For Kansas ED Directors, structuring a TIF Bond that a capital provider can purchase is where your deal-making expertise has the most impact. Here is how to structure special obligation TIF Bonds under KSA 12-1774(a) with taxpayer agreements under HB 2737 that Hageman Capital can purchase.
Structural Requirements for Bond Purchase
The bond should be a private placement issued by the city directly to the developer, non-recourse to the city, secured by pledged ad valorem increment, sales tax, franchise fees, and a taxpayer agreement. The feasibility study must demonstrate the but-for case, and the projected multi-stream revenue must provide adequate debt service coverage. The developer needs financial capacity to support the guarantee, and written mortgage holder consent must be obtained per HB 2737.
Building the Redevelopment Agreement
The redevelopment agreement should include clear TIF-eligible cost identification (remembering Kansas prohibits funding private building construction), enforceable construction milestones, a strong taxpayer agreement with explicit shortfall calculations, financial reporting obligations, and default remedies. The planning commission must find the project plan consistent with the comprehensive plan before the governing body votes.
Engage Hageman Capital During Structuring
The most efficient deals have the capital provider at the table from the start. Hageman Capital provides guidance on coverage ratios, amortization structures, taxpayer agreement terms, and multi-revenue-stream pledging during the negotiation phase — preventing costly restructuring after the two-thirds supermajority vote.
The Competitive Advantage
ED Directors who can offer developers a clear, tested path from incentive approval to day-one capital win projects that other cities lose. Hageman Capital is available as a free structuring resource. Connect with Whitney Peterson to discuss your pipeline.
When a TIF Bond resolution comes before your Kansas city council, the structuring details determine whether the deal delivers real value while protecting public funds. Understanding how TIF Bonds are structured for capital provider purchase helps you evaluate the deal in front of you.
How Developer-Backed TIF Bond Sales Work in Kansas
The city issues a special obligation bond to the developer, who sells it to Hageman Capital for upfront construction cash. The bond is repaid from ad valorem increment, sales tax, and franchise fees. The developer’s taxpayer agreement under HB 2737 guarantees any shortfall — enforceable as delinquent real estate taxes. The city issues the bond as a conduit with no obligation to advance funds. No public debt is created.
What to Look for Before Your Vote
Focus on several elements: Does the feasibility study demonstrate a genuine but-for case? Has the developer signed a taxpayer agreement with clear guarantee terms? Has written mortgage holder consent been obtained? Has a capital provider been identified? Is the project plan consistent with the city’s comprehensive plan, as confirmed by the planning commission? You do not need to evaluate the modeling yourself, but you should confirm that qualified professionals are satisfied with the structure.
Why the Capital Provider’s Involvement Matters
When Hageman Capital is willing to purchase the bond, it means an independent third party has validated the deal’s soundness. That should give you additional confidence. The two-thirds supermajority threshold exists because TIF decisions are significant — the involvement of experienced capital providers helps ensure that significance is matched by quality structuring.
Hageman Capital provides free educational support to Kansas council members. Connect with Whitney Peterson for a no-obligation conversation before your next vote.
For Kansas municipal financial advisors, structuring a TIF Bond that a capital provider can purchase is the technical exercise that determines whether a developer-backed transaction delivers its intended benefits. Here is the framework for structuring special obligation TIF Bonds under KSA 12-1774(a) with taxpayer agreements under HB 2737 that Hageman Capital can purchase.
Bond Structure Requirements
Hageman Capital purchases special obligation bonds structured as private placements — non-recourse to the city, payable from pledged ad valorem increment (excluding 20 mills for school districts and 1.5 mills for the state), local sales tax increment, franchise fees, and secured by a taxpayer agreement. Key parameters include amortization schedule, interest rate, maturity (within the 20-year TIF period), and coverage ratio. Kansas’s multi-revenue-stream framework provides layered security that enhances the bond’s value — but each stream must be modeled independently with conservative assumptions.
The Taxpayer Agreement as Security
Under HB 2737, the taxpayer agreement creates a binding guarantee enforceable as delinquent real estate taxes. Written consent from existing mortgage holders is required before execution. The agreement does not constitute public debt, does not pledge the city’s credit, and does not count against debt limitations. For capital provider underwriting, the key evaluation points are the developer’s financial capacity, the guarantee calculation methodology, and the enforceability provisions. The mortgage holder consent requirement should be factored into your closing timeline.
