An Incentive-Based Approach to
Downtown Economic Development

#SmithvilleForward • #HistoricSmithville • #HopeFloatsHere

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This is a resource for citizens, property owners, small business owners, entrepreneurs, developers, and city leadership.

Spring & Summer 2026

Why this matters

Six benefits of incentive-based economic development in Smithville: vibrant storefronts as vacant buildings become active businesses; lower tax burden as new development expands the tax base; Smithville becomes the destination of choice for developers and investors; historic heritage is preserved and celebrated; every improvement protects surrounding property values for all owners; and new residents, workers, and visitors share the responsibility of preserving what makes Smithville special

Smithville has something rare:

A historic downtown with authentic character. Deep community roots
A location at the crossroads of one of Central Texas’ fastest-growing regions
Bastrop County is growing at 3% annually
The region serves 76,000+ residents and visitors
And Smithville sits 45 miles from Austin, 10 minutes from Bastrop, on Highway 71 — a vital artery connecting key Texas cities

The community is ready:

Citizens are ready to invest their energy
Property owners are ready to act
Small business owners are ready to grow
Entrepreneurs are ready to open their doors
Developers and investors are ready to bring capital

All of them are looking for a city that is excited to grow alongside them. That city is Smithville

And we've already done the hard work of planning:

The 2024 Comprehensive Plan
The Historic Preservation and Design Standards Advisory Committee
The Texas Commission on the Arts’ Cultural District designation
The Preserve America designation
Participation in the Texas Historical Commission’s First Street Initiative

These are real achievements that reflect a community with a clear vision. Now it’s time to channel that vision into action.

Welcoming new investment, new residents, and new businesses through incentive-based economic development ensures that Smithville thrives for generations to come.

The challenges We Face

Historic buildings cost more to rehabilitate, more to maintain, and more to bring to code than new construction.

Many well-intentioned business and property owners are simply unable to further invest when there is a lack of economic activity to provide an adequate return on that investment.

That’s not a reason to give up — it’s exactly why the tools in this document exist. Used together, they can close the gap between existing economic activity and current potential, and make Smithville’s downtown not just a beautiful place, but a financially viable one.

Smithville is competing in a real market for limited investment dollars.

In today’s high-interest-rate environment, development capital is limited and investors are cautious. They are actively choosing between communities — asking hard questions about risk, return, and whether a city is truly open for business before they commit.

The cities that win are not necessarily the biggest or wealthiest. They are the ones that make it easiest to get started, reduce uncertainty, and show up as genuine partners.

Smithville has every natural advantage. What it needs now is the signal that says, clearly and warmly: ‘We are ready. We are open. And we are glad you’re here.’

What Is Incentive-Based Economic Development?

A three-step cycle showing how incentive-based economic development works. Step 1: The city opens the door — reducing risk, streamlining permits, and offering rebates on net new tax revenue, signaling partnership to investors. Step 2: Investment arrives — developers, entrepreneurs, and property owners bring capital and projects to downtown Smithville. Step 3: Everyone benefits — the tax base grows, the burden on residents falls, and downtown comes alive for the whole community.

Incentive-based economic development means the city actively reduces risk and cost for people who want to invest in Smithville — rather than waiting for investment to arrive on its own or adding barriers or punitive measures to existing property owners that discourage it.

It doesn’t require the city to spend money it doesn’t have. Many of the most effective tools cost nothing except a willingness to lead. The guiding principle is simple:

“Every dollar attracted in private investment generates sales tax, property tax, jobs, and vitality that benefits the entire community for decades. Growing the pie is how we reduce the burden on every individual resident.”

The tools below are organized from those requiring no city expenditure to those representing modest but targeted investment. Together they form a framework that makes Smithville irresistible to the people and projects that will define its next great chapter.

The Tools: A Practical Incentive Framework

A four-tier framework showing Smithville's incentive-based economic development tools organized from least to most financial commitment. Tier 1, zero financial cost: Policy and Process Leadership — publish incentives, streamline permits, adopt a resolution — costs nothing but commitment. Cost indicator: 0. Tier 2, low cost: Fee Adjustments and Voluntary Partnerships — waive permit fees, voluntary property partnerships, free pre-application consultations. Cost indicator: $. Tier 3, targeted investment: Tax Tools and Development Agreements — Chapter 380 rebates, property tax rebates, TIF — funded by the revenue they create. Cost indicator: $ . Tier 4, legacy investment: Grant Programs and Funding Partnerships — historic tax credits, PACE financing, capital stack navigation — outside dollars, local impact. Cost indicator: $$$. Footer note: Every tier builds on the last. Start at Tier 1 today — no budget required."

