dayton is definitely on the map as part of the vibrant and growing Houston Metro. 

As its name implies, a TIRZ is focused on industrial development. Industrial development is a valuable resource for an area because it provides good, living-wage employment opportunities compared to other jobs in the same geographic area. In addition, the tax generated from industrial development frequently dwarfs other sectors of development. As cities worldwide look for opportunities to raise the standard of living and quality of life for their residents, industrial development is seen more prevalently as a means to that end.

Many cities around the world are vying for a limited number of large industrial developments. Because of the benefits involved, it isn’t just the cities who are part of such recruitment; elected leaders at the county, state, and federal level are interested in such developments as well. The City of Dayton is in this global clash of competition, contending with major cities from around the world, including, but not limited to, Atlanta, Raleigh-Durham, Hong Kong, Kuala Lumpur, and Singapore. Soon cities from India will also be in a position to contend for the same type of industrial, powered by the continued growth of the Port of Calcutta.  

With this international perspective in place, the need for competitive advantages is readily apparent. Tax Increment Reinvestment Zones (TIRZ) provide a funding mechanism for developers to tap into future tax funds generated by their own development. This is not a tax increase, rather a method to earmark future revenues allowing the developer to negotiate for some of the future taxes they generate with their new development. 

This is a vital and proven tool in commercial recruitment, especially in heavy commercial and industrial developments. Investors and developers can spend hundreds of millions of dollars just in infrastructure to make their property ready to construct buildings. It is easier to make such capital intensive investment if a developer knows that if they are capable of recapturing some cost through TIRZ funding. Another advantage to developments inside of a TIRZ is that developers are able to lower the price to purchase land within the development since a portion of the infrastructure costs has been subsidized by local TIRZ funds. In short, TIRZs give developers some security of infrastructure cost repayment as the properties develop, which makes the properties stand out in a market flooded with opportunities by lowering the cost to potential industries.

A TIRZ is a specially designated area in which future increases in tax revenues are set aside by cities and/or counties to help developers offset costs of development within that zone. The City of Dayton set a baseline year (2018) in which the City will continue to receive taxes based on those values. Half of all revenue increases within the zone for years 2019-2044 are earmarked and set aside to encourage and assist developers who decide to build within the TIRZ. If a manufacturing facility generates an additional $10,000 in taxes over the baseline year, then $5,000 goes into this special fund. Developers have the opportunity to negotiate with the TIRZ Board about reimbursement from the fund.

Liberty County has agreed to work with the City within our TIRZ district, a partnership that will bring good-paying, primary jobs to the area. The Dayton City Council and TIRZ Board (a citizen board comprised of local residents and business leaders) worked with a development group to put in place the finance plan and master development agreement that lays the groundwork for the development of the Gulf Inland Logistics Park. The master development agreement is valued at $68 million to help the developer recoup infrastructure investments on the property.  While $68 million is a significant amount of money, it is only a tiny portion of the total that the developer will be investing in areas such as utility and transportation infrastructure, including natural gas and rail that will be needed.

If Gulf Inland Logistics Park is to compete on a global scale for industrial development, then offsetting the cost of infrastructure, which could total over $150 million, is necessary to keep the cost of land at a competitive price. Solid research and planning from our economic strategist ensures the viability of the finance plan, as well as modeling a solid economic forecast for future employment opportunities. Gulf Inland Logistics Park has the opportunity to employ as many as 7,000 – 10,000 employees at full build-out; living-wage jobs that spur other development from retail to professional services.

Dayton is on a path toward sustainable prosperity, and it is a pleasure to build the foundational pieces that are vital to its success.


  1. Your talking about a logistic park. Your saying it will create so many more good paying jobs. Logistic parks – truck drivers, 1. Swift will probably come & they are always getting sued for not paying employees. 2. Most people in Dayton cant even drive a car let alone a big rig. All I see is our taxes going up, roads being filled & congested w/ Big rigs by people who dont even live in TX. Why dont you invest in protecting our people from floods instead?

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