Page 47 - Murfreesboro, TN Comprehensive Plan: Chapter 7, Economic Development

Economic Development 7.47

DRAFT 12.02.15

development staff. Their funding typically comes from
TIF revenues, block grants and development fees.
Advantages of redevelopment authorities is their power
to act on behalf of (and sometimes with the full faith and
credit of) the city and their dedicated funding streams.
DEVELOPMENT CORPORATIONS
Development Corporations are sometimes structured
the same way as redevelopment authorities and can
be involved in the same types of activities. The term
“development corporation” however usually connotes a
higher degree of autonomy from city government and are
often structured as private or public-private non-profit
organizations. They sometimes operate with a board
that is more or less independent of city government and
rely more heavily on creating and managing their own
sources of operating capital. It is also somewhat more
common for corporations to be involved in activities
other than just real estate development to include the
administration of low interest loans pools or managing
business incubators that support start-up activity.
Operating capital often derives from the ownership and
management of real estate assets, private donations,
development and financing fees, fees from tax exempt
bonds, special taxes and/or annual stipends from the
City.
Advantages of development corporations generally
include their ability to act with greater confidentiality
and speed; especially when it comes to real estate
deals where agility and privacy can be very important.
When they are structured autonomously from city
government, development corporations can also help
take some of the politics out of public-private joint
ventures and can operate more effectively in the tax
credits markets where they can act as syndicators.
They can also solicit tax-deductible donations from
foundations and other philanthropic entities whereas
most purely public entities are prohibited from doing so.
They are also frequently used as pass-through vehicles
for tax-exempt government bonds.
Disadvantages of the typical development corporation
structure include their self-supporting nature and
frequent lack of dedicated public financing. This often
means a precarious financial existence and sometimes a
greater amount of time and energy spent raising money
and managing overhead than actually doing deals.