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Thank you. Thank you. Hello everyone. On behalf of the Federal Highway administration, I would like to welcome you to today's of the Federal Highway administration, I would like to welcome you to today's virtual event on value capture strategies. This is transportation reinvestment This is transportation reinvestment zoning. As the operator said, I work at the USDOT in Cambridge Massachusetts. I will be facilitating today's webinar and helping to address any technical problems. As Massachusetts. I will 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 for you today. They will share their experience we have a great set of presenters for you today. They will share their experience and expertise on today's topic. We will introduce you to them in more detail in just a few minutes. Just will introduce you to them in more detail in just a few minutes. Just to give you an orientation to the webinar room, in the top left corner of the screen, the webinar room, in the top left corner of the screen, you will see a box or window called audio information. We encourage you to try joining window called audio information. We encourage you to try joining us by telephone if you experience audio issues while listening through your computer. In the lower left corner of the experience audio issues while listening through your computer. In the lower left corner of the screen, you should see an audience chat window. We invite you to submit questions or comments during chat window. We invite you to submit questions or comments during the webinar. Our moderator today will be monitoring the audience be monitoring the audience chat window and helping to get your questions answered. We will also give you an opportunity if you would like to get your questions answered. We will also give you an opportunity, if you would like to ask questions by telephone; our operator will be helping us with that. We will fill you in with the detail's operator will be helping us with that. We will fill you in with the details at the appropriate time. Regarding the slides, you all have an option to enter full-screen mode. The slides to the slides, you all have an option to enter full-screen mode. The slides will appear larger on your screen. To do that, just look for a button in the upper right corner of the to do that, just look for a button in the upper right corner of the window with the slides. When you hover the pointer over the correct button, you will see the words hover the pointer over the correct button, you will see the words go full screen. To exit full-screen mode, you can just hit your escape key or look for a button again, in the you can just hit your escape key or look for a button again, in the upper right corner of the screen. We will be fielding questions for the presenters at the end of each presentation. We will be fielding questions for the presenters at the end of each presentation. We will also have a longer question and answer session with all of our presenters toward the end of and answer session with all of our presenters toward the end of the webinar. We will make the presenter slides available for download toward the end of the webinar. And again, as the presenter slides available for download toward the end of the webinar. And again, as the operator mentioned, we are recording today's event so that folks can listen to it at a later time. The slides today's event so that folks can listen to it at a later time. The slides and the recording of the event will be posted to the FHW letter a website. If you are will be posted to the FHW letter a website. If you are interested in applying for professional development hours for credits for participation in today's webinar, we will provide information on how you hours for credits for participation in today's webinar, we will provide information on how you can get that confirmation. So, I am going to return back to the poll question. Thank you to those who I am going to return back to the poll question. Thank you to those who have already responded to them. We invite you to answer these invite you to answer these three questions that will allow us to get a better sense of who is in the audience to get a better sense of who is in the audience today and your level of experience with value capture in general. with value capture in general. Specifically, it this will deal with the transportation and reinvestment zones. While you answer those questions, I'm going to go with the transportation and reinvestment zones. While you answer those questions, I'm going to go ahead and introduce our moderator for today's event. It is today's event. It is Terry read. Terry is a principal technical advisor for innovative transportation and planning at the U.S. D.O.T. focus center in principal technical advisor for innovative transportation and planning at the U.S. D.O.T. focus center in Cambridge Massachusetts. He has over 30 years of experience working at the regional, state, and federal levels on years of experience working at the regional, state, and federal levels on issues involving transportation, planning and [ Indiscernible ]. Terry, as I turn things over to you, what is your reaction [ Indiscernible ]. Terry, as I turn things over to you, what is your reaction to our poll results so far?
Well thank you. Thank you for everyone filling out these polls. This really helps
Well thank you. Thank you for everyone filling out these polls. This really helps our speakers better understand the audience. As you As you can see, we have well over half of the people today who are from the local government transit agency or over half of the people today who are from the local government transit agency or the Metropolitan planning organization. We have about 15% from the state duty and we have 11% from the federal government. about 15% from the state duty and we have 11% from the federal government. It really is a broad range of people. In terms of the current level of knowledge, most people of people. In terms of the current level of knowledge, most people have heard of TRZ, but they do not know much about it and they do not have prior knowledge. What we do not know much about it and they do not have prior knowledge. What we have talked to our speaker to try to make sure today is that we help give you that information. We to try to make sure today is that we help give you that information. We would love for you during the presentations to enter questions into the chat pod as we go along so that we presentations to enter questions into the chat pod as we go along so that we can have a good conversation. In terms of the current level of knowledge and experience, very few people are very knowledgeable. terms of the current level of knowledge and experience, very few people are very knowledgeable. And so, I think people here are interested in learning.
So are interested in learning.
So now I want to introduce our presenters today. We are going to hear from Mr. Rafael from presenters today. We are going to hear from Mr. Rafael from the Texas transportation Institute. He is the author of TRZ. As pepper mentioned, you are going to be able to is the author of TRZ. As pepper mentioned, you are going to be able to download that toward the end of the webinar along with all the presentations that you see today. From the front the webinar along with all the presentations that you see today. From the front regional counsel, we will hear from Mr. Andrew as well as Mr. Becker who Mr. Andrew as well as Mr. Becker who is the vice president of [ Indiscernible ]. Finally, we are going to hear from Mr. Raymond who is the [ Indiscernible ]. Finally, we are going to hear from Mr. Raymond who is the executive director of the Camino Real regional mobility Authority located in El regional mobility Authority located in El Paso Texas. We will have a question and answer period. If you have questions during an of the presentations, please a question and answer period. If you have questions during an of the presentations, please submit it into the chat pod so that we can queue it up for the speaker. When possible, we are going so that we can queue it up for the speaker. When possible, we are going to respond with questions in the chat pod. In addition, we are going to ask chat pod. In addition, we are going to ask the operator to open telephone lines for people who are over the telephone. Note that if we do not have time for people who are over the telephone. Note that if we do not have time to answer all of your questions during the webinar today, we are going to post all of the questions received as during the webinar today, we are going to post all of the questions received as well as answers on the federal highway value highway value captured website. First, we will hear from a senior research scientist at Texas transportation Institute. He oversees the research and hear from a senior research scientist at Texas transportation Institute. He oversees the research and up limitation program focused on international order transportation planning and operations, trade facilitation, and air quality. He orders transportation planning and operations, trade facilitation, and air quality. He oversees the offices in San Antonio and El Paso, serving U.S. federal, state, and local transportation agencies. In addition, he Antonio and El Paso, serving U.S. federal, state, and local transportation agencies. In addition, he has been working with federal highways as a subject matter expert for the past three years on the value capture topic. as a subject matter expert for the past three years on the value capture topic. Second, we will here from Andrew. He is the executive director of the regional counsel He is the executive director of the regional counsel in Utah. The Western front is a Metropolitan a Metropolitan planning organization. We have headquarters in Salt Lake City. This provides a forum for collaboration among cities, counties, and transportation in Salt Lake City. This provides a forum for collaboration among cities, counties, and transportation agencies and other public/private community stakeholders. With it partner, it has the regional decision for growth and development, and it deals with a long-range transportation plan. For regional decision for growth and development and it deals with a long-range transportation plan. For the past 20 years, he specialized in real estate in real estate consulting and [ Indiscernible - low - volume]. His expertise includes in-depth consulting for highest and best use analysis, low - volume]. His expertise includes in-depth consulting for highest and best use analysis, development feasibility studies, land development and arbitration. He deals with value added and land-use planning issues. In our third and final arbitration. He deals with value added and land-use planning issues. In our third and final presentation, it will be by Raymond. Raymond is the executive Raymond is the executive director of the regional mobility Authority. This was established in 2007. It was created to assist in the development of major This was established in 2007. It was created to assist in the development of major transportation projects in the El Paso reason. To date, the agency has helped deliver a diverse reason. To date, the agency has helped deliver a diverse range of transportation options including the El Paso streetcar, the Interstate 10, Luke 375, the America's interchange project, the El Paso streetcar, the Interstate 10, Luke 375, the America's interchange project, the Cesar Chavez toll lanes, the Porter West Expressway and the son share bicycle program. So that concludes the introductions. Now I'm going to turn it over to bicycle program. So that concludes the introductions. Now I'm going to turn it over to Rafael. Do you want to give us an introduction into the transportation reinvestment zones?
Thank you, Terry. Good morning and us an introduction into the transportation reinvestment zones?
Thank you, Terry. Good morning and good afternoon, everyone. This presentation will provide a preview provide a preview of the [ Indiscernible - low - volume] in - volume] in business zones. We will be addressing this throughout the day today. The presentation is divided into seven sections. I summarize addressing this throughout the day today. The presentation is divided into seven sections. I summarize different portions of the primer. We begin with an overview begin with an overview with some basics on TRZ's. We will discuss the will discuss the legal framework and we will talk about the implementation of TRZ's. Also, we will talk about talk about the implementation of TRZ's. Also, we will talk about how TRZ's are used and the opportunities and the opportunities and challenges that local governments have faced and how they have overcome some of faced and how they have overcome some of these issues. I will not be presenting a case study, but it will be part of the presentation that you be presenting a case study, but it will be part of the presentation that you can download later. We have several presentations from Utah and Texas. So, value capture techniques rely on increases in presentations from Utah and Texas. So, value capture techniques rely on increases in property values. It deals with business activity and this all relates to transportation infrastructure. We want to activity and this all relates to transportation infrastructure. We want to plan current and future transportation. [ Indiscernible - low - volume] Indiscernible - low - volume] this helps pay for transportation. You can see this on the screen here. Consider that can see this on the screen here. Consider that public investment is a part of economic development. The and economic development. The and economic development improves land development and it increases property values it increases property values and activity. It deals with employment in the corridor is [ Indiscernible - low - volume]. In turn, in the corridor is [ Indiscernible - low - volume]. In turn, the owners in these areas see the value of the [ Indiscernible - low - the value of the [ Indiscernible - low - volume]. This is dealing with businesses in the zone. They experience increased sales. Ultimately, businesses in the zone. They experience increased sales. Ultimately, this deals with increased property and sales tax revenue for local and state government. TRZ's are sales tax revenue for local and state government. TRZ's are mechanisms to capture a proportion of the growth and it of the growth and it also helps pay for the cost. Now let's talk about the Now let's talk about the primer. TRZ's are local, excuse me they are available to local governments in Texas me they are available to local governments in Texas and Utah. The primary's audience includes practitioners from communities that don't currently use TRZ's. They may be interested in using includes practitioners from communities that don't currently use TRZ's. They may be interested in using them in the future. Communities already using TRZ's already using TRZ's but interested in learning other available TRZ's are available TRZ's are important. We look at how TRZ's have been implemented in Utah. Which local governments can use TRZ's and what projects TRZ's have been implemented in Utah. Which local governments can use TRZ's and what projects are eligible to be funded? What are the opportunities and challenges that local governments have faced in using What are the opportunities and challenges that local governments have faced in using TRZ? Now I am going to talk about something. I will start with a definition. So, when creating a TRZ, look governments designate with a definition. So, when creating a TRZ, look governments designate a contiguous area in an impact his own. This is in order to capture a portion of his own. This is in order to capture a portion of the income from sales tax revenue. This This is used to support the funding of the project. In other words, I of the project. In other words, I am sorry, [ Pause] in other words, a TRZ allows a portion of the land other words, a TRZ allows a portion of the land development that is applicable to the project to be used. This allows the community to the project to be used. This allows the community to [ Indiscernible] experience the benefits of increased economic activity. [ of increased economic activity. [ Indiscernible]. There are a few other definitions related to TRZ's that we need to keep in mind. What we few other definitions related to TRZ's that we need to keep in mind. What we see here on the screen is a figure that illustrates some business initiatives used in a figure that illustrates some business initiatives used in the property tax example based on Texas law. In the upper chart, what we see, in the vertical access, we on Texas law. In the upper chart, what we see, in the vertical access, we have property values within a zone, within an area. This is around the project. And the horizontal axis, we within an area. This is around the project. And the horizontal axis, we see a timeline in years. The base year is the year when base year is the year when the PRC is created. At that point in time, the tax income in days is defined as the value of the tax base within days is defined as the value of the tax base within the zone within the year that the TRZ was created. That is within a population. the TRZ was created. That is within a population. on the other hand, in the subsequent year, as land develops and property values change or subsequent year, as land develops and property values change or increase, there is an incremental appraisal value that gets captured. We value that gets captured. We call that the [ Indiscernible]. When we multiply that times the tax rate, say]. When we multiply that times the tax rate, say for example of a municipality, we get two components. The first one is related to the property tax that continues we get two components. The first one is related to the property tax that continues flowing through the municipality fund. The second component is the second component is the tax increment revenue. This is the revenue that is produced within the [ Indiscernible]. It can be used for the revenue that is produced within the [ Indiscernible]. It can be used for the project related statements to deliver project. And I mentioned earlier that, And I mentioned earlier that TRZ's are mechanisms. We also have the traditional [ Indiscernible]. How are they similar and how are they different? have the traditional [ Indiscernible]. How are they similar and how are they different? Well, it turns out that TRZ's are very similar to [ Indiscernible] regarding the are very similar to [ Indiscernible] regarding the financial mechanism. It is used to allocate public investments. They differ in that they are explicitly dedicated to transportation groups. On the other hand, they are used that they are explicitly dedicated to transportation groups. On the other hand, they are used to pay for a wider range of [ Indiscernible ] including transportation, landscaping, streets gaping as well as other development projects of [ Indiscernible ] including transportation, landscaping, streets