Tax Increment Financing (TIF)

As part of the City of Waco's commitment to revitalization and development, we have established three Tax Increment Financing (TIF) Zones.

What is TIF?

TIF is a vital tool for supporting existing businesses and attracting new commercial enterprises to Waco. It serves as:

  • An economic development strategy to assist economically distressed or blighted areas within the city.
  • A tool to stimulate development in areas where private investment alone is unlikely in the near future.
  • A mechanism that allows local governments to publicly finance structural improvements and infrastructure enhancements within a defined area.

Waco TIF Zones Overview

Waco has three zones established for Tax Increment Financing (TIF), use the TIF Boundary Map to ensure your project is in a TIF zone.

Reinvestment Zone Number One (TIF #1):

Established in 1982, this zone supports mixed-use development along the Brazos River. West of the river, it extends from Gurley Lane to Lake Shore Drive; east of the river, it runs from Chapel Hill to Waco Drive and from Herring Avenue to confluence of the Bosque and Brazos Rivers. The zone expires in 2032. 

Reinvestment Zone Number Three (TIF #3):

Created in 1986 at the request of a developer for a mixed-use project, this zone is bounded by the Bosque River, Lake Shore Drive, and North 19th Street. It will expire in 2026.

Reinvestment Zone Number Four (TIF #4):

Established in 2022 to support underdeveloped and undeveloped areas, this zone covers approximately 17.4 square miles in a non-contiguous area. Its termination date is December 31, 2051. 

How Tax Increments Work

Tax increments refer to the increase in property tax revenues above a baseline value set by the municipality in the base year. The purpose of Tax Increment Financing (TIF) is to facilitate the development or redevelopment of economically disadvantaged areas. Funds generated within the TIF zone are used for public improvements and to support private initiatives, ultimately enhancing the value of real property within the zone.

Chart Demonstrating Tax Increment Values

Eligible Uses of TIF Funds

  • Installation of public works and improvements
  • Utilities, water, sewer, flood, and drainage facilities
  • Railroad or transit facilities
  • Streets and streetlights
  • Affordable housing
  • Remediation of contaminated land or buildings
  • Preservation or demolition of public or private building façades
  • Professional services (e.g., architectural, planning, and engineering costs)
  • Public projects, including buildings or educational facilities for schools, community colleges, or other state political subdivisions

Note: Eligibility under State law does not guarantee TIF funding; final approval is at the discretion of the TIF Board and/or City Council.

Project Eligibility Checklist

The following questions can help potential applicants determine if their project is eligible for TIF funding:

Project Impact:

Does the project:

  • Benefit the general public?
  • Create a positive economic impact within the zone?
  • Increase property value?
  • Create jobs?
  • Revitalize vacant land or structures?
  • Have additional sources of support?

Alignment with Plans:

Is the project consistent with:

  • TIF Goals and Objectives?
  • The City of Waco’s Comprehensive Plan?
  • The Imagine Waco Plan?

Overlay Zone Consistency (if applicable):

Depending on location, does the project align with the:

  • Downtown Overlay Zone?
  • Brazos Corridor Overlay Zone?
  • University Overlay Zone?

Funding Improvements with TIF

  • A developer may cover the cost of approved public improvements related to a private development and be reimbursed over time using the tax increment generated by the project.
  • Increment funds can also be used directly to pay for public improvements, encouraging further development within the zone. 
  • Public improvements may be funded through the sale of bonds, which are repaid over time using tax increments.

TIF Project Approval Process

The TIF Board is composed of eight members: five appointed by the Waco City Council and one each by the participating taxing entities (McLennan County, Waco Independent School District, and McLennan Community College). The Board recommends project and financing plans and advises the City Council on development activities and the use of TIF funds for each zone.

Application Process:

  • Potential applicants should contact Economic Development staff at (254) 750‑7005 to determine if public improvements related to the proposed project are eligible for TIF funding.
  • Staff will present eligible TIF funding requests to the TIF Board with a recommendation.
  • The TIF Board will vote on the request before forwarding it to the City Council for final consideration.
  • City Council must approve or deny the project funding. If approved, the City of Waco will enter into a reimbursement contract for TIF-eligible work.

Requirements for Approved Projects:

  • Contractors must obtain all required permits, insurance, and bonding before work begins.
  • Completed work must comply with applicable City codes and construction standards to qualify for reimbursement.

Important Notice:

Please contact Economic Development staff before starting any work on your project at (254) 750‑7005. This ensures you understand which project elements may be eligible for TIF funding and receive guidance through the application process.

TIF Project Examples

Find impactful projects supported by TIF incentives, complete with before-and-after examples.

TIF Projects

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