Structuring Your TIF: What It Means for Tennessee and Economic Development Directors

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.