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Welcome to U.S. Department transportation to development agreements and other captured conference call. At this time all participants in a listen only mode. Later we will conduct a question-and-answer session. Instructions will be given at that time. If you should require assistance during the call please press star zero. This conference is it being recorded. Like to now turn the conference over to your host. Please go ahead.
On behalf of the federal highway menstruation of the to thank everyone to the virtual peer exchange development in the recently released agreement. My name is Charity Coleman I'm with the U.S. Department of transportation. A be facilitating today's webinar and helping to address any technical problems. As you can see on the screen we have a great set of presenters today who will share their experiences and expertise on the topic of development. We will issue them in more detail in [Indiscernible]. I just want to give you a guide to the layout in the room. You will notice in the top left corner of the screen you will find the audio calling information. In the lower left corner see the chat box. You can use that to submit to our center. You can ask questions by pressing star one on the phone but our operator will also give you additional instructions. If you have any technical difficulties please use the chat pod or window to send a private message to me and you can start a private conversation we can try to resolve those issues. We will field questions for the presenters at the end of each presentation. We will also have time at the end of the webinar for additional Q&A. After each speaker in addition to the questions spent in the chat pod we will open the telephone line for questions. The speaker plantation will be available for download at the end of the webinar. There are many people who are unable to participate in today's webinar so we are recording the webinar as well. If you're interested in the professional development hours or credits for your participation in today's webinar will provide information at the end of the webinar to obtain confirmation of your participation. We like to ask a couple questions. What do you represent? What is your current knowledge and experience with value capture tools? And if their enabling legislation for jurisdiction?
If you can take a moment to respond to this poll questions that would be great.
While you are wrapping up the pool questions like to introduce our moderator for today's virtual peer exchange. Terry Regan is a technical advisor for innovative transportation and planning at the Volpi center. He has over 30 years experience at the regional, state, and federal level.
Want to broadcast the results. With 14 percent from various federal agencies. We have some others. Those are private sector. In terms of experience and knowledge of value capture tools the majority of people have somewhat knowledge or have heard of them. We hope you learn a lot in this next two hours. With enabling legislation 18 percent say yes they do. The vast majority of people don't know. We hope you can learn a lot during these next two hours and we can find out more about how your local situation is. Truly is the program director from the global project center. You have a question answer period after each session submit them in the chat pod the first presenter research is the author of the primer on comprehensive development agreements. Julie has over 30 years of experience in large infrastructure project delivery. With a special expertise in the transportation sector and infrastructure finance. Julie's in the preachy program director at the Stanford global project center. And the urban infrastructure finance fellow at the new cities fellow. Prior to this, Julie was the director of the Asian specific at the rain Corporation and vice president director of transportation architecture for a calm. Research focuses in recent years on how value capture and generating local structure forces. Julie is of value captured subject matter expert for the federal highway EDC program and is currently preparing for primers for us on various value capture related topics. Actually holds a bachelors in civil engineering from MIT and a Masters and PhD from Stanford. After Julie's presentation will a short question answer period about our presentation. Feel free to submit those questions in the chat pod. Our second speakers Jeff. Jeff has more than 25 years of experience working at the highest levels of transportation. As a member of [Indiscernible] Ministry of law department Jeff represents clients on a wide rage of manners related to real estate, transportation, construction, infrastructure developing, and redevelopment and previously he served as the secretary of transportation for the Commonwealth of Massachusetts. Our third speaker is Roxanne 10 more. Roxanne has been a planner with the city of Santa Monica since 2004. In her role with the city she served as a project manager for major development projects and worked on many facets of planning and development in Santa Monica area including staffing the city's landmark commission, drafting ordinances and policy initiatives on preservation. Managing development agreement projects and leading the city's annual DA monitoring program. In addition to her work in Santa Monica Roxanne and her husband are proud parents. Now let me turn it over to Julie. Julie?
Thank you Terry. This is Julie Kim. This be a basic were on development agreement and other contract-based value capture techniques. Development agreements are among the most evolved techniques available today they provide more flexible and the solution to generating for infrastructure. They DA and community benefits DA you also cover other contract-based will such as [Indiscernible -- low volume] contrabass techniques can sometimes help to integrate value strategy. Overview and history. It's a long-term agreement between 10 to 30 years in the local governments and one or more developers. It is a voluntary. The DA local government grant long-term development rights and the developers in exchange developers provide a contribution for improvements. For local governments the advantage of T DA are larger concessions from developers and are otherwise not possible. They provide greater flexibility in project conditions and advancing the new innovated training policies that can facilitate reaching their long-term local planning goals. For developers the advantage is that the development rights for longer term than otherwise possible providing greater assurance that their project will be built it also makes it easier for them to secure their financing. For developers the most important legal aspect is a vested right. Granted vested rights are property owners that cannot be changed by future policies and regulations. Developers often rely on this because the ordinance can be changed at will by local government or communities through various initiatives. A project can be committed in one year but can change altogether and it can change in another year. It protects developers from any changes in zoning related to their projects. The key legal question has been when it takes place. It's in California. Due to a court case, the echo case involving the commission in 1976. The ruling for significant risk to developers in the case it essentially ruled that vested right can be granted only after developers and land owners have substantial financial liability based purely on good faith reliance and local government that the will eventually grant all necessary permits. The vehicle understands great [Indiscernible] in development communities. It's the California legislature to create the need to reduce their vulnerability to regulatory changes and descriptive very approval. The result of the development is 1979 which served as a tentative for TA in other states. Understand they history is important to understand -- I'm missing some slides here. To understand legislative history it's important to understand to take some time to understand developer extractions in general. Developer extractions have had long legal history and [Indiscernible] to go over this slide and take a little bit of time here. Until late 1980s they were defended as exercise of broad local police powder to serve the public interest. Because exceptions based on [Indiscernible] have always been contested the public agency ability to collect has often been determined by lawsuits. Before 1980s courts have generally ruled in favor of local government the local government study to use exaction aggressively to generate revenues to make up for the decline in property tax revenues and straight estate transfers. It's in favor of developers and land owners which culminated into Supreme Court [Indiscernible].
