When a commercial real estate developer secures a TIF Bond in Tennessee, they have options for what to do with it. Each option carries different financial implications for the developer — and understanding these options helps municipal leaders have more informed conversations with the developers proposing projects in their communities. Here is a breakdown of the three primary paths a developer can take with a TIF Bond, and why selling the bond to a capital provider like Hageman Capital typically delivers the most favorable outcome for everyone involved.
Option 1: Hold the Bond and Collect Increment Over Time
A developer can hold the TIF Bond and receive regular payments from the tax increment revenue as it is collected by the municipality each year. This is the simplest approach — the developer waits for the project to generate assessed value, the increment flows into the TIF fund, and the municipality passes through payments on the bond according to the amortization schedule.
The advantage of this approach is that the developer captures the full face value of the bond over time. The drawback is significant: the developer does not receive capital when they need it most — during construction. Development costs are front-loaded, and waiting years for increment to accumulate creates a cash flow gap that must be filled by other sources. For most developers, tying up capital in a long-duration receivable is not financially efficient, especially when construction lenders expect equity contributions at closing.
Option 2: Borrow Against the Bond
A developer can use the TIF Bond as collateral to secure a loan from a bank or other lender. This provides some upfront liquidity, but typically at a discount — lenders will not advance 100% of the bond’s value, and the interest rate on the loan adds cost to the transaction. The developer also retains the ongoing obligation to manage the loan relationship, and the bond’s value is subject to the lender’s assessment of risk, which may not fully account for the taxpayer agreement guarantees now available under Tennessee’s SB 1760.
Borrowing against a TIF Bond can work for certain situations, but it introduces complexity and cost that many developers prefer to avoid — especially when a cleaner alternative exists.
Option 3: Sell the Bond to Hageman Capital
The third option — and the one that Hageman Capital specializes in — is for the developer to sell the TIF Bond outright to a capital provider. Hageman Capital purchases developer-backed TIF Bonds, providing the developer with upfront cash at loan closing. This is the approach that delivers the greatest financial efficiency for the developer and the most certainty for the project.
When a developer sells their TIF Bond to Hageman Capital, they receive immediate capital that can be applied to the construction budget, reducing the equity gap and improving the project’s overall returns. There is no ongoing loan to manage, no interest accruing on borrowed funds, and no uncertainty about future collections. The developer trades a long-duration receivable for day-one cash — and the municipality benefits because the project moves forward faster and with greater financial certainty.
Why This Matters for Municipal Leaders
Understanding a developer’s financing options helps you evaluate TIF proposals more effectively. When a developer tells you they plan to sell their TIF Bond to Hageman Capital, it signals several positive things about the transaction: the developer has a clear capital strategy, the project’s financial structure is sound enough to attract a third-party purchaser, and the TIF Bond will be underwritten by professionals who evaluate these instruments for a living.
It also means the developer will have capital certainty at closing — which reduces the risk that the project stalls during construction. For municipalities, a completed project that generates assessed value and tax increment on schedule is the best possible outcome. The financing path that maximizes the likelihood of that outcome is the one where the developer has upfront capital and the municipality has zero credit exposure.
Tennessee’s Taxpayer Agreements Strengthen Every Option
Under SB 1760, the taxpayer agreement creates a binding developer guarantee with a lien that carries property tax priority. This strengthens the TIF Bond regardless of which financing path the developer chooses — but it is especially valuable when the developer sells the bond to a capital provider, because the taxpayer agreement provides enforceable security that supports the purchase price. The stronger the legal framework, the more capital the developer can unlock and the more confident the municipality can be in the transaction.
Hageman Capital works with both municipalities and developers to structure TIF Bonds that maximize value for all parties. Our team is available as a free resource to Tennessee municipal leaders who want to understand how these financing options work and how to evaluate the proposals developers bring to the table. Connect with our team to start the conversation.
