Nebraska’s Community Development Law creates a defined TIF framework with unique characteristics that shape your financial analysis. Here are the pitfalls Hageman Capital sees financial advisors encounter most frequently.
Pitfall 1: Not Accounting for the Ad-Valorem-Only Framework
Unlike multi-revenue-stream states, Nebraska TIF captures only real property taxes. Your increment projection depends entirely on assessed value growth — making accurate property valuation estimates and conservative development timeline assumptions critical. There is no sales tax or franchise fee cushion to offset underperformance in property assessments.
Pitfall 2: Underestimating Assessment Risk
Under current law, a property owner within a TIF district can challenge their property assessment. A successful appeal reduces the excess value and the increment available for debt service. This is one of the key risks LB 1168 would address — taxpayer agreements could contractually limit assessment challenges. Until that legislation is enacted, factor assessment appeal risk into your models with conservative assumptions.
Pitfall 3: Confusing CRA Bonds With City Debt
CRA bonds are general obligations of the CRA, not the city. However, they do expose the CRA’s broader revenue base to bondholder claims. If the CRA is involved in multiple projects, assess the cumulative exposure. Under proposed LB 1168, conduit revenue bonds would isolate project-specific risk — but until that legislation passes, current law applies.
Pitfall 4: Missing the July 1 Filing Deadline
The Notice to Divide Tax must be filed by July 1 on the prescribed form. Missing this deadline means the taxes remain undivided for the entire tax year — a costly delay. Verify the filing is complete and timely as part of your closing checklist.
Pitfall 5: Weak Cost-Benefit Analysis
The cost-benefit analysis must evaluate tax shifts, infrastructure impacts, employment effects, and other factors. A superficial analysis that does not genuinely demonstrate the but-for case creates legal risk and undermines your recommendation. Build a thorough analysis that withstands public scrutiny.
For Nebraska municipal financial advisors, structuring a TIF Bond that a capital provider can purchase requires navigating the Community Development Law’s specific characteristics — particularly the ad-valorem-only framework and the CRA’s general obligation bond structure. Here is the technical framework for bonds Hageman Capital can purchase, and how proposed LB 1168 would expand your options.
Bond Structure Requirements
Hageman Capital purchases CRA-issued TIF Bonds structured as private placements to the developer, backed by redevelopment contract guarantees, and supported by conservative ad valorem increment projections. Key parameters include amortization within the 15-year period (20 for extremely blighted), interest rate, and coverage ratio. Under current law, CRA bonds are general obligations of the CRA — under proposed LB 1168, conduit revenue bonds would be payable solely from pledged revenues, providing clearer project-level risk isolation.
Increment Modeling for Ad-Valorem-Only Revenue
Nebraska’s single-revenue-stream framework means your model depends entirely on real property value increases. Project the excess value (current minus base) against debt service, account for construction timeline risk and county assessor lag, and stress-test scenarios where the property is assessed below expectations or the project delivers late. Interest and penalties on delinquent taxes flow to taxing bodies, not the TIF fund — so your projection should use net collections. Under LB 1168, the ability to limit assessment challenges through a taxpayer agreement would reduce a key modeling risk.
The Redevelopment Contract as Security
Under current law, the redevelopment contract is the primary vehicle for developer guarantees. The contract should include explicit shortfall coverage obligations, minimum valuation commitments, construction milestones, financial reporting requirements, and meaningful default remedies. Under LB 1168, the taxpayer agreement would formalize these guarantees with statutory lien priority — but even without the new legislation, a well-drafted redevelopment contract provides substantial security.
Coordinating Documents and Deadlines
Documentation includes the CRA bond resolution, the bond or note, the redevelopment contract, the security agreement, and bond counsel’s opinion. The blight declaration, planning commission recommendation, public hearing, governing body approval, CRA 30-day notice, and July 1 filing must all be sequenced correctly. Bond counsel should verify compliance with the Community Development Law at every stage.