gaping as well as other development projects such as affordable housing hotels, et cetera. So aside from the fact that TRZ's have dedicated transportation, there are two key cetera. So aside from the fact that TRZ's have dedicated transportation, there are two key differences between a TRZ and TIF. This has made TRZ popular in Texas. First, TRZ's are TIF. This has made TRZ popular in Texas. First, TRZ's are easier. In Texas, TRZ can be initiated by the local government be initiated by the local government from the governing body, the city Council. This is after public hearings are held. On the other hand, Council. This is after public hearings are held. On the other hand, the Texas version of the TIF in the investment son has a more complex in the investment son has a more complex initiation mechanism. Texas can be initiated by M&A's apology by M&A's apology or by property owners within the zone. If it is initiated by the city, majority of the property owners have the zone. If it is initiated by the city, majority of the property owners have [ Indiscernible]. In addition, this can only be initiated by a city with no more than 10% of the [ can only be initiated by a city with no more than 10% of the [ Indiscernible]. It is a lot more complex. Second, TRZ's have a more complex. Second, TRZ's have a lacks complex governing or oversight structure. In Texas, a TRZ does not structure. In Texas, a TRZ does not require a separate oversight structure once it has been approved. On the other hand, a TIF requires once it has been approved. On the other hand, a TIF requires setting up [ Indiscernible - low - volume]. It has a more complex - volume]. It has a more complex governance mechanism. So, what is the role of TRZ's in the delivery of transportation projects? There is the role of TRZ's in the delivery of transportation projects? There are three ways of looking at the roles at the goal of TRZ in project delivery. First, roles at the goal of TRZ in project delivery. First, is that using TRZ's, local governments in Texas have leveraged traditional and nontraditional funding sources. This in Texas have leveraged traditional and nontraditional funding sources. This is including federal state transportation funds, tolls, and other value capture mechanisms. To expedite tolls, and other value capture mechanisms. To expedite the expert [ Indiscernible - low - volume]. - volume]. Second, TRZ's are generally not projects that are the sole funding that are the sole funding mechanism. Rather, they are often used as a complementary funding source as a complementary funding source to help local governments close gaps or to provide local matching funds when or to provide local matching funds when required by state or federal funds. And finally, one TRZ can be created to support one single project or multiple funds. And finally, one TRZ can be created to support one single project or multiple projects. [ Pause] among the circumstances, the main motivating creation of a TRZ, there are two that are among the circumstances, the main motivating creation of a TRZ, there are two that are worth mentioning. The first is the need to deal need to deal with regional customers. In Texas for example, it is possible for neighboring or overlapping governments to partner with each other for example, it is possible for neighboring or overlapping governments to partner with each other in order to deliver a TRZ project that enhances development in project that enhances development in region one. You can create the TRZ with the objective the TRZ with the objective of funding [ Indiscernible - low - volume] in one or more neighboring jurisdictions. This is - volume] in one or more neighboring jurisdictions. This is as long as another TRZ is created for the project. Like other capture techniques, TRZ can promote equity and economic is created for the project. Like other capture techniques, TRZ can promote equity and economic efficiency through the [ Indiscernible]. When using eight TRZ from the transportation project, those who benefit from the When using eight TRZ from the transportation project, those who benefit from the project say in portion to the benefit they received, they have the benefit they received, they have capital cost. In this case, this includes property owners and developers within the zones who benefit from property values includes property owners and developers within the zones who benefit from property values as well as benefits who businesses who benefit who benefit from increased taxes. Now, we have legislation in Texas and Utah that will be addressed. The level of detail in have legislation in Texas and Utah that will be addressed. The level of detail in each state varies significantly. I will start with start with some background. I will start with the legislation in both states. The legal framework for TRZ's in Texas alleged the legislation in both states. The legal framework for TRZ's in Texas alleged native with legislation in 2007. This allows for the creation of two basic types of allows for the creation of two basic types of TRZ. The legislation has been amended multiple times. The first TRZ's in Texas were created in 2010. As of 2010, there were 16 actives TRZ's in Texas were created in 2010. As of 2010, there were 16 actives TRZ's in Texas supporting a wide variety of projects by local of projects by local entities. On the other hand, Utah enacted its legislation in 2018. They amended it in Utah enacted its legislation in 2018. They amended it in 2019. However, no TRZ's have been created in the state of Utah as of today. We hear created in the state of Utah as of today. We hear more [ Indiscernible - low - volume]. Earlier this year, the Utah volume]. Earlier this year, the Utah legislature passed legislation that created a similar value capture. The Utah housing a similar value capture. The Utah housing zone act was signed into law last March. This law creates a framework for the creation last March. This law creates a framework for the creation of housing investments owns. These are focused on housing as the name implies. It is a different law that does not modify or amend the existing framework implies. It is a different law that does not modify or amend the existing framework for the [ Indiscernible]. That is where they were enacted, and 2018. is where they were enacted, and 2018. as I mentioned, earlier, the legal framework of Texas has evolved. This has been primarily in response to the experience of framework of Texas has evolved. This has been primarily in response to the experience of the first [ Indiscernible]. There were municipalities and counties were municipalities and counties that created TRZ's under the original legislation. They identified legislation. They identified issues and provided clarifications or amendments that could expand the practical use as a result of subsequent amendments that could expand the practical use as a result of subsequent [ Indiscernible]. They amended the law and they expanded the use of TRZ's, and they clarified law and they expanded the use of TRZ's, and they clarified the process to set up one. This made them even one. This made them even more popular. In terms of what are the legal requirements in Texas to create a TRZ, you can divide it what are the legal requirements in Texas to create a TRZ, you can divide it into three different areas. The first one is the characteristics of first one is the characteristics of the area. The law in Texas gives the local government the ability to create a TRZ to determine that the gives the local government the ability to create a TRZ to determine that the area is underdeveloped and the zone could promote public safety and facilitate development or could promote public safety and facilitate development or redevelopment property, and could facilitate the movement of traffic and enhance the municipality's movement of traffic and enhance the municipality's ability to deliver a transportation project. The finding is not required to create a TRZ. This is not like a project. The finding is not required to create a TRZ. This is not like a TIF. Second, in terms of the boundaries and limits, the law does not limit the maximum size of the boundaries and limits, the law does not limit the maximum size of a TRZ if it is a when the local government's jurisdiction. The boundaries can be amended to be increased and the local government's jurisdiction. The boundaries can be amended to be increased and to accommodate changes in project limits. They cannot be reduced. Property cannot be removed from the TRZ once it They cannot be reduced. Property cannot be removed from the TRZ once it has been committed for example to [ Indiscernible] related to the two [ Indiscernible] related to the project. Also, a TRZ that is created can include property values is created can include property values already part of a TIF. However, this property is only added to maintain continuity of However, this property is only added to maintain continuity of the TRZ and the revenue from the property is not considered for the TRZ. These obligations have to be fulfilled from the property is not considered for the TRZ. These obligations have to be fulfilled before they can be channeled to the to the TRZ. Finally, in terms of other requirements, the lawn Texas does not require local governments to dedicate 100% of the other requirements, the lawn Texas does not require local governments to dedicate 100% of the tax income and revenue to a project. It gives the local government the flexibility of choosing to reduce all or project. It gives the local government the flexibility of choosing to reduce all or a portion of the revenue, of the property tax revenue in any given year. The reminder of the property tax revenue in any given year. The reminder of the amount collected [ Indiscernible - low - volume] can be used for any other - volume] can be used for any other government purpose. In terms of the requirements in Utah, as I mentioned earlier, the legal framework was created first in the requirements in Utah, as I mentioned earlier, the legal framework was created first in 2018. And in Utah, the legislation required the agreement of two or more public agencies to the basic elements of legislation required the agreement of two or more public agencies to the basic elements of the zone. This includes the transportation infrastructure needs, and the proposed improvement. It deals with the boundaries for the zone. And infrastructure needs, and the proposed improvement. It deals with the boundaries for the zone. And it deals with the terms for sharing the future sales and sharing the future sales and property tax revenue. The law allows different types of public agencies to participate in creating a TRZ as long as one different types of public agencies to participate in creating a TRZ as long as one of them has land-use authority within the zone's boundaries. In Utah, the land-use authority includes municipality and counties. within the zone's boundaries. In Utah, the land-use authority includes municipality and counties. Utah law that does not explicitly allow or disallow changes in the footprint or boundaries of TRZ's. Month it has explicitly allow or disallow changes in the footprint or boundaries of TRZ's. Month it has been created, and the law is also new regarding limitations for the size of the boundaries. Utah law does not also new regarding limitations for the size of the boundaries. Utah law does not limit the use of funds in local, state, or federal transportation projects. It is very flexible in that it local, state, or federal transportation projects. It is very flexible in that it allows the dissipating public agencies to define the improvement within the zone as approved define the improvement within the zone as approved to the improvements that are eligible. It makes it makes it very flexible. Now I am going to move on to briefly describe the implementation of going to move on to briefly describe the implementation of the process. This is based on the current Texas the current Texas legal framework. Each of the five steps that you see on the screen is described steps that you see on the screen is described in subsequent slides. I will briefly summarize in the interest of time. The first stage in creating a TRZ is briefly summarize in the interest of time. The first stage in creating a TRZ is the initiation stage. In this stage, the project is identified as well as the area for the project. In this stage, some preliminary analysis is conducted in as the area for the project. In this stage, some preliminary analysis is conducted in order to assist the potential for economic development or the tax limitation revenue in the future that could be used to economic development or the tax limitation revenue in the future that could be used to support the project. The second stage is the formation of the zone. is the formation of the zone. This is where the formal process starts. It is in this phase where the boundaries of the TRZ are actually process starts. It is in this phase where the boundaries of the TRZ are actually determined. There is a requirement to publish a 60-day notice letting the public know that the municipality to create publish a 60-day notice letting the public know that the municipality to create the TRZ is happening. It is at this time that the analysis of the at this time that the analysis of the future potential revenue is conducted. There is also a public hearing and adoption. 50 days after the publication of the There is also a public hearing and adoption. 50 days after the publication of the notice, the public notice, the municipality is supposed to hold a public hearing so that the public is able to speak is supposed to hold a public hearing so that the public is able to speak for or against the creation of the zone. At the hearing, the municipality and the zone. At the hearing, the municipality and governing body proceeds to vote on the creation of [ Indiscernible]. Stage IV is simply the operation. This is on the creation of [ Indiscernible]. Stage IV is simply the operation. This is basically the collection of the property tax and income revenue, the execution of the project, and so on. Finally, the laws tax and income revenue, the execution of the project, and so on. Finally, the laws provide for the termination of the TRZ once the [ Indiscernible] for the project is fulfilled. Or, if the revenue for the project is fulfilled. Or, if the revenue has not been used for the purpose of the project that the purpose of the project that the TRZ was created for, the TRZ expires from the 10th year after its creation. So, you have the 10 years. If the municipality has not used after its creation. So, you have the 10 years. If the municipality has not used the TRZ, the TRZ ceases to exist. I'm going to move now to slide 26. exist. I'm going to move now to slide 26. We are going to talk here about how TRZ's are used. What local jurisdictions can about how TRZ's are used. What local jurisdictions can use TRZ's? In Texas this in cute municipalities, [ Indiscernible in cute municipalities, [ Indiscernible], and port authorities. They can create TRZ's within the tax section. However, while Texas counties have explicitly been allowed to create TRZ's, the ability to use while Texas counties have explicitly been allowed to create TRZ's, the ability to use tax revenue from bonds is limited. Several Attorney General's opinions have made it clear that the Several Attorney General's opinions have made it clear that the use of TRZ revenue could be constitutionally challenged. constitutionally challenged. [ Indiscernible - low - volume]. These opinions have basically rendered Texas counties unable to effectively volume]. These opinions have basically rendered Texas counties unable to effectively use TRZ revenue to fund transportation. However, in the recent legislative session that concluded the regular session However, in the recent legislative session that concluded the regular session that was conducted in May, house resolution 99 was passed by the legislature in resolution 99 was passed by the legislature in Texas. This resolution put forward a popular vote in the November election, a constitutional amendment. If the amendment is passed, a popular vote in the November election, a constitutional amendment. If the amendment is passed, we will allow counties to issue bonds or notes for transportation improvements. This will be backed by property taxes. If this bonds or notes for transportation improvements. This will be backed by property taxes. If this resolution is approved by voters, this will solve the issue that Texas currently has in place. will solve the issue that Texas currently has in place. On the other hand, as I indicated earlier, Utah law indicates that a TRZ can be created by two or I indicated earlier, Utah law indicates that a TRZ can be created by two or more [ Indiscernible]. One of these need to be with a county or municipality that has land-use authority within of these need to be with a county or municipality that has land-use authority within the zone. Most importantly, I think in both states, local governments in in both states, local governments in Texas or Utah can join [ Indiscernible ] resources to one project or a set of Indiscernible ] resources to one project or a set of projects to enhance mobility. TRZ's are a tool that can be a tool that can be used to enhance not only local infrastructure but regional infrastructure by using partnerships with those agencies that are interested. local infrastructure but regional infrastructure by using partnerships with those agencies that are interested. so now in terms of what types of projects can be funded with types of projects can be funded with TRZ's , Texas law allows for the creation of a TRZ for a variety of transportation projects including among for the creation of a TRZ for a variety of transportation projects including among others told and non-toll roads, passenger or freight rail facilities, passenger or freight rail facilities, bicycle facilities, parking garages, and other infrastructure. Texas does not limit the use of TRZ funds to state or federal other infrastructure. Texas does not limit the use of TRZ funds to state or federal transportation projects. In practice, what this means is that the TRZ funds can be used on local transportation projects that this means is that the TRZ funds can be used on local transportation projects that are not linked to a state facility. This is if the local government is not planning to see facility. This is if the local government is not planning to see a state infrastructure bank or loan finance or. I will talk more about this on a subsequent slide. Do talk, Utah finance or. I will talk more about this on a subsequent slide. Do talk, Utah law does not define a project that can be used for these revenues. It allows the local governments to find the transportation needs of the opposing crew. It allows the local governments to find the transportation needs of the opposing crew. This makes it very flexible. In terms of terms of financing methods that can be used with TRZ, the experience in Texas has shown that there are three main options