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.
When a TIF Bond resolution comes before your Tennessee city council, the structuring details matter — not just for the project’s success, but for whether the deal delivers real value to your community while protecting public funds. Understanding how TIF Bonds are structured for capital provider purchase helps you evaluate whether the deal in front of you is sound. Here is what council members should know.
How Developer-Backed TIF Bond Sales Work
In a developer-backed TIF transaction, the TIF agency issues a bond to the developer. The developer then sells that bond to a capital provider like Hageman Capital in exchange for upfront cash to fund construction. The bond is repaid over time from the tax increment generated by the completed project. The developer’s taxpayer agreement under SB 1760 guarantees any shortfall — meaning the municipality has no financial obligation beyond serving as the conduit issuer.
For this to work, the bond must be structured in a way that a capital provider will purchase it. That means the projected increment must be sufficient, the taxpayer agreement must be enforceable, and the developer must have the financial capacity to honor the guarantee. When these conditions are met, the deal has a clear path to closing — and your community gets a completed project.
What to Look for in the Deal Structure
As a council member reviewing a TIF resolution, focus on several key structural elements. Does the projected increment cover the debt service with a reasonable cushion? Has the developer signed a taxpayer agreement with clear shortfall guarantee terms? Is the taxpayer agreement lien recorded and enforceable as property taxes? Are there construction milestones and default remedies in the redevelopment agreement? Has a capital provider been identified, confirming the bond is purchasable?
You do not need to evaluate the financial modeling yourself — that is the job of your municipality’s financial advisors. But you should confirm that a thorough feasibility analysis has been completed and that the professionals advising the deal are satisfied with the structure.
Why the Capital Provider Matters
The involvement of a capital provider like Hageman Capital is a positive signal about the deal’s quality. A capital provider that purchases TIF Bonds for a living has underwritten hundreds of these transactions and evaluates the same risk factors your financial advisors do — projected increment, developer capacity, legal enforceability, and market conditions. When a capital provider is willing to purchase the bond, it means an independent third party has validated the deal’s financial soundness. That should give you additional confidence in the structure.
Your Role: Verify, Then Vote With Confidence
Council members are not expected to be TIF structuring experts. Your role is to verify that the process has been followed, the analysis is sound, the protections are in place, and the project serves the community’s interests. When the deal is structured for a capital provider to purchase the bond, the developer gets upfront capital, the project gets built, and the city holds zero debt. That is the outcome every council member should be looking for.
For Tennessee Economic Development Directors, structuring a TIF Bond is where theory meets execution. The difference between a deal that closes and one that stalls often comes down to whether the TIF Bond was structured in a way that allows a capital provider to purchase it — giving the developer upfront cash and the project momentum. Here is how to structure TIF Bonds that Hageman Capital can purchase, and what that means for your pipeline.
The Structural Requirements for Bond Purchase
Hageman Capital purchases developer-backed TIF Bonds that meet specific criteria. The bond should be issued as a private placement by the TIF agency directly to the developer. It must be non-recourse to the municipality — payable solely from tax increment revenues and secured by a taxpayer agreement under SB 1760. The projected increment must demonstrate sufficient coverage over the bond’s debt service, and the developer must have the financial capacity and track record to support the taxpayer agreement guarantee. The bond terms — interest rate, maturity, amortization schedule — should reflect market conditions and be negotiated with the capital provider’s requirements in mind.
Choosing the Right TIF Agency for the Deal
The agency choice affects eligible costs, allocation period, and approval complexity — all of which impact bond structuring. IDB structures are typically faster for projects that qualify as public infrastructure, but the 20-year allocation period limits the amortization schedule. Housing Authority structures offer 30 years and broader eligible cost authority but require blight findings. If the project includes significant private property improvements through an IDB, factor in the state approval timeline from the Comptroller and Commissioner. Each of these variables affects the bond’s attractiveness to a capital provider.
Building the Redevelopment Agreement for Capital Certainty
The redevelopment agreement is the foundation document. For a bond that Hageman Capital can purchase, the agreement should include clear identification of TIF-eligible costs and maximum reimbursement caps, enforceable construction milestones with disbursement conditions tied to progress, a strong taxpayer agreement with explicit shortfall guarantee calculations and lien provisions, financial reporting obligations that give the capital provider visibility into project performance, and meaningful default remedies. When these elements are in place, the developer has a bond that is purchasable — and that translates to upfront capital at closing.