Engage Hageman Capital During Structuring
Having the capital provider at the table during structuring prevents rework after governing body approval. Hageman Capital provides guidance on coverage expectations, ad-valorem-specific modeling, developer guarantee terms, and timing — at no cost to the municipality or CRA. Connect with Whitney Peterson for a technical consultation on the transaction in front of you.
For Tennessee municipal financial advisors, structuring a TIF Bond that a capital provider will purchase is the technical exercise that determines whether a developer-backed TIF transaction delivers its intended benefits. The deal that works — upfront capital for the developer, zero credit exposure for the municipality, and a completed project that grows the tax base — depends on getting the bond structure right. Here is the framework for structuring TIF Bonds that Hageman Capital can purchase.
Bond Structure Requirements
Hageman Capital purchases developer-backed TIF Bonds structured as private placements — issued by the TIF agency directly to the developer, who assigns the bond to Hageman Capital at closing. The bond must be non-recourse to the TIF agency and municipality, payable solely from tax increment revenues and secured by a taxpayer agreement under SB 1760. Key structural parameters include the amortization schedule (which must align with projected increment timing), the interest rate (negotiated based on market conditions and deal-specific risk), the maturity (within Tennessee’s 20-year IDB or 30-year Housing Authority limits), and the coverage ratio (the margin by which projected increment exceeds required debt service).
The Taxpayer Agreement as Security
The taxpayer agreement is the instrument that makes developer-backed TIF Bonds purchasable. From a capital provider’s perspective, the agreement must include a clear taxpayer direct payment calculation (the positive difference between the next-due debt service and available increment), a recorded lien with first-priority status that runs with the land and survives foreclosure, enforcement provisions that allow collection as real property taxes, and the anti-acceleration provision specified in SB 1760 (ensuring existing mortgage holders cannot call their loans solely due to the taxpayer agreement). The developer’s financial capacity to honor the guarantee is evaluated through balance sheet review, track record analysis, and assessment of their other outstanding obligations.
Increment Modeling for Capital Provider Underwriting
The increment projection is the foundation of the bond’s valuation. Your model should account for the development timeline (including conservative assumptions about construction delays and assessment lag), the assessed value increase based on the project’s expected market value at completion, the applicable tax rate and any millage rate changes, and the increment calculation methodology specified in the TIF plan (aggregate vs. parcel-by-parcel). Hageman Capital’s underwriting team will review these projections independently, but starting with a conservative, well-documented model streamlines the process and builds confidence.
Coordinating Bond Documents
The loan documentation for a developer-backed TIF Bond transaction typically includes the bond or note itself, the redevelopment agreement, the taxpayer agreement, a security agreement pledging TIF revenues to the bondholder, and bond counsel’s opinion. Bond counsel should review all documentation to ensure statutory compliance under the Uniformity Act and SB 1760. The TIF agency’s filing obligations — recording the taxpayer agreement with the register of deeds, notifying the county trustee, and filing parcel data with the Comptroller — must also be completed on schedule.
Why Engage Hageman Capital During Structuring
The most efficient path to closing is having the capital provider at the table during the structuring phase — not after the bond documents are finalized. Hageman Capital can provide guidance on coverage ratio expectations, amortization preferences, taxpayer agreement terms that meet our underwriting standards, and timing considerations. This front-end collaboration prevents costly restructuring after governing body approval and gives all parties — the municipality, the developer, and the lender — certainty that the deal will close.
Nebraska’s Community Development Law creates a well-defined TIF framework with specific characteristics that shape your financial analysis. Proposed LB 1168 would introduce instruments that materially change the risk architecture. Here is a technical overview.
Nebraska TIF Framework
TIF captures only ad valorem real property taxes — no sales tax or franchise fees. The tax division period is 15 years (20 for extremely blighted areas). CRA bonds under current law are general obligations of the CRA payable from all CRA revenue and income. They are not a debt of the city. Interest and penalties on delinquent taxes flow to the taxing bodies, not the TIF fund. The cost-benefit analysis must evaluate tax shifts, infrastructure impacts, employment effects, and other factors. The Notice to Divide Tax must be filed by July 1.