Tier 1 - Zero Financial Cost • Policy & Process Leadership

(1) Publish a "Welcome to Smithville" Developer & Investor Guide

Answer the question every developer asks first: what does Smithville offer, and how do I get started? Make that answer easy to find, impossible to miss, and impossible to misunderstand.

Smithville already has more to offer than most developers know. The administrative approval track, the on-demand HPDS meeting provision, the existing permitting process — these are real advantages that simply aren’t being communicated clearly or proactively. The solution is a plain-language, publicly available guide that covers:

All available incentives and how to access them
The COA and permitting process with realistic timelines — including what does NOT require a committee meeting or COA
A map of available and eligible downtown properties
A single point of contact — the Economic Development Director — with a direct phone and email
Available grants, tax credits, and financing resources developers can access directly

Publish it on the city website. Distribute it through the Chamber of Commerce to every real estate agent in Bastrop County. Share it proactively at regional economic development events. This guide is also Smithville’s primary active recruitment tool for investment.

Who Benefits? Every potential developer, investor, and entrepreneur considering Smithville. Real estate agents who can now connect clients to a clear opportunity. Property owners who want to sell or develop but don’t know where to start.

(2) Communicate What’s Already in Place — Loudly and Clearly

Smithville already has a strong foundation of pro-development policies. The single most important thing the city can do right now is make sure everyone knows it.

Smithville already has more to offer than most developers know. The administrative approval track, the on-demand HPDS Several key provisions are already in place that make Smithville more developer-friendly than it may appear:

Administrative Approval: Property owners do not need to consult the city or the HPDS for repairs that make no change to the look of the building. Interior renovations have never required HPDS review. This should be prominently communicated to every property owner and prospective developer.
On-Demand HPDS Meetings: The committee meets any month that actionable items are submitted before the first Wednesday — not just at quarterly intervals. Developers don’t have to wait three months for a review. This needs to be the first thing every applicant learns.
Pre-Application Consultations: Any developer or property owner can meet with city staff before spending money on plans to get early alignment on design standards, zoning, and available incentives.

The opportunity here is not to change the policy — it’s to communicate it so clearly and proactively that no investor, developer or property owner ever feels like Smithville is difficult to work with.

Who Benefits? Developers and property owners who gain confidence to act. The city, which attracts investment it was already equipped to support. The HPDS volunteer committee members, whose work is better understood and appreciated.

(3) Publish Clear Permitting Timelines

Certainty is one of the most powerful things a city can offer an investor or developer. Publish what to expect — and deliver it.

Smithville’s city staff has been working hard to expedite permits given available resources. The next step is to make those timelines visible and public. A developer who knows what to expect is a developer who moves forward. The city should publish its current review timelines clearly for every project type — interior renovations, administrative COA approvals, and major renovation projects — and commit to meeting them.

Publishing timelines is also a statement of confidence and a call for specfic projects: ‘We’ve thought about this, we know what type of projects we need, we’ve made it easy for you to get started.’ That signal matters as much as the timeline itself.

Who Benefits? Developers and architects whose project planning improves. Property owners who gain confidence to act. The city, which processes applications more efficiently when expectations are clear on both sides.

(4) Formal Adoption of an Incentive-Based Economic Development Policy Resolution

A City Council resolution formally committing Smithville to incentive-based economic development costs nothing and signals everything.

Bring a resolution to City Council that formally establishes incentive-based economic development as official city policy — a public declaration that Smithville is open, ready, and excited to partner with those who want to invest in its future. Pair it with a press release, a social media announcement, and direct outreach to the regional development and real estate community.

Who Benefits? The entire community — and every investor, property owner, developer, or entrepreneur who sees that Smithville has made its intentions clear and public.

Tier 2 -- Low Cost • Fee Adjustments & Voluntary Partnerships

(5) Downtown Permit Fee Waivers or Deferrals for Historic Rehabilitation

Waive or defer permitting fees for qualifying downtown rehabilitation projects — a small act that pays back within weeks of a project opening and keeps paying forever.

For example: a rehabilitation project generating $40,000 per year in combined property and sales tax pays back the cost of an estimated typical permit fee in approximately two weeks of operation — every year, permanently. The city forgoes modest fee revenue now in exchange for a project that generates returns for decades.

Qualifying projects: any renovation or adaptive reuse of a vacant or underutilized building within the Historic Downtown or Central Business District. The details of the program would be worked out between city staff, the city attorney, and the Council — but the direction is clear and the math is compelling.

Who Benefits? Developers and property owners whose project costs decrease. New tenants whose buildout becomes more affordable. Every resident who benefits from an expanded tax base and a lower individual burden.