It's for commonly known [Indiscernible -- audio cutting out]. It's 1987 refer to essential [Indiscernible] repair there needs to be a direct relationship between the exaction and the performance development project. In 1994 it referred to required that exaction must be personal to impact created by the project. At present any and all forms of exam. Not provided developers also exemptions from central nexus for local government under the normal [Indiscernible]. Ultimately, given the [Indiscernible] history in general they provide [Indiscernible] more flexible and less expensive solutions for both local government and developers alike. The DA can work on agreement based on terms that are accessible for both parties. Although [Indiscernible] have increased in recent years very widely in general, there best suited for long-term, large-scale master-planned developments are typically planned don't jointly by the local agency and developers. It should be noted that DA is about public improvement needed to support a real estate project and it will pay for those improvements. [Indiscernible] DA should not be confused with what's called CDA. The turn often used to represent a major infrastructure project based on along term confession model public product concession model. Not directly tied to a real estate project. The primary focus is on the method used to deliver infrastructure that creates project financing package. That key elements of DA shown on this slide. A few elements highlighted are various public benefits such as dedication of land for public purpose including formal housing, civic proceedings, various public services such as jobs and informant training and other public improvements that can increase examples, local streets and roads, to the system to manage trafficking through sections, utilities, water, sewer, drainage, gas. Cost trails, bike paths, and most importantly other improvements by communication measures. Another key element is that ethical law not subject to vested right. Allowing you as long as it's not conflict with [Indiscernible] and not applying rules that nullify prior approvals. All DA must comply with any state and federal regulations and after the DA is assigned and effective precisions are modified or suspended. It's also subject to environmental and requirements which is [Indiscernible] on any other projects. Finally, the process does not end with approval. It's other to ensure transparency. Such as formal recreation of DA ordinance or annual usage DA terms are met. DA implantation process involves several key steps. It will be covered in more details later by the next two speakers. Other steps need highlighting our public hearing in which consist of two basic components. Public hearing link to the approval and public motor to these public abilities. As mentioned liquidation of other steps are also critical including process involved in amending the DA and DA accountability. At minimum and in a review of the diverse compliance with the a terms and responsibilities requiring the developer to demonstrate compliance. In terms of case example GA's have a wide range of applications in terms of project type, size, location and extent to which public improvements are covered. The following two slides example show the range of DA that have been influenced by city and the state of Washington where application has varied from small to large projects ranging from cleanup and redevelopment of a contaminated urban site to a 1200 acre mass plan community that included affordable housing and space. This table provides a good representation of different ways DA's can be used by local government to obtain funding for public improvement including those for local transportation infrastructure. In terms of direct linkage DAs can be protecting and capturing and monetizing anticipated new developments along plan major highway and transit corridors. DAs can be [Indiscernible] level involving jurisdictions or individual intersections of station level involving a single jurisdiction. In most cases, however DAs are driven by major real estate projects initiated by developers and focused on infrastructure capacity needed for their project. A good example of DA driven by major real estate is the new stadium for LA Rams and Chargers in Inglewood California as shown here. The DA involved 300 acres and $5 billion development in major sports and entertainment complex and mixed use of retail center in this case it was not only to obtain contributions but also the means to integrate other publicly sponsored [Indiscernible] and assessment to ensure future funding resources for all improvement willing to support the project more clearly and committed at the project onset. It's located only three miles from LAX airport and close to three Metro transit stations. It's planning on a [Indiscernible] systems to connect the stadium complex with one of the metro stations and looking to one or more techniques as a potential source for the APM system. This slide shows that the implementation timeline associated with the DA includes key implementation steps discussed in the previous slide. In this case it took about three years from one the project started community engagement to the privilege obtained for the final adoption of the DA. For terms and projects the process can take longer and will be shown later by the next speaker. As mentioned, community benefits agreement is up prevalent value capture technique. CVA is involuntary but again, legally binding contract between a developer and a community representative. Committing the developer to fulfill since the thick obligations for the benefit of the community in the development project. The exchange the community provides at minimum for the proposed projects. Although many development projects create new jobs and economic growth they do not automatically result in sustain local economic benefits. CBA is a technique that state and local government used to help build sustained benefits to host communities with increased transfer Terrence he and [Indiscernible]. CBA is the signatory on the community side and can include local residents, labor, environmental, religious groups, and all formal housing as it appears. Developer community commitment in CBA are typically monitoring in nature but can include non-monitoring benefits as well. They can include investment in the community center and formal housing fund while agreements [Indiscernible -- low volume] the promise of community supporting terms can be used with the developers seeking timely project approval so government subsidies. In addition help to avoid long delays for developers CBA helps minimize the possibility that their project may be denied altogether. Similar to DA it can make it easier for developers to secure project financing. In CBA it's about birds benefit by establishing relationships with community members and they can help avoid costly legal [Indiscernible] and public protests.