Municipal leaders across Tennessee are accustomed to fielding inquiries from commercial real estate developers — but understanding what drives those developers, how they evaluate markets, and what makes a project financially viable is essential to deploying TIF effectively. Developer-backed TIF Bonds work best when municipalities understand the developer’s perspective, because that understanding helps you structure an incentive that attracts investment without giving away more than necessary.
How Developers Choose Where to Build
Commercial real estate developers evaluate potential markets across several dimensions simultaneously. They look at population growth trends, employment centers, infrastructure quality, and regulatory environment. They assess whether the local market can support the rents, lease rates, or sale prices their project requires. And they compare the incentive landscape across competing municipalities — because in today’s environment of elevated construction costs and tightening capital markets, the availability and quality of public incentives can determine whether a project lands in your city or a neighboring one.
Tennessee’s business-friendly environment, absence of a state income tax on wages, and growing metro areas in Nashville, Memphis, Knoxville, and Chattanooga already make the state attractive. But developers making site selection decisions weigh those macro advantages against the specific financial feasibility of each project — and that is where TIF becomes the differentiator.
The Financial Anatomy of a Development Project
Every development project has a capital stack — the combination of equity, debt, and incentives that funds the total project cost. The developer contributes equity (their own money), secures construction and permanent debt from lenders, and looks for additional sources to fill any remaining gap. That gap is the difference between what the project costs and what private capital alone can cover while still generating a return that justifies the risk.
TIF fills that gap. By capturing the incremental property tax revenue generated by the completed development and directing it toward eligible project costs, TIF provides a revenue stream that reduces the developer’s out-of-pocket equity requirement and improves the project’s financial feasibility. When the developer can sell their TIF Bond to a capital provider like Hageman Capital, that future revenue stream becomes upfront cash — reducing contributed equity even further and accelerating the project timeline.
What Makes a Project Ideal for TIF
Not every project needs TIF, and not every project qualifies. The “but-for” test requires the municipality to be satisfied that the project would not proceed without TIF assistance. Projects most suited for developer-backed TIF Bonds typically share several characteristics: significant infrastructure or site preparation costs that public investment can address, a projected assessed value increase large enough to generate meaningful tax increment, a developer with the financial capacity to guarantee bond repayment through a taxpayer agreement, and a clear public benefit such as job creation, blight elimination, or tax base expansion.
Tennessee’s TIF framework supports both public infrastructure improvements (roads, utilities, parking, drainage) and, with state approval for IDB projects, private property improvements. Housing Authority TIFs can fund a broad range of redevelopment costs in blighted areas. Understanding which costs qualify — and which TIF agency structure best fits the project — is where municipal leaders can add real value to the developer relationship.
Positioning Your Municipality as Developer-Friendly
Developers value certainty and speed. A municipality that can clearly communicate its TIF process, identify the right TIF agency, and move efficiently from application to bond issuance will attract more and better projects than one where the process is opaque or unpredictable. This does not mean lowering your standards — it means being prepared.
Key steps to positioning your municipality include having a clear TIF policy or application process in place, identifying which TIF agency (Housing Authority or IDB) is best suited for the types of projects you want to attract, understanding the taxpayer agreement framework under SB 1760 so you can discuss it knowledgeably with developers, and working with experienced TIF advisors who can help you evaluate proposals quickly and structure deals that protect the public interest.
Hageman Capital: Bridging the Gap Between Municipalities and Developers
Hageman Capital sits at the intersection of municipal finance and commercial real estate development. We purchase developer-backed TIF Bonds, providing developers with the upfront capital they need — and we work with municipal leaders at no cost to help them understand developer needs, evaluate TIF proposals, and structure transactions that work for both sides. Understanding your audience — the commercial real estate developer — is the first step toward deploying TIF as the powerful community growth tool it is designed to be. Connect with our team to learn more.
