Value Capture Webinar Series

Making the Business and Economic Case for Value Capture-The Primer

October 6, 2021 at 1:00pm ET

Audio: https://connectdot.connectsolutions.com/p4pvsg0w130g/

Hello everybody welcomes to today's event on making the business and economic case for value capture. I work with the D.O.T. Volpe Center in Cambridge Massachusetts and I will be facilitating today's event. As you can see, we do have a great set of presenters for you to hear from and we will be introducing the speakers shortly. Right now, I will orientation to the webinar in the top left you will find a window with audio information. We encourage you to listen to the event through your computer speakers but if you're having any audio issues we invite you to dial in using the dial in code in the upper left-hand corner that would enable you to ask questions by phone and we will provide instructions for how to do that. Below the audio information is the audience chat window and that is where you can type in questions or comments for the presenters and our moderator will field these questions and we'll do our best to make sure all these questions get answered by the end of the webinar. We will do a short Q&A session and then we will have time for a longer session at the end of the webinar. With regard to the slides if you look in the upper right corner of the window where the introductory slides are being presented you will see a button if you click on that button it will take you into full-screen mode. Skate button on your keyboard and you will see a same spot on your other button that will be labeled exit full screen over it. Our webinar will run until 3 PM Eastern and we are recording the event. That recording and the slides used today will be posted on the FHWA website. We will also be making the slides available for download at the end of the webinar today. If you're interested in applying for credits for today's webinar, we will information how to do that at the end of the event. I had these questions up before if you haven't had a chance to respond to them we invite you to do that now that gives us more context of who we have listening in and all you do that I would like to introduce the moderator my colleague Mr. Terry Regan he's a principal technical advisor for innovative transportation and planning here in Cambridge Massachusetts. He has over 30 years of experience working at the original state and federal levels. As I turned things over to you what is your reaction to our poll results so far?


Thank you it has been the case for most of these series we have done we have a lot of representatives from local governments RPO level. Possibly some private sector consultants. A rather large percentage someone knowledgeable have heard a little bit much. We're hoping by the end of this webinar you gain some insight and we have provided you with more information to learn. In terms of if you have implemented value most of you have not had a healthy percentage considering 37% say no. Once again, we hope that you learn some of the framework of value capture. So with that, first we will hear from our main speaker she is going to provide an overview of value capture strategies making the business and economic case and you will be able to download it later in the webinar in the file pod and also be posted on the federal highway website. Julie has over 30 years of experience in large-scale infrastructure projects delivery. With a special emphasis on the transportation sector and infrastructure financing. The founder and CEO of a consultancy specializing in financing. In an urban infrastructure finance at the new city's foundation. Her research focus has been on value capture funding sources. Julie has been one of our valued subject matter experts for the program and with that let's hear your presentation.