Here are the benefits of CBA. To be clear and measurable commitments. Not just [Indiscernible] standards. It should describe the roles and responsibilities in order to facilitate compliance and specify how noncompliance will be addressed. A sample list of community benefits are on the slide which can include affordable housing, local hiring for construction and nonconstruction jobs, living wage goals and right to organize, job training for both [Indiscernible] apprenticeship and on job training. Local business support such as [Indiscernible] for local businesses. Open space and parks and recreational facilities. There is community facility and services including you senders, clinics, [Indiscernible] community and senior centers. Finally, sometimes they can partnerships with local schools that include construction of new schools, [Indiscernible] program, and education programs. There are numerous examples to the DA. In terms of the number of states that allow them. Relatively speaking CBA associated with transportation projects are less common. It's linked to highways. This slide highlights to non-highway CBA examples that were linked to oriented development. [Indiscernible -- low volume] both involving the system. LAX airport. Considered when the most comprehensive CBA to date. Very often, CBA is directed to a DA as mentioned earlier. CBA's are between developers and community coalitions. CBA is not part of the DA. The role of the local government in CBA is one of a facilitator. More recently local governments are choosing to become a direct signatory. In some cases, making CBA more voluntary but mandatory for any [Indiscernible] projects. Any projects over $5 million require negotiated CBA. Wow a local agency can enhance the possibility of developers commitment for community benefits it can potentially diminish [Indiscernible] of the community coalition of the local agency in the developer. Despite several advantages there are several issues ready to involved. For DA some of the key [Indiscernible] have included the need for greater transparency in public participation in general. On the government side, the concern has been the local government giving out voluntarily their right to change the land and zoning requirements. On the developer side the concerns have been the misuse of DA for local governments to force the developers into paying unreasonably large [Indiscernible]. Also in DA term it's long. Developers sometimes try to [Indiscernible] by selling the project before they are built and the new owners when they went to change the plan and thus instructing the [Indiscernible] and long-range planning goals. Although improving, the basic work for the negotiation such as term for amendments, extensions, determination are unique. Regarding CBA, regarding the techniques CBA is a relatively new comer in the capture toolbox. Compared to DA the performance outcomes and much more mixed. For the possibility CBA is tested in the court of law. This is the reason why it was combined with DAs and possibilities. DAs involve transparency. There's also been concerns about the legitimacy of the community records and their authority to negotiate on behalf of the public. In addition to DA other notable value capture techniques that are contract based include joint development agreements and various forms of right away agreements. In general, joint development or JDA between a landowner and a developer a landowner provides access to the property and the developer undertakes the responsibility in property improvement. Including approvals, launching, and marketing development projects. In the JPA they typically [Indiscernible] the land owner in terms of a percent of sales revenue or of the newly constructed project. Only [Indiscernible] in the public sector by the agency or local government with the agreement and the agency is partaking in the development project alongside developers by creating public answers. Public answers here can include development right above, below, or adjacent such as the rights as tracks or [Indiscernible]. According to FTA development is defined as a public transportation project that relates to and co-locates with commercial residential mixed-use, or other non-transit development. Along the lines occur from DA. For a divine project it's primarily about public improvement for the real estate development including pace for them. JDA itself and the public agency's involvement in the development or public improvement. There's a natural nexus in that the contain lack of provision for public improvement needed in the project. When project economics is in the balance in addition to arrangements it contains an arrangement for improvement. Especially in the project is critical for posting the local economy. Local agencies may choose to supplement.Bowers contributions with additional funding that could be generated from other sponsors such as [Indiscernible] and special assessment. This slide shows a couple of examples involving terms of station. In 20 13 develop an entity calls. It enters into an agreement with the D.O.T. and the authority of the TA to design, build, and fund inter-station. It completed in 2017 and name the landing station as part of the community rail was a part of a much larger development to deliver new headquarter and other commercial [Indiscernible]. In addition to covering hundred percent of the station and track construction costs they funded a portion of the cost of the station for the first 10 years of operation. It provided much needed [Indiscernible] so it could not afford while allowing convenient access for new balance. More detailed is provided by [Indiscernible]. Particular example involves Atlanta authority on [Indiscernible] joint partnership with KDC real estate to develop an expansion on the existing station. Is charged with developing full common insurance with largest office project Metro Atlantic history. The first of the four towers is located adjacent to the station. The extension includes a new exit point, structure connecting it to the new office building and providing direct access to the platform. In return for stations access they agreed to finance and deliver the station expansion in JDA where granted easement and to provide construction on the public right-of-way. They are are responsible for owning and maintaining the public portion of the property where they own the public extension.
There are various public asset agreements that can include assets themselves as well as development rights to or adjacent to public right-of-way's. They can be a subset of a large JDA which typically pertained to their rights or a sector standalone agreement. A couple examples of right away are highways or highway caps which is shown on the site. The CAP is a station project. [Indiscernible -- low volume] 25,000 square foot development. Located above I 670 in Columbus, Ohio. The capital crossing project is much larger. 1.3 billion, 2.2 million square in seven acres in Washington, DC the. Air rights involving transit systems in large lung skill example is Hudson yard in New York City where air rights above the MTA were transferred to product developers for over 17 years on the development of a 28 acre site. For the Hudson project one of the key core program elements has been the extension of number seven subway. This major infrastructure is creating the Hudson infrastructure which is a nonprofit entity focused on the portion of the project which is the overall economic development on the [Indiscernible]. It has many different value techniques such as developer [Indiscernible] PDR transfer and [Indiscernible]. It's not only for subway extension provisions including affordable housing. Finally, the rights advertising and corporate sponsorships can be linked to various public spaces to generate revenues including highways, transit stations, public buildings and [Indiscernible] these techniques provide funding under more traditional exactions. These revenue pretension is [Indiscernible] rights to major sports landmark promotional buildings and transfer stations can get top dollars for local governments. The [Indiscernible] historically from 100 million to $600 million. They are essentially a concession in a public sector commits public real estate to a public sector holding the necessary expertise to capitalize the efficiency as well as generating opportunities. It's involved in entities on public real estate for example public buildings and a parking lot canopies or at rest areas. It includes any exploring to accommodate technologies they add value to the right away assets and create a resource for operating costs. Depending on the business model these agreements third-party can variously involve manipulation, operational and ownership rights on the target are part public sector. Energy or other local applications for energy conversion for the network modernization various franchise models such as [Indiscernible] or operator owned as well. In conclusion, the concept of value capture is not new. What is new is that there's a need for infrastructure can no longer be supplementary in nature. It's to support real estate projects or as a last resort get financial recognize him. The funding responsibility on local and state government value capture can potentially become the funding sources paid for critical infrastructure needs's. Experience has shown an effective [Indiscernible] am starting early alongside capital planning and development process and long before the project opening date. This is when the general recognition [Indiscernible] overall value and before the development rights and [Indiscernible] assessment of the potential based on benefits and cost to each stakeholder involved. Local communities are reluctant to dedicate the revenues that they consider a federal [Indiscernible]. In this case the lower value could be justified above foreground based on the recognition that the development and the resultant increase in local revenues would not be possible without the transportation project. At a strategic level the value capture project could be multilayered starting with [Indiscernible] impacts stakeholders such as tax increment and [Indiscernible -- low volume] on [Indiscernible] framework involves multiple techniques that are therefore designed to ensure cost benefits and link to value is equitably distributed and adjusted stakeholders. It can help ensure transparency from the project yet go to help local government to best manage stakeholder expectations. [Indiscernible] some the case examples presented earlier one important take away is that long-term techniques covered in this [Indiscernible] available currently and can facilitate and establish an integrated value policy and implementation framework. It's presentation or control.