(6) Voluntary Downtown Property Development Partnership

Proactively reach out to every owner of a vacant or underutilized downtown property — not to enforce, but to help.

The Economic Development Director schedules a voluntary partnership meeting with each downtown property owner to review their goals, walk through available incentives and grants, discuss potential buyers or tenants, and map a path forward. No penalties, no mandates — just a city saying: ‘We want to help you succeed with this property. Here’s what we can do together.’

Who Benefits? Property owners who want to act but don’t know where to start. Prospective buyers and developers who gain access to owners not yet in conversation with the market. The downtown district, as buildings move from idle to active.

(7) Free Pre-Application Consultation Program

Any developer or property owner can meet with city staff before spending a dollar on plans — getting early certainty on design standards, zoning, and incentives.

Advertise this prominently as a benefit — not a bureaucratic step. At the meeting, the developer receives early clarity on COA requirements, likely approval conditions, and available incentives. The goal: by the time a formal application is submitted, approval is nearly certain and the timeline is short. Available at no cost to any developer, property owner, or entrepreneur interested in a downtown project.

Who Benefits? Property owners, developers and architects who save time and money on revision cycles. Property owners who gain confidence to act. Prospective tenants who get to opening day faster. The city, which processes cleaner, better-prepared applications.

Tier 3 -- Targeted Investment • Tax Tools & Development Agreements

(8) Chapter 380 Economic Development Agreements — Ready to Execute

Texas law already gives Smithville the power to offer meaningful financial incentives to qualifying downtown projects — funded entirely by the revenue those projects generate.

Chapter 380 of the Texas Local Government Code authorizes cities to offer rebates of city funds — including rebates of new sales tax or property tax revenue — to stimulate economic development. Because incentives are structured as rebates of revenue the project itself creates, the net cost to the city is zero. Rebates (rather than abatements) ensure the city retains control: the developer pays first and receives a rebate upon demonstrated performance, protecting taxpayer dollars at every step.

The key to making Chapter 380 work is being prepared. The city should:

Work with the city attorney to pre-authorize a clear menu of what Smithville is willing to offer under 380 — for example, a sales tax rebate for qualifying retail or hospitality projects, or a property tax rebate on the increment above current assessed value for a rehabilitation project
Develop a plain-language one-page term sheet the EDD can hand to any developer in a first meeting, summarizing Smithville’s 380 offer before legal documents are drafted
Ensure the city attorney is engaged and ready so agreement drafting can begin within days of a developer expressing interest

Every 380 deal is unique — but having a clear framework and a ready process is the difference between ‘we might be able to do something’ and ‘here’s what we can offer, let’s get started.’ Corsicana’s Main Street program has used a similar property tax rebate model to drive significant private rehabilitation investment. Source: visitcorsicana.com/main-street

Who Benefits? Developers and investors whose project financial models improve significantly at no upfront cost to the city. The city, which gains permanent tax revenue after the incentive period ends. Every taxpayer, as the expanded tax base reduces individual burden over time.

(9) Property Tax Rebates for Downtown Historic Rehabilitation

Offer performance-based tax rebates on the incremental value added by qualifying downtown projects — reducing developer risk with no loss of current city revenue.

Under Texas Tax Code Chapter 312, Smithville can offer property tax rebates on the incremental assessed value added by a qualifying downtown renovation or new construction project. The city only rebates taxes on value that does not yet exist — so there is no reduction in current revenue. The rebate is tied to performance milestones, ensuring the city retains full control. After the rebate period, the city collects full taxes on the improved value permanently.

Who Benefits? Any developer or property owner investing in downtown Smithville, particularly those tackling larger rehabilitation projects where carrying costs make the timeline challenging. Future property owners who inherit a fully productive, improved asset.

(10) Tax Increment Financing (TIF) District for Downtown

A downtown TIF district turns new development into a self-funded engine for public improvements — making the entire district more attractive for every project that follows.

A TIF district captures the incremental growth in property tax revenue created by new development and reinvests it back into the downtown district — streetscaping, utilities, parking, public spaces — raising the value and appeal of the entire area. TIF draws from taxes on value that would not exist without the development, making it genuinely self-funding. Elgin, TX has used similar reinvestment tools to generate over $26 million in private downtown investment. Source: elgintexas.gov/Main-Street-Downtown-Development

Who Benefits? All downtown property owners and businesses over time, as public improvements raise the value and vitality of the entire district. Future developers, who find a more attractive, better-maintained downtown worth investing in.

