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Targeted Tools-Mark Mamantov-TN Economic Development Finance Course
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Targeted Tools-Mark Mamantov-TN Economic Development Finance Course

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  • 1. Tennessee Economic Development Finance Course Local Economic Incentives in Tennessee February 20, 2014 G. MARK MAMANTOV BASS BERRY & SIMS PLC 900 SOUTH GAY STREET SUITE 1700 KNOXVILLE, TN 37902 865-521-0365 MMAMANTOV@BASSBERRY.COM
  • 2. What are you trying to incentivize? • Retail/Commercial • Industrial/Corporate headquarters • Downtown revitalization
  • 3. Two Primary Tools • Tax Abatement (PILOTs) • Tax Increment Financing (TIFs)
  • 4. What entities do you need to implement an incentive program? • Industrial development board • Housing authority (or CRA in Shelby County) • Health Ed Board
  • 5. Do you have or want incentive policies? • PILOT policies • TIF policies
  • 6. Why is tax abatement so complicated? • Constitutional limitations • Imputed rent
  • 7. PILOT Structure • Simple Lease • “Phantom” Bond Structure
  • 8. PILOT Terms • • • • Length Amount Clawbacks Assignment
  • 9. Special considerations regarding a PILOT • Financing by lessee • State grants
  • 10. Administration of PILOTs • Monitoring clawbacks • Assessment issues (particularly as to expansions)
  • 11. Tax Increment FinancingThe Approval Process • Plan preparation • Public Hearing • Government Approvals
  • 12. Reimbursement TIF versus Financing TIF • Monetization of TIF Value • Developer Guaranty (or Not) • Housing Authority TIF must involve financing
  • 13. Considerations in Plan Drafting • • • • • • • Parcel-by-parcel or total area calculations Multiple TIFs within a plan area Commencement of Allocation Debt service component and other withholdings Administrative costs Payment dates Eligible costs
  • 14. Structuring a financed TIF • Term • Amortization • Tax-Exempt versus Taxable
  • 15. Basic Documents for a TIF • Development Agreement • Loan Agreement and Note • Assignment of TIF Revenues
  • 16. Administration of TIF • Calculations • Payments
  • 17. Required State Approvals and Filings • Term of TIF or PILOT • Possibly Amortization of Housing Authority TIFs • PILOT Cost-Benefit Analysis • PILOT Agreements and TIF Plans • CT-0253 Form for Borrowings • Certain Costs Paid with TIF Proceeds • Annual Informational Filings with the State
  • 18. Special Assessment Districts • Special Assessment Districts • Central Business Improvement Districts

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