used with TRZ, the experience in Texas has shown that there are three main options that are available. Each one of these has its own advantage and disadvantages. The first one Jake is [ of these has its own advantage and disadvantages. The first one Jake is [ Indiscernible]. This simply refers to the financial improvement using current revenues. This the financial improvement using current revenues. This is like [ Indiscernible]. So here, the issue is that local governments have to maintain the annual project within So here, the issue is that local governments have to maintain the annual project within the budget. This is set up by the actual revenue. This is very by the actual revenue. This is very small and grows over time. It has the advantage of not maintaining a financial cost. There is no interest. However, the has the advantage of not maintaining a financial cost. There is no interest. However, the disadvantage is there is low project delivery because of the capital [ delivery because of the capital [ Indiscernible]. Secondly, we are using municipal dollars. So, here the local board may seek financing from the capital market. using municipal dollars. So, here the local board may seek financing from the capital market. I am sorry. And there could be future tax revenues [ Indiscernible - low - volume]. This has been future tax revenues [ Indiscernible - low - volume]. This has the advantage of providing earlier availability of capital and the ability to use the of capital and the ability to use the funds to face any type of project including projects that are off the state highway system. However, municipal bonds also of project including projects that are off the state highway system. However, municipal bonds also entail a significant transaction and financial cost. This is because of the risk associated with it. This cost. This is because of the risk associated with it. This increases the [ Indiscernible - low - - volume]. The third source of financing that can be used or has been used in Texas with TRZ includes of financing that can be used or has been used in Texas with TRZ includes the state infrastructure bank. The state infrastructure banks are revolving funds established by infrastructure banks are revolving funds established by states. They provide funds to local governments using direct loans to pay for governments using direct loans to pay for transportation projects. Because they mix federal and state funds, there are some constraints that local governments are facing regarding the types of issues that can be paid constraints that local governments are facing regarding the types of issues that can be paid for using state bonds. They offer low transaction costs and low interest rates. low transaction costs and low interest rates. They provide long-term debt using the [ Indiscernible - low - [ Indiscernible - low - volume]. So, this has the benefits of making capital available earlier coupled with low transaction costs. The limitation benefits of making capital available earlier coupled with low transaction costs. The limitation is that the funds can only be used on projects classified as federal highways be used on projects classified as federal highways of love [ Indiscernible]. That is included is included in the TIP. That is because they are combined with, they are combined with federal transportation funds. Now I will move on to the opportunities and challenges that have been faced by local governments will move on to the opportunities and challenges that have been faced by local governments in Texas. Primarily, in terms of opportunity, some political and opportunity, some political and public support, TRZ's have not created a tax increase. Creating a TRZ does not require an increase in created a tax increase. Creating a TRZ does not require an increase in the existing sales or property tax rates. The revenue certainly realized in the real property tax base within the zone tax rates. The revenue certainly realized in the real property tax base within the zone and economic activity. So, as a result, local governments have faced result, local governments have faced low or [ Indiscernible - low - volume] when creating a TRZ. Second, - volume] when creating a TRZ. Second, TRZ's help communities expedite or make possible the delivery of a project that would otherwise have been delayed for many make possible the delivery of a project that would otherwise have been delayed for many years. Expediting projects like this for most economic development well beyond the most economic development well beyond the TRZ. It goes well inside the boundaries of the TRZ. These benefit local communities. This is across the boundaries of the TRZ. These benefit local communities. This is across the board. Third, creating a TRZ generally entails a great deal of intelligence and collaboration that opens opportunities to leverage TRZ generally entails a great deal of intelligence and collaboration that opens opportunities to leverage funds across agencies. This is including state DOT, the regional MPO as well as other governments and agencies. When a local state DOT, the regional MPO as well as other governments and agencies. When a local government creates a TRZ, it signals to other stakeholders in the region not only that the project is a priority to other stakeholders in the region not only that the project is a priority but also that it is open to collaborative and creative ways to improve the region. TRZ's have funding mechanisms that can to collaborative and creative ways to improve the region. TRZ's have funding mechanisms that can promote economic efficiency related to the principles that we the principles that we have discussed. In terms of challenges, the Texas the Texas experience has shown that there are concerns about the ability of the local government to sustain services within the zone are concerns about the ability of the local government to sustain services within the zone as a result of some of the incremental value. Incremental property the incremental value. Incremental property tax revenue is dedicated to a transportation project. Typically, these concerns are used when an explanation is provided as to a transportation project. Typically, these concerns are used when an explanation is provided as to how the transportation project is likely to result in increased property tax revenue well beyond the TRZ boundaries. So, when to result in increased property tax revenue well beyond the TRZ boundaries. So, when local policymakers or the public learn more about the TRZ work, these concerns are often East. more about the TRZ work, these concerns are often East. Secondly, the TRZ revenues as I mentioned earlier are subject to uncertainty. They are I mentioned earlier are subject to uncertainty. They are driven by conditions of the local real estate market. So, and economic recession for example is likened to have a local real estate market. So, and economic recession for example is likened to have an effect on property values, the real estate market in general. This affects the future market. These challenges or these risks are estate market in general. This affects the future market. These challenges or these risks are frequently translated into high cost of borrowing from the private capital markets. As a result of this, like I mentioned earlier, borrowing from the private capital markets. As a result of this, like I mentioned earlier, these loans have been one of the most cost-effective and financial options for local governments regarding projects that exist and are the most cost-effective and financial options for local governments regarding projects that exist and are funded within the state highway system. and finally, the last challenge has been the one that we discussed earlier. Counties in and finally, the last challenge has been the one that we discussed earlier. Counties in Texas have not been able to use TRZ to pay for use TRZ to pay for projects. If the constitutional amendment is approved in November, this will be sorted out. And is approved in November, this will be sorted out. And with this, this is an overview of the primer. I have much more detail in of the primer. I have much more detail in the contents. The slides you will receive include more details. I will be happy to take questions once the time for receive include more details. I will be happy to take questions once the time for questions comes. Thank you. We can proceed with the proceed with the next presentation.
Well thank you Rafael. That was extremely informative. We have lots of questions in the chat you Rafael. That was extremely informative. We have lots of questions in the chat room. So, I am going to ask you ask you some questions. If any of the other presenters have thoughts that you would like to add, please feel free to the other presenters have thoughts that you would like to add, please feel free to chime in. First, we are going to deal with some kind of general questions. David wants to know, are there any to deal with some kind of general questions. David wants to know, are there any other states other than Texas and Utah with TRZ legislation. Utah with TRZ legislation.
From what we understand, Texas and Utah are the only states that have specific TRZ and Utah are the only states that have specific TRZ legislation.
Okay. And then Mark is following on that. Why have there only been 16 TRZ's established in 11 Mark is following on that. Why have there only been 16 TRZ's established in 11 years? This is considering that it is easier than a TIF.
There have been more TRZ's established. Currently active, there is easier than a TIF.
There have been more TRZ's established. Currently active, there are only 16. The reason for that was that some of the TRZ's that were created in the beginning dealt that was that some of the TRZ's that were created in the beginning dealt with legislation. These ended up being rescinded for a number of reasons. Some of the reasons were for example that counties rescinded for a number of reasons. Some of the reasons were for example that counties found out that they could not use TRZ. So, as to why they are not used more in 11 years, use TRZ. So, as to why they are not used more in 11 years, this is because the biggest changes in the legislation only took in the legislation only took place in 2015. That is when the changes in the legislation that made them more flexible came when the changes in the legislation that made them more flexible came to happen. That is why you see some of these issues. I see some of these issues. I anticipate that if the constitutional amendment is approved, there will be increased leaders. A lot of the projects that are amendment is approved, there will be increased leaders. A lot of the projects that are seeking funding right now are regional projects that go beyond the boundary of projects that go beyond the boundary of local municipalities. This is across local government. Government. I hope that answers the question.
We are going to hear both from Texas and Utah about what its questions.
We are going to hear both from Texas and Utah about what it is like to start up TRZ's and operate them. We will provide more and operate them. We will provide more information on that. Jonathan wants to know is a state legislation required prior to a local to know is a state legislation required prior to a local government starting? And Jennifer wants to know can a state prohibit TRZ for local know can a state prohibit TRZ for local governments.
Let's start with the with the first question. I think most often, states or most of states or most of the states except Arizona has legislation that allows the creation of that allows the creation of this. So, in order to create the TRZ or something that resembles a, you would need specific the TRZ or something that resembles a, you would need specific legislation. That could allow other local governments that do not have the legislation to local governments that do not have the legislation to use the TRZ legal framework for the same purpose. Of course, it is going to is going to have some additional administrative burdens. This is what I mentioned. Again, you This is what I mentioned. Again, you would require state legislation in order to meet the TRZ. And the to meet the TRZ. And the second question is here.
Jennifer says does each state have specific laws pertaining to TRZ and could a state Jennifer says does each state have specific laws pertaining to TRZ and could a state prohibit the TRZ for local governments.
Yes, only Texas and Utah have specific laws dealing with TRZ.
Yes, only Texas and Utah have specific laws dealing with TRZ. And, and to my knowledge, there is there is no legislation that allows for TRZ's. I do not think I do not think that this could be prohibited if it does not exist.
Could I jump in briefly on that question? This if it does not exist.
Could I jump in briefly on that question? This is Rupert from Utah. Just on the question of whether the question of whether specific laws are required to have a TRZ, I think that may depend on the legal structure state-by-state. Some states have a TRZ, I think that may depend on the legal structure state-by-state. Some states, the way it works is that the local the local governments have all powers except those that have been taken away are restricted by the legislatures. In other states, the those that have been taken away are restricted by the legislatures. In other states, the local governments only have the powers that have been granted to them by the legislature. And so, typically in order to that have been granted to them by the legislature. And so, typically in order to do a deal like this, you would want to have the certainty of state legislation would want to have the certainty of state legislation so that the deal when being put together, the financing and funding being put together, it is not in question. being put together, the financing and funding being put together, it is not in question. This is particularly if it is a novel approach. From a legal perspective, whether legislation is technically required to authorize a novel approach. From a legal perspective, whether legislation is technically required to authorize a TRZ, this may depend on the legal framework and structure state-by-state.
Excellent, yes.
Great. So, I am going legal framework and structure state-by-state.
Excellent, yes.
Great. So, I am going to read another question. I also wanted to have [ Indiscernible] open the telephone lines. Can you see if we have any questions that are coming open the telephone lines? Can you see if we have any questions that are coming in from the telephone line? I will ask this question and you can let us know if we have anybody over will ask this question and you can let us know if we have anybody over the telephones.
Sure thing, thank you.
So, if a county creates a TRZ, can you.
So if a county creates a TRZ, can the municipality be included under the County umbrella with by in or appropriate wording in an ordinance or resolution for efficiency County umbrella with by in or appropriate wording in an ordinance or resolution for efficiency or do they need to create their own individual create their own individual TRZ?
Can you repeat the question?
Sure. If a county creates a TRZ, Ken Lemon is the polities the question?
Sure. If a county creates a TRZ, Ken Lemon is the polities be included under the County umbrella with by and or appropriately wording an ordinance or resolution for efficiency? Do they need with by and or appropriately wording an ordinance or resolution for efficiency? Do they need to create their own individual TRZ?
Each jurisdiction in Texas will have to create their own. This is
Each jurisdiction in Texas will have to create their own. This is because each has their own, their own, you know, I guess tax base overlapping tax base. Each would have to create own, you know, I guess tax base overlapping tax base. Each would have to create their own. But then, they would enter into a local agreement. For example, they could be jointly funding a project. I enter into a local agreement. For example, they could be jointly funding a project. I think that Raymond can talk about this. This is with an example regarding the local agreement. This basically funnels the money this. This is with an example regarding the local agreement. This basically funnels the money to an agency that will execute the project. They commonly choose you know, say for example the county or in the project. They commonly choose you know, say for example the county or in the case of Texas, the regional authority. And the County and the local governments within the county could create their TRZ and the County and the local governments within the county could create their TRZ and funnel their revenue. They could use that revenue to secure that and use that revenue to secure that and deliver the project.
Great. Do we have any questions on we have any questions on the telephone?
Yes. Ladies and gentlemen, if you wish to ask a question, please press star 1 on your and gentlemen, if you wish to ask a question, please press star 1 on your telephone keypad. A voice prompt on your telephone line will indicate when your prompt has been open. You can remove yourself your telephone line will indicate when your prompt has been open. You can remove yourself from the queue by pressuring the star key followed by the digit two. star key followed by the digit two. If you are using a speakerphone, make sure that you pick up a make sure that you pick up a handset before pressing the corresponding digits. Press star one this time if you wish to ask Press star one this time if you wish to ask a question.
I see a question there, I am sorry.
I'm sorry.
I see a question there, I am sorry.
I'm sorry.
I see a question there.
It appears we do not have any questions at this time. I am sorry.
Okay great, thank do not have any questions at this time. I am sorry.
Okay great, thank you very much. We still have three more questions from the chat pod. They all relate a little bit about gentrification. three more questions from the chat pod. They all relate a little bit about gentrification. So, Nicholas asked how is unproductive and underdeveloped defined. Has there been and underdeveloped defined? Has there been any recent pushback on this definition as it relates as it relates to gentrification?
So, you know, there is no there is no law as to what the law says. They say that the municipality makes the determination. In this case, that basically law says. They say that the municipality makes the determination. In this case, that basically has meant that the city Council will decide if the area is unproductive or underdeveloped. There is no metric or indicator will decide if the area is unproductive or underdeveloped. There is no metric or indicator that is used. So far, in Texas, there has not been a push back related Texas, there has not been a push back related to gentrification.
Go ahead, I'm sorry.
sorry.
This was related to the other question. This was under gentrification. I am sorry. How does it impact?
Charlene other question. This was under gentrification. I am sorry. How does it impact?
