HC Case Study, and What It Means for Tennessee

When Old Town Companies set out to develop the North End project in Carmel, Indiana, they faced a challenge familiar to commercial real estate developers everywhere: a mission-driven, mixed-use project that served the community’s needs but required creative financing to be economically feasible. The solution came through Tax Increment Financing — and specifically, through Hageman Capital’s ability to purchase TIF bonds and deliver upfront capital. For Tennessee municipal leaders evaluating the state’s new developer-backed TIF legislation, this case study illustrates exactly how TIF transforms a project from infeasible to operational.

The North End Project: What Was Built

North End is a mixed-use development located north of Smokey Row Road along the Monon Trail in Carmel, Indiana. The project includes 168 high-end apartments, with 40 units dedicated to serving individuals with intellectual and developmental disabilities (IDD), plus office and retail space. Old Town Companies served as the developer, and the City of Carmel provided municipal support through TIF revenues backed by the real estate development.

The project had strong community support — it added housing, office, and retail to an area with limited commercial development, and the IDD-dedicated units addressed a real need. But mission-driven housing is rarely profitable on its own, and the financial gap between what the project cost and what private financing could cover required a public incentive to bridge.

How TIF Made It Work

Old Town was financing the project through a Freddie Mac program with specific requirements: the project needed municipal incentives to qualify, at least 10% of units had to be under 80% Area Median Income, and Freddie’s underwriting standards required multiple iterations of financial and construction budget reviews. The municipal incentive came in the form of TIF — but for the project to close, Old Town needed to monetize that TIF upfront, receiving proceeds at loan closing rather than waiting years for increment revenue to accumulate.

Hageman Capital purchased the TIF bonds from Old Town, providing the upfront equity required to satisfy the lender’s requirements and close the construction loan. Throughout the transaction, Hageman Capital maintained financing flexibility and created solutions that kept the real estate closing as the primary goal. North End officially closed in December 2021, and the project is now complete — delivering housing, commercial space, and long-term tax base growth to the City of Carmel.

What Tennessee Municipal Leaders Should Take Away

The North End project demonstrates several principles that apply directly to Tennessee’s new TIF framework under SB 1760 / HB 1892. First, TIF can make projects feasible that would not otherwise proceed — satisfying the “but-for” test that Tennessee requires for TIF approval. Second, developer-backed TIF bonds shift the financial risk away from the municipality. Carmel did not pledge its general credit; the TIF revenue was supported by the real estate development itself. Third, the ability for a developer to sell their TIF bond to a capital provider like Hageman Capital and receive upfront cash is what transforms TIF from a long-term revenue stream into an immediate project catalyst.

Tennessee’s new taxpayer agreement provisions strengthen this model further. Under SB 1760, the developer can now contractually guarantee any shortfall between actual tax increment revenues and the required debt service — a binding obligation backed by a lien that carries the same priority as property tax liens. This gives both municipalities and capital providers like Hageman Capital greater confidence in the transaction, which ultimately means more projects get built.

The Types of Projects TIF Can Support in Tennessee

Tennessee’s TIF framework is broad enough to support a wide range of project types. Housing Authority TIFs can fund redevelopment of blighted areas including site acquisition, infrastructure installation, and public improvements. IDB TIFs can support commercial, industrial, retail, and mixed-use projects — with TIF proceeds funding public infrastructure directly, and private improvements with state approval. The North End model — a mixed-use development combining market-rate housing, affordable units, and commercial space — is precisely the kind of transformative project Tennessee municipalities can now greenlight with even stronger financial protections.

Hageman Capital: Your TIF Partner at No Cost

Old Town Companies has become one of Hageman Capital’s closest partners because the relationship works: Hageman Capital understands its role as a facilitator, not a complication. That same approach extends to our work with municipal leaders. We provide free, expert guidance to Tennessee municipalities looking to understand how developer-backed TIF Bonds work, how to evaluate projects, and how to structure transactions that protect the public interest while delivering real community growth. Connect with our team and see how TIF can transform development in your community.