Financing Transportation and Community and System Preservation Projects
The Transportation Equity Act for the 21st Century (TEA-21), passed by Congress in 1998, included an authorization of $120 million over five years to fund the Transportation and Community and System Preservation Pilot Program (TCSP). Small in comparison to the total of $218 billion in transportation spending authorized under TEA-21, the TCSP program nonetheless is having an impact far out of proportion to its size. Administered by the Federal Highway Administration (FHWA), TCSP has funded projects in all 50 States and the District of Columbia to link transportation, community, and system preservation practices. This program is leveraging other Federal resources, State, regional, and local funds, and private sector contributions, to create lasting changes in planning and implementation practices.
State, regional, and local agencies throughout the country, with their private and nonprofit partners, face unique challenges in financing projects that meet TCSP objectives. This case study discusses ways in which grantees have used TCSP funds to leverage resources from other sources, to accomplish things that could not have been done through a single funding source. Approaches to project finance are discussed for two distinct scales of projects:
Regional planning and visioning efforts supported by TCSP have most commonly been led by a public agency with regional scope, usually the metropolitan planning organization (MPO) or a county. In some cases, nonprofit coalitions of business and community interests have taken the lead in initiating a regional planning effort. State agencies also have played key supporting roles by developing data and analysis tools.
Regardless of who initiates the project, some of the most effective projects have benefited from the involvement of multiple agencies and funding sources. TCSP grantees have taken their efforts beyond what could have been accomplished with a single funding source by:
The Envision Utah project in northern Utah has been supported by over $10 million in resources through its sevenyear history, including over $6 million in private funding and inkind contributions, $2.3 million in State inkind contributions, $1.4 million in Federal funds, and $133,000 in local government funds. The State played an important technical role by developing data and tools to analyze the impacts of alternative growth futures. An FY 1999 TCSP grant of $425,000 was instrumental in enhancing transportation and land use models to support this technical work.
The Envision Utah project originated in 1995, when the Coalition for Utah's Future, a diverse group of business and community leaders, undertook an outreach effort to determine support from the public for a regional visioning effort. After this effort demonstrated widespread concern about the impacts of growth on quality of life in the 10county northern Utah region, the George S. and Dolores Dore Eccles Foundation gave the Coalition a $150,000 grant as seed money to further its work. The Coalition used this seed money to establish the more broadly based Envision Utah organization. The same foundation then offered a $500,000 challenge grant to match $1 million raised from public and community sources. These funds were raised primarily from the private sector through contributions from corporations and other local foundations. Local government also provided financial support, while the State contributed inkind resources.
To obtain the State inkind contributions, the Coalition worked with the legislature to appropriate $550,000 to fund the development and application of data and technical tools. The Governor's Office of Planning and Budget created a Quality Growth and Efficiency Tools (QGET) division that led the development of models to assess land use, infrastructure costs, water use, and air quality impacts resulting from alternative growth scenarios. An FY 1999 TCSP grant allowed QGET, working with the regional MPOs, to enhance transportation models to better quantify the transit ridership, walking, and bicycling impacts of transitoriented development scenarios; initiate the development of a land use modeling system for the region; and undertake public outreach to communicate the impacts of alternative growth scenarios.
The Envision Utah effort also included an extensive process of outreach to nearly 100 local governments as well as to the general public throughout the region. The result of this process was the adoption of a preferred "Quality Growth Strategy" that provides land use, transportation, and infrastructure recommendations. Local jurisdictions are working to implement many of those recommendations, with the help of financial and technical assistance from Envision Utah. The effort has been so successful at building a broad base of support that a number of private foundations are continuing to provide grants to ensure implementation of the Quality Growth Strategy recommendations, and the State is continuing to provide approximately $300,000 a year in technical resources to support the effort.
Concord, New Hampshire
The Vision 20/20 project in Concord, New Hampshire joins Envision Utah as an example of a nonprofit led effort. This project was initiated by Concord 20/20 Vision in collaboration with the New Hampshire DOT. The purpose of the project was to develop a longrange plan for the Concord region that integrated transportation, the environment, economic development, and urban design. An FY 2000 TCSP grant of $348,400 was supplemented by $175,000 in private contributions from foundations, including the Jamieson Fund and New Hampshire Charitable Foundation, as well as local businesses and individual donors. These privatesector and nonprofit contributions were raised by Concord 20/20 Vision, which met with boards and heads of groups with a potential interest in improving the environment and quality of life in the Concord area.
