Plano’s new tax increment reinvestment zone could allocate $700M for Dallas Stars arena

Plano City Council approved the city’s sixth tax increment reinvestment zone, or TIRZ, to allocate funds for the team’s arena to be constructed at Willow Bend Mall at a City Council meeting June 8.

In a nutshell

Local governments use a TIRZ to finance projects that will provide economic benefits to the area, per city documents.

Sales and property tax growth from 896.94 acres along the Dallas North Tollway will be used to fund the city’s portion of construction for the Stars arena, Plano Director of Special Projects Peter Braster said.

Construction for the arena is estimated to cost $1 billion or more, according to city documents. The city will use $700 million from the newly implemented TIRZ 6 to cover some of the construction costs. Dallas Sports & Entertainment LP, the parent company of the Stars, will cover the rest of the construction costs.

The zone is expected to generate more than $1.3 billion in new property tax revenue and roughly $245 million in sales tax revenue within the 41 years it will be in effect, per city documents.

Dig deeper

Braster said the TIRZ separates taxes from the area into two categories: revenue from its base value and revenue from its growth since the TIRZ was established.

“This tool does not impact the current property tax rate for our residents,” Braster said.

Braster said taxes based on the base value of properties in the zone will continue to go toward the city’s general fund. He said the base value is based on the amount of tax revenue collected in 2026, with any additional revenue collected in future years due to increased property value being reinvested into projects within the TIRZ.

New revenue in the area will be set aside for the next 41 years, Braster said. The designated TIRZ 6 will expire at the end of 2067 and is currently 100% nonresidential, he said.

Braster said the city has four other zones currently active in the city, including in Downtown Plano, along the DART Silver Line, at the Collin Creek redevelopment and the Legacy business area.

Something else

Plano residents may also have the opportunity to vote on additional taxes applied to “visitors and activities related to the venue” in November, Assistant City Manager Doug McDonald told council on June 8.

Taxes that could be implemented on visitors include the following:

• Minimum 5% rate on short-term motor vehicle rental
• Maximum 2% hotel occupancy tax
• Maximum $3 per vehicle on venue event parking
• Maximum 10% rate on venue admissions
• Maximum $5,000 per game for each member of a major league team that plays in the venue

Council will have until Aug. 17 to call an election, and the proposed taxes would appear on the Nov. 3 ballot.

Next steps

City Council has been designated as the board of directors for TIRZ 6. Braster said they will develop a final project and finance plan to adopt at a future council meeting.

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