Increment Modeling for Multi-Stream Revenue
Your model should project ad valorem increment (excluding protected mill levies), local sales tax increment (if pledged — at the governing body’s discretion), and franchise fee revenue separately. Account for development timeline risk, assessment lag, sales tax volatility, and tenant occupancy assumptions. The feasibility study must document these projections and demonstrate the but-for case. Hageman Capital’s underwriting team reviews projections independently, but a well-documented, conservative model streamlines the process.
Coordinating Bond Documents
Documentation includes the bond resolution, the bond or note, the redevelopment agreement, the taxpayer agreement, the security agreement pledging revenues, and bond counsel’s opinion. The two-thirds supermajority vote must adopt the project plan before bonds are issued. Bond counsel should verify statutory compliance with both KSA 12-1770 and HB 2737, including the eligible area designation, feasibility study requirements, and taxpayer agreement recording provisions.
Engage Hageman Capital During Structuring
Having the capital provider at the table during structuring prevents costly rework after governing body approval. Hageman Capital provides guidance on coverage expectations, multi-stream revenue pledging, taxpayer agreement terms, and timing — at no cost to the municipality. Connect with Whitney Peterson for a technical consultation on the transaction in front of you.
Kansas has long been one of the most developer-friendly TIF environments in the region, with a statutory framework under KSA 12-1770 et seq. that allows cities to capture ad valorem property tax increment, local sales tax, and franchise fee revenue to fund eligible public infrastructure costs. In April 2026, Governor Laura Kelly signed House Bill 2737 — the Taxpayer Agreement Act — adding a powerful new layer to this already strong foundation. For municipal leaders across Kansas, this legislation opens the door to developer-backed TIF Bonds with enforceable guarantees that shift financial risk decisively away from the municipality.
What the Taxpayer Agreement Act Changes
Kansas cities have issued special obligation TIF bonds under KSA 12-1774(a) for years — bonds payable solely from pledged increment and other revenues, without backing from the city’s general credit. What HB 2737 adds is the taxpayer agreement: a voluntary, binding contractual obligation where the developer guarantees payments in connection with ad valorem taxes on the project area. Delinquent payments under a taxpayer agreement are enforceable with the same priority as delinquent real estate taxes — the strongest collection remedy available under Kansas law. The Act also authorizes conduit bond issuance, where the city has no obligation to advance funds, levy taxes, or appropriate money for repayment.
How Kansas TIF Compares to Other State Incentives
Kansas municipalities have access to a robust incentive toolkit. STAR Bonds can finance major tourism and entertainment destinations with sales tax revenue. Industrial Revenue Bonds provide tax-exempt financing for manufacturing and industrial projects. The PEAK program offers income tax credits for job creation. Tax abatements reduce property tax obligations for qualifying businesses. Each tool has a specific niche, but developer-backed TIF Bonds offer advantages the others do not: TIF generates long-term tax base growth rather than reducing it, captures revenue that would not exist without the project, and under HB 2737 carries zero municipal credit exposure. Unlike STAR Bonds, TIF is available for a wide range of project types beyond tourism. Unlike tax abatements, TIF does not reduce revenue flowing to schools and services.
Special Obligation Bonds vs. Full Faith and Credit
Kansas TIF law authorizes both special obligation bonds and full faith and credit bonds. Special obligation bonds — the focus of developer-backed transactions — are payable solely from pledged revenues. If the increment falls short, the city is not obligated to cover the gap from its own resources. Full faith and credit bonds pledge the city’s general taxing power as additional security, offering lower interest rates but exposing the municipality to financial risk. For individual developer-driven projects, special obligation bonds with taxpayer agreements provide the optimal balance: enforceable developer guarantees without municipal credit exposure.
Evaluating Project Feasibility
Kansas requires a feasibility study before TIF can be approved, demonstrating the project would not proceed “but for” TIF assistance. The study must include projected TIF-eligible costs, estimated tax increment revenues, a cost-benefit analysis, and a relocation assistance plan. The governing body must adopt the project plan by a two-thirds supermajority — a higher threshold reflecting the significance of the decision. For developer-backed transactions, the feasibility analysis should also evaluate the developer’s financial capacity to honor the taxpayer agreement guarantee and confirm the projected increment provides adequate debt service coverage.
