Using and Negotiating a TIF

[Ricky Beliveau]

I have been presented with a development opportunity and the town is offering a TIF (Tax Increment Financing). Does anyone have personal experience using and/or negotiating one? Best example would be someone in the Boston Massachuestts Area if possible but open to any advice. 

[William Hiday]

I serve on the local Town Council and we just re-drew an existing TIF and implemented another brand new TIF in hopes of attracting positive commercial and residential growth.   My advice to you would be to a) get in touch with an attorney who is experienced in this sort of thing and b) think along the lines of tiered or stepped tax abatements.  

A lot of the developers who are coming to us are using five and ten year models where they (ex) pay 0% the first year, 10% the second, 20% the third and so on and so forth until they're paying 100% by year 10.  

We have typically been requiring these developers to meet certain progress marks (construction complete in XX months, be open for business and hire at least XX employees within X years, etc, etc), and we also use the abatement as a leveraging tool (ex: we'll grant the abatement, but you need to replace all the sidewalks on your property and give us a 15' utility easement).  

My point is this: be willing to negotiate and try for a win/win.  If they've put a TIF in place, they want you there as much as you're wanting to be there.  Don't be so rigid that you can't get a deal done.  Good luck with it!