Raleigh staff propose tax‑increment reimbursement program to pay developers for public improvements

Ken Bowers, Planning and Development, told the Raleigh City Council at a work session that staff propose replacing the city’s unused May 2021 tax increment grant policy with a Tax Increment Reimbursement Program, or TURP, to reimburse developers from the future property tax increment generated by a project.

The program is meant to let the city leverage private development to deliver public benefits that go beyond what regulation can require, Bowers said: "partnerships allow the city to shape and leverage development in a way that you can't do with regulations alone." He described TURP as a site‑specific reimbursement arrangement in which the developer builds improvements and the city repays a negotiated share of the annual tax increment over time.

Staff say the tool would let the city act quickly when opportunities arise because reimbursements are tied to actual tax receipts that start only after a project is assessed and producing taxes. Under the proposal staff described, the program would include a minimum agreement value of $200,000, a citywide cap that would prevent more than 2 percent of the annual ad valorem tax levy being committed to outstanding agreements, and budget reporting showing outstanding reimbursements.

How it would work: Bowers used a worked example to show the mechanics. He said a…