Franklin begins policy discussion on infrastructure development districts; board debates public benefits, transparency and caps

City staff presented a draft policy framework and examples for Infrastructure Development Districts (IDDs) at the Aug. 26 work session, seeking guidance on three core areas: community public benefits, disclosure and transparency requirements, and whether to set a cap or limit on assessments.

Staff outlined proposed measurable public benefits that applicants would be expected to deliver in exchange for an IDD, including: construction or financial contributions to city priorities (for example multimodal transportation) valued at a minimum of 1% of the funded value of the development district; funded public infrastructure (roads, utilities, stormwater) valued at a minimum of 1% of the funded value; high‑quality placemaking elements that exceed base design standards; preservation or adaptive reuse of historic structures (when applicable) valued at a minimum of 1% of district value; and integration of public art and wayfinding. A second category would require two or more of several public‑service items such as land dedication for public use (suggested 5% of total site or equivalent cash contribution), additional public open space (20% more than required), greenway trails (1,000 linear feet per 50 acres), emergency service access design (a 4‑minute travel time target to 90% of units or fire marshal standard) and undergrounding of adjacent public utilities. Staff proposed documentation, quantification and alignment with the City’s adopted plans as part of the application.

On attainable housing staff proposed that at least 10% of units in a development using the tool should be deed‑restricted for households earning between 50–150% of area median income (AMI), with a stated goal of equal numbers of deed‑restricted rental and for‑sale units for low‑income (<=80% AMI) and workforce (80–150% AMI) households. Staff said those figures came from comparable policies and were open for board direction.

Staff proposed a disclosure and transparency framework requiring developer disclosure of district obligations and projected assessments before sale (including in the purchase contract and with a minimum three business‑day acknowledgment before closing), a publicly accessible website with governing documents, budgets, maps, audits and assessment ballots and standardized resale disclosure templates.

On the question of caps, staff presented an example cap calculated as a multiple of the city property‑tax rate (an illustrative 5× city tax rate cap was used only as an example). Staff, meanwhile, described lender and underwriting considerations and suggested a conservative lien‑to‑value ratio (they noted the state requires 2:1 and staff discussed a 3:1 target in underwriting discussion). Aldermen differed widely: several said the draft was “overly restrictive” or “cumbersome” and warned rigid, prescriptive thresholds could discourage developers from using the tool; other aldermen stressed public‑benefit expectations and public‑safety items such as emergency access and dedicated open space. Developers, industry representatives and a municipal finance professional asked for market‑driven flexibility, urged staff to consult the development community on realistic thresholds, and noted in public comment that jurisdictions typically tailor caps and standards to projects rather than impose one fixed approach.

Staff said these draft sections will be incorporated into a formal policy for the board’s later consideration and that staff will continue consulting stakeholders and underwriting partners to refine caps, valuation assumptions and disclosure mechanics.