Franklin JRB hears pro forma for TID 10; consultants say development unlikely without public assistance

The City of Franklin Joint Review Board met Feb. 16 for an organizational session on proposed Tax Increment District (TID) 10 and heard a third‑party financial review concluding the planned residential project is unlikely to proceed without public assistance.

At the meeting the board appointed Sally Smiths as the public member and reappointed John Regatz as chair. No final action to create the TID was taken; the hearing and decision schedule remains: a plan commission public hearing Feb. 19 at 6 p.m., common council consideration March 17, and a return to the JRB for a final determination on whether the statutory "but‑for" test is met at a later meeting (the JRB set March 25, 2026 at 6 p.m. as a tentative date).

Ehlers, the city's public finance adviser, summarized the TIF mechanics and TID 10 specifics, saying the proposed district covers about 30.31 acres and that wetlands and right‑of‑way acreage were included in the blight designation. Ehlers reported that 81% of the district area is being designated as blighted in the project plan and identified the Orchard View Shopping Center as the main redevelopment site. The consultant described a proposed residential development of 292 units, roughly split across two years of construction, and noted a potential small retail tenant embedded on a first floor.

Ehlers outlined a PAYGO (pay‑as‑you‑go) developer incentive structure under which 90% of the tax increment generated by that residential development would be returned to the developer as municipal revenue obligations and said the city has proposed capping the developer payments at $15,000,000 over the life of the district. Ehlers emphasized that the TID tool itself does not approve a development agreement and that any such agreement would require separate council action.

SB Friedman Advisors presented a pro forma included in the project plan. The firm reported a total project cost of about $83,800,000 for the residential development and said the budget, operating and financing assumptions were broadly reasonable compared with comparable projects. In the pro forma, SB Friedman estimated a leveraged internal rate of return (IRR) of about 8.42% without public assistance—below typical market returns—and about 11.56% with the requested assistance. "Based on everything that I just described ... the pro forma analysis is our opinion that this project would not occur, but for the assistance as requested at this time," an SB Friedman representative said.

Board members asked whether the PAYGO and any upside‑sharing provisions applied to residential value only or to other commercial development in the area. SB Friedman and Ehlers clarified that the pro forma and the upside‑share term referenced the residential component plus a small embedded retail space (about 4,050 square feet) within one building; other potential commercial development on adjacent parcels was not included in the firm's analysis because there is no firm plan for it.

Next steps: the plan commission public hearing (Feb. 19) will be the forum for public comment on the project plan; if the plan commission approves, the common council may consider the resolution March 17, after which the JRB will schedule a final meeting to evaluate the but‑for test and any formal creation of TID 10. The JRB tentatively set March 25, 2026 at 6 p.m. for that meeting and noted publication of a class 1 notice at least five days before any final meeting will be required.