Thank you, hello everyone this first review introduces making business and economic cases for using the techniques. The goal of this portion is to provide an overview and proper context this one we have an example of that presented. These slideshows the outline which includes the purpose and value capture implementation process building blocks and qualitative assessments to making the business economy case with fewer remarks. First the basic purpose. Value capture is from real estate developments the goal of making the case is to generate new funding sources for Trent rotation projects by establishing a clear nexus the development transportation is. Making this case is all of also about developing a transparent strategy to strengthen and preserve the value capture but engaging multiple stakeholders early on. The value of exultation is clearly recognized. The goal here is to the benefits in a balanced and equitable manner to reach situations. Effective strategy is to start early during project planning stage with active involvement processes and events transportation acquisition and project procurement. These slideshows the overall value capture lifecycle which broadly entails information from the standpoint of value capture, regulatory and institutional needs. Developing and securing financing plan based on revenues and administering the program over the lifecycle with stakeholder ordination taking place. Preliminary case can be made to make decisions whether to one or more value capture techniques for the assessment could be more qualitative in nature. More detailed assessment in particular to provide input in developing the overall financing plan. A friend technique for fire different implementation processes one of the key implementation considerations is to obtain buy-in from cities to contribute their tax dollars for funding in such a project. The talent is often about determining whether the assessment is considered a fee benefiting the district only or benefiting general public beyond the district boundary which can him approval requirements and that is the key and implementation. Nexus and fee studies are key to determining legal defensible levels which can become quite complicated and costly. In most cases local governments consider and lament each value capture tech separately. In order for subsystem source although this has not been often what is needed currently. Shows an example of processes and on and implementing the district identifying specific steps required to use this technique. Because more capture techniques with examples bites by the government especially those that are government-sponsored, the process can be white mirrors with most levels of regulatory and institutional requirements of the state levels now for the building blocks. Among others are the key building blocks for the value capture case generally to dining quality objectives. Identify tensile value capture areas understanding the typology and knowing techniques that can be of to each of the areas identifying key sick owners with different value techniques and opportunity areas determining key evaluation to assess and compare and finally designing overall developing a strategy. The basic objective first and foremost generating new funding sources which is more typically linked to real estate projects to pay for improvements and developments. Less common but more important for our purposes they also from our local contributions to major projects with benefits especially when other traditional funding sources are and expect. Can also help local jurisdictions meet their overall policy goals which include creating more and better jobs providing more housing including transit-oriented developments and local and regional transportation connectivity. Providing more open space including trails and other amenities providing growth and land use development. Determine opportunity areas remain considerations the first being geographic boundary of the node where various value capture techniques could be implemented. For example, it could be linked to developments. Second consideration is an example whether the node is urban versus rural, and I will areas for the degree of saturation relative density for value capture. Finally the potential determined by the maximum density allowed by regulations associated with the notes says city for residential and personal usage there are many techniques that could be of to specifically obtain areas more prevalent being different variations of special assessment districts and other actions such as land dedication or other provisions. There's also other such as agility operations and maintenance focus. And finally, there is techniques such as development agreements, asset, or right-of-way use agreement. There are many stakeholders value capture implementation in addition to local women's responsible for lamenting various techniques. There are other and public transit agencies and others have a stake in the successful value capture outcome. Most importantly the key stakeholders are those direct way public improvements linked to value capture and ultimately, they are the financial burden to contribute to the revenue funding sources. It is also the tenant on the specific techniques use identifying the stakeholder should be directly tied to relevant regulatory and institutional varmints specific to each technique. Finally, lenders and investment communities that cater to realist date and infrastructure project space might have a stake in how it could impact the overall project economics. Develop the approach it is helpful to start with a set of bacteria for evaluating the effectiveness of each value capture technique. In addition, also enabled other techniques. Instead of evaluation criteria which are used as the qualitative assessment. One developing an integrated strategy is important to keep in mind value capture tools are often applied to late after appreciation is taken place in anyway and existing properties next to new developments on enjoy gains in property appreciation without paying their share in improvements. The best practice now is to start early to maximize the leverage. The both new and existing properties and apply the technique for longer. It is a strategic from the basic approach the multilayered and phased starting with those techniques that have the least impact on stakeholders with the lowest risk followed by those involving new charges increasing risk such as those for special assessments. In a manner that is risk-adjusted. An underlying framework have brought the dimension best able to bear the risk and dimensions that can benefit the most. Moving onto qualitative assessment. As mentioned earlier it will be initial phases they can evaluate and can compare the effectiveness identified. These criteria increase the potential