Engaging Hageman Capital Early in the Process
The most efficient deals are structured with the capital provider at the table from the beginning. When Hageman Capital is involved during the redevelopment agreement negotiation, we can provide guidance on coverage ratios, amortization structures, taxpayer agreement terms, and lender requirements — ensuring the bond is structured correctly the first time rather than reworked after approvals. This saves time, reduces friction, and gives the developer confidence that the capital will be there at closing.
The Competitive Advantage of a Structured Pipeline
ED Directors who understand how to structure TIF Bonds for capital provider purchase can offer developers something most competing cities cannot: a clear, tested path from incentive approval to day-one capital. That is a powerful differentiator in a competitive market. Hageman Capital is available to Tennessee ED Directors as a free structuring resource — helping you build that capability into your pipeline. Connect with Whitney Peterson and let’s talk about the deals in front of you.
For Tennessee mayors championing TIF-supported development, the ultimate goal is a completed project that grows the tax base without exposing your city to financial risk. Achieving that goal depends on how the TIF Bond is structured — and specifically, whether it is structured in a way that allows a capital provider like Hageman Capital to purchase it from the developer. Here is what that structuring process looks like and what it means for your role.
What Makes a TIF Bond Purchasable
Hageman Capital purchases developer-backed TIF Bonds — but not every TIF Bond meets the criteria for purchase. The bonds that work are structured as private placements issued by the TIF agency directly to the developer, non-recourse to the municipality, secured by the tax increment revenue and a taxpayer agreement under SB 1760. The projected increment must be sufficient to support the debt service with a reasonable coverage cushion, and the developer must have the financial capacity to honor the taxpayer agreement guarantee.
For mayors, this means the structuring decisions made during the redevelopment agreement negotiation directly affect whether the developer can monetize the bond and receive upfront capital. A well-structured deal attracts capital. A poorly structured deal leaves the developer without a buyer — and the project without a clear financing path.
The Taxpayer Agreement Is the Key
SB 1760’s taxpayer agreement creates the enforceable security that capital providers require. The developer’s contractual guarantee of any shortfall between actual increment and required debt service, backed by a first-priority lien on the property, is what transforms a TIF Bond from a speculative revenue instrument into a purchasable asset. Without a strong taxpayer agreement, the bond carries too much uncertainty for a capital provider to price it favorably. With one, the developer receives competitive proceeds at closing.
How the Process Works From the Mayor’s Perspective
As mayor, you will not be drafting the bond documents or negotiating coverage ratios — that is the work of your economic development team, financial advisors, and bond counsel. Your role is to ensure the deal gets structured properly by engaging the right professionals, supporting a thorough feasibility analysis, and guiding the governing body through the approval process. When Hageman Capital is identified as the capital provider early in the process, it gives the developer certainty, the lender confidence, and the governing body assurance that the deal has been vetted by professionals who purchase these instruments for a living.
The Outcome Everyone Wants
When a TIF Bond is structured correctly, the developer sells it to Hageman Capital at closing and receives the upfront cash needed for construction. The municipality issues the bond as a conduit with zero credit exposure. The project gets built, generating assessed value that flows into the TIF fund and services the bond. When the allocation period ends, all tax revenue flows permanently to the taxing jurisdictions. Jobs are created, blight is eliminated, and the community’s tax base is larger than it was before.
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.
Voting on a TIF resolution is one of the most consequential economic development decisions a Tennessee city council member will face. Developer-backed TIF Bonds under SB 1760 offer strong protections for your municipality, but there are common missteps that council members should be aware of before casting that vote. Hageman Capital works with municipal leaders across the state, and here are the pitfalls we encourage council members to watch for.
Pitfall 1: Voting Without Fully Understanding the Structure
TIF is a complex financial tool, and there is no shame in needing more information before you vote. The pitfall is voting yes — or no — without understanding what you are actually approving. Before the vote, make sure you understand how the increment is calculated, what the taxpayer agreement guarantees, how long the allocation period lasts, and what happens if the project underperforms. If you do not understand something, ask. It is far better to request a briefing than to vote on incomplete information.
Pitfall 2: Confusing TIF With a Tax Giveaway
The most common public misconception about TIF is that it gives away taxpayer money to developers. If you share this misconception, you will either vote against a beneficial project or be unable to defend your yes vote to constituents. TIF does not redirect existing tax revenue. It captures only the new increment — revenue that would not exist without the project. The base amount continues flowing to all taxing jurisdictions. Under developer-backed structures, the municipality carries zero credit risk. Being able to articulate this clearly is essential to your role.
Pitfall 3: Not Reviewing the Taxpayer Agreement Terms
SB 1760 authorizes taxpayer agreements, but the strength of those agreements depends on the specific terms negotiated. As a council member, you should review (or have your financial advisor review) the shortfall guarantee provisions, the lien terms, the enforcement mechanisms, and the developer’s financial capacity to honor the guarantee. A taxpayer agreement that looks good on paper but lacks enforcement teeth does not protect your community.