Charlene wants to know how this impacts renters. Could this contribute to gentrification and displacement?
So, creating a TRZ does renters. Could this contribute to gentrification and displacement?
So, creating a TRZ does not affect, it does not impact renters. What could impact renters. What could impact renters is or create, it could have any influence on [ have any influence on [ Indiscernible], this is the development of the transportation [ Indiscernible]. However, when you think about it, most of the transportation [ Indiscernible]. However, when you think about it, most of these projects are related to transportation plans. These are mobility projects that have been determined to be necessary. And, to transportation plans. These are mobility projects that have been determined to be necessary. And, delivering the project is related to using any other transportation a source. This would create using any other transportation a source. This would create the same value, land value or development phenomena that simply funding it development phenomena that simply funding it with a TRZ would create. The impacts on rents and the impacts on rents and so on, those are an effective development. This in turn development. This in turn could be created or produced by the project. This is not the project. This is not by the TRZ. They want to anticipate impacts to help pay for anticipate impacts to help pay for the project. It all depends on the project.
Can I supplement the project?
Can I supplement that answer? This is Andrew in Utah. The two questions about impacts potentially on renters and then also on lower in Utah. The two questions about impacts potentially on renters and then also on lower income communities, this is an important question. I agree that it is not a TRZ itself that dictates what question. I agree that it is not a TRZ itself that dictates what will and will not happen to lower income communities or renting communities. It lower income communities or renting communities. It is the development and increase and development activity that has the potential to have a gentrifying impact. Now I development activity that has the potential to have a gentrifying impact. Now I will get into this a little bit later when I talk. One of the tools that we created in Utah is bit later when I talk. One of the tools that we created in Utah is called the housing and transit investments own. Actually, statutorily, it has a requirement that there be a certain amount of new own. Actually, statutorily, it has a requirement that there be a certain amount of new housing created and it needs to be affordable. That is one of the statutory objectives that was set be affordable. That is one of the statutory objectives that was set up. It pays attention to the lack of affordable housing and trying to actually increase the availability and affordability of the lack of affordable housing and trying to actually increase the availability and affordability of housing. As a policy matter, when the legislature is establishing the authorization for the legislature is establishing the authorization for these tools, things like the risk of gentrification, the availability and affordability of housing; this can be considered in the statutory of gentrification, the availability and affordability of housing; this can be considered in the statutory framework when the tool is being established.
Great, thank you enter. We have one established.
Great, thank you enter. We have one more question. I wanted to address that toward that toward the end. James was talking about how it helps low income. I think Andrew, you have touched on it. I about how it helps low income. I think Andrew, you have touched on it. I think it is a question that we will explore more after we hear from the will world. So now we are we will explore more after we hear from the will world. So now we are going to hear from several people all who have real-world experience both developing and implementing projects, utilizing TRZ. We all who have real-world experience both developing and implementing projects, utilizing TRZ. We will hear from Raymond, the executive director of the authority director of the authority and El Paso Texas. Raymond, please take it away.
Thank you. I am happy to be here. I am happy to take any opportunity that I am happy to be here. I am happy to take any opportunity that I can get to highlight what we are doing out and El Paso in West Texas. My name is Raymond. I am are doing out and El Paso in West Texas. My name is Raymond. I am the executive director of the regional mobility authority. Although we are going to talk about are transportation mobility authority. Although we are going to talk about are transportation reinvestment zone that is being used in El Paso, the way that I wanted to do that was to explain, used in El Paso, the way that I wanted to do that was to explain, I think I need to explain who we are and how we are using it. Really the hopes of doing it who we are and how we are using it. Really the hopes of doing it this way is that while in Texas, a municipality can create a TRZ, these revenues can be assigned to virtually in Texas, a municipality can create a TRZ, these revenues can be assigned to virtually any other entity that can then pursue the development of the project. That is important when transportation projects cross pursue the development of the project. That is important when transportation projects cross jurisdictional lines. This can be from an entity or region that wants to develop a project that crosses various jurisdiction from an entity or region that wants to develop a project that crosses various jurisdiction lines. We want to be able to utilize an entity that can do that type of project. That is my thinking to utilize an entity that can do that type of project. That is my thinking behind our agenda. We will be talking about regional mobility issues in the state of Texas. We will talk about be talking about regional mobility issues in the state of Texas. We will talk about this particular one. I will highlight some of the projects. I will breeze through the first three bullets really quickly. Then some of the projects. I will breeze through the first three bullets really quickly. Then we will get into TRZ number two. This is so that you can understand how we are using it. With that two. This is so that you can understand how we are using it. With that in mind, the RMA here in the state of Texas is a political in the state of Texas is a political subdivision of the state. As you all likely no, that is a fancy way of saying we are a separate you all likely no, that is a fancy way of saying we are a separate governmental body. We are tasked solely with the ability to with the ability to pursue and develop transportation projects. That is a defining term within the statute that creates RMA. That is a defining term within the statute that creates RMA. That term is being broadly defined. It includes toll and non-toll rail, pedestrian bike paths, parking facilities, crossings, paths, parking facilities, crossings, virtually anything that creates or relates to mobility. If you are to mobility. If you are thinking about parking, hiking, biking, everything in between; we can be involved in not. We are in between; we can be involved in not. We are very narrowly tailored as an entity to receive transportation projects. This is really all-inclusive as it relates to receive transportation projects. This is really all-inclusive as it relates to mobility. This particular RMA, at last count there were like say maybe nine or 10 different ones throughout the last count there were like say maybe nine or 10 different ones throughout the state of Texas. This one was created in El Paso back in 2007. Excuse me. We have a Board of was created in El Paso back in 2007. Excuse me. We have a Board of Directors of seven. The chair is appointed by the governor and there are six directors appointed by the city Council. The appointed by the governor and there are six directors appointed by the city Council. The jurisdictional boundary is the city of El Paso. The city created us. Because of the nature of El Paso. The city created us. Because of the nature of RMA, we are designed such that we can cross jurisdictional boundaries and operate outside of the jurisdiction that we created. that we can cross jurisdictional boundaries and operate outside of the jurisdiction that we created. That is really helpful in an area like El Paso where area like El Paso where we are along a state and international boundary. That means by statute, we can operate into Mexico. We can build and international boundary. That means by statute, we can operate into Mexico. We can build a roadway that crosses. Think about Interstate 10 or something along those lines. We can also operate into Mexico. That is Interstate 10 or something along those lines. We can also operate into Mexico. That is where you would think about a port of entry for example. We can do those types of things. port of entry for example. We can do those types of things. We have flexible organization. We are however an however an unfunded agency. That is really important. We have no taxing authority. We have no ability to create a RMA. We important. We have no taxing authority. We have no ability to create a RMA. We can utilize any funding source that any other entity that has created or generated. That is an important point as any other entity that has created or generated . That is an important point as we get into number two. The history for this agency, since 2007 we have been involved in expenditures over $1 The history for this agency, since 2007 we have been involved in expenditures over $1 billion. We will talk about some of the larger projects that we have been involved in that get us to this of the larger projects that we have been involved in that get us to this tab. One of the important points about RMA, we are very flexible. We can do toll roads and bridges and all about RMA, we are very flexible. We can do toll roads and bridges and all of the things that you see there. Another really important distinction is that we can be involved in any part there. Another really important distinction is that we can be involved in any part of a project. What do I mean by that? Transportation projects include everything from planning, financing, I mean by that? Transportation projects include everything from planning, financing, construction and actual operation and maintenance. We can do any piece We can do any piece of that, any piece or the whole of it. That means when you look at the projects, we have been the whole of it. That means when you look at the projects we have been involved in, we have served as the financing arm for one particular project. Everybody else took care of the rest of the financing arm for one particular project. Everybody else took care of the rest of the project. In another project, we provided the design plans. We stepped away as the text out constructive the change. In provided the design plans. We stepped away as the text out constructive the change. In another project we will do everything from the planning all the way to the financing from the planning all the way to the financing through the construction and operation as well. In the bike share program, we had to operate that. Very flexible, that will well. In the bike share program, we had to operate that. Very flexible, that will help us later as we get into our TRZ example. I will burn through some of these to give you an into our TRZ example. I will burn through some of these to give you a feel of what we are able to do. I hope that this highlights how you in your area could utilize the TRZ. It does not have to highlights how you in your area could utilize the TRZ. It does not have to be the entity that creates it, it could be third parties like us. Our first it could be third parties like us. Our first project , I briefly mentioned this when we talked about how the RMA can serve as a financial arm. In this when we talked about how the RMA can serve as a financial arm. In this project we issued $239 in bonds by using a pledge of revenues from [ Indiscernible]. That was bonds by using a pledge of revenues from [ Indiscernible]. That was the first project. Out of the chute, we were a finance arm. Subsequent to that, we entered into an agreement the chute, we were a finance arm. Subsequent to that, we entered into an agreement with El Paso County. The county implemented an optional vehicle registration. Every year, there is an additional fee that is tacked implemented an optional vehicle registration. Every year, there is an additional fee that is tacked onto your registration fees here in El Paso County. That $10 goes into a separate bucket. The vehicle registration bucket, that El Paso County. That $10 goes into a separate bucket. The vehicle registration bucket, that bucket is assigned to the RMA. We went out and we went out and we used that pledge for $107 million. We are developing the projects that you see there in the color red. This million. We are developing the projects that you see there in the color red. This is on behalf of the County. Some of them were designing. Some of them we were designing and constructing. Some of Some of them were designing. Some of them we were designing and constructing. Some of them, we were simply providing the funding. Here is a closer look at some of the projects that we are doing funding. Here is a closer look at some of the projects that we are doing for them. Again, there is flexible organization. You can do whatever it is you are looking for. On the city side, organization. You can do whatever it is you are looking for. On the city side, the city went out and got some construction funds for a streetcar project. This [ Indiscernible - low - volume]. some construction funds for a streetcar project. This [ Indiscernible - low - volume]. The city designed the program and handed the design times over to us. We handed the design times over to us. We did the construction. We have also done aesthetic improvements. We own and operate a bike share program. Lastly of interest, I done aesthetic improvements. We own and operate a bike share program. Lastly of interest, I think mostly to me, we have partnered with the state of Texas, the Parks and wildlife Department in order to design partnered with the state of Texas, the Parks and wildlife Department in order to design and construct a tramway. This is to replace an existing tramway in El Paso. to replace an existing tramway in El Paso. Again, anything is related to mobility is relevant. I am hoping that this shows you the flexibility of is relevant. I am hoping that this shows you the flexibility of this organization. The idea is that the third party can access TRZ generated revenue for construction of the third party can access TRZ generated revenue for construction of projects. That is the most important point that you can come away with from the previous slide. So anyhow, we are going to talk specifically about transportation with from the previous slide. So anyhow, we are going to talk specifically about transportation into number two. Rafael has covered a lot of this. You all hopefully will have access to these slides, I believe that a lot of this. You all hopefully will have access to these slides, I believe that you will. This is really just intended to provide a very general description of what TRZ's are. The second intended to provide a very general description of what TRZ's are. The second slide is a simplified example that I use when I explain how the TRZ works. The city in our case that I use when I explain how the TRZ works. The city in our case would receive $100 from a particular parcel and 2021. This would be considered the parcel and 2021. This would be considered the base created for the TRZ in 2021. And 2022, if you created 2021. And 2022, if you created $110 , $110, the $100 goes to the city as it did in the prior year. That extra $10 goes to the city as it did in the prior year. That extra $10 goes into that incremental TRZ fund. That is really what we are talking about. There is incremental revenue. That is the TRZ. is really what we are talking about. There is incremental revenue. That is the TRZ. That fund could then be used as a repayment source for debt incurred on the transportation project to realize the as a repayment source for debt incurred on the transportation project to realize the TRZ. This is a simplified example of how TRZ works. Rafael's explanation is more detailed. It is more useful to of how TRZ works. Rafael's explanation is more detailed. It is more useful to you but that is really how we are using we are using them. So, background, there was a company mobility plan put together between the city of El Paso, the RMA and a company mobility plan put together between the city of El Paso, the RMA and the [ Indiscernible]. We agreed on about $1 billion of transportation projects that were really important to us. They were on about $1 billion of transportation projects that were really important to us. They were above and beyond the existing MPO planning documents. We agreed that we were going to collectively pursue the billion dollars for planning documents. We agreed that we were going to collectively pursue the billion dollars for upcoming projects. Each entity agreed to do different things. One of the projects and there was the energy project. That to do different things. One of the projects and there was the energy project. That is what we are going to talk about. That has been funded by TRZ number two. Each entity had agreed talk about. That has been funded by TRZ number two. Each entity had agreed to do certain things. The city of El Paso agreed to provide of El Paso agreed to provide local participation through the creation of transportation and reinvestment zones. At least one or maybe transportation and reinvestment zones. At least one or maybe a couple were depending on what was necessary after the study was completed. Again, this is a slight. $1 billion what was necessary after the study was completed. Again, this is a slight. $1 billion worth of projects were under the [ Indiscernible]. What the city agreed to do was to provide $70 million plus [ Indiscernible]. What the city agreed to do was to provide $70 million plus the financial interest cost for three specific projects. The way that they did that was by creating the specific projects. The way that they did that was by creating the transportation reinvestment number one in 2008. I have a note there. Rafael made note of this I have a note there. Rafael made note of this as well. TRZ actually rescinded back in 2010. The reason for that was there was some continuity issues. I want back in 2010. The reason for that was there was some continuity issues. I want to say we were the first if not one of the first if not one of the first transportation reinvestment projects in the state. There was a learning curve. What we realize later was that There was a learning curve. What we realize later was that it broke continuity going through several sections of the federal reservation here near Fort bliss. So, we went back and we sections of the federal reservation here near Fort bliss. So, we