Another tool that MDHA utilizes to spur urban redevelopment is called Tax Increment Financing (TIF). TIF is a tool to generate funding for public improvements in support of economic development.

 

TIF works as follows: The city establishes the base value of a piece of property before redevelopment occurs. Metro then bases its taxes for this property, even after development, on that base value. MDHA, as the master developer of a TIF property, will receive the remaining tax which is generated by the steady increase in value as the property is being developed.

 

TIF was available in both Rolling Mills Hill and the Gulch and helped spur the private investment in residential units. “We had worked on an overall market study in 2003, and it revealed there was a large residential hole downtown” said Joe Cain, development director at MDHA, in a Tennessean article penned by Nancy DeVille in 2012. “In 2004, there were 1,200 residential units and 1,800 residents downtown. Today there are more than 5,700 people living in 3,838 units, officials with the Nashville Downtown Partnership said. They project that number to jump to 7,600 residents by the end of 2014."

 

TIF will also be used in the Sulphur Dell ballpark development with MDHA looking to increase tax increment financing in four of its redevelopment districts, including the three that cover Rolling Mill Hill, the Gulch, and Sulphur Dell/Capitol District.

 

"We can't do much more development without an increase in these areas," Joe Cain is quoted by reporter Scott Harrison in the Nashville Business Journal. "It was necessary [to seek an increase]. And in light of the momentum we've seen, we want to keep that going for the city."