Rachel Blackhurst, director of government affairs for NAIOP Tennessee, visited the Gallatin City Council to explain how the states new infrastructure development districts, or IDDs, work and how developers are using them to finance off-site infrastructure.

Blackhurst said the state law is enabling rather than mandatory, and local governments retain full discretion. "This legislation is just enabling; all the authority going forward rests with local legislative bodies," she told the council, adding that municipalities can approve, deny or draft a local policy for requests.

Council members and staff pressed Blackhurst on whether IDDs would lower housing costs and who ultimately pays. Councilman Greg Chivas, who said developers in Gallatin already pay for infrastructure, argued the tool is unlikely to be needed for purely residential projects in the city because developers already fund roads, sewers and utilities for those subdivisions. "On the residential side, pure residential, I think we don't need it here because developers pay for infrastructure," Chivas said.

Blackhurst and other proponents said IDDs can expand the capital stack for large projects and make ambitious infrastructure feasible. "It's a tool to help make development more feasible," she said, adding that in many cases IDD financing allows developers to do more than the bare minimum required for a single project.

Council members emphasized that the local policy would matter. "This legislation is just enabling," Council members repeated in discussion; several said any IDD request would return to the council for local policy and vote. Council asked staff to bring back examples and local policies used elsewhere in Tennessee; staff said several jurisdictions in Tennessee have applications in process but none had yet borrowed or started construction under an IDD.

The council did not take a formal vote on IDDs. Instead staff and the Economic Development Agency said they would collect more examples from Knoxville, Franklin and other Tennessee communities and return with recommended policy language when or if the city receives a local request.

Why it matters: IDDs create a new financing option that could change how large commercial or mixed-use projects pay for extensive off-site roads, utilities or drainage. Whether an IDD is used in Gallatin would depend on council policy and whether developers or the city propose it.