Working With Developers on Terms
The redevelopment agreement is the central contract. Key provisions include the developer’s construction obligations and timeline, TIF-eligible cost caps (remembering that Kansas TIF cannot fund privately owned building construction), the taxpayer agreement terms, and default remedies. HB 2737 requires written consent from each existing mortgage holder before a taxpayer agreement is executed — a practical step that should be addressed early in negotiations to avoid closing delays.
TIF as a Community Growth Engine
Developer-backed TIF Bonds create a repeatable model for turning blighted, conservation, or aging areas into productive tax base. Every completed project adds assessed value that, after the 20-year TIF period ends, flows permanently to all taxing jurisdictions — with school district and state mill levies protected throughout. Hageman Capital is the capital provider that purchases these bonds, and we serve as a free resource for Kansas municipal leaders navigating this new framework. Connect with our team to explore what developer-backed TIF Bonds can do for your city.
As a Kansas city council member, you may soon face a TIF vote requiring a two-thirds supermajority — the highest threshold for any incentive approval in your jurisdiction. Kansas’s Taxpayer Agreement Act (HB 2737) has introduced protections that make developer-backed TIF Bonds far more favorable for municipalities. Here is a high-level overview.
TIF in Plain Language
TIF captures only the increase in property taxes generated by new development. No existing revenue is redirected — the base year taxes continue flowing to all taxing jurisdictions. The 20 mills for school districts and 1.5 mills for the state are fully protected from TIF capture. Only the new growth is set aside for up to 20 years to fund eligible public infrastructure costs like streets, utilities, demolition, and site preparation. When the TIF period ends, all revenue flows permanently to the taxing jurisdictions.
What HB 2737 Means for Risk
The Taxpayer Agreement Act ensures the developer — not your city — guarantees bond repayment. Delinquent payments are enforceable as delinquent real estate taxes. Conduit bonds issued under the Act carry no city obligation to advance funds. No public debt is created, no municipal credit is pledged, and the feasibility study required before any TIF approval must demonstrate the project would not proceed without TIF assistance.
What You Are Voting On
Kansas requires a two-thirds supermajority to adopt a redevelopment project plan. Before that vote, you will review the feasibility study, attend a public hearing, and evaluate whether the project area qualifies as an eligible area. The project plan must include estimated costs, projected increment, and the financing structure. Your job is to verify the analysis is sound and the protections are in place.
Kansas’s passage of the Taxpayer Agreement Act (HB 2737) has added a significant new capability to the state’s already strong TIF toolkit. For Economic Development Directors managing active developer pipelines, this overview covers the framework and how it fits into your work.
Kansas TIF: The Framework
TIF in Kansas operates under KSA 12-1770 et seq. Cities can capture ad valorem property tax increment, local sales tax increment, and franchise fee revenue to fund eligible public infrastructure costs for up to 20 years. Special obligation bonds under KSA 12-1774(a) are payable solely from pledged revenues — not backed by the city’s general credit. The 20 mills for school districts and 1.5 mills for the state are protected from capture. Eligible areas include blighted areas, conservation areas, buildings 65 years or older, and several specialized categories.
What HB 2737 Adds
The Taxpayer Agreement Act introduces taxpayer agreements (binding developer guarantees enforceable as delinquent real estate taxes), conduit bond authority (city has no obligation to advance funds), and a requirement for written mortgage holder consent before entering a taxpayer agreement. For ED Directors, this means you can offer developers a structure with upfront capital certainty and enforceable security — a combination few competing cities can match.
How This Helps You Close Deals
Developer-backed TIF Bonds with taxpayer agreements give developers upfront cash when they sell the bond to Hageman Capital. Kansas’s multi-revenue-stream framework enhances the bond’s value. The feasibility study requirement, two-thirds supermajority vote, and planning commission review provide the procedural foundation your governing body needs to approve with confidence. Your job is to navigate this process efficiently and present deals that are defensible, competitive, and structured for success.
Hageman Capital as Your Resource
We work alongside Kansas ED Directors as a free TIF structuring resource. Connect with Whitney Peterson to discuss your pipeline.
If you are a Kansas mayor exploring developer-backed TIF Bonds for the first time, this overview covers what you need to know. The Taxpayer Agreement Act (HB 2737), signed into law in April 2026, gives your city one of the strongest TIF frameworks in the country — combining Kansas’s established special obligation bond authority with new enforceable developer guarantees.
