We’ve previously written about using synthetic tax increment financing (synthetic TIF) to fund economic development, and more precisely to determine if your public investment will have an economic return through an increase in property taxes or other private sector activity.

However, we recently came across an exciting and innovative proposal by our friends over at the City of Henderson that is worth closer examination – using a synthetic TIF analysis in connection with a local match for a federal grant.

The City was applying for a $33 million USDOT grant for construction of a new rail station and searching for ways to fund the expected 5% match. City staff proposed using a synthetic TIF analysis based on figures from a July 2023 Transit Oriented Development study. They saw that within an area around the proposed station – equivalent to a TIF district – the expected incremental tax revenues would allow the City to recover the upfront match within ten years, without incurring debt or needing County participation. Here’s a link to the City’s agenda item that spells out the analysis in more detail.

Using synthetic TIFs for grant matching analysis can allow your municipality to get more aggressive in seeking grant funds, and therefore can lead to development opportunities you didn’t think possible. So, our hat’s off to the Henderson staff, and who knows what other creative uses for TIF analysis may be out there?

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