Tier 4 -- Legacy Investment • Grant programs & funding Partnerships

(11) The EDD as Capital Stack Navigator — Help Developers Find and Layer Available Funding

The gap between a developer’s vision and a project that pencils out is often financial feasibility. The EDD’s most powerful role is helping close that gap — connecting developers to every dollar available for their project.

Experienced developers know how to build a ‘capital stack’ — layering multiple funding sources to make a project financially viable. For many first-time or smaller developers, this knowledge is the difference between a project that happens and one that doesn’t. The EDD should:

Meet individually with every active developer or property owner to walk through which programs apply to their specific project
Help developers design their scope of work to maximize eligible grant and tax credit dollars — projects should be designed to the money that’s already available
Proactively notify the development community when new grant cycles open
Maintain and publish a current, plain-language guide to funding sources available for downtown Smithville projects

A five-layer diagram showing how multiple funding sources can be combined to make a downtown Smithville development project financially viable. Layer 1: Federal Historic Tax Credit — 20% of qualified rehabilitation expenses for income-producing historic properties. Layer 2: Texas Historic Tax Credit — 25% state credit, stackable with the federal credit. A callout box to the right shows that layers 1 and 2 combined equal 45% of rehabilitation costs covered. Layer 3: PACE Financing — energy, water, and systems upgrades repaid via property tax assessment at zero upfront cost. Layer 4: Chapter 380 Rebate — the city rebates 10 to 90 percent of net new sales and property tax revenue the project generates. Layer 5: Local Bank Financing — the Economic Development Director connects developers to local lenders familiar with historic rehabilitation projects to bridge the remaining gap. Footer note: The EDD helps developers identify and layer every source that applies to their project.

Key funding sources developers can access directly:

Federal Historic Rehabilitation Tax Credit: 20% of qualified rehabilitation expenses for income-producing historic properties. Source: thc.texas.gov
Texas Historic Preservation Tax Credit: 25% state tax credit — stackable with the federal credit for a combined 45% incentive on qualified rehabilitation expenses. Source: thc.texas.gov
PACE Financing (Property Assessed Clean Energy): Allows property owners to finance energy efficiency, water conservation, and resiliency improvements with no upfront cost, repaid through a property tax assessment over time. A powerful tool for the expensive systems upgrades historic rehabilitation projects require. Source: texaspaceauthority.org
Chapter 380 Rebates: As described above — structured as a share of revenue the project itself generates.
Local bank financing: The EDD can facilitate introductions to local and regional lenders familiar with historic rehabilitation lending.

Additionally, the City of Smithville has historically pursued infrastructure and community development grants on behalf of the community — including programs through the Texas Department of Agriculture, the USDA, and HOME grant programs — that improve the public environment surrounding private investment. Developers should ask the EDD what city-applied grant programs are in the pipeline that may benefit their project timeline and design.

A note on the City’s facade grant program: The City currently offers a small facade improvement grant administered through the Chamber of Commerce. While modest in scale, it represents a meaningful first step and a signal of the city’s commitment to downtown investment. As resources grow, this program deserves to grow with them.

Who Benefits? Every developer, property owner, and entrepreneur working on a downtown project who gains financial feasibility they may not have known was available. The EDD, who becomes an indispensable partner. Every taxpayer who benefits from the investment those projects generate.

(12) Texas First Street Initiative — Maximize Current Participation

Smithville is already participating in the Texas Historical Commission’s First Street Initiative — the foundation for preservation-based economic development. Now is the time to get everything it offers.

The First Street Initiative provides Smithville with access to THC technical expertise, design assistance, preservation tax incentive guidance, and connection to a statewide network of communities committed to historic downtown revitalization. The EDD should actively mine every resource this membership provides:

Access THC design consultation and technical assistance for property owners and developers
Use the THC connection to help developers navigate the federal and state historic tax credit process
Build relationships with THC staff who can flag relevant grant opportunities as they open

Note: Full Texas Main Street Program designation — the next level up — would unlock additional resources including the DowntownTX.org property visibility tool and deeper technical support. It requires a dedicated full-time staff position, which represents a meaningful investment the city would need to plan for. That’s a longer-term goal worth building toward as Smithville’s economic development momentum grows. Source: thc.texas.gov/preserve/tourism-and-economic-development/texas-main-street-program

Who Benefits? Property owners and developers who gain access to free technical expertise and tax credit guidance. The city, which builds relationships with state resources that support future grant applications and investment attraction.

put it into action now

A timeline of five steps Smithville's city leadership can take now, requiring no new budget. Step 1, this week: Open the door — publish the Welcome to Smithville developer guide. Step 2, immediately: Communicate what already exists — tell developers what already works in their favor. Step 3, within 30 days: Build the Chapter 380 framework — pre-authorize the incentive menu and draft a term sheet. Step 4, ongoing: Navigate capital stacks — connect every developer to every available funding source. Step 5, quarterly: Convene the roundtable — community partnership, progress, and accountability.

