Without reading about the TILT model, it seems that it would be more attuned for new construction rather than infill and would probably be more akin to a residential area such as WGV or Nocatee or even Oakleaf as a way to incorporate actual commercial use in the neighborhood instead of having a cluster just on the outside.
The article seemed to really be about residential development, not business or commercial. Essentially, if I wanted to tear down my single family home and build a 4-story apartment building, I could be sure that under current zoning practices, the neighborhood would always find a way to stop it unless they could be compensated in some way, such as TILTs.
I thought the core idea of tax-sharing was interesting and might apply to non-residential development being blocked by residents: if Mellow Mushroom became a success and if all the free parking around the Shoppes area was converted to pay parking, then all homeowners within, say, 5 blocks of Mellow Mushroom would be entitled to a portion of the business taxes and parking fees for a period of, say, 5 years.
I'm usually skeptical of libertarian solutions as being too simplistic and under-counting how difficult collective action is, but this sounded solution sounded reasonable so I thought I'd post it.