The use of tax increment finance (TIF) arrangements to finance capital-intensive infrastructure needs is not a new concept, but it is gaining traction in many states and municipalities. This article presents the case of the Town Center project in Virginia Beach, Virginia, and the use of a TIF to provide infrastructure for the project. The authors find that the success of the TIF is because of a combination of a reduction in public risk, careful planning, and close attention paid to the capabilities of the private sector partners. The authors conclude that the TIF mechanism is an appropriate and attractive means to fund infrastructure needs, provided the trade-offs and pitfalls are carefully considered and understood.
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