went back and we rescinded it. We created two separate TRZ's. We did this at the same TRZ's. We did this at the same time. The intent was that number two would provide partial funding for number two would provide partial funding for an interchange and direct connectors. The TRZ would serve TRZ would serve financing, as a finance entity, excuse me, a financing excuse me, a financing tool for transmountain Northeast projects. So that is what the city agreed to do, create number two to provide partial So that is what the city agreed to do, create number two to provide partial funding for the interchange. This is the interchange, the portions that were funded by number two. There were three initial direct the interchange, the portions that were funded by number two. There were three initial direct connectors. In the end, the financing was sufficient to allow was sufficient to allow us to complete the design for the entire interchange. If you were to fly out there today, you would see for the entire interchange. If you were to fly out there today, you would see the entire interchange completed, not just these first that were initially funded by these first that were initially funded by TRZ number two. Here is detail on that particular project. You can get a feel of what we were after detail on that particular project. You can get a feel of what we were after at that time. What was unique about it is that at the time, that is when the era, the stimulus funds about it is that at the time, that is when the era, the stimulus funds were coming out. So, we were able to able to create what we were referring to as a funding cocktail. It took three different funding sources to complete the interchange. We as a funding cocktail. It took three different funding sources to complete the interchange. We had 96 million coming in from letter either are that area. I am assuming that this example will come into, letter either are that area. I am assuming that this example will come into, it will serve as an example for us in the future. This is because for us in the future. This is because of the transportation funding that we helped to see coming down from the federal side. 96 million came from that. we helped to see coming down from the federal side. 96 million came from that. 15 million came from a separate coordinated board infrastructure federal fund that was available to border communities throughout the country. And coordinated board infrastructure federal fund that was available to border communities throughout the country. And then there were $30 million that made up the rest. That was from a state infrastructure bank loan that made up the rest. That was from a state infrastructure bank loan that was repaid with TRZ revenues. Let me tell you how that works. Actually, first, here is the TRZ number two. This me tell you how that works. Actually, first, here is the TRZ number two. This thing is huge as you can see. El Paso is a city of over 600,000 people. This see. El Paso is a city of over 600,000 people. This encompasses the entirety of the city. You have a mountain center. This You have a mountain center. This is why you see the white. The white to the right is the military reservation. Now, this zone has multiple white. The white to the right is the military reservation. Now, this zone has multiple corridors and it is really quite a long corridor. It generates a lot of revenue. That is what that a long corridor. It generates a lot of revenue. That is what that looks like. This is how we actually put it together. This is really I think somewhat unique. So again, the we actually put it together. This is really I think somewhat unique. So again, the city of El Paso created number two. They assigned those revenues to the regional mobility authority. We went with that pledge two. They assigned those revenues to the regional mobility authority. We went with that pledge to the Texas state infrastructure bank and for and for this one, we were the first entity to go out and issue debt with all of these. We were the first entity to go out and issue debt with all of these. We were the first ones at the door explaining what the city had done, what we were going to continue to do. We actually what the city had done, what we were going to continue to do. We actually borrowed $30 million from the state infrastructure bank. Again, that was using the pledge from the city regarding incremental revenues to infrastructure bank. Again, that was using the pledge from the city regarding incremental revenues to repay it. What we were also able to do is part of the stimulus package, able to do is part of the stimulus package, this included the build America Bonds. What we were able to do is package that $30 million own as a build What we were able to do is package that $30 million own as a build America Bond. At the time, with those, what you could do is you could pull down a subsidy. If you with those, what you could do is you could pull down a subsidy. If you paid, whatever you paid in interest in any particular year for a build America Bond, you in any particular year for a build America Bond, you would receive back I think it was 35% of your interest paid from the federal government. What we agreed to do was 35% of your interest paid from the federal government. What we agreed to do in this particular project was split that 35% return half of that that 35% return half of that went to the RMA as an operating expense and the other half went to pay down the debt an operating expense and the other half went to pay down the debt sooner. This was a nice, innovative tweak to an already innovative tweak to an already innovative program. An interest rate for the state of the structure bank was 4.95. At the time, that was the state of the structure bank was 4.95. At the time, that was really good. But we were required to have the same general fund is the guarantee. That is an important .2. required to have the same general fund is the guarantee. That is an important .2. This is important. People did not know how this know how this would work. They did not know what we thought it was going to do based on our what we thought it was going to do based on our projections. The bank did require a general fund guarantee from the city of El Paso. The terms included inter-zoning for a general fund guarantee from the city of El Paso. The terms included inter-zoning for the first couple of years. That is also important. You have to remember a TRZ generates is also important. You have to remember a TRZ generates revenue once the project, the transportation project is complete and the values on either side of that transportation reinvestment zone transportation project is complete and the values on either side of that transportation reinvestment zone has begun to increase. That is when the incremental revenues really start to when the incremental revenues really start to jump up. The early years are going to be tight. That is why you need the general fund to help you going to be tight. That is why you need the general fund to help you or you need to get help in the early years. We were able to get interest only in the first couple in the early years. We were able to get interest only in the first couple of years. That was able to get us across the line for that. We talked a little bit about that. That get us across the line for that. We talked a little bit about that. That is how we structured it. Really, this is an interesting approach. We have gotten a lot of really good feedback Really, this is an interesting approach. We have gotten a lot of really good feedback over the years for this particular structure. It really helped us get one of our priority projects up and running. I structure. It really helped us get one of our priority projects up and running. I thought I would mention also as Rafael mentioned, TRZ's can fund multiple projects. Number two was set up to Rafael mentioned, TRZ's can fund multiple projects. Number two was set up to fund three per secular projects. We talked a little bit about the first one, we talked a little bit about the first one, we are at 30 million. We also barred an additional 20 million from the state infrastructure bank for that one. That also barred an additional 20 million from the state infrastructure bank for that one. That was completed as well. Finally, we borrowed $6 million for borrowed $6 million for the widening. That was a mistake, that last one actually came from number three. I apologize for that. But the that last one actually came from number three. I apologize for that. But the important point is that you can borrow, you can use a borrow, you can use a TRZ for multiple projects. That is an important point. And further, along is an important point. And further, along that line, recently, the city of El Paso had a project that they really wanted El Paso had a project that they really wanted to participate in. That was the Interstate 10 widening project. This was an Interstate 10 widening project. This was a good project. There was about a $170 million worth of cost. This widens Interstate 10 down to major energy a $170 million worth of cost. This widens Interstate 10 down to major energy in Mesa. The city of El Paso wanted to contribute $30 million. We looked back to the number two specifically. El Paso wanted to contribute $30 million. We looked back to the number two specifically. Just as I mentioned in the prior slide, number two was created the interchange. However, the revenues are strong. prior slide, number two was created the interchange. However, the revenues are strong. The projections came in lower than the actual revenues. There is quite a bit of capacity the actual revenues. There is quite a bit of capacity in the revenues against the state infrastructure bank loan. We went back to this and we asked if we could state infrastructure bank loan. We went back to this and we asked if we could pull another $30 million loan that is being repaid from number two. The is being repaid from number two. The numbers worked out. They were comfortable. Now since we are going back a second time on this particular. Now since we are going back a second time on this particular TRZ that we have gone back on with them; they are familiar with the tool. They know how it works. back on with them; they are familiar with the tool. They know how it works. They are comfortable with it. The projections are much lower than actuals. They were able to go out with another $30 projections are much lower than actuals. They were able to go out with another $30 million loan which we closed on last month. This is interesting. You will have to remember, when you do something like last month. This is interesting. You will have to remember, when you do something like this, when you execute your debt instrument, in our case, it deals with the state infrastructure instrument, in our case, it deals with the state infrastructure bank. These are the owners of the debt. They own the revenue. We had to go back and get the consent the debt. They own the revenue. We had to go back and get the consent before we issued another debt. We went there in both instances. This is something you might went there in both instances. This is something you might want to keep in mind. Along those lines, our statutes allow those lines, our statutes allow for different percentages of the revenues coming to you. What I mean by that is coming to you. What I mean by that is the revenue in the example that I gave you I gave you of $100 and the $10 going into the fund; you have the ability when you create the TRZ into the fund; you have the ability when you create the TRZ to [ Indiscernible ]. You could go anywhere from 10% to 50%, whatever you would like to do. This You could go anywhere from 10% to 50%, whatever you would like to do. This is you do not want to assign 100% of the revenue. You have that ability. This is an interesting aside assign 100% of the revenue. You have that ability. This is an interesting aside as well. Here is another interesting one. So,one. So, the town of Horizon city is a smaller community outside of the city of El Paso. They have created there is a smaller community outside of the city of El Paso. They have created their own TRZ out there. And what we did with them was a little bit unique. It was a little bit we did with them was a little bit unique. It was a little bit different than what we did with El Paso.El Paso. They wanted to develop a project called Eastlake Boulevard with El Paso County. The way we structure that one was project called Eastlake Boulevard with El Paso County. The way we structure that one was because there TRZ was much smaller and the revenue on that is much smaller as well; the County of El Paso and the revenue on that is much smaller as well; the County of El Paso agreed to fund the funds for the development of Eastlake. Horizon city has in effect pledged there TRZ revenues through for the development of Eastlake. Horizon city has in effect pledged there TRZ revenues through the RMA to repay the County of El Paso over time. The county is serving as an infrastructure County of El Paso over time. The county is serving as an infrastructure bank. They are fronting it. Horizon city is paying the back city is paying the back over time. Because the regional mobility Authority has such a strong relationship with the county and developing a lot of mobility Authority has such a strong relationship with the county and developing a lot of projects for them, we are actually serving as a conduit between the two entities. We have got the agreement and the serving as a conduit between the two entities. We have got the agreement and the County agreed to fund the RMA to construct Eastlake. Horizon agreed to pay the to construct Eastlake. Horizon agreed to pay the trans-A's and back for the portion of the project. Just another way of using a TRZ in order of the project. Just another way of using a TRZ in order to get a project done is this. They are very flexible. You really start to think about how to use is this. They are very flexible. You really start to think about how to use them and achieve some of your goals. Goals. So last slide here. I think I am just about to run out of time. So, we have some lessons think I am just about to run out of time. So, we have some lessons learned. You have got to include your financial team in the development of TRZ. This make sense. Early on, they were your financial team in the development of TRZ. This make sense. Early on, they were mainly driven by engineers with some planning folks in the room. You need the right consultants to identify projections. You some planning folks in the room. You need the right consultants to identify projections. You have got to be conservative on those. You really need to make sure that you are generating more revenue than the those. You really need to make sure that you are generating more revenue than the debt service requires. This is on all fronts. Right? all fronts. Right? The public generally, there is not a lot of pushback. But, when you start rolling out the idea, the concept not a lot of pushback. But, when you start rolling out the idea, the concept of a TRZ, everybody seems to think of a new tax. You have to be clear that this is not a think of a new tax. You have to be clear that this is not a new tax. This is a parsing of the existing real estate taxes that are going to be coming at us. parsing of the existing real estate taxes that are going to be coming at us. That is an important point is well. I touched on well. I touched on this one. Revenue is going to be minimal. You have got to structure your debt accordingly or have some sort to be minimal. You have got to structure your debt accordingly or have some sort of other funding source to cover those. You those. You need to be conservative. I mentioned it but it is worth mentioning one more time. You have got to be conservative. it but it is worth mentioning one more time. You have got to be conservative. So, I am happy to answer any questions. I am not sure that we are doing that now or later. I any questions. I am not sure that we are doing that now or later. I am hoping that this was helpful, and I am happy to answer questions.
Raymond, that was great. We have two and I am happy to answer questions.
Raymond, that was great. We have two question specifically about your presentation. [ Indiscernible] wants to know, do Indiscernible] wants to know, do regional bull mobility authorities work with NGOs? Can you explain that working relationship?
Yes. When you think about NPO with NGOs? Can you explain that working relationship?
Yes. When you think about NPO and the way that I normally describe it out here in El Paso is that this is the planning agency. They describe it out here in El Paso is that this is the planning agency. They are not tasked with the development of projects. They are there for the funds and the planning process. This is made of projects. They are there for the funds and the planning process. This is made up of a whole bunch of implementing agencies. The RMA is an implementing agency. When you look at the governing implementing agencies. The RMA is an implementing agency. When you look at the governing board, this includes the cities, the County, the state, the DOT, the County, the state, the DOT, the RMA could serve. We do not in our RMA and in our NPO. There in our RMA and in our NPO. There are RMA's that are actually owning the governing board of the NPO. We monitor and participate and NPO. We monitor and participate and cooperate with them. We were just meeting with them this morning. We are not an active member of their just meeting with them this morning. We are not an active member of their governing board. There is a whole slew of different reasons. You could have a different conversation about that. Bottom line, whole slew of different reasons. You could have a different conversation about that. Bottom line, we are an implementing agency as part of the NPO but not otherwise.
Great, our next question, part of the NPO but not otherwise.
Great, our next question, and this dealt with your slide 17. Philip wants to know, are tax 17. Philip wants to know, are tax base year basis adjusted for inflation or other project influence in the season? That was the one where you show inflation or other project influence in the season? That was the one where you show the $100 and it increases to $110.
I got you. So, let me see if I can sift through $110.
I got you. So, let me see if I can sift through that question. This is the basis adjusted for current inflation. They are not. So, whatever is adjusted for current inflation. They are not. So, whatever is generated by your -- we have the El Paso Central appraisal District. Whatever revenue is generated from one your to have the El Paso Central appraisal District. Whatever revenue is generated from one your to the next, that is what goes into the TRZ project, no adjustment.
Great. Dan wants to know if you into the TRZ project, no adjustment.
Great. Dan wants to know if you are issuing TRZ bonds from tax increments, what is a typical debt service coverage. Is it 125%? Is it 150? 175? What would be a typical debt service coverage? Is it 125%? Is it 150? 175? What would be a typical amount?