Thank you very much for that presentation, Julie. Now we like to spend a few minutes addressing any questions that the participants had about Julie's presentation. If you do, please submit your questions into the chat pod. Remember, we are going to have a longer question answer period after the three presentations were off three speakers can address your questions. In addition, and open the phonelines for anyone who would like to ask a question over the phone. Operator, would like you to open the phonelines to see if there any questions there.
If you'd like to ask a question signal by pressing start one on your telephone keypad. If I you are using a speakerphone make sure your mute function is turned off. The prompt on the phone line will indicate when your line is open. Please state your name before posing your question. Again, star one to ask questions. Will pause for a moment for an opportunity to signal.
While we wait for any questions I just want to make sure everyone knows that at the end of this presentation we will present all the presentations in the download pod. You will be able to get those. Do we have any calls -- any questions on the call.
There are no questions at this time.
Why don't we give it a minute. I see Fred is typing. Having the questions, why don't we move on to her second presenter. As I mentioned, Jeff Molen is a partner at Foley Hoag and former public sector of Czar having worked at Turnpike Authority. The integral in the formation of mass.as well as working on the central Audrey project. Jeff, why don't we turn it over to you.
Thank you. Can everyone hear me okay? Let me make a couple of intra-doctors. I'm thrilled to be with you and I want to think my friends at federal highway in the multicenter for inviting me today. The second is this set of slides is my earlier version. I think we can get through it okay, no problem. I'm about tactics. I'm hoping to complement Julie's presentation on different ideas and strategies with some tactics we've developed over the past decade. I'm hoping there helpful. I noticed from the people that signed up from the seminar that most of you are practitioners. Some federal and NPL. I'm hoping you will find this particularly helpful. The third part I want to make is how I organize this. I have three sets of three sites each. I've preliminary observations based upon different transactions that I've been aware of. I have a three step approach things around I'm hoping to find familiar. And then three quick case studies be done here in Massachusetts. At least one of which Julie referred to. We talked about value capture. What were really talking about our agreements concerning rate of development with primary departments in lieu of condemnation. Occasionally, actually sometimes very often, were driven by the private sector. It has a project they want to get developed. In my experience it involves some public action. You called him lots of different things. The jurisdiction you're working has the right to do that. That doesn't make that any less of the dominant agreement. Or any less of a value-based exchange. I wanted to point out that important observation. Lastly, they always make the reflecting authority in your jurisdiction. Every action needs to less on its own bottom. You need to recognize that because for example the statute in the state permits you to be development agreements. It may not permit you to do everything in that development agreement. This is the concept I work with clients on understanding nearly every transaction I work on. Federal Highway sector for innovation has a definition to value capture as mechanisms that may be used to derive monetary value from transportation improvements to help the cost of importation. I really like that definition because to my second point value is not lost. I find these terms are often confused and the reason why it's important to remember that is value for the public sectors are often very different. When we think of value capture we sometimes think of in almost exclusively think of future value created. Is going to build a highway in this area. I want capture the value of bringing. That's a value capture example. It also includes money, time, certainty. Limiting on sharing risk see what it is for the agency to the extent that it executes the development. I like to think of the agreement as if it were any other project. A typical management technique. How do you define success. I would set out the purpose and meaning. Treat this agreement as if it's part of the project and a significant undertaking. As if you were building a road or train or separate development project. If it's taken out earlier don't confuse cost and value. It's gonna cost X dollars. What is it worth to the agency to under take this initiative. Visit the balcony. By this I mean you need to see the perspective of the other counterparty. These private-sector parties are in the public sector in the public sector and private sector it's public sector values quality or preserve in the capital or cost it's important to think about. Lastly, I don't like the term win-win. It's clients for thinking. If it's good for the developer it doesn't mean it's bad for the agency and vice versa. I encourage you to think along those lines. Third point. Agreement formation. I encourage you to spend time before you negotiate getting ready and organize. Past experiences try to not reinvent the wheel. Develop a schedule. Make sure every action is authorized by the governing body. Mark your progress incommensurate. In terms of filling way documents. Resist the urge to pre-negotiate. My experience is that parties want to get big issues out of the way early. Think about comprehensively. Negotiate in some type of organized fashion of consistent with your purpose and need. Lastly, develop a benchmark approach. Do not paint your organization into a corner where they have no other option but to do the development agreement. It's the next best scenario. Without that I think you will find out you'll be entering into an agreement you don't like. The negotiation approach. We all need to discipline yourself. Develop what works for you and your agency. Designate a key negotiator. If you don't have a consistent knowledgeable negotiating strategy you tend to get mixed messages. You need to close the back door and walked through the front door. You of a public facing organization have a public facing project. You don't necessarily have a public facing negotiation but you want to be careful to close the back door and negotiate and negotiate consistent my. We need to work with the project team. This is not a one up separate negotiation agreement itself and standalone, Schmidt. The agreement as part of a larger whole that commits you to build a project in which the agency in the development is interested in. I recommend the clients to have an operations first approach with the business unit and and DTB and client. Think about long-term what works for the organization. The projects we work on may have taken a year or two to document to agree but they tend to last 50, 75, 100 years. During the negotiation you have to take time to document actions and expenses. This will be important when people ask questions about why things are done. It's inability will happen. Lastly, make sure your leadership is with you. It's knowledgeable in incremental progress. By this, I don't mean substitute your judgment for there's. But also, don't surprise them with last-minute decisions that may not make sense or provide them with a feel for what this negotiation is all about. Post agreement considerations. Too often, parties finish development agreement put it in the file and say they are done. The promise that is when the project gets in the field the clients with whom you're working don't know anything about it. You will find you spend a lot of time negotiating a particular point only to have that lost because it's sitting in the legal department of your agency without anyone knowing about it. Take time to prepare a summary so the people in the field understand what you're talking about. Use language people can understand. Develop a standard procedure. Develop a manual. All your agencies like and use manuals and leverage those quite a bit and work with what works for the agency. Take the time to negotiate for that project team what the agreement sets. What's important, what's not part. Take time to do an after action review. What did you do right? What did you do wrong? The reason this is important is you need to build and [Indiscernible] within the organization. This is incremental change that is so calming to progressive development in