"TIF"
- Tax Increment Financing Plans For Commercial Real Estate New Construction
Projects...
For commercial real estate
development projects, Tax Increment Financing
("TIF") plans provide a definitive
source of equity  financing for today's savvy developer even though the intent of
the legislation supporting most Tax Increment Financing programs specifically
forbids the use of TIF plan bond fundings to support developer equity.
These are a public finance mechanism similar to the CDD
Financing Plan.
Now, why do you suppose it ends
up working this way? Let's find out and see if we can help you.
The reality of TIF plan funding
programs is that no matter how they are in fact structured, their use is limited
to a scope that automatically results in the TIF plan bonds being used to
augment the developer's equity commitment to the project budget. This
means that all TIF plans are therefore subjective in nature and that is why many
end up in court battles that drag on for years at a stretch.
Tax Increment Financing is
intended to accomplish a very limited scope of activities, to wit:
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Assembling land parcels for
development. |
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Developing infrastructure to
support development. |
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Providing pre-construction
phase planning to support development. |
If you look closely at each one
of these uses, these uses are essentially those uses that are typically
undertaken by the developer out of the developer's own funds in advance of
getting a project proposal funded. Accordingly, the argument is always
going to be there that the proposed new TIF district is supplanting developer
equity.
This means you have to create an
exit strategy into the financing plan that makes sense on multiple levels in
order to create a Tax Increment Financing District proposal that people can
embrace, and that means it may be time to talk to Rainmaker Marketing
Corporation.
Find out more about why you
should be looking at a TIF, a CDD, or even abandoning these strategies in lieu
of something more attractive and efficient. Start things off with a free
initial consultation by contacting RMC today.
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