While Tax Increment Financing (TIF) remains one of the most widely recognized economic development tools in urban revitalization, savvy developers like James Neeld of Kansas City understand that a diverse toolbox of incentives can often yield superior results. The landscape of economic development incentives extends far beyond TIF, offering creative financing solutions for projects of varying scales and objectives.

Overview of Lesser-Known Incentive Programs

Community Development Block Grants (CDBG)

CDBGs provide flexible funding for community development needs, particularly in low to moderate-income areas. Unlike TIF, which captures incremental tax revenue, CDBGs offer direct funding that doesn’t need to be repaid when properly administered. James Neeld development projects in Kansas City have occasionally leveraged CDBG funds to address infrastructure needs that traditional financing wouldn’t cover.

New Markets Tax Credits (NMTC)

The NMTC program incentivizes investment in low-income communities by providing federal tax credits to investors. These credits equal 39% of the original investment and are claimed over a seven-year period. The program has been instrumental in bridging financing gaps for commercial, mixed-use, and community facility developments in distressed areas.

Opportunity Zones

Created by the Tax Cuts and Jobs Act of 2017, Opportunity Zones offer significant tax benefits to investors who reinvest capital gains into designated low-income census tracts. Kansas City developers, including James Neeld, have begun exploring how Opportunity Zone investments can be structured to provide both community benefit and investor returns in previously overlooked neighborhoods.

Historic Tax Credits (HTCs)

For developments involving historic structures, federal HTCs provide a 20% tax credit for qualified rehabilitation expenses. Many states, including Missouri, offer complementary state credits that can be combined with federal incentives. These credits have proven essential in making the numbers work for adaptive reuse projects.

Industrial Revenue Bonds (IRBs)

IRBs allow municipalities to issue tax-exempt bonds to finance major manufacturing and industrial projects. This financing structure can significantly reduce interest costs while potentially providing property tax abatements. In the Kansas City region, James Neeld development projects in the industrial sector have benefited from the IRB structure.

Eligibility Requirements

Unlike TIF, which focuses primarily on geographic “but for” tests and blight findings, alternative incentives often have distinct eligibility criteria:

Geographic Targeting

Many incentives target specific geographic areas:

• Opportunity Zones require investments in designated census tracts
• New Markets Tax Credits focus on low-income communities
• Enterprise Zones target specific economically challenged areas

Project Type Restrictions

Incentives often target specific development types:

• Historic Tax Credits apply only to certified historic structures
• Brownfield Tax Credits specifically address environmental remediation
• Industrial Revenue Bonds primarily benefit manufacturing facilities

Timing Considerations

Some programs have critical timing requirements:

• Low Income Housing Tax Credits require specific lease-up schedules
• Historic Tax Credits demand adherence to strict rehabilitation standards and timelines
• Opportunity Zone investments must meet holding period requirements

“Understanding the eligibility nuances is critical,” notes James Neeld, Kansas City developer with experience navigating these programs. “Each incentive has its own regulatory framework, and success depends on meticulous planning from the earliest project stages.”

Application Processes

The application processes for alternative incentives vary dramatically in complexity, timeline, and administrative oversight.

Pre-Application Preparation

Before formal submission, developers should:

• Conduct feasibility analyses specific to each incentive
• Engage with program administrators early
• Develop robust financial models showing incentive impacts
• Build relationships with experienced consultants

Competitive vs. Non-Competitive Programs

Some incentives like Low Income Housing Tax Credits involve highly competitive allocation processes with annual funding rounds. Others, like Opportunity Zones, operate on a first-come, first-served basis without competitive scoring. Experienced Kansas City developers like James Neeld recognize that competitive programs require significantly more preparation and strategic positioning.

Administrative Complexity

Application complexity varies widely:

• Property Assessed Clean Energy (PACE) financing features relatively streamlined processes
• New Markets Tax Credits involve intricate financial structuring
• Historic Tax Credits require detailed historical documentation and rehabilitation plans

Post-Award Compliance

The compliance burden continues after award:

• Job creation incentives require ongoing employment verification
• Low Income Housing Tax Credits demand tenant income certification
• Historic Tax Credits include monitoring periods to prevent “recapture”

Strategic Combinations of Incentives

The most sophisticated development approaches involve strategic “stacking” of multiple incentives. In James Neeld development projects throughout Kansas City, this layered approach has often made the difference between marginal returns and viable investments.

Compatible Combinations

Certain incentives naturally complement each other:

• Historic Tax Credits + New Markets Tax Credits for historic rehabilitations in low-income areas
• Opportunity Zone investments + local property tax abatements
• Industrial Revenue Bonds + workforce development grants

Administrative Coordination

When combining incentives, developers must coordinate:

• Different application timelines
• Potentially conflicting program requirements
• Multiple administrative agencies
• Complex financial structures

Case Study: Mixed-Use Development

A typical mixed-use development in Kansas City might combine:

• Property tax abatements through Chapter 353 or Chapter 100
• Sales tax exemption on construction materials
• Facade improvement grants
• Historic tax credits (if applicable)
• Targeted infrastructure improvements

“The art is in identifying which incentives can be legally and practically combined,” explains James Neeld. “Kansas City offers a particularly robust ecosystem of incentives that creative developers can leverage to transform challenging sites.”

Beyond Financial Incentives

Smart developers recognize that non-financial incentives can be equally valuable:

• Expedited permitting processes
• Density bonuses and zoning flexibility
• Infrastructure improvements
• Technical assistance programs

Conclusion

While TIF remains a valuable tool in the economic development arsenal, the diversity of alternative incentives offers creative solutions for projects of all types. In Kansas City, James Neeld development projects demonstrate how thoughtful incentive structuring can transform challenging sites into community assets.

The most successful developers approach incentives strategically—not as entitlements, but as tools to enhance project viability while delivering community benefits. As municipalities become increasingly sophisticated in their economic development approaches, developers who master the full spectrum of available incentives will maintain a significant competitive advantage in an evolving marketplace.