agencies. Lastly, do it again. Once you find something that works and you separate the things you didn't do well but you know the things you did do well you want to leverage those. You want to capture those as an independent measure of capturing value and do it again. With my remaining time let me give you a few case studies. The first one Julie referenced in her presentation. Let's see if this works. This is the station in Austin. This is the Massachusetts Turnpike often it's the neighborhood in Boston. It's the south side of Turnpike. This is the new balance development was done. What happened here as Julie indicated it came to the Massachusetts Turnpike Authority to build this rail station as a way of getting people to this development and to increase transit access. They need the station to assist with their planning. They requested that it accepts the extension, on the station on the condition it was paid for by new balance which is what Julie indicated. The project is today, often cited by the NDA that buttes filter stations. That's cost-sharing between the public and private sectors. Partly, it's not an urban transit. It provide service in a way that doesn't always work for the neighborhood. Nevertheless, it's important access. It's helped other projects as well. On the downside, the station has [Indiscernible] between Boston which is important transit car the Commonwealth and unfortunately this station is very close to another station that's being plans. We have questions as to whether or not the station of necessary times. Nevertheless, it's important large improvement that's provided at least one operating model. This here -- this is the station had house. This is the development. There's a tower being built here. What happened here in the 1960s the development acquired it from the bankrupt and central railroad. The rights over the station here. They sold the station preserving the rights to the and ETA. They on the station but they on the air rights above the station. Through the 1970s and 80s and 1990s the project didn't reseed. The idea is that they would eventually build up a station and that was part of the original agreement. Part of that bus station got bill in the 1990s the remainder never did. More recently with the increase of values what's happened is a developer came forward and is now building this tower as stage one of the development that includes the construction of the bus terminal that MBTA agreed to build subject to available funding in the 1960s. What happened is MBTA is receiving the bus station in exchange for the disposition of a small amount of development rights that it had retained in the original transaction. What the developer is getting is the right to build this tower this is feeds three. The bus terminal is beneath that in this area. About this project I would say it was a 50 year endeavor. It just started being under construction under the last several months. Has a very unique set of facts. It's only possible because it's Austin cell station. It's possibly one of the most valuable pieces of land in Boston. Has incredible access. It's on top of an interstate highway with great access to interstate 93. Has Subway communing rail. And transit access. It's very unique and that's what's driven the value. At the end of the day what were seeing at substation is the completion of transportation elements at the station that will envision [Indiscernible] and can be realized at the end of 2022. For that MBTA and the Massachusetts Department of transportation should be proud. The last study and I'll complete my presentation hopefully, within my allotted 15 minutes. There's a smaller project but one I'm hoping as practitioners will appreciate. The idea is not all these projects need to be large. The two I gave you were large. This is small. Nevertheless represents value and is an important example of how the department and D.O.T. can leverage the property. What happens is the department of transportation rain here in this area. It uses our informal parking lot. The developer of adjacent land wanted to reach a development but in order to do that -- check make this bigger. They needed to widen this road here. With this transaction is about is mass.is providing an easement in its parking lot in exchange for the developer agreement to provide replacement property here which will make the number of parking spaces the same and an agreement on the part of developer to rebuild the parking lot and to perform maintenance. The end of the transaction MassDOT has a brand-new parking lot and provided its way into the developer so it can unlock that development and it's leverage the developers expertise to do the management of a relatively small but nevertheless, important parking lot facility for the people that live there. The last point is the city of Woburn was making these presentations even though is a small project but important. Point of this case study is that they don't always need to be large but nevertheless, this is an example of MassDOT capturing value . I hope you appreciate that. That's it. That's my presentation. I appreciate being with you today. I'm happy to take any questions you have. Either now or at the end of the presentation.
Jeff, thank you for the presentation on your observations of best practices and working on development agreements on transportation projects. It's great to hear from somebody who has experience from the public and the private sector side. Now were going to have a brief period of question answer. Operator, I would like you to open the phone line to see if there any questions. While Jeff is presenting we have a couple of questions. Ronnie wants to know is there template for development agreements at the county level that you may share with us? I know that the development agreement primer in which there is a debarment agreement template and it I believe you will be able to download today. It will also be posted on the federal website. In addition to federal highways it's going to upload at template on the value capture website. Any presenters want to speak to that question about a template for agreement? Julie, do you want to quickly talk about the one you have in the primer?
The ones in the primer provides an extended DA template which is used often. The example that I've shown in the presentation are little bit more detailed in terms of those what those terms are. It's [Indiscernible] once it's there. One of things you need to look out for is to focus on [Indiscernible].
Any other presenters or anyone from federal highway want to add to that
We have another question. Jessica oh is asking what are your authorizing statute the activities you talk about?
In general I would say that the present development that MBTA and MassDOT has done is built into the [Indiscernible] Association. For example, you the right to acquire land by eminent domain, the authority [Indiscernible] and third parties. We have the authority to build their own improvements. Generally what I see is a problem together in various enabling authorizations buried and or built within the Association. This being Massachusetts there are many examples of special statutes that authorize a particular project. My expensive these is the trick is to be able to build an agreement and reach an agreement with the developer will also been constrained by the procurement. That is sometimes difficult and sometimes requires a developer the agency [Indiscernible] fact in the case of substation that's what we saw. That RFP was put out a couple of decades ago at this point. The developer designated that the had the staying power all those years. It's a little bit of both. It's enabling legislation [Indiscernible]. Massachusetts does have some value capture authorizing legislation regarding taxing districts, improvement, tax increment bonus zoning etc. Those are [Indiscernible]. We have received a bit of attention depending on the jurisdiction.
Great. We have another question from Fred Payne. He wants to know if you're familiar with multicounty industrial business development using SC to help bridge public and private investments to help fund desire development? Fred, I'm not sure which speaker you are addressing this to. Let me point out to any of the three.
This is Jeff. I'm not familiar with the agreement in South Carolina or mechanism in South Carolina. I do have experience in multi-jurisdictions. It's an supremely difficult to do that. My experience is they have to think about their own Coralville involvement. Unless you have authority across the jurisdiction that can be very difficult. Kudos to South Carolina. I'm not familiar with the statute.
Go ahead, Julie.