When Old Town Companies set out to develop the North End project in Carmel, Indiana, they faced a challenge familiar to commercial real estate developers everywhere: a mission-driven, mixed-use project that served the community’s needs but required creative financing to be economically feasible. The solution came through Tax Increment Financing — and specifically, through Hageman Capital’s ability to purchase TIF bonds and deliver upfront capital. For Tennessee municipal leaders evaluating the state’s new developer-backed TIF legislation, this case study illustrates exactly how TIF transforms a project from infeasible to operational.
The North End Project: What Was Built
North End is a mixed-use development located north of Smokey Row Road along the Monon Trail in Carmel, Indiana. The project includes 168 high-end apartments, with 40 units dedicated to serving individuals with intellectual and developmental disabilities (IDD), plus office and retail space. Old Town Companies served as the developer, and the City of Carmel provided municipal support through TIF revenues backed by the real estate development.
The project had strong community support — it added housing, office, and retail to an area with limited commercial development, and the IDD-dedicated units addressed a real need. But mission-driven housing is rarely profitable on its own, and the financial gap between what the project cost and what private financing could cover required a public incentive to bridge.
How TIF Made It Work
Old Town was financing the project through a Freddie Mac program with specific requirements: the project needed municipal incentives to qualify, at least 10% of units had to be under 80% Area Median Income, and Freddie’s underwriting standards required multiple iterations of financial and construction budget reviews. The municipal incentive came in the form of TIF — but for the project to close, Old Town needed to monetize that TIF upfront, receiving proceeds at loan closing rather than waiting years for increment revenue to accumulate.
Hageman Capital purchased the TIF bonds from Old Town, providing the upfront equity required to satisfy the lender’s requirements and close the construction loan. Throughout the transaction, Hageman Capital maintained financing flexibility and created solutions that kept the real estate closing as the primary goal. North End officially closed in December 2021, and the project is now complete — delivering housing, commercial space, and long-term tax base growth to the City of Carmel.
What Tennessee Municipal Leaders Should Take Away
The North End project demonstrates several principles that apply directly to Tennessee’s new TIF framework under SB 1760 / HB 1892. First, TIF can make projects feasible that would not otherwise proceed — satisfying the “but-for” test that Tennessee requires for TIF approval. Second, developer-backed TIF bonds shift the financial risk away from the municipality. Carmel did not pledge its general credit; the TIF revenue was supported by the real estate development itself. Third, the ability for a developer to sell their TIF bond to a capital provider like Hageman Capital and receive upfront cash is what transforms TIF from a long-term revenue stream into an immediate project catalyst.
Tennessee’s new taxpayer agreement provisions strengthen this model further. Under SB 1760, the developer can now contractually guarantee any shortfall between actual tax increment revenues and the required debt service — a binding obligation backed by a lien that carries the same priority as property tax liens. This gives both municipalities and capital providers like Hageman Capital greater confidence in the transaction, which ultimately means more projects get built.
The Types of Projects TIF Can Support in Tennessee
Tennessee’s TIF framework is broad enough to support a wide range of project types. Housing Authority TIFs can fund redevelopment of blighted areas including site acquisition, infrastructure installation, and public improvements. IDB TIFs can support commercial, industrial, retail, and mixed-use projects — with TIF proceeds funding public infrastructure directly, and private improvements with state approval. The North End model — a mixed-use development combining market-rate housing, affordable units, and commercial space — is precisely the kind of transformative project Tennessee municipalities can now greenlight with even stronger financial protections.
Hageman Capital: Your TIF Partner at No Cost
Old Town Companies has become one of Hageman Capital’s closest partners because the relationship works: Hageman Capital understands its role as a facilitator, not a complication. That same approach extends to our work with municipal leaders. We provide free, expert guidance to Tennessee municipalities looking to understand how developer-backed TIF Bonds work, how to evaluate projects, and how to structure transactions that protect the public interest while delivering real community growth. Connect with our team and see how TIF can transform development in your community.
Kansas’s Taxpayer Agreement Act introduces enforceable developer guarantees and conduit bond authority that strengthen the financial advisor’s toolkit — but careful analysis remains essential. Here are the pitfalls Hageman Capital sees financial advisors encounter most frequently.