to generate revenues within a reasonable time and the flexibility and uses of the funds a wide range of improvements. The second criteria has to do with balancing efficiency including social factors based on only those able to pay principal. The second part of the balancing act proportionality factor based on is a principle is configured so the most insufficient factor whether there are any known legal obstacles to implementation it is also and cost effective to tease such as collection of revenues and activities. Also go to capture success whether the financial burden transparent to value policy goals three more common techniques based on evaluation. The slide. The driver is a major transportation project with real estate developments along the word oral and the edge to materialize, the quantity assessment can help determine the maximum potential that can support funding for the border project. In chapter 5 working for the discussion quantity assessments are performed with three most common techniques. The basic steps in the assessment identified on the slide each of these steps are in more detail in the next few slides. It should be noted that we can always hire specialty insult and for more quantities assessment. What is shown in the next two slides is for preliminary assessment that could be done for planning and budgetary purposes. The first step is to find the areas which entails identifying areas along the corridor where developments could occur as I mentioned intersections are with high growth potential. Local general plans and specific plan will generally help and geographic extent of the node. The second step is to develop scenarios which would involve converting the current ones into higher usage consistent with growth plans and maximum allowable densities. There also use for guidelines densities in different settings whether they are urban or rural settings. The first step is to estimate the maximum potential for the Pacific technique used for increment financing the revenues are testing space and the key is to find a baseline assessed value from which revenue estimated. To make reasonable assumptions about the development and absorb what is the future value and how the assessed value of both existing and new developments escalated keeping in mind there might be such a Tori limitations on how it can be escalated on an annual basis. Establish the extent to which cities and counties are willing to share their love revenues to pay for major infrastructure projects. The key is to establish maximum potential rate over and above the existing rates that could be acceptable for development impact fees. The incremental revenues are derived from users under the scenario. In the absence of studies that probably occurring later phases current fees and adjacent areas can provide some indication of market accepted fee levels. It is important to keep in mind fee levels might differ depending on where the area is located in a high-density urban area where existing infrastructure capacity can be leveraged. The fees are often much lower whereas in suburban and rural areas the fees tend to be matched higher. For each technique within each load one of the last steps cash flow for that technique to get the lifecycle picture of the revenue potential decimate capacity for upfront step financing requires basic assumptions on time frame of the value capture corresponding to the term. Various debt financing terms and underwriting assumptions and the discount rate for value analysis. For the integrated lifecycle cash flow for a single node combining annual cash flow for all value capture techniques used within that node for assessing system-level value capture lifecycle cash flow line annual cash flow of all value capture techniques or for system-level network multiple corridors with multiple nodes. As mentioned before the integrated approach where multiple techniques are considered I was fortunate enough to get involved in a couple of projects recently when the approach was considered. This example is for a single node representing value capture for essential mobility hub in the San Diego area. It is a 6 billion connecting all the transit systems with major highways. With is defined as shows annual cash flows or increment financing or fees over the 40 five your turn for tax increment and special assessment revenues are for the entire lifecycle whereas fees shown in red being a one-time connected space the cash flow ends when the new development of the area is complete. The green line shows combined annual cash flow for all techniques. The table on the right shows total lifecycle cash flows and value close to about $1 billion which coincidentally is the current funding gap. It also shows capacity for different techniques. Four times over the lifecycle they are 15 and 20 or the special assessment is a 30-year bond issued one time in the beginning. There are some pay-as-you-go financing options without any of that. This example is for systemwide assessment involving multiple quarters representing all new future real quarters that are under construction or in planning. For each new quarter there are multiple stations and each quarter as scheduled to come on board at different times. The buildout scenarios and multiple station needs courier. They were developed by combining techniques for all stations and all corridors based on the schedule depicted in this round. To summarize making different for different parts of contexts when the driver is a major real estate project as is often the case, making the case is mostly about determining improve as needed to support the specific programming in the real estate project. The cost of these implements what establish the level of funding. When the main value capture driver is a major infrastructure project making the cases essentially about establishing a direct nexus between the project and any real estate developments that might be triggered by the project. Rationale would be on Brown's that is the recognition that the resulting increase would not occur without the project. Finally, value capture and play an important role if you deliver an infrastructure project. When a project is based on payment with a significant component within its scope value capture could be based use in the real estate component to generate additional funding to support the infrastructure component. Value capture revenue could help the payment obligation. I want to conclude this briefing with a few key takeaways. Value capture is essentially a low will and the use of techniques to pave or major infrastructure projects especially those that extend the jurisdiction limited to date. It is becoming increasingly difficult for the state funding sources. For projects with less thing back on the communities the overall approach to be more expensive.