What LB 1168 Would Change
Conduit revenue bonds would be payable solely from pledged revenues — not CRA general obligations. Taxpayer agreements would create developer shortfall guarantees with liens carrying parity with property tax liens, priority over mortgages, and the ability to limit assessment challenges. This addresses two key risks in current practice: CRA exposure to project-specific underperformance, and assessment appeal risk that can reduce the increment below projections.
Key Modeling Considerations
Nebraska’s ad-valorem-only framework makes your increment projection especially sensitive to assessed value accuracy and development timing. Model the excess value (current minus base) against debt service, account for construction delays and assessment lag, and verify the base value with the county assessor. The 15-year period constrains amortization more than longer-term states. The blight study findings should be cross-referenced against the redevelopment plan’s projected improvements to ensure consistency.
Hageman Capital as a Technical Resource
We work alongside Nebraska financial advisors at no cost. Connect with our team for a technical consultation.
Tennessee’s new TIF legislation (SB 1760 / HB 1892) introduces legal instruments that materially change the risk analysis for TIF-supported projects. For municipal financial advisors responsible for evaluating bond structures and protecting the municipality’s fiscal position, this overview covers the key statutory provisions and their practical implications.
Tennessee’s TIF Framework at a Glance
TIF in Tennessee operates through Housing Authorities (up to 30-year allocation periods, blighted areas, broad eligible cost authority) and Industrial Development Boards (up to 20-year allocation periods, broader project eligibility, state approval required for private improvements beyond public infrastructure). The increment consists of the increase in property taxes above the base amount established at plan approval. Tennessee allows personal property taxes to be included in the increment for IDB projects.
TIF bonds or notes issued by a TIF agency are non-recourse — payable solely from tax increment revenues. Neither the TIF agency, the city, nor the county pledges its general credit. This has been the case under existing law, but SB 1760 strengthens the framework considerably.
Taxpayer Agreements: The Technical Details
Under SB 1760, a TIF agency can enter into a taxpayer agreement with a property owner in the plan area. The agreement creates a “taxpayer direct payment” obligation — the positive difference between the next-due debt service and the actual increment available. The taxpayer agreement lien is recorded with the register of deeds, carries first-priority status over existing and subsequent mortgages, runs with the land, and is enforceable as real property taxes. Critically, the lien is not accelerated or eliminated by foreclosure of a property tax lien, and any deed of trust provision requiring acceleration solely due to entering a taxpayer agreement is unenforceable.
Implications for Your Analysis
The taxpayer agreement structure means TIF bonds issued under this framework do not constitute municipal debt, carry no recourse to the municipality’s general credit, and are fully backstopped by a developer guarantee with the strongest lien priority available under Tennessee law. For your analysis, the key modeling inputs are the projected assessed value increase, the resulting annual increment, the debt service schedule, and the developer’s financial capacity to honor the taxpayer agreement guarantee. Coverage ratios, development timeline risk, and the methodology for calculating increment (aggregate vs. parcel-by-parcel) should all be evaluated.
Compliance and Reporting Requirements
After plan approval, the TIF agency must file parcel descriptions, resolutions, and base tax amounts with the Comptroller and each applicable tax assessor. Annual reports on tax increment revenues allocated to the TIF agency are due by October 1 each year. Taxpayer agreements must be filed and recorded with the register of deeds, including the legal description, property owner name, lien term, and the executed agreement. Written notification to the county trustee of any specific collection or enforcement requirements must be provided on or before the recording date.
Hageman Capital as a Technical Resource
Hageman Capital works alongside municipal financial advisors as a specialized TIF structuring resource. Our team has experience across multiple state legislative frameworks and understands the technical details that matter for your analysis. Connect with our team for a no-cost technical consultation.
