Municipal Backed TIF vs. Developer Backed TIF: Making the Right Call for Nebraska

Under current Nebraska law, TIF bonds issued by a CRA are general obligations of the CRA. Proposed legislation (LB 1168) would create conduit revenue bonds — a fundamentally different structure that shifts project-specific risk from the CRA to the developer. Here is why this distinction matters and why developer-backed structures are the right choice for most projects.

CRA General Obligation Bonds: Current Law

Under current law, TIF bonds are payable from the CRA’s revenue, income, receipts, and proceeds. While not a debt of the city, they expose the CRA’s broader asset base to bondholder claims. If a specific project underperforms, bondholders can look to the CRA’s other resources for repayment. This creates risk concentration when the CRA is involved in multiple TIF projects simultaneously.

Conduit Revenue Bonds: What LB 1168 Would Enable

LB 1168 would create conduit revenue bonds payable solely from specifically pledged revenues — isolating project-specific risk from the CRA’s other activities. The developer’s taxpayer agreement would guarantee any shortfall, with liens carrying parity with property tax liens and priority over existing and subsequent mortgages. The developer could also agree to limit their right to challenge property assessments, providing greater revenue certainty for bondholders.

The Developer Gets the Same Proceeds Either Way

The bond’s value is determined by the projected ad valorem increment — which is the same regardless of whether the bond is a CRA general obligation or a conduit revenue bond. What changes is the risk allocation. Developer-backed conduit revenue bonds give the developer competitive proceeds when selling to Hageman Capital, insulate the CRA from project-specific risk, and deliver the same economic development outcomes for the community. Municipal leaders get what they want, developers get what they want, and the CRA’s broader obligations remain protected.

What You Can Do Now

Even under current law, developer-backed TIF bonds with strong redevelopment contract guarantees can shift meaningful risk to the developer. LB 1168 would formalize this with statutory authority. Regardless of the legislation’s status, Hageman Capital purchases developer-backed TIF Bonds and works with Nebraska municipal leaders and CRAs at no cost. Connect with our team to evaluate the right structure for your community.