Olney City Council Blesses TIRZ-2 Business Tax Zone

After nearly two years of debate, the Olney City Council voted Monday, Dec. 15, to approve the creation of a new Tax Increment Reinvestment Zone, clearing a key hurdle for long-discussed economic development plans along the Main Street business corridor.

The zone, known as TIRZ No. 2, was proposed by the Olney Economic Development Corporation in early 2023 but had stalled due to questions about cost, boundaries, and the potential risk to the city’s general fund. Those concerns were revisited one final time during a special-called council meeting, where OEDC Executive Director Tom Parker walked council members through updated projections and answered lingering questions.

Mayor Rue Rogers said the past month included “a lot of discussion and more detail” than earlier hearings, noting multiple meetings with Mr. Parker and the OEDC to better understand the zone’s footprint, financing plan, and exit options.

“At the start, it was so much (that) you just really didn’t understand,” Mayor Rogers said. “After going through it, I feel comfortable — and kind of excited — about TIRZ 2 and the opportunities that it can create.”

TIRZ No. 2 encompasses approximately 1,275 acres within the city limits and extraterritorial jurisdiction, excluding the municipal airport and other city-owned parcels that the OEDC initially intended to include, such as Olney Lake. Under state law, the zone captures future increases in property tax revenue within its boundaries and reinvests them into infrastructure and development projects inside the zone.

A key point of contention had been the potential impact on city finances if development failed to materialize. Parker told council members the downside risk was minimal, estimating the city’s exposure at roughly $12,000 per year under conservative assumptions — an amount he contrasted with a potential $45 million to $50 million increase in taxable value if planned projects move forward.

“It’s a situation of if we do nothing, we spend nothing,” Mr. Parker said, noting the zone could be dissolved in as little as two years if necessary.

Timing also played a decisive role. The TIRZ needed council approval by Dec. 31 to capture tax increases resulting from Young County’s 2025 citywide reappraisal as well as PSI’s new construction on Main Street, giving the zone an immediate revenue base.

Another major factor was Young County’s commitment to participate fully. County commissioners have pledged to initially contribute 100 percent of the incremental county tax revenue generated within the zone — a move Mr. Parker described as a “big win” for Olney’s development efforts.

Following the discussion, the council unanimously approved the ordinance creating TIRZ No. 2 on first reading. A second and final reading was scheduled for the council’s next meeting on Dec. 22.

With approval in hand, the next steps include appointing a TIRZ board and prioritizing projects, which Mr. Parker said will likely focus first on infrastructure and housing initiatives designed to support long-term growth.

Council member Steven Nurre said the TIRZ is “a good business decision all around for everybody in the City and for the City.”

“It’s going to give the City the shot in the arm that it needs,” Mr. Nurre said.