Development projects frequently depend on public incentives, each with its own qualification requirements and clawback provisions.
Tax increment financing. Capture of the increase in property tax revenue within a designated district to reimburse eligible development costs, under an approved plan. Eligibility of costs, the capture period and the approving authority are set by statute.
Property tax abatements. Statutory programmes reducing tax on new investment for a term, typically requiring an application before construction begins, approval by resolution after a public hearing, and a written agreement with investment and employment commitments.
Brownfield incentives. Reimbursement of eligible environmental and, in some states, non-environmental costs on contaminated or functionally obsolete property, through a brownfield plan approved by an authority.
Historic rehabilitation credits at federal and state level require compliance with rehabilitation standards and a multi-part certification process, with the building’s historic character preserved.
Low-income housing credits allocated competitively under a qualified allocation plan, with extended use restrictions running decades.
Common threads. Apply before commencing; document the but-for justification; expect clawbacks if job or investment commitments are missed; and read the compliance and reporting obligations, which continue long after construction and are the most common source of forfeiture.