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Bond lawyer and developers present special-assessment plan to finance Collegedale housing infrastructure
Summary
At the March 2 Collegedale City Commission meeting, a public finance lawyer and developers outlined how newly revised state law and industrial development boards (IDBs) could use special-assessment districts to finance roads, sewer and other infrastructure for new housing projects, and said the tool could reduce upfront lot costs and lower home prices by roughly $18,000–$20,000.
A public finance lawyer and area developers briefed the Collegedale City Commission on March 2 about using special-assessment districts and industrial development boards (IDBs) to finance housing infrastructure under recent state-law changes.
The presenter, a public finance lawyer who said he works on tax-exempt financing for local governments, explained that the law allows a property owner or developer to petition a city to establish a special-assessment district. He told commissioners the assessments are generally used to finance public infrastructure — roads, utilities, sewer and stormwater — and the financing can be structured as long-term, tax-exempt bonds. "I'm a public finance lawyer, a bond lawyer," he said, describing how the mechanism works and why communities sometimes route issuance through an IDB so the city's name is not on the debt.
The presentation stressed three practical points: the petition-driven nature of special assessments (property owners must consent), the typical use for greenfield or phased developments (not for retrofitting established neighborhoods), and the county collection issue in Hamilton County, where the county often handles property tax billing and could require a separate agreement or third-party administrator.
Developer Paul Corley of Empire Homes gave the commission a project example, Chastain Trails, and described how IDD-style financing would apply to his subdivision. Corley said the project includes roughly 335 homes in the current phase (planned to exceed 500 at buildout), a roundabout, trail connections and a sewer lift station. He estimated the infrastructure improvements totaled several million dollars and said using bond financing tied to special assessments could reduce the base home price. "We'll be able to lower home prices by close to $20,000," Corley said, and estimated homeowner assessments at about $1,200 per home annually, spread for the life of the bonds.
Commissioners asked detailed follow-up questions about homeowner notice, whether assessments can be prepaid, bond no-call periods, the removed $5 million project minimum in recent amendments, and how underwriters view assignability and default risk. The presenter said prepayment is legally possible but bond documents often include no-call provisions; he also said the law has been amended to remove the earlier $5 million minimum and cited examples of petitions and projects in other Tennessee localities.
Concerns raised during Q&A included how the assessments would be collected in Hamilton County (staff noted the county typically issues a combined bill and the county trustee's cooperation is important), how default would be enforced, and whether the city should form its own IDB to isolate reputation and risk. The presenter recommended considering an IDB that issues the bonds and has a development agreement with the developer so the city's direct exposure is limited.
No formal action was taken at the meeting. Staff and the commission agreed to schedule follow-up briefings and to gather more details on administration, collection logistics with the county trustee, and sample development agreements before any petition or formal request returns to a future meeting.
Next steps: staff will coordinate follow-up meetings with legal and finance staff, discuss trustee cooperation, and collect comparative data from other Tennessee cities that have used the tool.