That is a good question. I do not know of anyone who has issued a bond off of it. question. I do not know of anyone who has issued a bond off of it. Now what we did is we went to the state infrastructure bank and we packaged that loan as they build America went to the state infrastructure bank and we packaged that loan as they build America Bond. But, the sole owner of the bond that we issued, the build America Bond that we issued was the state the bond that we issued, the build America Bond that we issued was the state restructure bank. We were able to work solely work solely with the [ Indiscernible]. It is a good question. I do not know that anybody have the answer yet. It is a good question. I do not know that anybody have the answer yet. I have not seen a TRZ be issued as the repayment source for a bond. In fact, I will ask Rafael be issued as the repayment source for a bond. In fact, I will ask Rafael and his research if he has seen anyone issue bonds yet.
You are right Raymond. I have not seen anyone issue bonds yet.
You are right Raymond. I have not seen many.
Okay, thank you.
And the last question and then we will move on to here from Utah.
And the last question and then we will move on to here from Utah; Joseph wants to keep you honest. Has any TRZ project been audited yet? If so, were there any issues?
Good Has any TRZ project been audited yet? If so, were there any issues?
Good question. They all have. The, so each of the projects that we have identified that have received TRZ dollars, so each of the projects that we have identified that have received TRZ dollars, they are federally funded. Each of them has been, they have gone through the usual federal reviews and audits that are delegated down to through the usual federal reviews and audits that are delegated down to the states. There were a number of audits done on us. We also, as a governmental entity, we have to number of audits done on us. We also, as a governmental entity, we have to be audited each year. As you can imagine, some of these projects are pretty big. They go into the single audit can imagine, some of these projects are pretty big. They go into the single audit each year. They have been reviewed on either side a couple of times each. And thankfully, we have been able to on either side a couple of times each. And thankfully, we have been able to keep our numbers straight.
All right, great. So now we are going right, great. So now we are going to turn and hear from the regional Council implementation and their use of TRZ. After that, we are going to the regional Council implementation and their use of TRZ. After that, we are going to have time for general questions. And Matt, we are going to deal with your question about states that are not And Matt, we are going to deal with your question about states that are not currently eligible during that conversation. So, take it away Andrew.
Okay, thank you very much. I am really happy to take it away Andrew.
Okay, thank you very much. I am really happy to be with all of you today. I know that this is a long webinar. Thanks to all of you for hanging I know that this is a long webinar. Thanks to all of you for hanging in there with us. I think the presentations so far have really been terrific and helpful. I will note, I am the presentations so far have really been terrific and helpful. I will note, I am from Utah. I work in Utah. I grew up in New York City. And then I worked in transportation in Chicago I grew up in New York City. And then I worked in transportation in Chicago for several decades. Now I work in Utah. I am actually coming to you in this presentation from a camper work in Utah. I am actually coming to you in this presentation from a camper on the coast of Oregon. So, I hope that you can hear me okay. I am going to look to our I hope that you can hear me okay. I am going to look to our friends who are moderating this webinar to help me with advancing slides as we go through this. So, I do just to help me with advancing slides as we go through this. So, I do just want to note that this was mentioned before. In Utah, we have a different situation than what Raymond described in Texas. mentioned before. In Utah, we have a different situation than what Raymond described in Texas. We have not actually implemented, we have not done any TRZ's yet. This is in Utah. Our story is more about the process of getting the implementing This is in Utah. Our story is more about the process of getting the implementing legislation passed. That is what we have done so far. We are looking ahead. Those of you that do not have done so far. We are looking ahead. Those of you that do not have TRZ authorizing legislation in your state which is everybody except for Texas and Utah, perhaps what I talk about today can which is everybody except for Texas and Utah, perhaps what I talk about today can be helpful as you think about how we could actually take the steps to get legislation passed that would even how we could actually take the steps to get legislation passed that would even authorize this tool. Let's go to the next slide. I am joined the next slide. I am joined today by Vance Becker. It was mentioned before. I think Raymond noted before that when you put a TRZ together, was mentioned before. I think Raymond noted before that when you put a TRZ together, you want to have your finance team involved. When you develop a legislation to team involved. When you develop a legislation to authorize TRZ, you want to have your finance team involved as well. It is one thing to have the theory have your finance team involved as well. It is one thing to have the theory of the tool, it is another thing to have folks who actually are putting thing to have folks who actually are putting these deals together to be able to advise you closely on what is going to work and what is not going to advise you closely on what is going to work and what is not going to work as you develop the structure for this. We had help doing this legislation. I will say as one overarching point, if any of you are doing this legislation. I will say as one overarching point; if any of you are thinking about how to get started on this, on this, it is collaborative. It must be collaborative. It must be cooperative as well. I think that is actually an object of collaborative. It must be cooperative as well. I think that is actually an object of creating TRZ's. It is to establish collaboration and cooperation among multiple entities. And I would also say that it is establish collaboration and cooperation among multiple entities. And I would also say that it is an imperative, political, and statutory process imperative in order to have the cities, the counties, the transportation agencies, the finance authorities, imperative in order to have the cities, the counties, the transportation agencies, the finance authorities, you know, the school districts if they are affected by they are affected by tax revenues. All of the parties might be impacted. They could be benefited or burdened by a TRZ. They should be might be impacted. They could be benefited or burdened by a TRZ. They should be involved from the get go as the concept is being developed. It is a tool. It is not a mandate to bring all of the parties It is a tool. It is not a mandate to bring all of the parties to the table. I will just also note, you have got to have a legislative champion. I mean, having a legislator also note, you have got to have a legislative champion. I mean, having a legislator that grasps this concept and is willing to push willing to push it forward, we have one Senator, many folks were involved. We have one Senator, Wayne Harper, he was the sponsor both many folks were involved. We have one Senator, Wayne Harper, he was the sponsor both of these pieces of legislation I will talk about. He is not only the chair of the transportation committee here in will talk about. He is not only the chair of the transportation committee here in Utah, he is also, in his day job, he is a city, community, and economic development were director. That day job, he is a city, community, and economic development were director. That expertise has really helped. Let's go to the next slide please. So briefly, Utah's story is really one of growth. You to the next slide please. So briefly, Utah's story is really one of growth. You know, I imagine that people know this. The west is growing really fast. We were the fastest growing state in know this. The west is growing really fast. We were the fastest growing state in the nation over the past decade. Our population is projected to continue to increase rapidly in the decades ahead. And you Our population is projected to continue to increase rapidly in the decades ahead. And you may, those of you that have visited Utah, you may think of it for the snowy mountains and the red rock visited Utah, you may think of it for the snowy mountains and the red rock deserts and the vast open spaces. That is all true. If you click one more time on the slide, it is That is all true. If you click one more time on the slide, it is actually, this may surprise you, it is the eighth most urban state in the nation. This is according to census data. is the eighth most urban state in the nation. This is according to census data. This means that the fast growing population, the majority of it is consolidated in a pretty narrow population, the majority of it is consolidated in a pretty narrow area bounded by the mountains on one side and the lakes on the one side and the lakes on the other side. This is along the front. That is where my organization, the regional Council, which is a Metropolitan planning the front. That is where my organization, the regional Council, which is a Metropolitan planning organization comes in one planning for transportation and development in that narrow area. So, let's go to the next slide. for transportation and development in that narrow area. So, let's go to the next slide. Of course, transportation is key to that. You know, with all of that growth, we have significant transportation needs. I am that. You know, with all of that growth, we have significant transportation needs. I am actually really happy and quite proud to say that all of Utah's transportation to say that all of Utah's transportation agencies are [ Pause ] the cities and counties, they have all collaborated together to create what we call Utah's the cities and counties, they have all collaborated together to create what we call Utah's unified transportation plan. For those transportation people out there, on this call; this consolidates all of the regional transportation and long-range people out there, on this call; this consolidates all of the regional transportation and long-range transportation plans. They are all developed together into one unified transportation plan. For our folks, here is together into one unified transportation plan. For our folks, here is a quote. This process of developing these transportation plans in Utah has been collaborative and comprehensive demonstrating the principle that collaboration these transportation plans in Utah has been collaborative and comprehensive demonstrating the principle that collaboration brings superior results. This serves as a best practice nationally. Thank you U.S. DOT for that recognition. These a best practice nationally. Thank you U.S. DOT for that recognition. These TRZ's are really one tool that we have we have created in order to help us implement what the plan contemplates as being needed. So now, let's go to the us implement what the plan contemplates as being needed. So now, let's go to the next slide. You know, this is not however just not however just about transportation. This is a fundamental point that I would like to drive home to everybody here. A TRZ, a fundamental point that I would like to drive home to everybody here. A TRZ, a transportation reinvestment zone is not just a tool about building transportation. just a tool about building transportation. This, by its very definition gets to the relationship between transportation and land-use and housing and economic development. And these tools are perfect for this. This is land-use and housing and economic development. And these tools are perfect for this. This is because they actually help contemplate what is going to be happening in that growth and recognize that by coordinating land-use with is going to be happening in that growth and recognize that by coordinating land-use with transportation, you can develop centered and terrific communities around transportation. This actually can be super helpful as you are and terrific communities around transportation. This actually can be super helpful as you are absorbing growth and capitalizing on the growth. So, what you are seeing on this slide now is what we growth. So, what you are seeing on this slide now is what we call our choice vision. This is a broader vision, not just transportation but land-use, open space, economic development at a broader vision, not just transportation but land-use, open space, economic development at Cetera. That is really the broad picture of where we are headed over the period between picture of where we are headed over the period between now and 2050. What you are seeing right here is the heart of the region, Salt Lake County, the most are seeing right here is the heart of the region, Salt Lake County, the most populous county. I will come back to this image later in the presentation. Okay so now, next slide, I said it to this image later in the presentation. Okay so now, next slide, I said it is not only about transportation but it is very much also, one of the cores is the fact about transportation and it is very much also, one of the cores is the fact about transportation and the need to generate revenue for transportation. So, in Utah, we have you know, we have this $100 billion in project transportation. So, in Utah, we have you know, we have this $100 billion in project cost that we anticipate between now and 2050 to develop the transportation system that we need. Now, the overwhelming majority of and 2050 to develop the transportation system that we need. Now, the overwhelming majority of that, we anticipate having it from funding sources that are already in place today. We are planning for new revenue from funding sources that are already in place today. We are planning for new revenue and we need additional revenue as noted in the great and red parts of the doughnut that you are seeing in noted in the great and red parts of the doughnut that you are seeing in front of you. That is where the TRZ tools come in. I should also note and this was alluded to already by Raymond. A TRZ is not should also note and this was alluded to already by Raymond. A TRZ is not a way to fund the entirety of a train frustration infrastructure project. This is one element that I think could of a train frustration infrastructure project. This is one element that I think could be utilized along with other more traditional revenue sources. There is direct traditional revenue sources. There is direct tax revenue. Typically, there are user fees. A TRZ is one potentially one element that could be a piece of user fees. A TRZ is one potentially one element that could be a piece of the pie in funding for transportation. Okay, next slide. With that backdrop, what I am going to do is I'm going Okay, next slide. With that backdrop, what I am going to do is I'm going to talk about the two elements or the two statutes that we have passed to authorize two different tools. One is or the two statutes that we have passed to authorize two different tools. One is the transportation reinvestment zones. These are the TRZ and the other is the letter H TRZ. The letter H stands are the TRZ and the other is the letter H TRZ. The letter H stands for housing. Both of these were passed by the legislature. The first one and next slide in the transportation reinvestment were passed by the legislature. The first one and next slide in the transportation reinvestment zone. This means an area created by two or more public agencies by local agreement. by two or more public agencies by local agreement. They capture increase property for sales tax revenue generated by a transportation infrastructure project. The basic idea project. The basic idea of a transportation reinvestment zone is that by building an infrastructure project, you create that by building an infrastructure project, you create increased development and value in proximity to that project. This generates additional revenue. This generates value in the land, property proximity to that project. This generates additional revenue. This generates value in the land, property tax revenue, additional economic activity and sales tax revenue that can be captured for a portion, it does not have to sales tax revenue that can be captured for a portion, it does not have to be all of it, a portion of that can be captured and reinvested to pay for the cost of the project of that can be captured and reinvested to pay for the cost of the project or associated costs. Next slide. Now comes the desired outcomes of actually having one of these. It is what we Now comes the desired outcomes of actually having one of these. It is what we have been talking about here. It is about generating additional revenue for road and transit projects, stimulating well-planned development that is about generating additional revenue for road and transit projects, stimulating well-planned development that is coordinated with the transportation. It deals with encouraging collaboration across city and county boundaries. So think about these projects as not with encouraging collaboration across city and county boundaries. So think about these projects as not being limited to one jurisdiction, one the polity; but often cutting across boundaries. And then, just as well, coordination is one the polity; but often cutting across boundaries. And then, just as well, coordination is not just with the municipalities but also it is directly between the municipalities and the also it is directly between the municipalities and the transportation agencies. Everybody needs to be on the same page with the project and the development and how it is going on the same page with the project and the development and how it is going to be paid for and how the project the project moves forward. And that gets back to my point before. As you are developing legislation, you have got to have all to my point before. As you are developing legislation, you have got to have all of the parties involved. Okay, next slide. This is going to be an overview of the process used statutorily in order slide. This is going to be an overview of the process used statutorily in order to develop a TRZ. Basically, you start by defining the parties to the TRZ, the start by defining the parties to the TRZ, the parties to the TRZ enter a local agreement. Then you define the transportation need and proposed improvement. You define the a local agreement. Then you define the transportation need and proposed improvement. You define the boundaries of the zone. That is around the transportation project. And then you establish a base year to calculate the is around the transportation project. And then you establish a base year to calculate the increase of property tax revenues within the zone. This can be captured. Venue establish terms for sharing any increase in property the zone. This can be captured. Venue establish terms for sharing any increase in property or sales tax revenue