City leadership — the City Council, City Manager, and Economic Development Director — can begin building Smithville’s economic development momentum today. These five steps require no new budget and no new policy. They require only intention, communication, and follow-through.

Step 1: Open the Door: Publish the “Welcome to Smithville” Guide This Week

Publish a clear, plain-language developer and investor guide on the city website listing available incentives, the permitting and COA process with timelines, available properties, and a direct contact for the EDD.
Designate the Economic Development Director as the single welcoming point of contact for any developer or investor interested in Smithville — and communicate that widely through the Chamber and real estate community.
Schedule a Downtown Development Listening Session within 30 days — invite property owners, real estate agents, developers, and entrepreneurs to share what they need to move forward.

Step 2: Communicate What’s Already Possible

Update the city website and all development-facing communications to clearly explain the administrative approval track, the on-demand HPDS meeting provision, and what does not require a COA at all.
Train all city-facing staff to communicate these provisions proactively — not just when asked.
Publish current permitting timelines clearly for every project type so developers know exactly what to expect.

Step 3: Build the 380 Framework

Work with the city attorney to pre-authorize a clear menu of what Smithville can offer under Chapter 380 — so the EDD has something concrete to discuss with any developer from day one.
Develop a plain-language one-page term sheet summarizing Smithville’s 380 offer for use in first developer meetings.
Bring a resolution to City Council formally adopting an incentive-based economic development framework as official city policy.

Step 4: Become the Capital Stack Navigator

Meet individually with every active developer or property owner working on a downtown project to walk through available funding sources.
Publish and maintain a plain-language guide to the federal historic tax credits, state historic tax credits, PACE financing, and other tools developers can access directly.
Ask the city attorney and relevant staff to confirm which city-applied infrastructure grant programs are available and communicate that pipeline to developers actively.

Step 5: Establish a Downtown Community Partnership Roundtable

Convene a roundtable at regular intervals — quarterly to start — bringing together property owners, real estate professionals, developers, small business owners, and interested citizens.
Keep it informal, solutions-focused, and 60 minutes maximum. Anchor each meeting to a specific agenda item so attendance feels worthwhile.
Publish a brief summary after each meeting so the broader community stays connected to the progress being made.
Consider writing this into the EDD’s formal job responsibilities to ensure it continues regardless of who holds the role.

what success looks like

Four pillars of success for downtown Smithville on a dark background. Pillar 01: Historic buildings restored — vacant buildings become vibrant businesses and community spaces. Pillar 02: Tax base grows, burden falls — new development generates revenue that reduces what each resident pays. Pillar 03: Community grows and thrives — new residents, visitors, and jobs share the pride of preserving Smithville. Pillar 04: Heritage honored for generations — what Smithville's founders built endures for the next generation. Tagline: #SmithvilleForward #HistoricSmithville #HopeFloatsHere.

Smithville’s downtown is not a problem to be managed. It is an asset to be cultivated — a collection of historic buildings, unique spaces, and community gathering places that together form something no new development on the highway can replicate: a genuine sense of place.

Yes, historic buildings are expensive to rehabilitate. Yes, bringing them to code takes real investment. Yes, the financial gap between a vision and a viable business is real. That’s exactly why the tools in this document matter — and why the EDD’s role as a capital stack navigator is so important. The cities that have invested in incentive-based policies have seen their downtowns come alive, their tax bases grow, and their communities find new pride in what makes them distinct.

Smithville is at the intersection of history, heritage, and possibility. The tools are here. The community is here. It’s time to build the downtown that honors where Smithville has come from — and opens the door wide to everything it can become.

we're all in this together

Smithville is at the intersection of history and possibility — a town with deep roots and wide horizons. The heritage, the character, the community pride, the beautiful bones of a historic downtown waiting to be filled with life for a new generation: these are real and they are rare.

What we build here, we build together — city leadership and citizens, property owners and entrepreneurs, longtime residents and new arrivals, all sharing the same dream of a Smithville that is vibrant, prosperous, and proud of every inch of its story.

The steps in this plan are a beginning, not a ceiling. They are things we can do right now, with the tools we already have, to start generating the momentum that makes everything else possible.

Let’s show Central Texas what Smithville looks like when it’s running at full stride — rooted in history, designed for the future, and open for everyone who wants to join in.

ready to show your support?

Sign the petition calling on Smithville’s city leadership to adopt incentive-based economic development policies that reward investment, protect our heritage, and build a community that thrives.