Pitfall 1: Over-Relying on Multi-Revenue-Stream Projections
Kansas TIF uniquely allows pledging ad valorem increment, local sales tax, and franchise fees. While multiple revenue streams strengthen the bond, each stream carries different risk characteristics. Sales tax revenue is more volatile than property tax increment and depends on tenant mix and consumer spending patterns. Model each stream independently with conservative assumptions rather than blending them into an overly optimistic aggregate projection.
Pitfall 2: Not Evaluating the Developer’s Capacity for the Taxpayer Agreement
The taxpayer agreement is enforceable as delinquent real estate taxes — but collection depends on the developer having assets to collect against. Evaluate the developer’s balance sheet, existing commitments, and capacity to service the guarantee alongside their other obligations. A taxpayer agreement from an undercapitalized developer provides less practical security than the statutory framework implies.
Pitfall 3: Overlooking the Mortgage Holder Consent Requirement
HB 2737 requires written consent from each existing mortgage holder before a taxpayer agreement is executed. If this is not factored into your timeline, it can delay closing significantly. Flag this requirement early and verify compliance before the bond issuance date.
Pitfall 4: Ignoring the Protected Mill Levy Carve-Outs
The 20 mills for school districts and 1.5 mills for the state cannot be captured by TIF. Your increment projection must exclude these amounts — failure to do so will overstate available revenue and undermine the feasibility analysis. Verify the applicable levy rates with the county before finalizing projections.
Pitfall 5: Treating the Feasibility Study as a Formality
The feasibility study is a statutory requirement that the governing body and public will scrutinize. It must genuinely demonstrate the but-for case, project costs and revenues accurately, and include a cost-benefit analysis. A weak study creates legal risk and undermines the governing body’s confidence in your recommendation.
Tennessee’s economic development landscape shifted meaningfully during the 2026 legislative session with the passage of SB 1760 and its companion bill HB 1892. These bills amend the Uniformity in Tax Increment Financing Act of 2012 to introduce taxpayer agreements — a new mechanism that allows municipalities and developers to structure TIF Bonds with enforceable, developer-backed guarantees. For municipal leaders across the state, this legislation opens the door to a more flexible, lower-risk approach to incentivizing commercial real estate development.
What the New Legislation Changes
Tennessee has used Tax Increment Financing for years through two primary TIF agencies: Housing Authorities and Industrial Development Boards (IDBs). Housing Authorities can allocate tax increment revenues for up to 30 years and focus on redeveloping blighted areas. IDBs can allocate increment for up to 20 years and have broader authority to support commercial, industrial, and retail projects — though they require state approval for spending TIF proceeds on private property improvements that do not qualify as public infrastructure.
What SB 1760 adds to this framework is the taxpayer agreement. Under this new provision, a TIF agency can enter into a contract where the property owner or developer guarantees, enhances, or otherwise secures the bonds or lease obligations of the TIF agency. If the tax increment revenues generated by the project fall short of the debt service payment, the developer makes up the difference — a mechanism the legislation calls a “taxpayer direct payment.” This is a binding contractual obligation, not a handshake promise.
How Developer-Backed TIF Bonds Compare to Other Incentives
Tennessee municipalities already have access to a robust incentive toolkit. PILOT agreements, administered through IDBs, allow developers to pay a negotiated reduced sum instead of full property taxes. The FastTrack Infrastructure Program provides state grants for public infrastructure supporting job-creating projects. Tax abatements offer temporary reductions in property tax obligations.
Each of these tools has its place, but developer-backed TIF Bonds offer a combination of advantages that other incentives do not match. TIF does not create new taxes or raise existing rates — it captures only the incremental revenue that would not exist without the development. Unlike PILOT agreements, which reduce near-term property tax revenue for schools and services, TIF preserves the full base amount for all taxing jurisdictions. Unlike state grants, TIF does not depend on appropriation cycles or competitive application windows. And unlike traditional municipal-backed TIF bonds, developer-backed structures remove the municipality’s credit exposure entirely.
