Best Tax Increment Financing Lawyers in Philadelphia

About Tax Increment Financing Law in Philadelphia, United States

Tax Increment Financing - commonly called TIF - is a public financing technique used to encourage economic development, infrastructure improvements, and private investment in designated areas. Under a TIF, the increase in property tax revenues that results from development - the tax increment - is captured and used to repay public investment in that development. That investment can include infrastructure, environmental remediation, land acquisition, and other public improvements intended to make projects feasible.

In Philadelphia, TIF and TIF-like tools are implemented by city entities such as redevelopment authorities and require approvals from local government. TIF arrangements in Philadelphia are part of a broader toolkit that can include tax abatements, payment in lieu of taxes agreements, and state or federal incentives. Because TIFs redirect future tax revenue flows and often involve bond or loan finance, they are subject to municipal finance rules, public notice and transparency requirements, and oversight by local legislative bodies.

Why You May Need a Lawyer

TIF projects intersect public finance, municipal law, land use, contracts, and community interests. You may need a lawyer if you are a developer, property owner, investor, community organization, taxpayer, or public official involved in or affected by a proposed or existing TIF. Common legal reasons to get help include:

- Drafting and negotiating TIF agreements, development agreements, or intergovernmental agreements to protect your financial and legal interests.

- Structuring financing - including bond issuance, loan documents, and repayment covenants - and ensuring compliance with municipal securities law and tax-exempt bond rules.

- Challenging the formation of a TIF district or its authorizing actions on procedural, statutory, or constitutional grounds.

- Advising on tax consequences, including property tax assessments, payment-in-lieu-of-tax arrangements, and potential impacts on school district or other taxing bodies.

- Navigating public process requirements such as public hearings, notices, compliance with open meetings rules, and Pennsylvania Right-to-Know Law requests for project records.

- Reviewing developer obligations and performance guarantees, and enforcing remedies if public commitments are not met.

- Representing community groups or local governments in negotiations to secure community benefits, mitigation measures, or enforceable commitments.

Local Laws Overview

TIF in Philadelphia operates at the intersection of municipal authority, state enabling law, and local ordinance. Key local legal aspects to understand include the following.

- Enabling authority and local actors: TIFs are implemented under state enabling statutes and local ordinances, and in Philadelphia are typically developed through the city administration, the Philadelphia Redevelopment Authority or similar municipal authorities, and approved by City Council.

- City Council and public process: Major TIF actions generally require formal city approval, public notice, and opportunities for public comment or hearings. Understanding the legislative timeline and council rules is critical for participation or challenge.

- Project documents and financing: TIFs usually involve a package of documents such as a TIF district designation, development agreement, financing plan, and security documents. These may include bonds or other indebtedness secured by the tax increment and backed by municipal or developer guarantees.

- Tax increment calculation and allocation: The increment is typically calculated as the difference between a defined base year tax levy and future tax levies following development. How increments are allocated - for debt service, to pay developer obligations, or to fund public improvements - will be specified in the project documents.

- Effects on other taxing bodies: Redirecting increments can affect revenues available to school districts, counties, and other local entities. In Philadelphia, intergovernmental coordination or consent may be required for some arrangements, and impacts are often a source of public scrutiny.

- Transparency and records: Pennsylvania has public records and open meetings laws that apply to municipal entities. Project documents, financial disclosures, and public notices should be available through those channels, and attorneys often use Right-to-Know requests and attendance at public hearings to gather information.

- Regulatory and tax compliance: If tax-exempt financing is used, IRS rules regarding private business use and arbitrage apply. Additionally, procurement rules, environmental reviews, and land use approvals may be relevant for the underlying project.

Frequently Asked Questions

What exactly is a TIF and how does it work in simple terms?

A TIF sets a tax base at the time a district is formed. As property values increase after development, the additional tax revenue above the base - the increment - is used to repay public investment used to spur that development. That repayment can take the form of debt service on bonds, reimbursements to developers, or direct funding of public improvements within the district.

Who decides to create a TIF in Philadelphia?

Decisions typically involve the city administration, municipal redevelopment authorities, and City Council. A proposed TIF will go through local planning and legislative processes that include analyses, resolutions, and public hearings before formal approval.

Does a TIF raise property taxes for existing residents?

Forming a TIF does not automatically increase the base tax rate. Instead, it captures the additional revenue generated by rising assessments. However, critics argue that TIFs can indirectly affect local services if increments that might otherwise increase general revenues are diverted to TIF repayment. The specific impact depends on the structure of the TIF and local budget decisions.

