Developer’s Guide - TIF Financing in Nebraska

What Is Tax Increment Financing (TIF)?

Tax Increment Financing (TIF) is a powerful tool that allows local governments to support private development in areas that need economic revitalization. In Nebraska, TIF is governed by state statutes and commonly used by cities like Omaha, Lincoln, Grand Island, and smaller municipalities to attract developers to underutilized or blighted areas.

The concept is simple: when a developer improves a property, its taxable value increases. That “increment” in property tax — the difference between the old base value and the new improved value — is redirected to help pay for public improvements or certain private project costs over a period of up to 15 years in Nebraska.

TIF can cover:

  • Public infrastructure (streets, utilities)

  • Site prep and environmental remediation

  • Façade improvements and demolition

  • Parking facilities and streetscape enhancements

Rather than collecting the higher taxes from day one, the city lets those future tax gains help finance the project itself — turning future revenue into immediate value.

TIF is not a handout or tax break — it’s a performance-based reimbursement mechanism that rewards private investment with a portion of its own future impact.

If you’re developing a project that enhances the surrounding area and aligns with a city’s long-term plans, TIF could make your vision financially viable.

How Does TIF Work in Nebraska?

In Nebraska, the TIF process is established under the Community Development Law (Neb. Rev. Stat. §18-2101). It’s designed to promote redevelopment in blighted and substandard areas, a designation that must be officially declared by the city or village.

Here’s a step-by-step breakdown of how it works:

Step 1: Blight Study
A local authority must first declare the project area “blighted and substandard,” usually after a planning department conducts a formal study.

Step 2: Project Plan Submission
The developer submits a redevelopment plan to the city that outlines project scope, timelines, estimated tax increment, and eligible costs to be reimbursed.

Step 3: Planning Commission & City Council Review
The plan must be reviewed and approved in a public hearing process, where both the planning commission and city council can recommend changes.

Step 4: TIF Agreement & Financing
Once approved, a redevelopment agreement is executed, and the developer can begin construction. Typically, the city will issue TIF bonds or allow developer-reimbursed TIF based on receipts of future tax increments.

Step 5: Reimbursement
The increased property taxes (the increment) are collected and used to pay off eligible project costs over the TIF term (typically 15 years).

TIF is flexible but highly regulated, and navigating the approval process requires strong documentation, financial forecasting, and community alignment — all areas where Pelshaw Group adds value.

What Makes a Project TIF-Eligible?

IF isn’t available for just any project. In Nebraska, projects must meet specific criteria and show substantial public benefit to qualify. Here are the key factors:

✅ Location
The project must be in a blighted and substandard area, as designated by city planning officials.

✅ Public Benefit
Projects should demonstrate how they:

  • Remove slum/blight
  • Create or retain jobs
  • Expand the city’s tax base
  • Provide housing, services, or infrastructure the community needs

✅ Financial Necessity
Most cities require a “but-for” test — the project must prove it would not be financially feasible “but for” the use of TIF.

✅ Eligible Uses
TIF funds can only be used for certain reimbursable expenses, including:

  • Grading, demolition, and environmental cleanup
  • Utility upgrades, public streets, sidewalks, and lighting
  • Parking structures and site infrastructure
  • Historic preservation and façade improvements

TIF works especially well for:

  • Mixed-use developments
  • Affordable or workforce housing
  • Commercial renovations
  • Historic rehabilitations

If you’re unsure whether your Nebraska project qualifies for TIF, Pelshaw Group can review your project and help you assess feasibility, design a strong proposal, and coordinate with city staff and legal advisors.

Why Developers Use TIF — Real-World Benefits

In an increasingly expensive and competitive construction environment, TIF can be the difference between a good idea and a funded, shovel-ready project. Here’s why more Nebraska developers are incorporating TIF into their financing stack:

1. Bridges Financial Gaps
TIF can cover 10% to 25% of project costs in many cases, closing funding shortfalls and making deals work.

2. Reduces Out-of-Pocket Costs
TIF reimburses eligible costs using future property tax increases, so developers can get upfront savings without giving up equity or incurring additional debt.

3. Improves Cash Flow
Lower upfront capital needs mean more room for strategic investments, design upgrades, or contingency coverage.

4. Enhances Project Appeal to Lenders & Investors
Lenders often view TIF as a stable secondary repayment source, especially in communities with strong tax bases and supportive local governments.

5. Creates Long-Term Value for the Community
TIF-backed developments often drive further investment, elevate property values, and revitalize entire neighborhoods.

At Pelshaw Group, we’ve helped developers leverage TIF to deliver transformative projects with lasting value — and we can help you do the same, from concept to closing.

 

How Pelshaw Group Helps You Secure and Maximize TIF

Navigating TIF in Nebraska can be complex — but with the right team, it becomes a strategic asset rather than a bureaucratic hurdle. Pelshaw Group offers full-service TIF consulting and development support for projects of all sizes.

Here’s how we support you:

Feasibility Analysis
We determine if your project location and scope align with local TIF requirements and estimate your potential reimbursement.

TIF Strategy & Planning
We help you craft a winning redevelopment plan, including tax increment forecasts, cost breakdowns, and a compelling public benefits narrative.

City Coordination & Public Hearings
We prepare you for meetings with city officials, attend public hearings, and help negotiate terms favorable to your development.

TIF Application & Legal Guidance
Working with legal partners, we manage the documentation process and keep your plan aligned with city and state regulations.

Development & Construction Oversight
As experienced builders, we ensure your TIF-aligned improvements are delivered on time, within scope, and fully reimbursable.

With TIF, timing and positioning are everything. Our local knowledge, relationships with Nebraska municipalities, and construction expertise make us the ideal partner to help you unlock the full power of TIF financing.

Ready to Explore TIF for Your Next Project?

Let Pelshaw Group help you navigate the TIF process and turn your vision into reality — with less risk, stronger funding, and bigger long-term value.

📍 Serving Omaha, Lincoln, and Communities Across Nebraska