within the zone. And again, all of this zone. And again, all of this is established pursuant to an interlocal agreement between all of the parties. All right. Next slide, we will go into interlocal agreement between all of the parties. All right. Next slide, we will go into a little bit of the details here. The first part is again defining the transportation need and zone in the agreement. here. The first part is again defining the transportation need and zone in the agreement. The first is the boundaries. Right? And you want to draw the boundaries. I am not saying you want to but And you want to draw the boundaries. I am not saying you want to but this is what is required by the statutory framework. You draw the boundaries to include the areas impacted by the transportation the statutory framework. You draw the boundaries to include the areas impacted by the transportation infrastructure project. The property or sales tax increases are anticipated. What is meant by a transportation project in the statute is tax increases are anticipated. What is meant by a transportation project in the statute is that it cannot be any project, it has to be a project that is part of the statewide long-range plan. There it has to be a project that is part of the statewide long-range plan. There has to be a regional transportation plan or a local generative plan. That defines where you can establish a TRZ around plan or a local generative plan. That defines where you can establish a TRZ around the project. The use of funds is a different question. The statutorily is a different question. The statutorily available or allowance of incremental revenue is different. That is very flexible. The funds can be used as state or revenue is different. That is very flexible. The funds can be used as state or local highways, public transit, parking facilities, capital projects and or ongoing maintenance and operations. Uses are capital projects and or ongoing maintenance and operations. Uses are very flexible. Okay, next slide. The other element to consider in establishing a TRZ is the revenue generation and sharing The other element to consider in establishing a TRZ is the revenue generation and sharing within the zone. Right? Now again, the idea is to capture incremental revenue the idea is to capture incremental revenue that is generated by the transportation infrastructure project. You build a project. There is additional economic activity. It generates additional transportation infrastructure project. You build a project. There is additional economic activity. It generates additional revenue. That can get captured. For property tax growth, you have to establish the property tax growth, you have to establish the base year. The terms for the use and sharing of the incremental revenue are relevant. All of the parties have the use and sharing of the incremental revenue are relevant. All of the parties have to agree, how much of the encounters being captured. How is it being shared and used? For sales tax, it is encounters being captured. How is it being shared and used? For sales tax, it is even more flexible. You do not even have to establish a base year. You can capture whatever percentage or portions of even have to establish a base year. You can capture whatever percentage or portions of sales tax that you want, those terms for the use of the sharing of it just have to terms for the use of the sharing of it just have to be established by the TRZ and the local agreement. And now going back to points that have already been talked about, the local agreement. And now going back to points that have already been talked about, the timing of the revenue question is essential. Typically, you build an infrastructure project, you have a majority of your is essential. Typically, you build an infrastructure project, you have a majority of your cost upfront. The value that can get captured comes later. Right? It is the incremental property value get captured comes later. Right? It is the incremental property value that increases. The sales structure, the economic activity comes later. You have this mismatch between the timing of the capital the economic activity comes later. You have this mismatch between the timing of the capital expenditure and the revenue generation. This is why I think as Raymond described before, from the very beginning, you should contemplate is why I think as Raymond described before, from the very beginning, you should contemplate pairing a TRZ with other approaches like bonding. You use that incremental revenue to pay debt service. There is narrowing like bonding. You use that incremental revenue to pay debt service. There is narrowing from a loan fund or a SIB, a state infrastructure bank or other tools to get at SIB, a state infrastructure bank or other tools to get at the mismatch. Okay? All right, next slide. We talked about this a little bit slide. We talked about this a little bit in the primer. So, you might be thinking well, we already have tax increment financing. We do that already interstate. might be thinking well, we already have tax increment financing. We do that already interstate. How is this any different? Well, there are two primary differences between the TRZ and the standard tax increment financing. For there are two primary differences between the TRZ and the standard tax increment financing. For a TIF, it is one to do your jurisdiction. A city creates a TIF in the boundaries. A TRZ is, do your jurisdiction. A city creates a TIF in the boundaries. A TRZ is, by its intention, multijurisdictional. It is governed by the interlocal agreement. Think about a project that cuts across multiple cities governed by the interlocal agreement. Think about a project that cuts across multiple cities or communities. And the idea of the TRZ agreement is that the TRZ agreement is that it will set up clear and shared governance structure found city by city. Everybody is on the same page with and shared governance structure found city by city. Everybody is on the same page with what is going to happen. It can also improve equity in the revenue generation and distribution. This is because different communities can also improve equity in the revenue generation and distribution. This is because different communities may have different impacts. There may be more of a project. One community might have more be more of a project. One community might have more stops or stations in their community. It does not necessarily make sense to have the exact Avenue capture It does not necessarily make sense to have the exact Avenue capture of percentages or distribution of revenue for the for the infrastructure investments from one entity to the next. There can be equity in the way the funding is distributed. Secondly, to the next. There can be equity in the way the funding is distributed. Secondly, a TIF is typically created by the municipality itself. Whereas with a TRZ, again, it is a set up the municipality itself. Whereas with a TRZ, again, it is a set up an interlocal agreement not just by the municipality but by the municipality but by the municipality and the transportation agencies. So that collaboration that I was talking about, it is core to the purpose agencies. So that collaboration that I was talking about, it is core to the purpose of a TRZ and the structure. If you think about it, if there is a city and a transportation agency, by If you think about it, if there is a city and a transportation agency, by having a TRZ, everything is established by agreement; it can ensure that there is alignment and by agreement; it can ensure that there is alignment and certainty on things like the project funding approach and financing. It deals with the timing of the project. It deals project funding approach and financing. It deals with the timing of the project. It deals with the design of the project, the alignment of a runway or a transit line, it Cetera. All of that can the alignment of a runway or a transit line, it Cetera. All of that can be established through the TRZ. The next slide, we will take you back again to the image that I showed The next slide, we will take you back again to the image that I showed you before of the regional vision. So again, you are looking at Salt Lake County to orient you. On your right So again, you are looking at Salt Lake County to orient you. On your right are the mountains. This gives us our water. That is where you go skiing if you come out to visit us our water. That is where you go skiing if you come out to visit us. Toward the top left is the great Salt Lake. Running right down the middle, you have Interstate 15. That is the great Salt Lake. Running right down the middle, you have Interstate 15. That is in the color red. In the dark blue, you have our commuter rail line. Now, if you look on the right, dark blue, you have our commuter rail line. Now, if you look on the right, it zooms in at a fast-growing area. This is a very fast-growing area of our region. We call it growing area. This is a very fast-growing area of our region. We call it point of the mountain. There is a 700 acre a 700-acre site there. There actually used to be, it is being moved, a state prison. This is our state prison. This to be, it is being moved, a state prison. This is our state prison. This is freeing up 700 acres of prime real estate for potential development. And what you can see if you look on prime real estate for potential development. And what you can see, if you look on the right side there, there is a dark blue line with white dots. This is to the left. On a dark blue line with white dots. This is to the left. On the right, there is a lighter and thinner blue line. That lighter and thinner blue line is a plan bus rapid and thinner blue line. That lighter and thinner blue line is a plan bus rapid transit line. This cuts right through the orange block. This orange block right in the middle, this is the 700 acres and more of anticipated development. And right in the middle, this is the 700 acres and more of anticipated development. And so what we want to do is coordinate the plan for development of that 700 acres is coordinate the plan for development of that 700 acres with a new, this does not exist yet; a new bus exist yet; a new bus rapid transit plan that runs right through the site. It cuts down and it connects up with other communities that right through the site. It cuts down and it connects up with other communities that are outside of that site both North and South. And so, this approach that we North and South. And so, this approach that we are intending for funding of this will create a TRZ will create a TRZ along the entirety of that light blue line, the new bus rapid transit that we are planning to build; and light blue line, the new bus rapid transit that we are planning to build; and all of the parties to this will be involved. You are going to have UTA as the operator of the bus will be involved. You are going to have UTA as the operator of the bus rapid transit. You have at least three cities involved. You can see some of them noted on here. We have Draper, three cities involved. You can see some of them noted on here. We have Draper, Riverton, bluff Dale, Lehigh. These are communities that go along the line. You have communities that go along the line. You have the U. involved. All of the municipalities, the taxing entities, the counties, the transportation agencies are all coming together in order to the taxing entities, the counties, the transportation agencies are all coming together in order to help determine, not just the project definition but also what is going to happen in the land use around the line. definition but also what is going to happen in the land use around the line. How will incremental revenues associated with the development be used to play for some of the costs of the project? the development be used to play for some of the costs of the project? This is over time. Okay. That touches on the TRZ. I will talk about the other tool which is touches on the TRZ. I will talk about the other tool which is again the HTRZ. The letter H stands for housing. This is the housing transit reinvestments own stands for housing. This is the housing transit reinvestments own act. The next slide sets the objective for HTRZ's. You are creating a new statute. It objective for HTRZ's. You are creating a new statute. It was just passed earlier this year. It is creating a new development tool to help address Utah's housing crisis. I year. It is creating a new development tool to help address Utah's housing crisis. I do not know if all of your states are many areas are your states are many areas are encountering this terrible pressure on housing prices and lack of availability of housing in particular housing that prices and lack of availability of housing in particular housing that is affordable. By facilitating mixed-use, multifamily and affordable housing developments within a one third mile radius of our fixed commuter multifamily and affordable housing developments within a one third mile radius of our fixed commuter rail stations or are existing and potentially new front runner stations are relevant. This potentially new front runner stations are relevant. This is about incremental value but not necessarily about generating revenue to pay for the not necessarily about generating revenue to pay for the transit line but to use, to recognize that the area around the transit line is a great place for them to recognize that the area around the transit line is a great place for the development of housing and other types of development. You can use some of that incremental value to pay for those housing of development. You can use some of that incremental value to pay for those housing costs and other associated costs. Okay. Next slide. This gets with desired outcomes for the HTRZ. Next slide. This gets with desired outcomes for the HTRZ. It all starts right in the middle box. You can see that it has encouraged mixed-use development and investment in middle box. You can see that it has encouraged mixed-use development and investment in transportation and transit. Again, that is what we are talking about. It is being able to have that development around is what we are talking about. It is being able to have that development around those transportation issues. Particularly in the case of HTRZ, it deals with commuter rail stations. What are the benefits of the case of HTRZ, it deals with commuter rail stations? What are the benefits of that higher utilization of public transit? There is more availability and affordable housing. It creates more housing. It conserves water resources There is more availability and affordable housing. It creates more housing. It conserves water resources more efficiently. This is the development. It typically uses less water per unit. It improves air quality with more people It typically uses less water per unit. It improves air quality with more people taking transit. It reduces fuel consumption and vehicle trips. There is strategic planning around transit. and vehicle trips. There is strategic planning around transit. And if jobs are located in proximity to the transit station across the region, we are increasing access to employment and proximity to the transit station across the region, we are increasing access to employment and educational opportunities. Next slide. I talked about the process for the TRZ. We have a different process for talked about the process for the TRZ. We have a different process for HTRZ. It starts with a city making a proposal, developing a proposal. Then city making a proposal, developing a proposal. Then that proposal is evaluated with a gap analysis. I will explain what I mean by that momentarily. And then, a gap analysis. I will explain what I mean by that momentarily. And then, the proposal would result with the gap analysis. These are evaluated by a committee made up specifically for that particular HTRZ gap analysis. These are evaluated by a committee made up specifically for that particular HTRZ regarding all of the relevant parties who have been affected parties who have been affected by the HTRZ. Let's talk about these elements just a little bit. Next slide. The city makes the about these elements just a little bit. Next slide. The city makes the proposal. Statutorily, the city is allowed to propose a development and they allowed to propose a development and they have to do the zoning around a front runner station. Again, this is within a one third mile radius. The around a front runner station. Again, this is within a one third mile radius. The development proposal can be a maximum of 125 acres specifically right around that front runner, that commuter rail station. It cannot of 125 acres specifically right around that front runner, that commuter rail station. It cannot just be conceptual. It has to be really complicated. Is typically a city would be working with a be really complicated? Is typically a city would be working with a developer, with a transit agency and they would actually have their plan in place and there zoning in place? they would actually have their plan in place and there zoning in place. That plan contemplates the funding and financing from a HTRZ. The proposal has to be mixed financing from a HTRZ. The proposal has to be mixed use. Think residential, commercial, complete communities around a commuter rail station. It has to average at least 50 units to communities around a commuter rail station. It has to average at least 50 units to the acre in the area contemplated. Heading back to what we talked about at the beginning of the call, Heading back to what we talked about at the beginning of the call, at least 10% of the housing has to be affordable. And now, what happens? This gets at the heart of it. has to be affordable. And now, what happens? This gets at the heart of it. If a HTRZ is set up, it up, it enables to 80% of the incremental local property tax revenue growth from the cities, counties, school districts, all the property incremental local property tax revenue growth from the cities, counties, school districts, all the property tax entities to be captured over a period of time as needed to support the cost of development in the area. a period of time as needed to support the cost of development in the area. The cost of development could be additional cost for the affordable housing. It deals with structured parking, land purchase, other additional cost for the affordable housing. It deals with structured parking, land purchase, other infrastructure issues. There are a few things to unpack here. It is up to 80%. It is not automatically 80%. few things to unpack here. It is up to 80%. It is not automatically 80%. It is whatever the city proposes, and it is actually needed to make this particular and it is actually needed to make this particular development proposal pencil, to use the development term. It has to be what is needed. A development could be done the development term. It has to be what is needed. A development could be done and developers could fund their cost without the HTRZ, without the capture of the incremental value, the toll does without the HTRZ, without the capture of the incremental value, the toll does not kick in. They have to need it to do additional density, the additional amenities, the additional affordable housing. The time need it to do additional density, the additional amenities, the additional affordable housing. The time period is up to 25 years. It all goes into making this desired community development