The New Hampshire DOT contributed $200,000 of Interstate Maintenance and State matching funds towards the development and application of a transportation model as well as the revision of the agency's guide for public participation. The model, which the DOT originally intended to support a corridor study of I93 through the region, was enhanced to be useful for the Concord 20/20 Vision project. The project was further supplemented by $50,000 in EPA grants, including $30,000 from EPA's Development Community and Environment Division to support Smart Growth activities and $20,000 from EPA Region 1's Regional Geographic Initiatives funds.
Willamette Valley, Oregon
In Oregon's Willamette Valley, a 12,000squaremile region that stretches from Portland to Eugene, an FY 1999 TCSP grant of $600,000 allowed the Lane Council of Governments to lead a regional transportation futures study. This study, conducted in conjunction with the Oregon DOT (ODOT), used ODOT's statewide transportation and land use model to assess impacts of highway investment, transit investment, compact development, and travel pricing strategies over a 50year timeframe. In addition to TCSP funds, the study was supported by $250,000 in State Planning and Research funds, $125,000 in foundation grants, $15,000 in private contributions, and an estimated $120,000 in inkind volunteer support.
At the outset of the study, ODOT funded a facilitator to bring together the directors of two concurrent longterm regionwide projects, one examining environmental and ecological issues and the other focusing on growth management, to discuss how to share resources and leverage efforts. As a result, the TCSP project ended up sharing data, development costs, and public outreach costs with these studies. The environmental study was supported by the U.S. Environmental Protection Agency, while the growth management study was funded by local nonprofits and foundations.
Madison County, Indiana
The Madison County Council of Governments (MCCOG) is working with the Indianapolis MPO and the Central Indiana Regional Citizens League (CIRCL) to address growth on the suburban fringes of the Indianapolis metropolitan area. Project partners have combined MPO and private resources to develop strategies to preserve natural areas, protect water supplies, and enhance the economic vitality of existing communities.
The Livable Communities and Edge Growth project is supported by an FY 2000 TCSP grant of $500,000 to MCCOG. While the COG originally intended to focus just on Madison County - one of eight suburban/ exurban counties ringing Indianapolis - it realized that it could expand the effectiveness of the project by partnering with the Indianapolis MPO and CIRCL, two agencies with regional scope. (The Indianapolis MPO conducts transportation planning in Indianapolis and 16 adjoining towns, but does not cover Madison County.) Project partners brought the following resources to the table to supplement TCSP funds:
Consistent with a new comprehensive plan, in July 2002 Madison County adopted zoning ordinances that include standards for road design, access control, and corridor preservation; corridor overlay districts; and requirements to support alternative travel modes. TCSP project funds and partnerships are helping to spread these innovations to other parts of the Indianapolis region. For example, the MPOs and CIRCL are working with the Indiana Planning Association to develop a certification program for planners on the principles laid out in the land use best practices and alternatives handbook. A nonprofit educational group will assist both MPOs in developing a tool to engage primary and secondary school age children in becoming involved in the transportation and community planning process.
Other Strategies for Financing Regional Planning
Other regional TCSP projects demonstrate how grantees have assembled funding and inkind resources from a variety of sources to implement their projects:
A statewide land-use database assembled by the Maryland Department of Planning in identifying where growth has recently occurred outside priority funding areas (PFA).
Conclusions on Regional Planning
These TCSP projects demonstrate that financial support for regional planning can come from a wide variety of sources. Each source may be motivated by different yet interrelated concerns, including maintaining mobility, enhancing economic competitiveness, preserving community character, and protecting the environment. Yet each also is motivated by a common factor - the perceived threat of current growth trends towards these common values. The catalyst is commonly a small group of visionary community leaders - perhaps a mix of elected officials, business leaders, and community activists - who take the lead on building a larger coalition of interests to address growth issues. These leaders assemble a convincing case for the need to address growth challenges through a collaborative process. Once the need is identified and the vision established, the hard work begins of soliciting funds to support the effort.
There is no "magic formula" for assembling the required resources; each region will have different agencies and institutions that see the value of looking at transportation and land use in combination from a regional perspective. The broader the demonstrated public support and commitment of local business and political leadership, however, the greater the likelihood of success in raising funds.
Local Planning and Implementation
Regional plans establish a vision for how communities want to develop, but implementing this vision requires specific local plans and actions. Agencies throughout the country, and their private and nonprofit partners, have led TCSP projects that focus on improving transportation, promoting economic development, and enhancing quality of life in individual neighborhoods and communities.
To support local area planning studies, TCSP project sponsors have combined TCSP funds with other Federalaid transportation funds, local (MPO, city, or county) planning funds, Department of Housing and Urban Development (HUD) grants for housing and community development, EPA funds, State DOT funds for transportation planning, and even contributions from local businesses, institutions, and utilities.
