Introduction
When Tennessee enacted the Real Estate Infrastructure Development Act of 2025 (codified at Tenn. Code Ann. § 7-84-801 et seq.), the legislation opened a powerful new door for developers and municipalities: the ability to finance public infrastructure through tax assessment districts. In the twelve months since its passage, we have watched REIDA evolve from statutory language into lived practice.
Over the past year, I’ve had a front-row seat to this conversation with Winstead’s development clients, municipal decision-makers, and project teams navigating the opportunities and complexities that REIDA presents. I’ve had the privilege of helping establish two Infrastructure Districts under the new law, including the first such district in Tennessee, and I have numerous clients actively working to establish their own districts around the state. These experiences have given me an inside perspective on what works, what doesn’t, and what every stakeholder should know before pursuing a district.
This 5-part blog series is designed to translate those conversations and experiences into practical guidance. Rather than rehashing the statute, I will focus on the real-world application of the lessons learned. If you’re considering an Infrastructure District under REIDA—whether you’re a developer, a municipality, or an advisor to either—this series will give you the benefit of lessons learned in a concentrated forum.
Let’s start with Lesson One: Education, Education, Education
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Education, Education, Education: Building Municipal Support for REIDA
The First Challenge in Any REIDA Initiative
When developers, municipalities, and community leaders explore infrastructure districts as a tool for mixed-income housing and community development, they often discover that enthusiasm quickly gives way to skepticism, particularly among the municipal staff and elected officials who must ultimately approve the initiative.
Municipal decision-makers are right to ask tough questions. They are stewards of taxpayer funds and elected to represent their communities responsibly. When a developer proposes a REIDA mechanism involving additional property tax assessments, infrastructure financing, and complex public-private arrangements, city councils, planning departments, and finance directors need to understand not just what is being proposed but why and how it actually works.
The path to successfully creating an infrastructure district to support a project runs through early engagement and education.
Why Early Engagement Matters
While they are common in other states, tax assessment districts are unfamiliar to municipal actors in Tennessee. They involve unfamiliar financing mechanisms, shifted incentive structures, and long-term commitments. Without early, deliberate engagement with municipal staff and governing bodies, even well-intentioned IDD proposals can stall or collapse under the weight of misunderstanding, suspicion, and conflicting assumptions about costs and benefits.
Early engagement does three essential things:
- It surfaces objections before they harden into positions. Concerns raised in preliminary discussions are easier to address than resistance baked into formal opposition.
- It builds ownership. When municipal staff participate in understanding how Infrastructure Districts work, rather than being presented with a finished proposal, they become partners in shaping the initiative rather than gatekeepers blocking it.
- It clarifies the true economics. Infrastructure Districts involve complex financial interplay between public and private actors. Walking through the numbers together, with transparency, builds credibility.