It all goes into making this desired community development around the HTRZ happen. Okay, next slide. That proposal is put together. There is then, slide. That proposal is put together. There is then, it is provided to the Governor's office of economic opportunity. This is a state Governor's office of economic opportunity. This is a state entity here. This then contracts for an independent financial analysis. an independent financial analysis. That analysis is designed to evaluate and verify the amount of public financing and tax increment captured needed for the evaluate and verify the amount of public financing and tax increment captured needed for the proposed development. To be blunt here, we are not just talking about a giveaway for a developer. You know we are not just talking about a giveaway for a developer. You know how sometimes in communities, they are looking to get a development done in their community. They do a race to are looking to get a development done in their community. They do a race to the bottom by giving tax breaks or incentives sometimes to developers. I am not critiquing developers. I'm just saying that it or incentives sometimes to developers. I am not critiquing developers. I'm just saying that it is challenging as communities are looking to have economic development in the area. This is designed for this. You have to have economic development in the area. This is designed for this. You have to evaluate and prove that the financing and funding through a HTRZ is needed to make a desire development happen. Then and funding through a HTRZ is needed to make a desire development happen. Then that gap, the proposal and the gap analysis go to a HTRZ committee. Again, it is required by statute. gap analysis goes to a HTRZ committee. Again, it is required by statute. Each individual HTRZ, there has to be a HTRZ committee that is set be a HTRZ committee that is set up. That committee has representatives as you can see from the city and the county and the schools and the as you can see from the city and the county and the schools and the transit agency and the state DOT, the legislature, the Governor's office. You get the theme of collaboration. All of them, they the legislature, the Governor's office. You get the theme of collaboration. All of them, they are not making a discretionary decision of whether we like it or not. They are basically evaluating whether the conditions laid of whether we like it or not. They are basically evaluating whether the conditions laid out in the statute have been met. That group then essentially decides yes, they have or know they have not. But met. That group then essentially decides yes, they have or know they have not. But if it is approved then the tax increment is captured pursuant to the proposal. Now, there is something really critical that tax increment is captured pursuant to the proposal. Now, there is something really critical that I would like to highlight here in this little sentence. A tax increment is captured pursuant to the proposal. in this little sentence. A tax increment is captured pursuant to the proposal. In the case of a HTRZ, the city makes the proposal. It says, like I noted before, we the city makes the proposal. It says, like I noted before, we need up to 80% of the incremental property tax revenue from the city, from the county, from the school district, the incremental property tax revenue from the city, from the county, from the school district, from all of the taxing entity; to make this proposed development work. Well, if the HTRZ is approved then there to make this proposed development work. Well, if the HTRZ is approved then there is mandatory capture of the revenues from all of those taxing entities. So, what I am saying here is that revenues from all of those taxing entities. So what I am saying here is that even if a County or a school district actually was not in favor of this, of school district actually was not in favor of this, of this proposal; if the committee approves it, their participation of their increment is mandatory. It is approving it, their participation of their increment is mandatory. It is captured anyway. This is a fundamental tool. Again, candidly, this is designed in part to bring all of the parties fundamental tool. Again, candidly, this is designed in part to bring all of the parties to the table and not be a recalcitrant in resisting a recalcitrant in resisting development proposals. Here it also notes that within that zone, in addition, 15% of the incremental state notes that within that zone, in addition, 15% of the incremental state sales tax is captured in revenue growth. This is from the HTRZ. It is transferred not necessarily directly to the revenue growth. This is from the HTRZ. It is transferred not necessarily directly to the transfer, but we have a state fund in Utah for transit projects. Some of the revenue comes around the increased fund in Utah for transit projects. Some of the revenue comes around the increased development. It goes into that state fund for tragic transit projects. Go to the next slide. We have the same image that I showed you before. Remember to the next slide. We have the same image that I showed you before. Remember before I was talking about on the right side, the thin blue line, the post-rapid transit? Look. We have highlighted areas the right side, the thin blue line, the post-rapid transit. Look. We have highlighted areas that are along the commuter railway. This is the front runner rail. The top one sick is an existing station. The This is the front runner rail. The top one sick is an existing station. The bottom one, the bottom circle highlighted in red is a planned commuter in red is a planned commuter rail station. Now, both of these areas, we think that they are ideal areas, we think that they are ideal possibilities for a HTRZ to take advantage of the existing front runner station, to do more intense development around the take advantage of the existing front runner station, to do more intense development around the station. It can capture the value to pay for some of the housing improvements. And the one, the bottom red circle to pay for some of the housing improvements. And the one, the bottom red circle is a contemplated, I should say a planned front runner station. We think that we can use a HTRZ there as a planned front runner station. We think that we can use a HTRZ there as well from the very beginning. In that case, we can use some of the revenues to pay for some of that case, we can use some of the revenues to pay for some of the cost of the infrastructure that is needed to build the station. Okay? So, the next and last slide is just is needed to build the station. Okay? So, the next and last slide is just a link to resources. With Becker's help, we have put together five papers that explained help, we have put together five papers that explained the details of transportation reinvestments oats and housing and transit reinvestment zones. I will tell you and housing and transit reinvestment zones. I will tell you all that we are excited about these tools. We are proud that we created them. I hope that you will about these tools. We are proud that we created them. I hope that you will all cross your fingers for us. We have not done them yet. We have not actually used them yet. We have not done them yet. We have not actually used them yet. But we are planning to. We will be sure to keep everybody posted as we will be sure to keep everybody posted as we move forward on these tools. That brings me to the end of my presentation. Of course, I would be happy to bring me to the end of my presentation. Of course, I would be happy to attempt to answer any questions.
Great, Andrew, thank you very much. We only have about 10 minutes left. First Great, Andrew, thank you very much. We only have about 10 minutes left. First, I want to talk about the file share and what people can download.
Yes, if you look on the file share and what people can download.
Yes, if you look on the left side now, in the middle of that left column, you should see a file share. This is of that left column, you should see a file share. This is a window. The first file listed is a PDF of the slides from today's presentation. The second document listed is a PDF of the slides from today's presentation. The second document is the TRZ primer itself. If you hover over either one, you should see a downward pointing arrow button that If you hover over either one, you should see a downward pointing arrow button that will allow you to download the file. file. Alternatively, if you click on those three buttons in the upper right corner of that window, you should see those three buttons in the upper right corner of that window, you should see a download all option. That will allow you to pull down both at the you to pull down both at the same time.
Great, let's try to answer a couple of questions in the next five minutes. Then we need try to answer a couple of questions in the next five minutes. Then we need everybody to do an evaluation. Matt has a question. has a question. For states where the TRZ is not eligible, how do we pursue starting a TRZ so we can utilize the not eligible, how do we pursue starting a TRZ so we can utilize the strategies?
This is Andrew again. I can jump in on again. I can jump in on that briefly. What we did in Utah is we look to Texas as a Utah is, we look to Texas as a starting point. We actually had some examples from Texas. We brought the concept to examples from Texas. We brought the concept to some legislators and to a meeting of the transportation committee. We did a presentation about here is a tool that meeting of the transportation committee. We did a presentation about here is a tool that Texas is using. We would like to explore this. And then we basically set up a working group in order to explore this. And then we basically set up a working group in order to evaluate the possibility of the tool. We emphasized again that this is a collaborative tool that can We emphasized again that this is a collaborative tool that can be utilized to help find transportation infrastructure and other associated costs as infrastructure and other associated costs as I noted. That was our first step in Utah.
Terry, if I can jump in. You know, I guess I understand in California you have to I can jump in. You know, I guess I understand in California you have to enhance the infrastructure financial district. This is about taxing the financial district. This does have some administrative burdens of a is about taxing the financial district. This does have some administrative burdens of a district. It does have a lot of the ingredients that you would want in a of the ingredients that you would want in a TRZ. There are requirements to cooperate between municipalities, counties and all of these businesses cooperating. So, you would cooperate between municipalities, counties and all of these businesses cooperating. So, you would have you know, not, excuse me a lot of things that would make TRZ's easier to use. Strategies as excuse me a lot of things that would make TRZ's easier to use. Strategies as far as funding would be looked at.
Let me ask you the next at.
Let me ask you the next question. Dave wants to know, do the tax increments or increases, do they have to be attributed to the transportation do the tax increments or increases, do they have to be attributed to the transportation project.
Well, in Utah, I will just will just go briefly. I am sorry, the increases in value for increases in value for a TRZ, yes, they are designed to be incremental revenue generated by the to be incremental revenue generated by the infrastructure project. Then the revenue, the uses of those incremental revenues are not limited to paying for uses of those incremental revenues are not limited to paying for that transportation project.
So again, this is Raymond. In Texas, in again, this is Raymond. In Texas, in our usage, the incremental revenue has to be used within the zone. It has to be used to be used within the zone. It has to be used for the projects that are identified. One of the things we had to do, we went back and we added identified. One of the things we had to do, we went back and we added the additional, the third project that I mentioned. The Interstate 10 widening, we had to amend the documentation to include the I mentioned. The Interstate 10 widening, we had to amend the documentation to include the new project. It is tied to expenditures within the zone in order to identify projects.
expenditures within the zone in order to identify projects.
And Raymond, I thank you for saying that. That is true. I am sorry, that is true for us as well. saying that. That is true. I am sorry, that is true for us as well. We have to use the funds within the zone for projects that are identified. It need not be only within the zone for projects that are identified. It need not be only for the transportation infrastructure project specifically.
So, I think the question was more do the tax increments have
So, I think the question was more do the tax increments have to be related to the transportation project? In Texas there is no requirement that they have project? In Texas there is no requirement that they have to be attributed to the transportation project. In fact, it would be difficult to segregate exactly what portion project. In fact, it would be difficult to segregate exactly what portion of the income is attributed to the project. So, that is why the law basically just says that any the project. So, that is why the law basically just says that any or a portion of the revenue would be delegated for would be delegated for the project. There is not a requirement to segregate specifically what is attributed to the project. This to the project. This would be unlimited.
Yes, so that is a good point. I may have read that differently. I think I was that is a good point. I may have read that differently. I think I was referring to the uses of it. Yes, I do not know how you would attribute Yes, I do not know how you would attribute it. That is good.
So, we only have about two more minutes. We have about eight questions. Let me So we only have about two more minutes. We have about eight questions. Let me just ask a couple. Those that we cannot answer, we will provide written answers and we will post it on the we cannot answer, we will provide written answers and we will post it on the federal highway website. Joseph wants to know, do TRZ's know, do TRZ's and or HTRZ funds need to be identified in an environmental document for the project? to be identified in an environmental document for the project?
Not in Texas.
Okay.
That is Okay.
That is correct.
John wants to know, what has been the direction of the HTRZ approval process. Are we looking at know, what has been the direction of the HTRZ approval process? Are we looking at months or years?
Well, Joan, we will see. We will see. We have not had any actually approved yet. We contemplate that a specific HTRZ would be done over the course of months. yet. We contemplate that a specific HTRZ would be done over the course of months. If it takes yours then we are going to have to revisit this. We are certainly hoping that it will we are going to have to revisit this. We are certainly hoping that it will be a period of months.
Great. Joseph wants to know if committee folks are unanimous or just majority rules.
Great. Joseph wants to know if committee folks are unanimous or just majority rules.
I assume that is HTRZ also. Basically, it is majority. This is sort of the point from before. You Basically, it is majority. This is sort of the point from before. You know, there are folks that are participating in the committee. They may say well, no, we may want to proceed with this. That is not a requirement. say well, no, we may want to proceed with this. That is not a requirement. The committee by majority has to say yes, the conditions and terms have been met. If so, the HTRZ springs to say yes, the conditions and terms have been met. If so, the HTRZ springs to life.
Great. Here is the last one: it is a complex question. I want a simple answer. Karen wants to last one: it is a complex question. I want a simple answer. Karen wants to know, do you think this would work well in a low growth community.
I can talk about examples of work well in a low growth community.
I can talk about examples of municipalities when it comes to TRZ. Basically, the low growth gets affected regarding the amount of revenue that comes in. Basically, the low growth gets affected regarding the amount of revenue that comes in. In those cases, it may not work as well. As we have said here, this work as well. As we have said here, this is the intention of the project, to generate growth.
This is Raymond again. I would note that if you are to generate growth.
This is Raymond again. I would note that if you are zone includes a low group area, route that sewn into a potentially high growth area. route that sewn into a potentially high growth area. Then you could utilize those funds anywhere within that zone that you would like. anywhere within that zone that you would like. You could utilize it. And you know, know, this will, this encourages a whole lot of discussion regarding generating lot of discussion regarding generating revenues. That is definitely one conversation that we could have regarding TRZ in the past couple of years.
Well, conversation that we could have regarding TRZ in the past couple of years.
Well, great. We are at the end of our time limit of our time limit here. I would like to turn it over to pepper to wrap up and provide you with an opportunity to turn it over to pepper to wrap up and provide you with an opportunity to give us your thoughts through an evaluation.
Thank you, Terry. I have pulled up the evaluation tool that we use. evaluation.
Thank you, Terry. I have pulled up the evaluation tool that we use. We would love to get your feedback on feedback on today's event. I would also like to again mentioned that the file share window is available now to download the like to again mentioned that the file share window is available now to download the slides and the primer. I posted a link a link in the chat pod or the window where you can see the future webinars and also look at recordings and files window where you can see the future webinars and also look at recordings and files from our past webinars. As I promised, if you want to receive promised, if you want to receive confirmation from FHW letter a for your participation in for your participation in today's event, email value capture@DOT.gov. That is also in the evaluation instructions in the upper left corner of the screen. That is also in the evaluation instructions in the upper left corner of the screen. Again, that is value capture@DOT.gov. Include your name, and we will get you confirmation your name, and we will get you confirmation of your dissipation. With that, I just want to say thank you to our presenters today for I just want to say thank you to our presenters today for their presentations. I would also like to acknowledge the ongoing support of the web like to acknowledge the ongoing support of the web conferencing office. They provide lots of help behind the scenes. For that we are very appreciative. With that, we will of help behind the scenes. For that we are very appreciative. With that, we will conclude today's webinar. Thank you, the audience, once again for your participation, thank you.
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