Structuring Your TIF: What It Means for Nebraska and Municipal Finance Advisors

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.