Franklin begins policy work on new state 'real estate improvement district' tool; board seeks definition of 'superior' community benefits

City staff and aldermen spent the largest portion of the June work session discussing Tennessee's new real estate infrastructure development district law and how Franklin should adopt a local policy to guide future petitions.

Shauna (City Attorney) and Vernon (development staff) explained the statute’s basic mechanics: district formation is initiated by a petition from a developer or owner; the city has 30 to 45 days to set a public hearing and must act (adopt, adopt as amended, or reject) at that hearing. Shauna urged the board to create a policy framework before petitions arrive so the city can make reasoned, not ad-hoc, decisions. She also noted the city previously amended statutory language to ensure Franklin would be an eligible host municipality under the law.

Staff and outside bond counsel told aldermen the law allows the host municipality and the Industrial Development Board (IDB) to facilitate financing tied to project infrastructure costs and to reimburse developers for eligible prior infrastructure expenditures; such financings are typically structured through the IDB and are separate from the city's general-obligation debt. Staff recommended the BOMA identify the categories of community benefits that would be considered “superior” to what developments typically provide—examples discussed included housing diversity with deed-restricted affordable/workforce units, dedicated land for schools or fire stations, multimodal transportation improvements, enhanced parks and open space, and distinctive placemaking design.

A wide-ranging board discussion followed. Several aldermen, including Alderman Grama and Alderman Baggett, argued the tool can help deliver housing diversity and redeem underutilized or aging commercial areas (Cool Springs and other nodes were named). Others urged caution: Alderman Barnhill pressed for clarity on how the debt is secured and how fees are disclosed to eventual homebuyers; Shauna and staff said disclosure requirements are a statutory requirement and must be made plainly in purchase documents. Alderman Peterson and others asked how impact fees and existing CIP priorities would interact with an infrastructure district; staff noted impact fees remain in place and that the new law permits impact fees to be included in eligible reimbursable costs but recommended careful policy limits to avoid using the tool to displace broader CIP priorities.

Staff asked the board to weigh in on a short menu of initial priorities and constraints—what qualifies as superior, whether partially vested or already-approved developments can apply, whether vesting or entitlement stage should be a gating condition, what dollar or amenity thresholds to impose, and how to structure disclosure and public engagement. Alderman Baggett suggested staff analyze whether and how phased-in impact fees might be incorporated to produce clear community benefit. Several aldermen said they favored a conservative approach and asked staff to return with draft policy language that would include measurable thresholds and examples.

No formal BOMA action was taken; staff said they will draft a policy with specific criteria (and suggested “menu” items) and return for a future meeting. Vernon said the city will also coordinate with the Industrial Development Board and legal counsel to ensure the IDB’s processes and responsibilities are aligned with any policy the board adopts.

Staff and legal counsel identified next steps: produce draft policy language that defines “superior” community benefits and measurable thresholds, outline the IDB’s role and training needs, and prepare examples of how the tool could be applied in Cool Springs, village-green/rural character areas and redevelopment zones.