Municipal-Backed vs. Developer-Backed: Understanding the Distinction
Under traditional TIF structures, the municipality or its TIF agency may issue bonds backed by its own credit or general obligations, pledging future tax increment revenues to repay bondholders. If the increment falls short, the municipality may bear some financial exposure depending on how the bonds are structured.
Developer-backed TIF Bonds flip this dynamic. The TIF agency issues the bond to the developer, who then assigns it to a capital provider — such as Hageman Capital — in exchange for upfront cash to fund construction. The bond is repaid solely from the tax increment, and the developer’s taxpayer agreement guarantees any shortfall. The taxpayer agreement lien carries the same priority as property tax liens, runs with the land, and takes precedence over any existing or subsequent mortgage. The municipality serves as a conduit issuer with no obligation to advance funds from the general fund.
Evaluating Project Feasibility
Before committing to any TIF structure, municipalities should conduct a thorough feasibility analysis. This includes estimating the increase in assessed property value once the project is complete, projecting the annual tax increment and verifying it can support the proposed debt service, evaluating the developer’s financial capacity and track record, and confirming the project meets the “but-for” test — the demonstration that the development would not proceed without TIF assistance.
Tennessee’s process requires preparing either a redevelopment plan (for Housing Authority projects) or an economic impact plan (for IDB projects), holding public hearings, and obtaining legislative approvals from all affected governing bodies. For IDB projects involving private property improvements, state approval from the Comptroller and Commissioner may also be required. These procedural steps exist to protect the public interest and ensure transparency.
Working With Developers to Secure Favorable Terms
The redevelopment agreement is the central contract governing any TIF transaction, and it is where municipal leaders have the most leverage. Key provisions to negotiate include the developer’s construction timeline and performance milestones, a detailed list of eligible costs and maximum reimbursement caps, the taxpayer agreement terms including the shortfall guarantee mechanism, financial reporting and disclosure requirements, and remedies for default by either party.
Tennessee’s new legislation also specifies that any provision in a deed of trust or mortgage requiring acceleration solely because the property owner entered into a taxpayer agreement is unenforceable. This removes a potential barrier that could otherwise discourage developers from signing taxpayer agreements, making the structure more practical for real-world transactions.
The Bigger Picture: TIF as a Community Growth Engine
Developer-backed TIF Bonds do more than close individual deals. They create a repeatable framework for attracting investment, expanding the tax base, and funding public infrastructure — all without exposing municipal finances to risk. Every completed TIF project adds assessed value to the tax rolls that, once the TIF period ends, flows entirely to all taxing jurisdictions. Jobs created during and after construction generate economic activity that extends well beyond the project boundaries.
Hageman Capital is the capital provider that purchases developer-backed TIF Bonds, giving developers the upfront cash they need to break ground. But we are also a free resource for municipal leaders across Tennessee who want to understand how this new legislation applies to their community. From evaluating project feasibility to structuring taxpayer agreements and navigating the statutory approval process, our team is available to help at no cost. Connect with our team and let’s explore what developer-backed TIF Bonds can do for your city.
Kansas’s Taxpayer Agreement Act (HB 2737) introduces instruments that materially change the risk analysis for TIF-supported projects. For municipal financial advisors evaluating bond structures, this overview covers the key statutory provisions under both the existing TIF Act and the new legislation.
Kansas TIF Framework at a Glance
Special obligation bonds under KSA 12-1774(a) are payable from ad valorem increment, local sales and use tax increment, franchise fees, and redevelopment agreement payments. The 20 mills for school districts and 1.5 mills for the state are excluded from capture. Eligible areas include blighted areas, conservation areas (50%+ structures 35+ years old), buildings 65+ years old, and several specialized categories. A feasibility study and two-thirds supermajority vote are required.