The cost of conducting a planning study is usually small compared to the cost of implementing its recommendations. Federal funding is potentially available for transportation projects meeting TCSP goals, through sources such as the Surface Transportation Program (STP), Transportation Enhancements (TE), and the Congestion Mitigation and Air Quality (CMAQ) program. The challenge is to create projects that perform well on the criteria established by State DOTs and MPOs for distributing these funds.
For projects with a community development focus, private investment in development projects is a key measure of success and complements public investment in infrastructure. Often, private investment in redevelopment areas requires "gap financing" techniques to make a project profitable for the developer. TCSP grantees have used Federal sources of gap financing such as HUD grants and loans for community development and housing projects, and EPA Brownfields cleanup funds, as well as State and local sources, including tax abatements and loan guarantees.
TCSP projects in Bethania, North Carolina; Springfield, Massachusetts; Burlington, Vermont; Denver, Colorado; and Fort Worth, Texas demonstrate the innovative use of funds from multiple sources to accomplish things that could not have been done through any single source. These projects have supported TCSP objectives through strategies such as historic preservation, brownfields redevelopment, urban revitalization, alternative transportation options, and transitoriented economic development.
Bethania: Historic Preservation
A $150,000 TCSP grant to the Town of Bethania, North Carolina leveraged a multimilliondollar private contribution to acquire land and preserve viewsheds from this historic 18thcentury community near WinstonSalem. Founded in 1759 as a planned agrarian Moravian settlement, the town today retains its original layout and many of its buildings and fields. Yet the historic character of the town is threatened by encroaching suburban development as well as traffic volumes, excessive speed, and heavy trucks on the town's main street.
When the town brought these problems to the attention of the North Carolina DOT (NCDOT), the DOT responded. Ed Davis, a historic preservation specialist at NCDOT, recognized the historical significance of the town as well as the threats it was facing. As the town and the State Historic Preservation Office successfully worked to have Bethania designated a national historic landmark, NCDOT applied for a TCSP grant to conduct a comprehensive transportation and land use study for the town. The recommendations of this study, completed in December 2001, included:
Already, the pieces are falling into place to ensure implementation of this plan. A Transportation Enhancements grant of $620,000 was used to finance the renovation of a farmhouse for use as a visitor center, design accessible pedestrian routes through town, and study temporary traffic calming measures. An additional grant of $1 million is being used to implement the traffic calming measures. The bypass will be studied in more detail using NCDOT "Small Urban Funds," a combination of Federal and State funds distributed to each district that are used to speed small projects. Finally, a number of anonymous local donors purchased land recommended in the plan for preservation in perpetuity. While the value of this transaction has not been disclosed, it is estimated to be in the millions of dollars.
Springfield: Brownfields Redevelopment
In Springfield, Massachusetts, the city with local residents and business owners are working to preserve and revitalize the Indian Orchard neighborhood, a traditional neighborhood that developed around a milltown manufacturing site along the Chicopee River. This neighborhood has many examples of historic architecture and a welldefined main street, but in recent decades has suffered from population loss and disinvestment. A major focus of the project is the cleanup and redevelopment of an abandoned 52acre brownfields site.
An FY 2000 TCSP grant of $171,000 is complementing sitespecific work to expand planning activities throughout the neighborhood. The city is using the TCSP grant to develop strategies to improve access to the site while minimizing transportation impacts on the adjacent neighborhood and improving mobility and livability for neighborhood residents. Strategies, including traffic calming, bicycle and pedestrian improvements, bus routes, and truck access routes are all being examined.
In 2000, the city also received a $250,000 grant from EPA to conduct environmental assessments at 10 brownfields properties, including the Indian Orchard site. The city contributed $15,000 to hire a separate consultant to look at the market feasibility of the 52acre site. "We could have eaten up the entire TCSP grant just by looking at the industrial site," noted Katie Galluzzo, a planner with the City of Springfield. "Instead, we wanted to use the grant to look at the entire neighborhood that surrounds the site and focus on complementary needs and improvements."
Burlington: Urban Revitalization
To implement a master plan for the North Street Revitalization Project, the City of Burlington, Vermont garnered funding from FY 2000 and 2001 TCSP grants of $348,400 and $661,408, respectively. The North Street Revitalization Project began in 1997 with the community's designation as an Enterprise Community, one of 72 such communities nationwide. As an Enterprise Community, it was initially assigned a staff coordinator through the AmeriCorp*VISTA program to engage in community organizing. Later, after the city took over fulltime staff support for the project, AmeriCorp*Vista continued to provide technical assistance to business and property owners to help them implement property improvements and negotiate permitting processes.
