TIF Expertise: Common Pitfalls for Kansas Economic Development Directors to Avoid

Kansas Economic Development Directors now have one of the strongest TIF frameworks in the country. But deploying developer-backed TIF Bonds under HB 2737 effectively requires avoiding several common missteps. Here are the pitfalls Hageman Capital sees most often.

Pitfall 1: Skipping the Feasibility Study Details

Kansas’s feasibility study requirement is detailed — it must address the but-for test, project costs, projected increment, a cost-benefit analysis, and a relocation assistance plan. Treating this as a box-checking exercise rather than a genuine analysis undermines your credibility with the governing body and creates legal risk. Invest in a thorough study and use it as the foundation of your deal presentation.

Pitfall 2: Misunderstanding What TIF Can Pay For

Kansas TIF cannot fund construction of privately owned buildings — the most critical limitation in the statute. TIF is limited to public infrastructure and site preparation: land acquisition, demolition, streets, utilities, parking structures, environmental remediation, and similar costs. If the developer’s TIF-eligible costs are primarily vertical construction, the deal will not work under Kansas law. Confirm eligible costs early and ensure the developer understands this boundary.

Pitfall 3: Not Securing Mortgage Holder Consent Early

HB 2737 requires written consent from each existing mortgage holder before a taxpayer agreement is executed. If this is not addressed until late in the process, it can delay or derail closing. Identify all existing liens on the property and initiate the consent process as soon as the taxpayer agreement is being negotiated.

Pitfall 4: Failing to Prepare the Governing Body for the Supermajority Vote

The two-thirds supermajority requirement means you need broader support than a simple majority. Brief council members individually before the hearing, provide clear materials on the deal structure and community benefits, and prepare answers to the questions constituents will ask. A well-prepared governing body votes confidently; a surprised one does not.

Pitfall 5: Structuring Without a Capital Partner

A developer-backed TIF Bond only delivers upfront capital if a buyer is identified. Engaging Hageman Capital early ensures the bond is structured to meet purchase criteria from the start. Request a meeting with Whitney Peterson and let’s structure your next deal for success.