What HB 2737 Adds
Taxpayer agreements create binding developer guarantees enforceable as delinquent real estate taxes. Written consent from existing mortgage holders is required before execution. Conduit bonds are payable solely from pledged security with no city obligation to advance funds. These instruments do not constitute public debt or count against statutory debt limitations. For your analysis, this means developer-backed TIF bonds under HB 2737 carry zero municipal recourse, with enforceable security that traditional special obligation bonds lacked.
Key Modeling Considerations
Your projections should model ad valorem increment, any pledged sales tax and franchise fee revenue, development timeline risk, assessment appeals, and the developer’s financial capacity to honor the taxpayer agreement guarantee. Coverage ratios should account for the multi-revenue-stream nature of Kansas TIF. The feasibility study requirement provides a formal framework for documenting these projections.
Hageman Capital as a Technical Resource
We work alongside Kansas financial advisors as a specialized TIF resource at no cost. Connect with our team for a technical consultation.
Kansas’s Taxpayer Agreement Act gives mayors a powerful TIF framework — but the details matter. Here are the common pitfalls Hageman Capital sees Kansas mayors encounter, and how to avoid them.
Pitfall 1: Approving TIF Without a Genuine “But-For” Justification
Kansas law requires a feasibility study demonstrating the project would not proceed without TIF. This is not a formality — the feasibility study is a statutory requirement reviewed by the governing body and available to the public. If the project would have happened anyway, you are giving away future increment unnecessarily. Insist on a genuine funding gap analysis before supporting TIF for any project.
Pitfall 2: Not Understanding Eligible Area Requirements
Kansas TIF can only be used in designated eligible areas — blighted areas, conservation areas, buildings 65+ years old, and several specialized categories. If the proposed project area does not meet these criteria, the entire TIF structure fails. Verify the eligible area designation early, before significant time and resources are invested in plan development.
Pitfall 3: Overlooking the Two-Thirds Supermajority Requirement
Kansas requires a two-thirds supermajority to adopt a redevelopment project plan — a higher threshold than most incentive approvals. This means you need broader council support than a simple majority. Build consensus early by briefing council members before the public hearing and ensuring they understand the developer-backed structure, the taxpayer agreement protections, and the community benefits.
Pitfall 4: Poor Communication About School District Revenue
Constituents often worry that TIF diverts money from schools. In Kansas, the 20 mills for school districts are explicitly protected from TIF capture. Lead with this fact in every public communication. The base year taxes continue flowing to all jurisdictions, and school funding is never reduced by TIF.
Pitfall 5: Going It Alone
The Taxpayer Agreement Act is new, and its interaction with existing TIF law adds complexity. Hageman Capital provides TIF structuring expertise to Kansas mayors at no cost. Request a meeting with Whitney Peterson, our Director – Government Relations, and make sure your city’s next TIF project starts on the right foundation.
Kansas Economic Development Directors now have one of the strongest TIF frameworks in the country. But deploying developer-backed TIF Bonds under HB 2737 effectively requires avoiding several common missteps. Here are the pitfalls Hageman Capital sees most often.
Pitfall 1: Skipping the Feasibility Study Details
Kansas’s feasibility study requirement is detailed — it must address the but-for test, project costs, projected increment, a cost-benefit analysis, and a relocation assistance plan. Treating this as a box-checking exercise rather than a genuine analysis undermines your credibility with the governing body and creates legal risk. Invest in a thorough study and use it as the foundation of your deal presentation.
Pitfall 2: Misunderstanding What TIF Can Pay For
Kansas TIF cannot fund construction of privately owned buildings — the most critical limitation in the statute. TIF is limited to public infrastructure and site preparation: land acquisition, demolition, streets, utilities, parking structures, environmental remediation, and similar costs. If the developer’s TIF-eligible costs are primarily vertical construction, the deal will not work under Kansas law. Confirm eligible costs early and ensure the developer understands this boundary.
Pitfall 3: Not Securing Mortgage Holder Consent Early
HB 2737 requires written consent from each existing mortgage holder before a taxpayer agreement is executed. If this is not addressed until late in the process, it can delay or derail closing. Identify all existing liens on the property and initiate the consent process as soon as the taxpayer agreement is being negotiated.
