Best Tax Increment Financing Lawyers in Massachusetts

About Tax Increment Financing Law in Massachusetts, United States

Tax Increment Financing, commonly known as TIF, is an economic development tool used by cities and towns in Massachusetts to encourage businesses to invest in specific areas. Through TIF agreements, local governments offer property tax exemptions or reductions on the increased value of real estate resulting from new investment or development. These agreements allow municipalities to support job creation, redevelopment, and capital investment while the property’s base tax value remains unchanged for the city’s revenue. The TIF program is designed to promote projects that might not proceed without public support or collaboration, making it a vital tool for local economic growth in Massachusetts.

Why You May Need a Lawyer

Navigating the TIF process in Massachusetts involves legal, financial, and regulatory complexities. You may require legal assistance in several situations, such as:

• Understanding TIF eligibility requirements and determining if your project qualifies
• Negotiating the terms and duration of a TIF agreement with the local municipality
• Ensuring compliance with Massachusetts laws and municipal regulations
• Drafting or reviewing TIF agreements to avoid costly errors or unintended obligations
• Resolving disputes that may arise between developers, property owners, and municipalities
• Managing potential public input or opposition during the approval process
• Coordinating TIF benefits with other economic development incentives

Given that TIF agreements are legally binding and can impact your business or property for years, consulting with a legal professional helps safeguard your interests and ensures the process goes smoothly.

Local Laws Overview

Tax Increment Financing in Massachusetts operates under Chapter 40, Section 59 of the Massachusetts General Laws. Here are some key features:

• Eligibility: TIF is available in designated Economic Opportunity Areas (EOAs) or Priority Development Sites. Projects must usually involve significant job creation, retention, or capital investment.
• Approval Process: A property owner or developer must apply to the local city or town, which evaluates the public benefit. Approved TIF agreements are subject to approval by the local city council or town meeting and the Massachusetts Economic Assistance Coordinating Council (EACC).
• Duration: TIF agreements may last up to 20 years, with specific terms set locally.
• Benefits: The municipality may exempt up to 100 percent of the taxes on the increase in assessed property value resulting from the new investment. The base tax value continues to be paid as usual.
• Public Process: Public hearings are usually required before approval, allowing community members to provide input.
• Compliance: Annual reporting and compliance with the terms of the TIF are required. Failure to meet agreed-upon benchmarks may result in termination or modification of the agreement.

Understanding these requirements is essential, as local variations and supplemental regulations may also apply.

Frequently Asked Questions

What is Tax Increment Financing in Massachusetts?

TIF is a program that allows municipalities to offer property tax exemptions on the increased value of property after redevelopment, in exchange for job creation or economic investment commitments from developers or property owners.

Who can apply for a TIF agreement?

Generally, property owners and developers planning significant investment in an eligible area, such as Economic Opportunity Areas or Priority Development Sites, may apply for TIF agreements.

What benefits can a business receive from a TIF?

A business may receive partial or full exemptions for up to 20 years on property taxes related to increased property value from redevelopment or new construction.

What are the typical requirements for a TIF application?

You must demonstrate that your project will create or retain jobs, result in substantial investment, and would not proceed without TIF support. Application requirements are determined locally and must also satisfy state guidelines.

How long does the TIF approval process take?

The process varies by municipality but generally includes local review, public hearing, and approval by the Massachusetts Economic Assistance Coordinating Council. It typically takes several months.

Are TIF agreements negotiable?

Yes, the terms, including the percentage of tax exemption and the duration, are negotiated between the applicant and the municipality and must meet state requirements.

Can a TIF agreement be terminated?

Yes, if the developer fails to meet the terms, such as job creation or investment promises, the local government can modify or terminate the agreement.

Do TIF agreements require public input?

Yes, public notice and hearings are typically required, giving community members the opportunity to ask questions and express support or concerns.

What happens to the property tax before and after the TIF?

The property continues to be taxed at its original, pre-development value. Only the increase in value (the "increment") due to new investment is subject to the exemption for the term of the agreement.

Is legal representation necessary in the TIF process?

While not legally required, having a lawyer is highly recommended to ensure you understand your obligations, maximize your benefits, and comply with all statutory and regulatory requirements.

Additional Resources

Here are some resources in Massachusetts useful for guidance and information related to Tax Increment Financing:

• Massachusetts Office of Business Development - Provides guidance and application materials for economic development incentives, including TIF.
• Massachusetts Economic Assistance Coordinating Council (EACC) - Reviews and approves TIF agreements statewide.
• Local city or town planning and economic development departments - Handle the initial application and public hearings for TIF agreements.
• Massachusetts General Laws, Chapter 40, Section 59 - Contains the statutory language governing TIF.
• Massachusetts Municipal Lawyers Association - Offers resources or referrals for legal professionals with experience in municipal finance and TIF law.

Next Steps

If you are considering a TIF agreement in Massachusetts or need help with an existing one, here are the steps you should take:

1. Review your project goals and determine if the location and investment might be eligible for TIF benefits.
2. Contact your local economic development or planning office for specific requirements, timelines, and processes in your municipality.
3. Consult with a lawyer experienced in real estate or municipal finance to review your options, ensure compliance, and assist in negotiations.
4. Prepare a detailed business and job creation plan as required for the application process.
5. Participate in the public hearing and approval process.
6. Monitor ongoing compliance if your agreement is approved, responding to all reporting requirements and maintaining contact with your legal counsel and municipal partners.

Taking these steps will help you make informed decisions, avoid potential pitfalls, and maximize the benefits a TIF agreement can provide for your economic development project in Massachusetts.