In 2007, The Texas Legislature enabled a new financing mechanism, the transportation reinvestment zone (TRZ), to encourage local infrastructure development. TRZs have proven very successful over the last decade for highway development.
TRZs designate an impact area around a needed improvement project. A municipality or county can use some or all of the property and sales tax increment revenue projected to accrue from the improvement to fund the project. While the original legislation applied to most transportation projects, port projects weren’t included — until now.
“The funding tools available to Texas ports have traditionally been focused on improvements within the ports themselves,” explains Texas A&M Transportation Institute (TTI) Senior Research Scientist Rafael Aldrete, who heads TTI’s Center for International Intelligent Transportation Research. “The legislation in 2013 recognized the positive impact expanding ports can have on the broader local landscape.”
Once the legal framework was in place, port authorities and the Texas Department of Transportation (TxDOT) saw the need for guidelines ports could use to set a TRZ. Under TxDOT’s direction, TTI developed webinar materials, case studies and evaluation tools, which are now available for any port to use.
“The quality of the roads — both within and outside the port — can impact a port’s effectiveness, and that in turn impacts the local economy,” says Aldrete. As ports expand by, say, increasing warehouse capacity, they naturally employ more local residents to work in those warehouses. And the residents need places to live (helping create a healthy real estate market) and buy goods (improving the local gross domestic product). In short, a healthy port makes for a healthy community.
“We used the ports in Beaumont and Brownsville to refine our model,” explains Bae, “and now it’s applicable to any port, anywhere, seeking funding through a TRZ.”
Texas has often led the nation in advancing transportation, and it was the first state to implement TRZs. Now, once again, TxDOT is setting the standard for ports nationwide to take advantage of this innovative financing tool.
Originally published as “Student Insights Lead to Research Innovations: TTI Provides Guidelines for Ports Seeking TRZ Financing” in the Texas Transportation Researcher, Volume 53, Number 1 (2017).