What TIF Is and What It Is Not
TIF captures the increase in property taxes generated by new development and directs that increase toward eligible public infrastructure costs. No new taxes are created. No tax rates increase. The base year taxes continue flowing to all taxing jurisdictions as usual — and the 20 mills for school districts plus 1.5 mills for the state are fully protected from TIF capture. Only the increment, the growth that would not exist without the project, is set aside for up to 20 years to support eligible costs.
What HB 2737 Changes
The Taxpayer Agreement Act authorizes voluntary taxpayer agreements where the developer guarantees payments on TIF bond debt. Delinquent payments are enforceable as delinquent real estate taxes. The Act also authorizes conduit bonds — where the city has no obligation to advance funds or levy taxes for repayment. This means your municipality bears zero financial risk on developer-backed TIF Bonds.
Your Role as Mayor
You champion projects publicly, ensure the governing body has sound analysis (including the required feasibility study), and guide the two-thirds supermajority vote to adopt the project plan. You are not expected to be a TIF structuring expert — that is what your economic development team, financial advisors, and resources like Hageman Capital are for. What you need to communicate to constituents is clear: TIF does not spend public money, does not redirect existing revenue, and under HB 2737, does not put the city’s credit at risk.
Kansas TIF law authorizes two types of bonds: special obligation bonds and full faith and credit bonds. This distinction is the most consequential structural decision in any TIF transaction — and with the passage of HB 2737, the Taxpayer Agreement Act, developer-backed special obligation bonds are now the clear choice for most individual development projects. Here is why.
Full Faith and Credit Bonds: Municipal-Backed
Full faith and credit TIF bonds pledge the city’s general taxing power as additional security. If the increment falls short, the city must cover the gap. These bonds may offer lower interest rates due to the municipal credit backing, but they expose the city to financial risk and may count against debt limitations. For large-scale public infrastructure projects where the municipality is the primary beneficiary, this structure may occasionally make sense. For individual developer-driven projects, it introduces risk that is unnecessary.
Special Obligation Bonds: Developer-Backed
Special obligation bonds under KSA 12-1774(a) are payable solely from pledged revenues — ad valorem increment, local sales tax, franchise fees, and redevelopment agreement payments. The city is not obligated to cover shortfalls from its own resources. With the Taxpayer Agreement Act, the developer now contractually guarantees any shortfall, and delinquent payments are enforceable as delinquent real estate taxes. Conduit bonds issued under HB 2737 go even further — the city has no obligation to advance funds, levy taxes, or appropriate money for repayment.
The Developer Gets the Same Proceeds Either Way
A common misconception is that developer-backed bonds reduce proceeds compared to municipal-backed structures. The bond’s value is determined by the projected increment — which is the same regardless of who backs the bond. What changes is the risk allocation. Under a developer-backed structure, the developer receives competitive proceeds when they sell the bond to Hageman Capital, the municipality carries zero credit exposure, and the project moves forward with the same financial impact. Municipal leaders get what they want, developers get what they want, and the project is greenlit.
When to Choose Developer-Backed
For individual commercial real estate projects — multifamily, mixed-use, retail, office, and industrial — developer-backed special obligation bonds with taxpayer agreements are the appropriate structure. The developer benefits most from TIF assistance and is best positioned to bear the performance risk. Kansas’s multi-revenue-stream framework (property tax, sales tax, and franchise fees) provides additional revenue security that strengthens the bond without municipal credit exposure. The two-thirds supermajority required for project plan adoption reflects the gravity of the decision and ensures the governing body is fully committed.
Hageman Capital Makes It Work
The developer-backed structure works because there is a capital provider willing to purchase the bond. Hageman Capital is that provider. We purchase developer-backed TIF Bonds in Kansas and work with municipal leaders at no cost to help evaluate structures. Connect with our team to make the right call for your municipality.
When a Kansas developer secures a TIF Bond, they have options for monetizing it. 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 and why selling the bond to Hageman Capital typically delivers the best outcome for everyone involved.
Option 1: Hold the Bond and Collect Increment Over Time
A developer can hold the TIF Bond and receive payments as tax increment is collected each year. This captures the full face value over time, but the developer does not receive capital when they need it most — during construction. Kansas TIF bonds can run up to 20 years, meaning the developer would wait two decades for full repayment while construction costs are front-loaded. For most developers, tying up capital in a long-duration receivable is financially inefficient.
