City Council Remains Cautious on TIRZ 2 Industrial Tax Zone

The Olney City Council asked Olney Economic Development Corporation executive director Tom Parker to return with more information about a proposed second tax increment reinvestment zone—TIRZ 2—at its Nov. 22 meeting, continuing a two-year debate over how broadly the zone should stretch and which properties should fall within its boundaries.

Olney’s 2025 citywide property reappraisal significantly raises the stakes for the business-focused TIRZ, which could benefit from a sharp increase in the city’s taxable value if it is approved before Dec. 31. In 2024, Olney’s market value was $185.9 million with a taxable value of $135.5 million. This year, market value jumped to $245.1 million, and taxable value rose to $147.9 million—a major increase that would substantially strengthen any future TIRZ revenue stream.

If approved in 2025, the industrial TIRZ would immediately receive the increase in property tax revenue that the new, higher appraisals will generate on businesses’ 2026 property tax bills.

At the Nov. 22 meeting, Mr Parker urged the Council to move forward with the TIRZ 2 discussion, emphasizing that the zone would focus heavily on water capture and water infrastructure— projects the city must complete to support industrial expansion. Mr. Parker said the TIRZ structure would also give the city flexibility to support other capital-intensive needs, including projects at Olney Hamilton Hospital.

That flexibility has taken on new importance. The hospital board recently learned that the long-anticipated Plug Power hydrogen plant— whose tax revenue the board had expected to rely on to repay construction bonds for the new hospital—will not be built. According to attorney David Earl, who represents TIRZ 1 applicant Mark McClelland, TIRZ 2 revenue could be structured to help repay those hospital bonds, should the hospital opt into the zone and contribute a portion of its future increment.

Even with these considerations, the Council remained cautious. Members again expressed concern over the proposed footprint of more than 1,700 acres, particularly because early drafts include land around Air Tractor, the Olney Municipal Airport, and Olney Lake—areas long considered politically sensitive.

During the meeting, Mayor Rue Rogers questioned the accuracy of the city-limit maps used in previous boundary discussions. The discrepancies reinforced the Council’s argument that they needed clearer mapping before they could consider moving forward.

As a result, the Council instructed Mr. Parker to prepare two boundary proposals: one including Air Tractor and Olney Lake, and one excluding them. Council members acknowledged the sensitivity of placing major employer properties in a TIRZ, but also appeared aware that delaying the decision further could limit the city’s ability to benefit from its sharply increased valuations.

Mr. Parker reminded the Council that industrial growth is already on the horizon, including interest from a California- based manufacturer in the former Olney Savings building and expansion plans by PSI Extrusions on West Main Street and in the former grocery store across from Stewart’s Food Store. Without a TIRZ in place, the city would be unable to reinvest the tax increment created by those projects into the infrastructure improvements needed to support them.

Although the Council did not set a date for reconsideration, members indicated they would revisit the issue after Mr. Parker brings back the revised boundary maps.