Thank you and hello. And on behalf of the Federal Highway administration I want to welcome you to today's webinar on assessing value capture risks. My name is Pepper Santalucia and I worked at the USDOT Volpe Center in Cambridge, Massachusetts in support of that and facilitating webinar and you can see on the screen we have some great presenters lined up to present to you today and share their experiences and expertise on the topic of assessing and mitigating value capture risks and we will introduce you to them in more detail in a few minutes. For now, I want to give you a quick orientation to the webinar room. In the top left corner of the screen, you should see a window or box labeled audio information. If you have any troubles through your computer speakers, you are welcome to join us on the phone and there is the phone number and code in that window.


In the lower left corner where it says audience chat, that is where you have the ability to send questions or comments during the webinar. We also give you the opportunity to ask questions by phone by pressing the * and the number 1 and we will remind you of that option as we go along. And with the slides you have the option to enter into full screen mode so the slides will be more visible on your screen and to do that you can look for a button in the upper right corner of the window with the slides. And the button has a colored and rectangle in the corners on it and if you cover your -- hover your mouse over that button, you should see an option that will say go full screen. If you click that you will enter full-screen mode. To leave it you can press the escape key on your keyboard or there will be another button in the same spot that will allow you to exit full screen. The webinar will run until 3:00 p.m. Eastern time and we are recording this session so people can listen and attend the webinar at a later time. That recording, as well as copies of the slides from today's event, will be posted on the website and in addition we will make the presenter slides available for download toward the end of the webinar.


Thank you for the presentation on the business case which as we mentioned going to be able to download and also be on the value capture website check to see if there are any questions from the audience. Feel free to type into the chat pod and we would like to open the phone lines if there are any for those on the phone.


You may remove yourself from you at any time if you're using a speakerphone pick up the handset before pressing the corresponding digits.


While we are waiting, we do have a question. Have there been examples of parking requirement changes in zoning to increase density and better take advantage of value capture tech?


Maybe this is a better question for the other speakers.


Have there been changes in zoning to increase density better take advantage of value capture to mark


And has been changed to reduce for apartments near transit in order to increase density along transit line and transit stops that is something that was particularly important. Lack of increases was part of the early conversation for the written line modernization project and the need to improve zoning and processes to allow denser develop there. Specifically tied to the overall conversation of how to increase densities along that line


If not, let's hear from the work in this field every day. First, we will hear from match the opposing analyst for planning. Northeastern Illinois metropolitan learning organization. Half of the regions municipalities provides research, analysis and policy recommendations including tax and fiscal policy, community, and economic development. Matt holds a master's city and regional planning University of Carolina Chapel Hill. And he has previously worked in international development and renewable energy sector


Things for having us today. I'm here to talk about work that has been done recently on how municipalities and local government, these are tools like financing and context of encouraging development many of these take the form of value capture and they are incredibly common there are often fundamental pillars. There's a wide variety of longer-term consequences for regional economies and getting a sense of weighing the pros and cons is something we have been working on for some time. Talked about the economic case. The noise of local governments can maximize that business and economic case. I will talk more we have recently to identify my recommendations for local governments. The Chicago region planning organization mandate includes programming transportation investments providing planning services and supporting communities on a wide range of all of our work is written for communities of a wide range of capacity in mind. Working on consent to use and although we do our work origin in mind think the work is quite broadly applicable. There are billions of dollars of market value property tied up in one form of tax incentive or another within the seven counties in which we are. The primary types which we look at our financing, sales tax rebates and two forms of property tax prevalent in the region. Any of these tools could be considered to be value capture although they are a slightly different model parts regardless with so much money on the line we think it is important to find what that case is so governments can experience the long-term development goals that they are seeking. I want to spend a few minutes on about the different perspectives that are experienced when talking about these. Local governments use incentives for media pressing in very legitimate reasons press with slow growth and high tax burdens competition with neighbors neighboring counties as well as limited capacity and financial resources, local governments see incentives as an economic development. These challenges can have the risk of decreasing the incentives in subtle ways there are a couple challenges I would like to mention. The first is information symmetry concern is local governments are not able to fully understand the position that they are in negotiations. The research tests 75% more than to don't actually sway the final location decisions so this question is borne out in some of that academic work. The second challenge is indirect cost of all the winner's curse. It's the idea the new development can generate public-sector costs for new fire protection services for school district funding that is as large or larger than the new revenues. The third concern is competition, that interviews can create bidding wars between major neighboring jurisdictions and the results can be that even if communities when deals the overall impact is a decrease in revenues for everyone over the long term. This is demonstrated by the substantial increase consent to these nationally where research suggests it is double or to just a couple of decades. Now that is a message communities development and financial incentives are seen as a solution they can decrease property tax rates and certain develop interests but there are also costs associated including burden shifting of where tax revenues need to be collected from on to taxpayers who are not incentivized as well as reducing revenues that would be otherwise available to fund robust public services. We argue that any business incentive and we argue that this includes value capture projects in the broader sense need to be structured to borrow a phrase from another world, a triple bottom line to make sure that deals were for governments and businesses and private sector partners are connected to. So how do we do that, the work that they have done highlights key principles that should serve as the basis of incentive use. The first is that incentives should be performance driven, one: many of the toolkits they should also be evaluated regularly and improved over time. Second incentive you should be transparent, being clear with businesses can be help and be an incentive in its own right about what you're willing to do but also being clear with constituents about what is incentivized, why and wears a unimportant part of program accountability. Communities they use incentives should always buy them and work with incentivized businesses to make sure provided neighborhoods and population and regional benefits of avoiding regional competition where everywhere possible demising rather than gain with all this in mind we recently published a guide about incentives Challenges that I spent the last few minutes talking about in attempts to recommend strategies and best practices to find a successful business and economic case for these economic development tool and recognizing the challenges that they face. I'm not going to go into detail as to what many of those practices are, but the guide is available to download and think we will get a link shortly. Was of things we talked about include establishing conditions for incentive policies and using a benefit identifying ways of non-solutions can be addressed and designing incentives to promote and for all of the old employment options. There is a link to our work topic our guide on the screen. Are interested in having conversations around our region and all about this work so I'm looking forward to the Q&A about and rifles to reach out to me afterwards.