I might add. I'm not familiar with the project are say but I would think there some kind of joint authority for large-scale projects like that. That would be my guests. I also want to add to the previous question about the authorizing statute. It's tax increments and districts or development each of these techniques have enabling stature. Individually they have an explanation that allows these tools. As I mentioned for development agreement the local audience. It's implemented. In addition where you will have a state level or DA legislation. The contract walls are for these agreements as well. Those are several statutes and can potentially refer.
Thank you. Lauren has a question for Jeff. Can you please clarify the pitfalls of pre-negotiation. At what point does the serious negotiation began.
I don't think we have enough time for that one.
Excellent question. The first is you don't want to negotiate the facts around the table. The person in charge of the moment will say don't worry developer, we will get this done for you. That person doesn't have all the facts. They don't know what the agency agreed. You have apparent authority you don't want to do. The second concern is that we determine outcome prior to the required that may be necessary to do it. That would be a concern of the policy act but ensure local and state. Where the project or how to build it. In terms of that what point to this year's negotiations began. There they would begin the fax from the table. What we really need to do is spend some time. Once you've identified and negotiated the counterparty make sure they're all talking about the same thing. Getting the terminology down, understand the expectations of the parties, the objectives of the parties, the timing of the parties and what the parties all seek to get from the issue. Once those are on the table and people now the facts and circumstances and constraints are then I think the serious negotiation could be good. I'm saying that at all. I'm just saying it's a designated person whose job is to negotiate that transaction.
I see we have a couple people that were maybe typing. They've got away. Why don't we move to hear from Roxanne. She's from the city of Santa Monica. She's going speak from her perspective. Once Roxanne finishes her presentation were going to open up the phone line for anyone that has questions for anyone who has an open-ended discussion around the presenters.
Thank you. I just want to say a couple words for certain. Thanks to Julian Jeff. They provided a wealth of information. Thank you for that. I'll try to tailor my position to not go over the position he eloquently stated. I'm in Santa Monica. Were small study. Were about 90,000. Born in urban contexts. Small city surrounded by city of LA. We have been using development agreements as a tool since 1981. We have over 40 department agreements and we've entered into over the years. The last being six months ago and a couple of pending right now that I am project managing that we hope will get for to the decision-maker sometime later this year. My presentation I want to hit a little on the who and the how and a few things to keep in mind. I know Jeff and Julie have covered the why. This is the perspective of a practitioner, the project managers me. And what you might want to keep in mind if you're embarking on this effort. It's an effort that it does reward first parties. Over the years we have done department agreements in the city of Santa Monica. We start out 1981. That was the first in California. We focus on larger scale campus development for us. 1 million square feet. Open space and some commercial retail components as well. Over the years we have used DA as a tool for various kinds of development. Hotel, office, we've used this as not all large-scale departments trainings. School expansion, churches, hospital campus. Earthquake, and the master planning process. We have biotech. We also use them for housing. In some regard. Heavily for housing development as well. The photos I have here on the slide are a couple of images. One of the earlier campus departments. Also, a view of one of the projects what it looks like. I will go over much on the slide. What is a DA. We've been enabling legislation at the state level and in Santa Monica we have at the moment agreement ordinance that sets out the requirement of the procedural in the findings that need to be made to the decision-maker in order to adopt the development agreement for the contracts. What I would point out highlights on the slide is that we approach to developing agreement with the shared outcomes in mind. Is a strategic and it's going to get at some point. Always keep in mind that the community and the developer have things to gain. It's always important. Those community benefits are going to the magnitude of those benefits on specifics of the project and always informed by committee value. This shows a couple projects. It's a movie theater and or downtown core. There's a hotel project that included a historic landmark building for hotel use rehabilitation of existing landmark what this chart shows is there are main facets of the development process or project and really what's particular from this is IDA provides a high-level of community control and ability to share a project. In Santa Monica we don't use this for enormous projects as case studies but really a more tool for site-specific development that's on a larger scale of our community. How that might apply to you would be looking at your size and scale of parcels and development and it can be small or large. And send Monica we've done DA on 15,000 square foot parcels up to for half acres. It can very. The DA gives you the most flexibility an opportunity to ship development outside of the zoning rules prescribed. I've a couple [Indiscernible] on the slide including an office camp duties development remittance in my cupboard and land as well as city-owned land. Those DAs on glands are a little bit more complex obviously because the development interest to consider the community interests is also the city of interest in his territory interest of landowner. That's something I wanted to go some these examples I'm talking about tend to lean on the developer lands. This question Jeff really highlighted this really well. I appreciated his comments. And think about should be involved. If you're thinking about how to use the domain agreement as the your agency sending that out of will leader negotiations. Assembling your team. Is gonna set direction and who's going to project management giving the size your staff were small city. With me six people in city planning and budget cuts. We have 19 staffing into the pending right now. We do [Indiscernible] a little bit. The project manager takes the lead in negotiations however our department director our city manager set the direction at the macro level. As your choosing a project manager or identifying who will lead the team you want to be remembering here negotiating on the half of your city Council and behalf of your community and hopefully do this on a project review. This is the site-specific department. Having all the expertise and planning in our case and posses having some awareness of the politics that are involved in your community some negotiation skills, and the personality to be well suited for a lengthy process. This slide shows you how to be comprised our city team for development agreements. One thing I want to note is it's working side-by-side with me. Were partners on the city side. We also retain environmental consultants and economic consultants to advise the city and the DA process and the project review process. The cost of those are reimbursed the cities reimbursed for this cost the developer although we retain those components and we are reimbursed. In terms of interaction at the highest level your agency will handle planning projects. We tend to have very high level of interaction in developing agreement process. We see them as is in some ways. It's a strategic negotiation and everything we do at the DA. We work on the project review I closely with them. On the slide there's a couple projects here there's two residential projects we use the DA for. In terms of how to start negotiations in this case the offer approaches the city of they've a project concept in line. They're always encouraging everyone to pay attention to our land-use policy our Pacific plans them it establishes what the goals and objectives are for that particular neighborhood or area of town. Heartland used animal -- scheming our general plan has specific community benefits outlying and the spinning documents. That source of guidance. One of the puzzle is shaped and the interaction with the city staff on that you want to think about the value of the project of the development is and the community benefits