Municipal financial advisors are the last line of defense before a TIF bond structure reaches the governing body for approval. Tennessee’s SB 1760 introduces taxpayer agreements and first-priority liens that strengthen the developer-backed TIF framework — but the technical details require careful analysis. Here are the pitfalls Hageman Capital sees financial advisors encounter most frequently, and how to avoid them.
Pitfall 1: Underestimating Development Timeline Risk in Increment Projections
Increment projections are only as reliable as the assumptions behind them. The most common modeling error is projecting increment based on a development timeline that does not account for construction delays, permitting holdups, or phased delivery. Property is not reassessed until improvements are complete, and increment does not flow until the new assessed value exceeds the base. Build conservative timing assumptions into your models and stress-test scenarios where the project delivers six to twelve months late.
Pitfall 2: Failing to Evaluate the Developer’s Financial Capacity
A taxpayer agreement is only as strong as the guarantor behind it. The developer’s commitment to cover increment shortfalls is a binding obligation, but if the developer lacks the financial resources to honor that obligation, the guarantee has limited practical value. Before recommending the structure, evaluate the developer’s balance sheet, track record, existing obligations, and the financial capacity to service the taxpayer agreement guarantee alongside their other commitments.
Pitfall 3: Not Accounting for the Increment Calculation Methodology
Tennessee’s TIF plan should specify whether the increment is calculated on an aggregate basis (all parcels combined) or a parcel-by-parcel basis. For multi-phase projects, the plan may allow allocation periods to begin at different times for different parcels. The methodology you use in your projections must match what the plan specifies — otherwise your revenue estimates may overstate or understate the actual increment available for debt service. Confirm the methodology with bond counsel before building your model.
Pitfall 4: Overlooking the IDB State Approval Requirement
If the TIF agency is an IDB and the proposed use of TIF proceeds includes private property improvements that do not qualify as public infrastructure, the Comptroller and Commissioner must approve the expenditure. If this approval is not obtained — or if the request is submitted late — the project timeline can be significantly delayed. Identify whether state approval is needed early in your analysis and factor the 30-day deemed-approval window into the project schedule.
Pitfall 5: Treating the Taxpayer Agreement as a Formality
The taxpayer agreement authorized by SB 1760 is a powerful instrument, but its effectiveness depends on the specific terms negotiated. Review the agreement for clear definitions of the taxpayer direct payment calculation, the lien recording requirements, the enforcement provisions, and the relationship between the taxpayer agreement and the redevelopment agreement. A well-drafted taxpayer agreement provides enforceable security; a boilerplate version may leave gaps that become problems later.
Hageman Capital as a Technical Partner
We work alongside municipal financial advisors as a specialized TIF resource — not to replace your analysis, but to complement it with experience structuring developer-backed TIF Bonds across multiple state frameworks. Request a meeting with Whitney Peterson, our Director – Government Relations, for a no-cost technical consultation on the deal on your desk.
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 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.
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.
Mississippi’s Tax Increment Financing framework — strengthened by the passage of Senate Bill 2846 — gives municipalities a powerful new tool for attracting commercial real estate development without exposing public credit. But for municipal financial advisors, the opportunity comes with a caveat: developer-backed TIF Bonds only protect your municipality if the structure is built correctly from the start. A misstep in Taxpayer Agreement negotiation, statutory compliance, or interlocal coordination can turn a promising project into a fiscal liability. Based on our experience working with TIF Bond structures across multiple states, here are some of the considerations Hageman Capital believes are worth keeping in mind.
Pitfall #1: Underutilizing Taxpayer Agreements
Senate Bill 2846 introduced voluntary Taxpayer Agreements into Mississippi’s TIF framework — and they are arguably the single most important protection available to municipalities in a developer-backed bond structure. A Taxpayer Agreement creates a binding contractual obligation requiring the developer to guarantee minimum payments if increment falls short of debt service requirements. It can also be secured by a lien on the project’s real property, with parity to ad valorem tax liens.