Let's me read out the first one and any of the presenters feel free to weigh in on this. Would it be correct to say that the value capture requires a more entrepreneurial mindset is typical infrastructure planning in other words additionally prioritize funding grants obtained and undervalued capture paradigm projects are prioritized in light of creation by the project those spirits are established. Any thoughts about value capture being more entrepreneurial than to infrastructure planning?


Question from Rick Woodard requires more vigor planning mindset and negative depends how we start looking at or frame the point and if it is as you will see if you look at how a more basic definition is driven that is the starting point planning and understanding the trigger, planning and regulations should be linked to kind of how the public sector is creating value which I would necessarily Those entrepreneurial but collective of a community see the point of your question if the starting point is real estate investment.


From in-transit perspective there is a lot encouraging density. Policy at the little hallway of original ways doing. Want to make sure that we're putting them in places over the long term. Essentially the infrastructure projects create value but then unless you can pay for it doesn't really create value on the real estate side.


We have a question from Matthew regarding the symmetry issue are some of the symmetries and assess data.


I think it remains an ongoing challenge as practitioners on this issue within the greater Chicago area is the intention of working in a very clever way with a business incentive and creating a really clear policy at the outset about the kinds of information that the municipality or other government is going to expect and having a clear sense of what terms or how much money a private sector or public sector entities prepared to incentivize regardless of the express size of The private sector. The benefits of looking for a third-party evaluation to hire and review the books and reviewed as it were and make a determination as an accurate size of the gap. I don't know if a public sector understands the full extent of the process. Only other presenters to get their thoughts as well.


One answer would be to continue to take more classes to be more informed about the intersection of planning and at least for those that are planners whether it is transportation planners the education doesn't do us justice for understanding what he's talking about the real estate section in that. This requires more trainings and outreach and education at ink you are seeing more platforms like this one trying to fill that gap needs to be embedded into the running programs at the very least. Another one I will touch on when I talk about the case there are mechanisms to try to make it transparent but the values were talking about both the public sector and private sector basically to find the value being bought to invest in the areas to the stock exchange. There are mechanisms out there to level the playing field and understand the values that were talking about the increments so fundamental to value recovery.


Was first hear from Liz because I after she speaks it will be good to take up those questions. The director of policy and Bureau of economic development in Cook County and Illinois which encompasses Conroe and hundreds of surrounding communities, previously she was a principal policy analyst and has also been a project manager for development advisors. Consulting firm with money and imitation of complex real estate development projects. Feels a master's in urban planning. Let's hear from you.