A master plan for the neighborhood was developed through a process that included a citizens' task force, a public survey, public meetings, and doortodoor outreach to local businesses and residents. Once the plan was developed, project staff took it to city departments and the city council for endorsement. According to city staff person Kirsten Merriman, the endorsement process not only helped to obtain buyin and support from key actors, but also led to the identification of additional funding opportunities.
To implement the master plan, the city pieced together funding from a variety of sources to meet the total construction budget of $4.45 million. In addition to the TCSP grant, these sources include $2 million in FY 2002 STP funds, $258,400 in FY 1999 TE funds, $390,000 in HUD Economic Development Initiative (EDI) funds, $220,000 from the State of Vermont, $328,000 in local taxes, and $324,000 from local utilities. Transportation and infrastructure improvements implemented under the master plan include:
Denver: Alternative Transportation Options
An innovative project in Denver, Colorado is providing alternative modes of local transportation to complement regional transit and reduce traffic congestion in this rapidly growing metropolitan area. An FY 2000 TCSP grant of $175,000 has supported planning for three transportation components - a bicycle station, electric vehicle (EV) hub, and local trolley service - to be located at historic Union Station in downtown Denver. These services will provide transportation options for workers and visitors to downtown Denver as well as for its growing residential population.
The TCSP funds complement planning funds of roughly $60,000 from the City and County of Denver and $50,000 from the Regional Transit District (RTD). Two private sources - the developer of a major residential project near Union Station and the Denver Aquarium - also have contributed $20,000 to the planning studies, recognizing the value of the proposed mobility options to both residents and visitors. A TE grant of about $500,000 is financing construction of the bicycle station.
Feasibility studies for both the bicycle station and EV hub have generated a significant amount of interest from the private sector, with at least two companies interested in operating the bicycle station and five expressing interest in the EV hub. Final vendors and the details of financing operations have not been determined, but project sponsors hope that both the bicycle station and the EV hub - scheduled to start operating in 2003 - will become largely or fully selfsufficient over time.
Fort Worth: TransitOriented Economic Development
The City of Fort Worth, Texas has combined funds from various sources to plan and implement improvements in five arterial corridors in the city with bus or proposed light rail transit service. The city received an FY 2000 TCSP grant of $1.3 million to conduct master planning for these arterial corridors. This grant has allowed the city to continue a larger effort, initiated in 1998, to stimulate reinvestment in these corridors and to ensure that the design of new development supports pedestrian and transit access.
With its TCSP funds, the city developed master plans for 10 "villages" or commercial nodes in these corridors. The master plans recommend land use policy changes, public investment strategies, and finance mechanisms that can be used as a catalyst for private investment. The master plans were developed through an extensive public outreach process, involving local business and property owners as well as residents from adjacent neighborhoods.
Christine MacGuire, a planner with the City of Fort Worth, views the TCSP planning grant as initial capital to leverage larger projects. To date, she estimates that the city has leveraged about $250 million in private investment using various means of gap financing. These mechanisms include loans, fee waivers, five to 10year tax abatements, tax increment financing, and infrastructure cost agreements. The city also has used a variety of Federal and local sources to provide this gap financing and also to create public improvements. These sources include:
According to Ms. MacGuire, the city considers their 10 pilot urban villages to be a "portfolio of assets." Areas with better market conditions need lower subsidies; for example, in one village, a $100 million project was leveraged with $2.3 million of public support. Other areas have required greater investments of public capital. Ms. MacGuire notes that in most of the villages, there are "real, committed development projects - transitoriented, pedestriansupportive, and multiuse."
Ms. MacGuire also noted challenges in obtaining private finance for nontraditional development concepts such as mixeduse and higher density, which are new to the Fort Worth area. Fortunately, successful examples of such development already exist in the neighboring Dallas area. The city and its private partners have sought lenders in Dallas or national lenders who understand mixeduse development. As implementation becomes more widespread in Fort Worth, they anticipate that local lenders increasingly will be core partners in financing transit corridor development projects.
In some areas, TCSP funds have allowed a grantee to undertake an entirely new planning effort that could not otherwise have been undertaken. In other areas, TCSP has added an innovative transportationrelated component to a larger project that covers multiple issue areas, such as transportation, housing, economic development, and the environment. In addition, TCSP grants have served as "seed money" to help solicit additional funding from State and local agencies, nonprofits, and the private sector.
The experiences of TCSP projects provide some ideas and lessons for other agencies working to finance transportation, community, and system preservation activities:
The combination of TCSP funds and other sources has allowed grantees to introduce new public involvement techniques, develop analytical tools, demonstrate innovative transportation and community design practices, and help communities and the private sector reexamine their land development practices to reduce transportation impacts. TCSP funds have broadened the scope of these efforts by introducing consideration of land use issues as a strategy for minimizing transportation needs.
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