Financing Mixed Use Development Place-Making Infrastructure

The Federal Perspective: Creating incentives and financing tools in the next Transportation Reauthorization

NHC Solutions for Sustainable CommunitiesSeptember 27, 2011 Washington, DC

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1. Who is LOCUS: Responsible Real Estate Developers and Investors

2. Prospects for Transportation Re-Authorization and TOD-Oriented Development

3. Question and Answers

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LOCUS: About Us…

• LOCUS, Latin for “place,” is a national coalition of real estate developers and investors who believe transportation drives development and who advocate for sustainable, walkable development in our towns and cities.

• LOCUS, in partnership with Smart Growth America, works to educate policymakers about the market demand for and the social and environmental benefits of walkable, sustainable development across the country.

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LOCUS: Steering Committee Members Christopher B. Leinberger

President, LOCUS andPartner, Arcadia Land Company

Ed Lipkin

President, EBL&S Development

Albert Ratner

Chairman of the Board of Directors, Forest City Enterprises

Jonathan Rose

President, Jonathan Rose Companies

Marilyn Taylor

Dean, University of Pennsylvania School of Design

Brenna S. WalravenManaging Director, USAA Real Estate

Company

Michael Lander

President, Lander Group

Richard Baron President, McCormack Baron Salazar

Catherine Crenshaw

President and CEO, Sloss Real Estate

Tom Darden

Managing Director, Cherokee Investment Partners

Robert Davis

Founder, Seaside and Partner, Arcadia Land Company

Bernie Glieberman

President, Crosswinds Communities

Pres Kabacoff

President, HRI Properties

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1. Who is LOCUS: Responsible Real Estate Developers and Investors

2. Prospects for Transportation Re-Authorization and TOD-Oriented Development

3. Questions and Answers

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LOCUS: Legislative Priorities

1. Increase overall transit funding through value capture

2. Incentivize transit-oriented development (TOD) through credit enhancement and tax incentives

3. Require strategic planning among metropolitan planning organizations (MPOs) and state Departments of Transportation (DOTs)

Flickr user: starquake

LOCUS: 3-Prong Strategy for Transit Oriented Development

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Value Capture and Transit

Photo Credit: Hawaii Government Archives

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Value Capture: How Will it Work?

Full Faith and Credit of USA

“1,000 Flowers Bloom” Approach

Bring the Private Sector to the Table

Photo by: Andrew Tucker

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Transit Oriented Development

Photo Credit: Wali Memon

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Transit Oriented Development: CHALLENGES?

• According to a Reconnecting America study, demand for living near transit in walkable, mixed-use communities is projected to double over the next 20 years to 15.2 million households by 2030.

 • A recent Government Accountability Office reports notes:

“Some project sponsors and experts believe federal loans, loan guarantees, or credit enhancements could help bridge a financing gap.

TOD Planning Program : How Will it Work?

DOT Secretary award grants to eligible recipients to develop specific, implementable strategy for mixed-income, mixed-use development

Eligible recipients include transit agencies, units of local government, metropolitan planning organizations, tribal governments, and states, in partnership with other public or private agencies or organizations; and

The total amount for program $40million.

TOD Credit Enhancement: How Will it Work?

Modeled after the Transportation Innovative Financing Infrastructure Act (TIFIA) program

Provide much needed “bridge financing” to

advance new transit-oriented development projects by providing TOD incentives such as direct loans, loan guarantees, and tax credits

TOD and Credit Enhancement: What is Eligible??

Eligible Improvements:

– Property enhancement, including conducting environmental remediation, park development, and open space acquisition;

– Improvement of mobility and parking, including rehabilitating, or providing for additional streets, transit stations, structured parking, walkways, and bikeways; or

– Utility development, including rehabilitating existing, or providing for new drinking water, wastewater, electric, and gas utilities.

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➔ House Transportation & Infrastructure Committee (T&I)➔ Senate Environment & Public Works Committee (EPW)➔ Senate Banking Committee (transit title only)➔ Senate Commerce Committee (Freight and Safety title only)

LOCUS: Key Players

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Final Transportation BillOct-Dec 2011

President’s 2011 ProposalFebruary 2011

Draft House ProposalJune 2011

Draft Senate BillMay/June 2011

LOCUS: Legislative Process…

17Flickr user: starquake

Spring/Summer 2011

“Grand Bargain”Revenue tied to deficit reduction (gas tax)

Fall 2011 White House engaged – pre-Presidential cycleNeed to get reelected trumps partisanship

2013 No agreement on revenue increasesPost-2012 Presidential election

LOCUS: Possible Scenarios…

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House Strategy: Value Capture + Credit Enhancement

➔ $210-220B/$300* for 6 years

➔ Streamline Project Delivery

➔ State Infrastructure Banks

➔ Innovative Financing, including

supporting value capture

initiatives

➔ Increased $ for TIFIA program

and expands eligibility –

potentially TOD credit

enhancement

Flickr user: starquake

Chairman John Mica (R-FL), House Transportation and Infrastructure Committee

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Senate EPW Strategy : Credit Enhancement

➔ Safety

➔ Asset Management

➔ Freight

➔ Metro Mobility

➔ Increased funding for TIFIA –

credit enhancement

Chairman Barbara Bozer (D-CA), Senate Environment and Public Works Committee

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Senate Banking Strategy: Planning Grants + Credit Enhancement + Increased Transit Funding

➔ Championed by

Sens. Bennett,

Warner, Hagan

➔ Includes both

Planning Grants and

Credit Enhancement

Program

Chairman Tim Johnson (D-SD), Senate Banking Committee

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President Proposal: Major Supporter for TOD

➔ $50B in addt’l funding for

Transit

➔ TOD is major criteria

➔ Infrastructure Bank

➔ “Roads, rails, runways”

➔ Multi-year bill

➔ “Reform” of programs

➔ High Speed Rail key issue

President Barack Obama

Key States:

– Florida – Tennessee– New Jersey– Pennsylvania – Texas– Illinois– California– Montana– Delaware– Oklahoma– Louisiana

LOCUS: We Need Your Voice

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Join us at

smartgrowthamerica.org/locus

Christopher Coes

Managing Director,

LOCUS: Responsible Developers and

Investors

ccoes@smartgrowthamerica.org

LOCUS: CONGRESS NEEDS TO HEAR YOUR VOICE

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Questions and Answers