How are redevelopment agencies financed?
Redevelopment is primarily financed by tax increment revenue. Other revenue sources include State, Federal, and private loans and grants and proceeds from tax allocation bonds, real property transaction proceeds, and private developer project contributions. Typically, agencies use tax increment funds to leverage financial contributions from various public and private sources. Through various types of development and financing agreements, agencies are able to lend and/or borrow funds over multi-year periods to finance project development costs. The most common bond instrument used by redevelopment agencies to finance projects is called a tax allocation bond. These bonds are not debt of the community or the general taxpayer. Rather, they are repaid solely from tax increment revenue generated within the project area. In other words, increased tax revenues generated through redevelopment activities are funneled back into the project area to stimulate more development projects as well as to