How long does a TIF district last?

TIF terms vary. Many TIF arrangements run for a set number of years - commonly 15 to 30 years - or until project debt is repaid. The exact duration and sunset provisions will be spelled out in the TIF ordinance and financing documents.

Can a TIF be challenged in court?

Yes. Legal challenges can be brought on procedural grounds (for example, lack of proper notice or hearings), statutory noncompliance, or constitutional claims. Successful challenges often depend on the facts, the strength of procedural defects, and the legal basis asserted. Timely action and knowledgeable counsel are essential for effective challenges.

Who bears the financial risk if a TIF-backed bond defaults?

Risk depends on how the financing is structured. If bonds are secured solely by the tax increment and that revenue stream is insufficient, bondholders may face losses unless additional municipal guarantees, credit enhancements, or developer guarantees are in place. Public entities sometimes provide moral support but not legal guarantees, so the financing documents must be carefully reviewed.

Will a TIF affect school district funding in Philadelphia?

Because school districts receive a portion of property tax revenue, diverting increments can reduce the revenue growth that would otherwise flow to the school district. Whether and how the school district is affected depends on the specific allocation structure and any intergovernmental agreements. Some TIFs include arrangements to mitigate impacts on schools.

What documents should I request to evaluate a proposed TIF?

Key documents include the TIF plan or ordinance, development agreements, financing plan and bond documents, feasibility studies and tax increment projections, appraisals and assessment records, public notices and hearing transcripts, environmental assessments, and any intergovernmental agreements. Right-to-Know requests and attendance at public hearings are common ways to obtain these materials.

How much does it cost to hire a lawyer for a TIF matter?

Costs vary with the complexity of the matter. Simple consultations or document reviews may be billed hourly or at fixed rates. Negotiating agreements, structuring financing, or litigating challenges can be substantially more expensive. Ask potential attorneys for fee estimates, billing structures, and whether they can suggest phased engagement to control costs.

How do I find an attorney experienced with TIF, public finance, or redevelopment issues?

Look for attorneys or firms with experience in municipal finance, redevelopment law, land use, and administrative law. Bar association referral services, law firm bios, and prior case or transaction histories can help identify experienced counsel. Also consider attorneys who have worked with redevelopment authorities, municipal bond counsel, or community organizations on similar projects.

Additional Resources

When researching TIFs in Philadelphia, the following local and state resources are commonly useful for factual materials, public records, and guidance:

- Philadelphia Redevelopment Authority and similar city agencies that administer redevelopment projects and financing.

- Philadelphia City Council offices and committee materials related to finance, planning, and community development for legislative records and public hearing schedules.

- Philadelphia Office of Property Assessment and Department of Revenue for assessment data and tax roll information.

- Pennsylvania state agencies such as the Department of Community and Economic Development and the Local Government Commission for state-level guidance and enabling statutes.

- Pennsylvania Right-to-Know Law resources to obtain municipal records, and local municipal code portals for ordinances and resolutions.

- Professional associations and educational resources such as municipal finance or redevelopment sections of bar associations, and national organizations that provide best-practice research on TIF.

Next Steps

If you believe you need legal assistance related to a TIF matter in Philadelphia, follow these practical steps:

- Gather basic information: Identify the proposed or existing TIF district, locate the TIF plan or ordinance, collect public notices and meeting records, and assemble any communications you have received from developers or city agencies.

- Request records: File Right-to-Know requests for project documents you cannot readily find online. Obtain assessment histories and tax revenue projections if available.

- Attend public meetings: Participate in City Council hearings and redevelopment authority meetings to hear updates, ask questions on the record, and preserve legal rights to challenge if necessary.

- Consult an attorney early: Contact lawyers with municipal finance, land use, or redevelopment experience for an initial consultation. Prepare questions about process, likely timelines, legal risks, and estimated fees.

- Consider technical help: Depending on your role, you may need economic or fiscal consultants to validate tax increment projections, or bond counsel to review financing structures.

- Decide on your approach: Options include negotiating for stronger community benefits or guarantees, pursuing administrative remedies, or filing timely legal challenges. Your attorney will help you evaluate costs, timelines, and probable outcomes.

Getting professional legal advice early can protect your rights, improve your negotiating position, and ensure project documents and public processes comply with applicable law. If you need help finding the right kind of lawyer, start with a focused search for municipal finance, redevelopment, or land use counsel in Philadelphia and request references for prior TIF-related work.