Local Infrastructure Financing for Tennessee
A public financing program to help local governments, developers, and property owners fund public infrastructure for new development projects
Administered by a public building authority (the “LIFT PBA”), LIFT streamlines the process of financing infrastructure improvements, and other development costs, making it easier for communities to grow while maintaining essential public services.
Local governments, developers or property owners planning new residential, commercial, or industrial projects identify required public infrastructure improvements and elect to participate in LIFT to finance these costs.
Even without a specific project identified, any local government may elect to become a member of the LIFT program at no cost. By joining LIFT, local governments will receive ongoing educational materials related to options for financing infrastructure improvements through the LIFT program. Local government membership in LIFT also communicates to developers and property owners an interest and possibly a need for new residential, commercial, or industrial projects within that community.
How LIFT Works
Project Identification and Membership
Application and Approval
The developer or property owner submits an application to LIFT, outlining the scope of the project and the public development costs to be financed. LIFT coordinates with the proper local government or governments to confirm project eligibility, the specific public improvements to be funded, and that the proposed financing complies with the IDD Act and LIFT’s financing policies. LIFT will then provide resources and support to local governments during the necessary creation of one or more infrastructure development districts (“IDDs”)
Bond Issuance
The LIFT PBA, working with LIFT, issues tax-exempt municipal bonds on behalf of the participating property owners or developers within the IDD. The proceeds from the bond sale are used to directly fund the construction of public infrastructure improvements that benefit property owners in such IDDs.
Repayment
Property owners within the IDDs pay special assessments levied on their property, and such special assessment revenue is used to repay the bond debt service. These assessments are collected annually via the property tax bill, typically over a period of 30 years or less.
Ongoing Administration
LIFT’s Program Administrator manages the ongoing administration of the assessments, bond payments, and compliance with all legal and regulatory requirements.
Financing Structures
Stand-Alone Financing
Typically for projects with capital needs in excess of $5,000,000 as a stand-alone financing.
“Pooled” or Multi Project Financing
Typically for projects with capital needs of less than $5,000,000 through a pooled financing with other projects with similar capital needs.
LIFT Team
LIFT PBA
The public agency that issues LIFT bonds.
Program Administrator
Manages the LIFT program, including serving as the LIFT PBA financial advisor, coordinating bond issuance transactions, and monitoring post-issuance obligations.
Financing Team
Firms, such as bond counsel, disclosure counsel, program administrator, trustee, appraisers, etc., that structure, market, and sell LIFT bonds, ensuring competitive financing terms.
Assessment Administrator
Entities responsible for coordinating the collection of annual assessments from property owners and managing bond repayment.