Henderson City Council approves grant application and creates synthetic TIF to fund local match

Henderson City Council unanimously approved two resolutions Sept. 25 to seek federal funding for the NCDOT S-Line Mobility Hub and to establish a Synthetic Tax Increment Financing (TIF) district to support a local match.

City Manager Edward T. Blackmon opened discussion by introducing the U.S. Department of Transportation’s Reconnecting Communities and Neighborhoods (RCN) grant as an opportunity to fund construction of S-Line components including a mobility hub, platform and surface parking. Assistant City Manager Paylor Spruill told the council that NCDOT is seeking a 20% local match, which the minutes record as $6 million, and that staff are proposing a smaller 5% city commitment via a Synthetic TIF to make the application more competitive.

Staff explained that the proposed Synthetic TIF would encompass the West End Urban Redevelopment Area (created by council in 2022), the Transit Oriented Development Study area and the Downtown District, totaling 269 acres, described in the minutes as “less than 5%” of the city’s land area. Spruill described Synthetic TIF as a project-development financing tool that allows the city to borrow for public improvements and to repay debt from incremental property tax revenue generated by new development; he said the structure can be crafted to limit repayment speed so liability to the general fund is constrained.

Councilmember Garry D. Daeke asked whether at-grade rail crossings would be closed; Spruill said all at-grade crossings would be closed. Daeke also asked when the city would provide the match; Spruill said the timing is pending and that match payments would likely be spread over multiple fiscal years.

Councilmember Melissa Elliott sought clarification about rail type, asking whether the project was for commuter rail or high-speed rail. Staff replied that commuter rail is expected to come first and that the system would be equipped to accommodate high-speed rail later.

After discussion, Councilmember Melissa Elliott moved to approve Resolution 23-32, authorizing the city to apply for the USDOT RCN grant for the NCDOT S-Line Mobility Hub program; the motion was seconded by Councilmember Marion B. Williams and recorded as approved unanimously. Councilmember D. Michael Rainey then moved to approve Resolution 23-33 to create a Synthetic TIF district; Councilmember Sara M. Coffey seconded and the motion was recorded as approved unanimously. The minutes record unanimous approvals but do not list individual roll-call votes.

The minutes note that NCDOT will be responsible for preparing the grant application and that staff believe a 5% city match commitment would strengthen the application’s competitiveness. The minutes do not specify the total federal grant award amount beyond the implication that 20% equals $6 million (which corresponds to a grant of approximately $30 million), nor do they specify the precise timing, fiscal-year schedule or exact legal boundaries and ordinances that will create the Synthetic TIF. Those details were described as pending or for future action by staff or council.

The council adjourned at 1:27 p.m.