The Dallas Stars hockey team and the Dallas Mavericks basketball team both plan to vacate the American Airlines Center, a downtown venue owned by the City of Dallas.
The Stars are eyeing Plano, while the Mavericks are preparing to move north but remain within Dallas city limits. Both teams have selected defunct malls for their new sites, both of which are located in tax increment reinvestment zones (TIRZs).
The City of Plano and the Plano Independent School District (ISD) struck an agreement to build a new arena for the Stars using public financing. The Mavericks plan to build their own arena.
Here’s how taxpayer funds are involved in each project.
The Stars
Local officials have already approved a TIRZ for the Stars’ next arena, and voters could approve additional public funding on Election Day.
The City of Plano and Plano ISD are collaborating on the TIRZ, which will allocate property tax revenue to the new arena project. The TIRZ will remain in place until 2052, according to city documents.
A TIRZ is an area in which property tax revenue above a certain threshold is set aside to fund a project.
After a city or county authorizes a TIRZ, excess property tax revenue generated within the zone goes into a tax increment fund (TIF) once the value of the property in the zone, known as the tax increment base, grows. This excess revenue is calculated as the difference between the zone’s appreciated value and its initial base value.
The money collected in the TIF can only fund improvement projects in the TIRZ, according to the Texas Comptroller of Public Accounts.
On June 8, the Plano City Council established a 900-acre TIRZ for the arena, covering The Shops at Willow Bend and the surrounding area along the Dallas North Tollway.
Plano ISD passed a resolution authorizing participation in the TIRZ on June 23, and it adopted an official participation agreement on August 4.
On October 12, the Plano City Council struck an interlocal agreement with Plano ISD to contribute tax money to a common fund for the new arena.
The city estimates that it will pay about $700.5 million for improvements and administrative costs in the TIRZ. PISD will pay up to $250 million, according to an August 4 presentation, which specifies that PISD is running a $44.8 million budget deficit.
Some Republican politicians criticized the agreement, including state Rep. Brian Harrison (R-Waxahachie) and outgoing U.S. Rep. Chip Roy (R-TX-21), arguing that the school district had too much money if it could afford to spend that much on the project.
“Good grief,” Roy wrote online.
In addition, the City of Plano called a special election to authorize several taxes to support the arena project: a short-term motor vehicle rental tax, a short-term hotel occupancy tax, an event parking tax, an admissions tax, and a venue facility tax.
The proposition, which Plano voters will see on the November 3 ballot, asks the public to approve the taxes to pay bonds that cover the project’s costs.
The proposed site for the new arena is The Shops at Willow Bend, an indoor mall that closed earlier this year.
The Mavericks
While the Dallas Stars’ arena would be publicly owned, the Dallas Mavericks intend to build their own on the site of the former Valley View Mall in North Dallas, according to a team statement issued in June.
However, the project site lies within a TIRZ — specifically, the Mall Area Redevelopment Tax Increment Financing District — wherein the city may pay out TIF money to developers who complete authorized projects.
The district board met on September 30, but the Mavericks project wasn’t on the agenda.
According to the City of Dallas, TIF money can fund public improvements such as sidewalks, utilities, landscaping, demolition, and historic preservation.
The Adelson family, owners of the Las Vegas Sands Corporation and prominent supporters of legalized gambling in Texas, own a majority stake in the Dallas Mavericks.