Note: The headline and first sentence of this article were updated to clarify that the judge ruled that creating a Tax Increment Reinvestment Zone to subsidize South Central Waterfront redevelopment is illegal.
A county judge has ruled against the city's plan to subsidize the development of a mixed-use district on the South Austin waterfront with $354 million in tax revenue.
Travis County District Judge Jessica Mangrum's Friday ruled in favor of plaintiffs who sued the city in 2023, claiming the it illegally created a Tax Increment Reinvestment Zone for a 118-acre development on the South Central Waterfront District, the Austin American-Statesman reported.
The City Council approved the creation of the TIRZ, a designation that allows the city to subsidize economic development and municipal projects through diverted tax revenue — in this case, for infrastructure upgrades in the new district — in 2022.
Redevelopment plans encompass multiple properties east of South First Street bordered East Riverside Drive and Lady Bird Lake, including the 19-acre Austin American-Statesman property and primary bat-viewing area.