you may be able to negotiate. Most importantly I think at the early stage what development would you be willing to negotiate on in Santa Monica density and putting height has been a big issue for us. So it pulled up to a compliance in general plans more than what zoning would allow. That might be the biggest we may negotiate on. Think about what development parameters aren't complaints might do the negotiating on more density for more retail square footage than would normally be allowed. Remember through this process there will be early community feedback as it developed. There may be some controversy. There always is in Santa Monica. Pros and cons. As were working through that concept phase were ready to make some adjustments and be responsive for what you're hearing from the community. Leading out to seeking counsel in Santa Monica we go to the Council at a preliminary format present the project concept and we stick authorization to negotiate on their behalf. We hope to get feedback. We embark on the project review negotiation. In terms of how to identify company benefits that might be negotiated on site-specific based on the kind of development that's being proposed. The general plan. User impact letter establish by code. Look at your affordable housing requirements. Those are all baselines to start your negotiations. You may get below a particular impact fee in exchange for something else. We use are code requirements as a baseline starting point. In terms of identifying a Trinity benefits based on many priority I'm thinking about infrastructure projects that you may be wanting to develop to the VA as a potential tool to fill some gaps in either funding or if you need physical lands. Those kinds of things. They don't necessarily find such as childcare fees that we collect on development that we are on. Obviously negative VA times. Need you for in the middle the negotiation and we see an unmet need the VA is an opportunity to resolve those issues in unmet need. [Indiscernible] around things around the table today. We use the VA to help us navigate those issues. Funding for station that was a big boom for parking, is just a platform. The scans of things. The funds were negotiated impaired DAs helped us on the gap. One of things we've negotiated last fall was and economic equity fund. Several hundred thousand dollars. To go towards job-training, economical initiatives for the city Council might choose to implement going forward. That was something new we never negotiated before. In terms of how to evaluate community benefits I think it goes this as well. Being clear what value creates, think about the value of the project and the community. It's not always going to be [Indiscernible] as discussed. Projects can be catalysts for other things that the city wants to see happen in a particular neighborhood or town. Remember, expectations about the DA process is not a safer all. It's a negotiation community benefits could outlive the VA. You could have a requirement for community benefits was something programmatic that goes on for life of the project versus the 15 year term to build out the project. That's providing some flexibility. We will use economic analysis. This an expensive and time-consuming step. We do have fiscal impact analysis to help inform decision-makers for negotiation leaves an impact analysis. We have a value enhancement analysis that we made up and shaped to help provide information to inform the negotiation. I'm going to move ahead. I will talk a little bit more about economic analysis at the end. We have a case study and the main thing about this is the for half acre site our specific plan laid out the requirements for the VA. It's develop of 240 feet in building height. It's the amount of achieved through DA. It's a store component for the negotiated I hope yours don't take 10 years we have the negotiation at the bottom of the slide there the negotiation happens towards it because the project review. What you want and need to see on the project in general. Work on that. You can be informed by environmental analysis the negotiation comes in full force. It leads on this project the last eight months. It's by the economic analysis that we did. We summarized at the value that we negotiated with particular projects I showed you on the previous slide we had a monetize a value of approximately $37 million we negotiated with additional benefits we can put a cost on. A monetize value includes job training, transportation, the land management. There's a host of other community benefits we didn't want assigned. In terms of key point in takeaways I know I'm running out of time here. I just a couple thanks. The eighth flexibility. It's a negotiation. One of things to consider is recognize the flexibility can equally to the sense of a lack of predictability from the development perspective and the community. Communicants I don't know what to expect. I like the rules of the zoning ordinance. I like to know what's going to be developed with transactional aspects. It can be managed. Thinking about the project if you're negotiating on you want to think about who's a project serving. Their interests always have to have a low [Indiscernible]. Think about what your trade-offs are. In terms of the committee outreach process the out level of transparency and negotiation. You do want to use community input. They want to know what why conceptually when negotiating and why were negotiated. Make sure were underserved on populations in the community. The needs are being met. It's an opportunity to do that. Economic analysis is my only point on this. You may expect us to dominate discussions at the public hearing those are really complex analysis. The developer is the analysis. Decision-makers make. Community will have questions. It's just a tool. It's a tool. It's one data point to help inform whether or not this project overall has enough value such that the cow you what's enter into. Don't spend all your time defending the numbers. That will lead to the most robust discussion about community value ultimately. And finally, I would just say there's a long process. Remember both parties have to agree on the terms otherwise you don't have a deal. Projects may be litigated. Keep that in mind as well. The DA doesn't preclude that as an outcome as well, unfortunately. And in terms of the wrapup on monitoring we do need to do annual demonstration that's compliant. You can build for the monitoring. The DA monitoring is not a one year event. It's an ongoing process that you're always in touch with developers on any number thanks. Finally doing that monitoring and reporting out is a very transparent. The community of trust. This is a tool that's viable and responsible to them. With that I've done. Thank you for your time and attention. I'm happy to answer questions.
Thank you Roxanne for that presentation. We've heard from the three speakers. Now go spend the rest of the webinar answered questions from the audience. First were going to address questions are specific for Roxanne and then would open up to any questions for any of the three presenters. Remember, we're answering questions both from the chat pod as well is over the phone. Operator we would like you to open the phone line to see if there any questions. We've gotten a number of questions of the chat pod. The first funds were gonna ask are directed towards Roxanne. The first one from Mohammed, Roxanne, have you ever been legally challenge for negotiating building heights or face community resistance?
We have had litigation on approved DAs or more specifically on the environmental analysis. That's where it starts. Building heights in particular get there's just a few in the skyline. We certainly don't do it that way. Again, always in compliance with your maximum on the left that's authorized by the general plan. Community resistance in many cases
Follow-up question. I think many developers would quest greater intensity or density. How receptors is a city to increase Balkan massive buildings.
How open is the city? I will say this. The decision-making bodies do change over time. Priorities and willingness. Look at increasing development. That can change over time. You have to monitor that at the highest level of decision-making going back to that direction. In our city Council and our community. We will have to take it case by case. That's the benefit and that's the challenge. What's the development proposal on the table. In some cases increased development seems like a fair trade-off and sometimes it's more problematic.
You may notice answer but the other two might want to chime in. How do you factor in the impact of dominance on the environmental justice population in the development agreement?
Did you want me to start?
Why don't you start. And then we can see if Jeff and Julie have anything to add.