Pitfall 4: Ignoring Constituent Communication Until It Is Too Late
Public hearings are a statutory requirement, but they should not be the first time your constituents hear about a TIF project. Proactive communication — explaining what TIF is, how it works, and why the specific project benefits the community — builds public support before opposition has a chance to form around misconceptions. Prepare talking points before the hearing, not after.
Pitfall 5: Assuming Someone Else Will Do the Oversight
Once a TIF plan is approved, your oversight role does not end. Annual reporting, construction milestone tracking, and compliance with the redevelopment agreement are ongoing responsibilities. Make sure the TIF agency has systems in place for monitoring and that the governing body receives regular updates on project status and increment performance.
Get the Clarity You Need
Hageman Capital provides free TIF education to Tennessee council members. Our goal is to make sure you have the understanding and confidence to cast an informed vote — and to explain that vote to the people who elected you. Request a meeting with Whitney Peterson, our Director – Government Relations, and get your questions answered before the next resolution hits the agenda.
Economic Development Directors in Tennessee are the professionals who source deals, structure incentives, and shepherd projects to completion. With SB 1760 introducing developer-backed TIF Bonds with taxpayer agreements, you have a powerful new tool — but deploying it effectively requires avoiding several common missteps. Hageman Capital works alongside ED Directors across the state, and here are the pitfalls we see most often.
Pitfall 1: Recommending TIF Without a Thorough Feasibility Analysis
The “but-for” test is both a legal requirement and a credibility check. If you recommend TIF for a project that would have proceeded without it, you undermine your position with the governing body and waste incentive capacity on a deal that did not need it. Before recommending TIF, verify the developer’s proforma, confirm the funding gap, and ensure the projected increment can support the proposed bond. An independent feasibility analysis protects both your recommendation and your credibility.
Pitfall 2: Choosing the Wrong TIF Agency Structure
Selecting between a Housing Authority and an IDB has downstream consequences for eligible costs, allocation period, and approval requirements. An IDB may seem simpler, but if the project involves significant private property improvements, you will need state approval from the Comptroller and Commissioner — which adds time. A Housing Authority offers broader cost authority and longer terms but requires a blight determination. Matching the agency to the project’s specific needs early prevents costly course corrections later.
Pitfall 3: Letting Developers Dictate Terms Without Pushback
Your job is to attract investment and close deals — but not at any cost. The redevelopment agreement is the central contract, and it is where you negotiate the protections that keep the deal fair for the municipality. Insist on enforceable construction timelines, clear eligible cost caps, strong taxpayer agreement shortfall guarantees, financial reporting obligations, and meaningful default remedies. A developer who resists reasonable protections may not be the right partner for a publicly supported project.
Pitfall 4: Failing to Prepare the Governing Body
Even a well-structured deal can fail at the council vote if elected officials are surprised by the details. Brief your mayor and council members before the public hearing — not after. Provide clear materials explaining the TIF structure, the risk protections, the projected community benefits, and the answers to the questions constituents will ask. Your role is not just to structure the deal, but to ensure the decision-makers understand and support it.
Pitfall 5: Not Having a Capital Partner Identified Early
A developer-backed TIF Bond only delivers upfront capital if there is a buyer for the bond. Identifying a capital provider like Hageman Capital early in the process gives the developer certainty, strengthens the lender’s confidence, and helps you present a complete deal to the governing body. Waiting until after approvals to figure out the capital side introduces unnecessary risk and delay.
Tennessee’s new developer-backed TIF Bond framework is a powerful tool — but like any complex financial instrument, the details matter. For mayors championing TIF-supported development in their communities, there are common missteps that can undermine a project’s success, erode public trust, or leave value on the table. Hageman Capital works with municipal leaders across Tennessee to help navigate these challenges, and we have seen the same patterns repeat. Here are the pitfalls worth watching for — and how to avoid them.
Pitfall 1: Approving a Project Without a Clear “But-For” Justification
Tennessee’s TIF framework requires that the project would not be economically feasible without TIF assistance. This is not a formality — it is the legal and political foundation of the entire transaction. If a project would have proceeded anyway, using TIF is giving away future tax revenue unnecessarily. Mayors should insist on a genuine feasibility analysis that demonstrates the funding gap and confirms TIF is the tool that closes it. If the developer cannot articulate why the project fails without TIF, the incentive may not be warranted.