Thank you for that introduction and thank you for having me here today we provide a range of services to communities and businesses within the county. I was asked to talk about the type of risks encountered in a value capture project and there are a number of these to think about so I will highlight some of those for you. Uses of this are the market dynamics that we see, at the end of the day the most important question there is all property values increase, the next major category of risk is regulatory it is something that we see most was in control of many of the local communities but it is also one of the riskiest over the long term as administrations change. Can the community afford value capture applied to the district and to the community as a whole? I think every presenter has talked about this and we will continue to talk about this but will value capture be approved by all the stakeholders that need to be on board with it. Finally, can the project be fully funded? I want to spend the most time talking about some of economic risks. The public and private sector think about all these risks from a different perspective. What does that mean for the value generation control of the project securely over the period were talking about to fund the project what might it imply for the ability to repay the project cost. In a reasonable timeframe. Local market conditions, even in a large economic downturn if we see industrial developments being quite successful, we saw that even when other realist products were experiencing significant issues. There might be an argument for developing the district based on industrial and along the highway being the primary development that we want to. There can be points even if larger concern is positive the private sector might take a look at that particular land-use and say okay. From the public sector side is a bit more about the goal and how can the market support something that is maybe innovative or will create in the community. Development required to support value capture with other local rules. The community has concerns about the impacts of the other types of developments even if the market will support that development will there be other pressures that will essentially limits the supportability. In many cases value capture is the way to help infrastructure investment in these areas and in that case a few things are required a very fusible market analysis that shows us the amount but also getting to some of the risks I'll talk about later. Alignment with other goals such as limiting justification. X category of risks is regulatory so does he have in place sufficient zoning to allow new real estate developments to some the revenue for us behind value capture analysis? Whether that is allowing the end a transit-oriented development or increase industrial development along the new highway object. In many cases of zoning is not in place and it is not necessarily seen as something feasible to pass from the private sector perspective, this will be of significant concern. Will they facilitate that development in a reasonable timetable while all the developing us to undergo a development process or other approaches that might extend the timeline of new developments and their the timeline of new real estate value one of the major areas of risk and value capture is the local risk and there are many different components of this. We've talked a bit about support within the district and demonstrating the value to them. One of the major issues, the graphic you see on the right is what a transportation facility improvement area looks like in Illinois and this case they essentially had a discussion on the impact of tax increment finance on schools so the goal is to establish districts that can really fund themselves based on the increment from the other taxing bodies within the district and take the schools out of the ocean. Displays differently depending on the type of value capture and you can purchase a date but in many cases there is a risk unless there are strategies put in place to bring them along showing them the economic and if it's then finally there is the risk of value capture. With other local priorities and we will talk about that next. We talked about fiscal risk we talked about the school risk on the site. There are few major things to think about there may be other major redevelopment priorities that the community has been worked with one city that after pursuing value captured in this severely have revenues in the near term for the development project and that did become an issue. Thinking about the amount of revenue needed or value capture community might want to invest in science center to environmental issues and then other priorities within the district. Communities think about these districts we need to think about the other types of ways that they might want to use the money and then finally there's the value capture district containing a significant portion being revenue based private sector perspective when you're talking about lower disabilities the major commercial district or the major office park it in the being a significant portion of their values those communities my need to take other strategies such as revenue assistance county and state such that if they encounter larger issues the bonds can be repaid. Finally, overall financing of the project. We mentioned just the complexity and ability of the overall running package often I see value capture coming at the end of the day to close the gap rather than be part of the early conversation. Already talking about funding is identify whether or not the other revenues for the project are feasible is particularly in from the public perspective as someone who works at an MPO if the rest of the funding for the project is identified as it considered feasible whether or not value capture a significant portion. The other issue to think about is a general obligation. Can you get all those parties in line and put them in place so you can implement the value capture? Everybody has competing options one of the things I highlighted in Illinois on the screen is one these in the community decided that he now wants to implement a Valley district. Intersections and put in place and many of them pursued value capture strategies or sales tax from the developments to pay for the cost of that value capture. Thinking about whether all those are amenable along project is also white important.


The cup question so we will take a couple questions and turn it over and have a kind of wonder time for discussion. The first question from well, the project also required to follow funding in the capital stack. Aren't a lot of these concerns and risks are to be discussed in the documents maybe the topics of land-use oral lust over. Member of the value capture implementation team knows what he's talking about.


In general value capture should not the federal states + infrastructure project Orioles a project linked still reach all the requirements next we have a question from Zach today minor turn developer maximize their profit in an area for value capture without shortchanging the government what are some win-win strategies to approach situation with greater a and for structure development or negotiation with government for value-based business subsidy. Looks like Zach is typing.