Option 2: Borrow Against the Bond
A developer can use the TIF Bond as collateral for a loan. This provides some upfront liquidity but at a discount — lenders will not advance full value, and interest on the loan adds cost. The developer retains the ongoing loan relationship and the bond’s value is subject to the lender’s risk assessment. This approach introduces complexity that many developers prefer to avoid when a cleaner option exists.
Option 3: Sell the Bond to Hageman Capital
Hageman Capital purchases developer-backed TIF Bonds, providing the developer with upfront cash at closing. No ongoing loan to manage, no interest accruing, no uncertainty about future collections. The developer trades a 20-year receivable for day-one capital that can be applied to the construction budget. Kansas’s multi-revenue-stream TIF framework — ad valorem increment, local sales tax, and franchise fees — can enhance the bond’s value, and the Taxpayer Agreement Act’s enforceable guarantees support competitive purchase pricing.
Why This Matters for Municipal Leaders
When a developer plans to sell their TIF Bond to Hageman Capital, it signals several positive things: the deal has a clear capital strategy, the bond structure is sound enough to attract a third-party purchaser, and the project has financing certainty at closing. For municipalities, a completed project that generates assessed value and increment on schedule is the best outcome — and the financing path that maximizes that likelihood is the one where the developer has upfront capital.
The Taxpayer Agreement Strengthens Every Option
HB 2737’s taxpayer agreement creates enforceable security that supports the bond regardless of which path the developer chooses — but it is especially valuable for bond sales, where the developer guarantee directly supports the purchase price. Hageman Capital works with both municipalities and developers to structure Kansas TIF Bonds that maximize value for all parties. Connect with our team to learn more.
Kansas municipal leaders field developer inquiries regularly — but deploying TIF effectively requires understanding what drives those developers, how they evaluate markets, and what makes a project financially viable. Developer-backed TIF Bonds work best when municipalities understand the developer’s perspective, because that understanding helps you structure incentives that attract investment without over-committing public resources.
How Developers Choose Where to Build
Commercial real estate developers evaluate markets across multiple dimensions: population growth, employment centers, infrastructure quality, regulatory environment, and the competitive incentive landscape. In Kansas, cities like Olathe, Overland Park, Wichita, and Lawrence all compete for developer attention — and the city that can articulate its incentive capabilities most clearly wins the conversation. Kansas’s established TIF framework, combined with the new Taxpayer Agreement Act, positions cities with a powerful differentiator: developer-backed TIF Bonds with enforceable guarantees and multi-revenue-stream security.
The Financial Anatomy of a Development Project
Every project has a capital stack — equity, debt, and incentives. The developer contributes equity, secures construction and permanent debt, and looks for incentives to fill the remaining gap between total cost and what private capital alone can cover. TIF fills that gap by capturing the incremental tax revenue generated by the completed development. When the developer sells their TIF Bond to Hageman Capital, that future revenue stream becomes upfront cash — reducing equity requirements and improving project returns.
What Makes a Kansas Project Ideal for TIF
Projects best suited for Kansas TIF share several characteristics: location in an eligible area (blighted, conservation, buildings 65+ years old), significant public infrastructure costs (streets, utilities, demolition, site preparation), a projected assessed value increase large enough to generate meaningful increment, and a developer with the financial capacity to support a taxpayer agreement. Remember that Kansas TIF cannot fund privately owned building construction — so the eligible cost component must be substantial enough to justify the TIF structure. Projects with major site preparation, environmental remediation, or public infrastructure needs are ideal candidates.
Positioning Your City as Developer-Friendly
Developers value certainty and speed. Many Kansas cities — including Olathe and Overland Park — have adopted formal TIF policies prescribing application formats, evaluation criteria, and approval timelines. If your city does not have a clear TIF policy, now is the time to create one. Understanding the Taxpayer Agreement Act framework, knowing your eligible areas, and having an experienced TIF resource identified before developers come calling positions your municipality to compete effectively.
Hageman Capital: Bridging Municipalities and Developers
Hageman Capital sits at the intersection of municipal finance and commercial real estate development. We purchase developer-backed TIF Bonds and work with Kansas municipal leaders at no cost to help them understand developer needs, evaluate proposals, and structure transactions that work for both sides. Connect with our team to learn more.