Pitfall 2: Not Understanding the Difference Between Housing Authority and IDB Structures
Choosing the wrong TIF agency can limit your project’s flexibility or introduce unnecessary approval requirements. Housing Authorities offer 30-year allocation periods and broader eligible cost authority for blighted areas, but require a blight determination. IDBs offer 20-year periods and do not require blight, but need state approval for private property improvements. A mayor who does not understand this distinction may inadvertently delay a project or miss out on a more favorable structure. Working with experienced TIF advisors early in the process prevents this.
Pitfall 3: Failing to Negotiate Strong Taxpayer Agreement Terms
SB 1760 authorizes taxpayer agreements, but the legislation does not dictate every term — many details are negotiated in the redevelopment agreement. Mayors should ensure the taxpayer agreement includes clear shortfall guarantee provisions, enforceable performance milestones, financial reporting requirements, and meaningful remedies for default. A weak taxpayer agreement undermines the protections the legislation was designed to provide.
Pitfall 4: Poor Public Communication
TIF is often misunderstood by the public. Constituents may believe TIF diverts existing tax revenue from schools and services, or that it amounts to a handout to developers. Neither is accurate, but if you cannot explain TIF clearly at a town hall, you will face opposition based on misconceptions rather than facts. The key messages are simple: TIF does not create new taxes, does not redirect existing revenue, and under the developer-backed structure, the city carries zero financial risk. Preparing clear talking points before the public hearing is essential.
Pitfall 5: Going It Alone Without Expert Support
Tennessee’s TIF legislation is new, and the taxpayer agreement framework adds legal and financial complexity that most municipal staff have not encountered before. Mayors who try to navigate the process without experienced partners risk structural errors, missed deadlines, or terms that do not adequately protect the municipality. This does not mean you need to hire expensive consultants — Hageman Capital provides TIF structuring expertise to Tennessee mayors at no cost. We work alongside your existing financial advisors, legal counsel, and economic development staff to ensure the structure is right.
Start the Conversation
If you are evaluating a TIF opportunity or simply want to understand how the new legislation applies to your city, Hageman Capital is here to help. Our Director – Government Relations, Whitney Peterson, works directly with mayors across Tennessee to provide education, structuring guidance, and deal support at no charge. Request a meeting with Whitney Peterson and make sure your community’s next TIF project is structured right from day one.
As a city council member in Tennessee, you may soon be asked to vote on a TIF-supported development project — and that vote will carry weight with your constituents, your fellow council members, and the local media. Tennessee’s new TIF legislation (SB 1760 / HB 1892) has introduced developer-backed TIF Bonds with protections that make the structure far more favorable for municipalities than traditional approaches. Here is a high-level overview to help you prepare.
TIF in Plain Language
Tax Increment Financing does not spend public money, create new taxes, or raise existing tax rates. It captures only the increase in property taxes that a new development project generates — revenue that would not exist without the project. The base amount of property taxes your city was collecting before the development continues flowing to all taxing jurisdictions as usual. Only the new growth, the increment, is set aside for a limited period (up to 20 or 30 years depending on the TIF agency) to help pay for eligible project costs.
When the TIF period ends, all revenue — including the increment — flows permanently to the city, county, schools, and other taxing bodies. The net result is a larger tax base generating more revenue than your community had before the project was built.
What SB 1760 Means for Risk
The new legislation authorizes taxpayer agreements — binding contracts where the developer guarantees bond repayment. If the increment falls short, the developer covers the difference. The lien created by this agreement carries the same priority as property tax liens and takes precedence over any mortgage on the property. The municipality issues the bond as a conduit — with no obligation to advance funds from the general fund. No public debt is created. No municipal credit is pledged.
What You Are Actually Voting On
When a TIF resolution comes before your council, you are voting to approve either an economic impact plan (for IDB projects) or a redevelopment plan (for Housing Authority projects). Tennessee law allows this approval by resolution at a single reading. Before that vote, you should have access to the TIF plan document identifying the project boundaries, projected increment, proposed allocation period, eligible costs, and estimated impact on all affected taxing agencies. The developer’s taxpayer agreement and redevelopment agreement terms should also be part of the record.
Your job is to evaluate whether the project genuinely benefits your community, whether the safeguards protect the public interest, and whether you can explain your vote clearly to constituents who ask. Developer-backed TIF Bonds make that explanation straightforward: the developer pays, the community benefits, and the city holds no debt.
Free Educational Support
Hageman Capital provides free TIF education to Tennessee council members. Whether you want a walkthrough of the legislation, help preparing constituent talking points, or simply want to ask questions before your next vote, our team is available. Connect with Whitney Peterson, our Director – Government Relations, for a no-obligation conversation.
