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City gets a deep dive on TIF, STAR bonds, CID and IRBs; staff warns of tight timelines for bond investors
Summary
Jeff White of Columbia Capital walked commissioners through TIF, CID, industrial revenue bonds, RHID and STAR bonds, explaining STARs capture state sales tax and require state review and project readiness; staff warned that investor readiness and statutory steps make an expedited July deadline unlikely.
Jeff White of Columbia Capital gave the commission an in‑depth primer on the incentives cities use to recruit large projects, covering the mechanics, common funding sources and the procedural steps that cities must follow.
White grouped incentives into four buckets—creating a new targeted tax (for example a community improvement district), redirecting new taxes (tax increment finance/TIF and related tools such as RHID), taking taxes away (property tax abatement/IRBs and sales‑tax exemptions for construction), and home‑rule programs (grants, fee waivers and publicly financed infrastructure).
He described the STAR bond process in detail: STAR bonds are a TIF‑like mechanism that can capture state sales tax in addition to local increment, but they require state Commerce Department review, a visitation study to demonstrate tourism/visitation benefits, and typically culminate in bond issuance rather than pay‑as‑you‑go reimbursement. White said state participation cannot exceed half the project cost and that bond investors expect substantial project readiness—private financing in place, lease commitments, and other guarantees—before they will buy pre‑construction bonds.
"STAR bonds are just TIF that capture some or all of the state sales tax," White said, describing the multi‑step state and local approval process and noting the additional feasibility work that is normally required to satisfy bond markets.
City staff told commissioners they are managing expectations: the city has started a revenue study RFP for a STAR bond district under consideration, but staff said their suspicion is that completing all steps and satisfying bond markets in the compressed timeline some have discussed is unlikely. "We are very skeptical that this would get done in the time frame that's been out there," staff told the commission, noting examples of comparable projects that took many months after initial public hearings to close bond sales.
White and staff also reviewed how incentive packages are typically assembled (TIF, CID, IRB sales‑tax exemptions and abatement) and how the city uses development agreements to lock in developer commitments before incentives are granted. Commissioners asked for follow‑up briefings; staff committed to additional education and to bringing advisors back for step‑by‑step review as the project evolves.
No formal action was taken.