In our experience, the challenge isn’t that advisors are unaware of Taxpayer Agreements — it’s that they may be treated as optional or negotiated without the level of detail they deserve. A well-crafted Taxpayer Agreement is detailed, enforceable, and structured alongside the redevelopment agreement rather than as an afterthought. Key provisions worth considering include specific shortfall payment triggers, lien terms, default remedies, and a clear assignment clause that allows the municipality to transfer enforcement rights to a bondholder or trustee. Hageman Capital has worked with Taxpayer Agreement structures across multiple states and is happy to share what we’ve learned with your team as you evaluate these provisions.
Pitfall #2: Misunderstanding What Developer-Backed Means
Developer-backed TIF Bonds are not general obligations of the municipality. They carry no pledge of municipal credit or taxing power and do not count against statutory debt limits. This is the core advantage of the structure SB 2846 enables — but it’s worth noting that the “developer-backed” distinction requires a different analytical lens than traditional municipal debt.
Because the municipality is acting as a conduit issuer, the bond is repaid solely from increment revenue and developer guarantees. That naturally shifts the focus of due diligence toward evaluating the developer’s capacity: Does this developer have the balance sheet to support the Taxpayer Agreement? Is the project’s pro forma realistic? What happens if construction is delayed or costs escalate? These are the kinds of questions that protect the public interest in a developer-backed structure, and they represent a meaningful departure from a traditional municipal-backed bond analysis.
Pitfall #3: Failing to Coordinate With Overlapping Taxing Bodies
TIF captures the incremental increase in property tax revenue — revenue that would otherwise flow to every taxing jurisdiction that levies property taxes in the project area. That includes school districts, counties, and utility districts. When coordination with these overlapping taxing bodies is limited or delayed, it can lead to political opposition, legal challenges, or interlocal disputes that derail a project after months of work.
Mississippi’s framework allows municipalities and counties to enter into interlocal cooperation agreements pledging both municipal and county increment to service TIF debt. This is a powerful feature, but it requires proactive communication about how existing revenue streams are protected. The original assessed value continues to flow to all taxing jurisdictions as usual — only the increment is redirected, and only for the bond’s term. Making that case clearly and early to school boards and county supervisors is often essential. Hageman Capital is available to provide independent analysis that may be useful in those conversations.
Pitfall #4: Neglecting the Public Hearing and Statutory Process
Mississippi’s TIF Act requires specific procedural steps before a TIF Bond can be issued: a redevelopment plan, a TIF plan, a public hearing with proper notice, governing body approval, and certification of the original assessed value by the municipal clerk. Skipping a step or cutting corners on public notice can create vulnerability to legal challenge — and in a state where this legislation is newly enacted and untested in court, procedural compliance is especially important.
The public hearing in particular is both a legal requirement and a political opportunity — it’s where elected officials demonstrate transparency and where community concerns can be addressed directly. Hageman Capital’s team has studied the full procedural sequence outlined in Mississippi’s TIF Act and is happy to walk through the requirements with your municipality as a supplemental resource.
Hageman Capital: A Free TIF Bond Resource
Every consideration on this list is manageable — especially when your team has access to experienced TIF Bond perspectives. Hageman Capital works alongside municipal financial advisors as a free educational resource, offering insight into the TIF Bond process from initial developer inquiry through Taxpayer Agreement structuring and bond issuance. We’re not a substitute for your legal counsel, financial advisors, or internal team — we’re a supplement, focused specifically on sharing what we’ve learned from structuring developer-backed TIF Bonds across the country.
Whether you’re looking for a second perspective on Taxpayer Agreement provisions, want to better understand how SB 2846 applies to a specific deal, or simply want to talk through the developer-backed bond structure with someone who’s seen it work in other states, our Director – Government Relations, Whitney Peterson, is available for a no-cost conversation. Request a meeting with Whitney here. There’s no obligation — just experienced TIF Bond professionals happy to share what we know.