I appreciate that question. It's something our awareness is broadening as we go through this process. I've been with the city for 16 years. I think it's something coming up in terms of what community benefits we negotiate. We look like the siting of this proposal's. If it's private development that's proposing were gonna look at our environmental review as being important component. These other DAs or not. It's part of our process in California. I think community benefits is one avenue and think about that in a new way. It's really something [Indiscernible]. It's brought in and out of parks and infrastructure. And money copper say. Think about how it can serve the community in ways we have necessarily traditionally gone through. I would say that something were working on and look at space site-specific dominant to make sure their environmentally responsible.
Jeff or Julie have anything to add?
This is Jeff. The short answer is not well enough. I think this is an area we have not done collectively a good job on. Sometimes we think these developments as agreements in and of themselves rather than a part of something larger. Reinforces the point I made in the conversation about making certain this negotiation with a private developer is done consistent with your regular purpose and need in your project development procedures which would include public input. And as part of public participation in hoping a process is part of the project and not in a separate room by itself with separate objectives. Lastly outreach to the EJ community really needs to be in the value-based exchange. Accomplishing some of the environmental justice objectives in and of itself is a value. And reinforces the fact that we need to keep an eye on how to measure value.
[Indiscernible -- low volume] has been said. Really benefits agreement and how this can be part of the signatory community of representatives. If anything, it makes it more relevant. I want to add a couple of points in the intensity question earlier. We did a value in development for [Indiscernible] perhaps 50 or 60 different stations. See what kind of value can get transit oriented development and higher density and intensity. Essentially the six stations cut across more than a dozen jurisdictions. When we did analysis we expected that there would be some density that value captured above the next allowable but surprisingly in all the cases even increased intensity a little bit it was all in the maximum allowable based on the local relations. I just want to share that point. Mindy has a question. Did your city include.'s development conditions regarding property maintenance and how does your city manage change of ownership. Maybe Jeff, you can chime in afterwards about the state perspective.
This is Roxanne. Is developing conditions was at the question? How do we use that?
Did your sitting clips of element conditions regarding property maintenance and how does the manage ownership. In general it specifies ask the development including what would happen after ongoing streams. The DA will contain it all. Certain aspects it's for the development. There we have negotiated a straight development of the development we had to negotiate will maintain and their cost for certain equities for that improvement. They have specified all that.
How does the city manage change in ownership?
The DA does have terms in the DA about assignment and assumption of the rights of responsibilities of the development agreement. We had change of ownership all the time. The city is notified of a potential change in ownership. There's formal documentation required regarding assignment of those development rights from one party to the other and then there's assignment of ascension to the right of responsibilities and we encourage all the requirements.
Anyone have anything else to add to that?
Next question I think is address towards Jeff. Are there examples of DAs may between the developer and estate DMP delivered transportation project?
Massachusetts has expendable trust statute that permits the Commonwealth to go private funds. I don't think there are a lot of examples of those because developers are not interested in relieving themselves of their money without a firm commitment from the public agency. It will deliver that project and agencies are not in the business of making firm commitments in design. It happens in the form of Massachusetts has mechanisms to capture those funds. I think it's exceedingly rare and even increasingly rare. Typically huge see the contribution in the form of money or and in time contributions in the agreement itself.
Here's a question and I think all three might weigh-in. At the city and County level should experts of DA be economic the parent or the paint department giving collaborations a must what are your expertise?
For they agreements are negotiated on the city planning. The DA involves public land but again we put that into two different kinds of contractual requirements. A DDA to represent our planetary interest and handle economic development in dealing with the developer and developing the actual project that's all planning. In those examples were doing a DA I think are in those terms. You will have two different goals in the product development it happens all through city planning. We have a city we consult with reviews our entire city team works that's led through planning.
From city to city it requires coordination. In my experience the example with Washington DC a lot of the DA is economic development partner. It depends on the [Indiscernible] you're talking about, I guess.
We only have about five minutes left. Let me get through some questions. Zachary wants to know if you can speak on any value capture strategies to maximize the crossover benefits of TOD to incentivize developers to make affordable housing?
I'm not sure I understand the question. Typically you use density and zoning [Indiscernible] as part of the DOD to encourage affordable housing. When you say benefits of [Indiscernible] could you perhaps explain what you mean by that?
What we move on. There's a follow-up for Roxanne. If the body does not support a request on the building what other incentives in your experience would be most appealing to a developer? That's a good question. As far as were looking at projects to specific development if you're looking at a larger scale or face development what they had both touched on becomes more valuable which is the certainty of her time. Ensuring you have perspective development will be subject to the change in codes the ability temperament overtime has a value has value for the city we know will be getting as well. In terms of a project site specific development you really are looking foundational he at the development. If your counsel doesn't want to be additional for area or building height I think that's something we have to discuss and and often cases the developer will bring your proposal to say what would work for them. Like what they would do.
It's now 258. We have Coleman's left. What I would like to do so charity, can you share with people what is coming up next as well as how people can download put the presentation as well is the primer and some sample development agreements?
Thanks Terry. As a reminder the topic is for future value capture of peer exchanges. The next one will be on April 14th from 1 to 3. The topic will be miscible bonds. Also, [Indiscernible -- audio cutting out]
Charity, are you on?
It looks like she was disconnected. One moment.
What we would like to do is if you now look at the file sure pod you can download to dominant agreements as well the development agreement primer. Actually, the larger file is six megabytes. There the presentations for today. Currently up is in evaluation. I'm not sure people are able to fill it out. If you could fill it out that would be very helpful. For anyone who works on the moment agreements if you would like to share with us a template that you think would be good for us to distribute we would love for you to send that to us. You can address it to charity whose email is here. Before we wrap up, we really appreciate you participating and all the questions you had.. If you're interested in implying educational credits for the webinar you can request confirmation of your participation today. To do so, please send a request to value capture at D.O.T.gov. This email address is provided in the pot in the upper left-hand corner of the screen labeled evaluation instructions. In conclusion, we would like to thank all the part presenters for the petition. That concludes today's webinar. This web room should be open for a while so you can download the presentations. I would just like to thank everyone.
That concludes our conference for today. Thank you for your participation. And for using AT&T teleconference service. You may now disconnect.
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