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Raleigh council adopts tax-increment reimbursement policy to broaden infrastructure funding tool
Summary
Council adopted a revised tax-increment reimbursement policy intended to make the tool available to a wider range of projects, set a $200,000 minimum agreement value, and advised county participation be sought for agreements valued above $1,000,000; staff said the city—s tax increment share is roughly 40% and the policy leaves reimbursement schedules negotiable.
Planning staff presented revisions to a tax-increment reimbursement policy originally adopted in 2021, saying the changes are intended to broaden eligibility beyond traditional, large-scale economic development projects and to allow the city to partner with private developers to fund public infrastructure and amenities.
Ken Bowers (Planning & Development) told council the updated approach keeps the tool—s legal foundation and ties reimbursements to actual incremental property-tax revenue, while building flexibility into the repayment schedule so the tool can be attractive to private partners. "We've taken the policy, we've brought in the legal foundation for it to, all the reimbursement authorities that the city has to partner with, private sector entities to produce public, benefits and infrastructure," Bowers said.
Key staff thresholds and guardrails include a staff-recommended minimum agreement value of $200,000 and guidance that the county should be approached for participation when an agreement exceeds $1,000,000 or has regional scope. Bowers said county participation matters because the county accounts for roughly 60% of the tax bill on a given property and that city-only agreements must be sized to the city—s tax increment capacity (in round numbers the staff estimated city-level increment at about 40% of total tax increment).
Councilors asked whether staff had consulted large landowners or developers about why the prior policy had no takers; Bowers said developers had reached out previously but projects often were ineligible (for example, primarily residential projects that did not meet the earlier "economic development" definition) and that prior repayment schedules lacked flexibility. After discussion about county coordination and program thresholds, council voted to adopt the revised policy.
Adoption means staff will update the city—s website with process guidelines and that any future tax-increment reimbursement agreement will require council approval.