Pitfall 4: Failing to Prepare the Governing Body for the Supermajority Vote
The two-thirds supermajority requirement means you need broader support than a simple majority. Brief council members individually before the hearing, provide clear materials on the deal structure and community benefits, and prepare answers to the questions constituents will ask. A well-prepared governing body votes confidently; a surprised one does not.
Pitfall 5: Structuring Without a Capital Partner
A developer-backed TIF Bond only delivers upfront capital if a buyer is identified. Engaging Hageman Capital early ensures the bond is structured to meet purchase criteria from the start. Request a meeting with Whitney Peterson and let’s structure your next deal for success.
Kansas requires a two-thirds supermajority to approve a TIF project plan — reflecting the significance of the decision. Before casting that vote, here are the common pitfalls council members should watch for.
Pitfall 1: Voting Without Understanding the Structure
TIF is complex, and the Taxpayer Agreement Act adds new instruments. Before voting, make sure you understand how the increment is calculated, what the taxpayer agreement guarantees, how the conduit bond structure insulates the city, and what the feasibility study demonstrates. Ask for a briefing if the materials are unclear.
Pitfall 2: Believing TIF Hurts Schools
In Kansas, the 20 mills for school districts and 1.5 mills for the state are explicitly protected from TIF capture. Base year taxes continue flowing to all jurisdictions. TIF captures only the new increment — revenue that would not exist without the project. If a constituent claims TIF takes money from schools, this is the fact that corrects the misconception.
Pitfall 3: Not Reviewing the Feasibility Study
The feasibility study is your primary analytical tool. It must demonstrate the project would not proceed without TIF, project the increment, estimate costs, and include a cost-benefit analysis. If the study is weak or the but-for case is unconvincing, that is a red flag — regardless of how attractive the project appears.
Pitfall 4: Ignoring Constituent Communication
Public hearings are required before both the redevelopment district and project plan votes. Use these as opportunities to educate, not just comply. Prepare talking points that address the most common concerns: no new taxes, school funding protected, developer bears the risk, city carries no debt.
Pitfall 5: No Ongoing Oversight
After approval, ensure the city monitors construction progress, increment performance, and compliance with the redevelopment agreement. Your oversight role continues after the vote.
For Kansas mayors championing TIF-supported development, the ultimate goal is a completed project that grows the tax base without exposing your city to risk. Achieving that depends on whether the TIF Bond is structured so a capital provider like Hageman Capital can purchase it from the developer. Here is what that means for your role.
What Makes a Kansas TIF Bond Purchasable
Hageman Capital purchases special obligation TIF Bonds structured as private placements, non-recourse to the city, secured by pledged increment and a taxpayer agreement under HB 2737. The projected revenue (ad valorem, sales tax, and franchise fees) must demonstrate sufficient coverage over debt service. The developer must have financial capacity to honor the taxpayer agreement guarantee, and written mortgage holder consent must be obtained. When these elements are in place, the developer receives competitive upfront capital at closing.
Your Role in Getting the Structure Right
You will not draft bond documents — that is the work of your ED team, financial advisors, and bond counsel. Your role is to ensure the right professionals are engaged, the feasibility study is thorough, and the governing body has the information needed for the two-thirds supermajority vote. When Hageman Capital is identified early as the capital provider, it gives everyone involved — the developer, the lender, and your council — certainty that the deal has been vetted by professionals who purchase these bonds for a living.
The Outcome
When structured correctly: the developer sells the bond to Hageman Capital and receives upfront cash, the city issues the bond as a conduit with zero credit exposure, the project gets built, and the tax base grows. School district and state mill levies are protected throughout. When the 20-year TIF period ends, all revenue flows permanently to every taxing jurisdiction.
Hageman Capital helps Kansas mayors ensure their TIF projects achieve this outcome — at no cost. Connect with Whitney Peterson to get the structure right for your community.