With the business incentive situation the root is an open is really one of Nancy and honesty and seeking to fill actual financial gaps that exist rather than profit maximization I will turn this over to the other panelists on more specific about the context of infrastructure and value capture. Let's turn this over to Henrique Silva. The U.S. meeting for Africa program at the Lincoln Institute of policy he manages the pollen is a couple of different angles on many of the great points that have been made today to sort of round out the conversation they were having and I'm going to start off by presenting the definitional present another definition value capture this is a definition that we use at the Lincoln Institute of policy. Very simple but very, looks at the same time. It enables communities to reinvest land value is or increments the investment public investment project we were talking about and also government action focusing much more on opportunities of government action and plans that provide. As we have seen many capitals. We need to immediately also think value ration we can talk about value capture without value ration when the public is reviewing the creation as it is to know how to recover these publicly triggered implements. How to recover the increments mistaken something that has been said is cannot be said too much it cannot be an afterthought, the moment of rezoning announced value to. Infrastructure and is we need to think about more critically and creatively. Secular density in ways we can mobilize and commence. Another one in Sao Paulo and development charges hopefully it will be embedded in your psych effort today as well when you think about value capture think about the part of the link the first part of the value creation what is it that is increasing the property value, what is the public action increasing the value. How do you distribute the value what are the limits or opportunities you have region of value? We have been talking primarily about value capture relationship you can think about it and parts of the space. And zoning changes land-use regulation. Are the industrial ship property values being the increase? They very likely know much about this than I do but the Institute introduced in partnerships with folks at the University of Maryland national Center for Smart growth. This literal project County is the mile one stations. Travels primarily through moderate and suburban land there is some delays here. To be corrected on the stats for the were on the project more carefully. Entered the conversation not as how value capture findings. The client has already been funded already have all the construction cost. The point is not talking about value capture what else can value capture views that the investment has been made across these two counties. This is where it is a slightly different angle this is where zoning and buildout actually does matter, and I would need is a risk. Resigned as an opportunity to leverage incentives around greater density similar to the presentations and how can the counties set up and take advantage of their winning hours and there's only capacity were talking about an opportunity in the level of zoning many of them the quarter. Developer obligations or in this case talking about how to reset so we can finance affordable housing. Within this there was any need to think about burden on the property tax for all of the issues and risks. The value capture tool, they wouldn't consider that it would probably reduce many of the risks. A quick trip down south. They are arguing the at the vanguard of capture and I know I am present some of the ideas present at least I offered this imagination into Inc. about what is possible largest city in Brazil the inlet has massive transportation needs and massive housing needs of the ways they finance infrastructure through the development charges this is not some have been overnight


Many different areas depending on the context of the infrastructure or service capacity to pay the city for that right. The way they have monetized their rights as ration what is called urban operation same master landed with buildout or spar services. The way that they finance that everyone has a basic FA are there everyone wants to be a paid need to buy certificates from the stock market what the city has done to finance the redevelopment of these districts. The developer would go to the stock market and bid for one certificate allowing them to generate funding what is now these are funds that were raised and what is also sedating is the start of the master of this district morning from an informal settlement. It is a very long and complicated story I want to momentous visit was able to do the story gets even better do with the Metro line extension across the area. Will find something hopefully I'm getting the picture across these are things that are being done unnecessarily what we can do here is these things inspiring us. Value capture and value creation context and value distribution is not just about infrastructure investments or thinking about the real estate investments that are already have. Zoning and planning as a tool is a trigger for that and whether or not you are over zoning and over incentivizing and already gave away the development or was there ways that you can rezone investments and things like impact inclusionary housing with equity in both cases you will understand these and is Vince Goodman them or impact them negatively because of increase values. Coalitions and communities are much more mindful about the potentially negative effect of infrastructure investments entire density and their avenues instruments to make sure that the communities that should be benefiting from these investments to remain there and join the


While we wait for questions in terms of the guidance captured improvements needed for real estate projects has been used forever, it is nothing new and a lot of what is being discussed has been more real estate project driven. One of the focuses the reason why we kind of doing this is how do we use value capture to support and fund major infrastructure project that create value. In terms of actually changing the property value for example the central mobility of that I mentioned going to change the entire value kind of underserved and medical presentation sometimes these transformative value creations have happened is whether you're going to get pocket at all. For structure projects might have to emphasize that. Any thoughts or comments about Henriquez presentation? Our AT&T operator could you open the telephone lines. We have any questions or phone? And while we wait for that I will let you give instructions.


Wants to know value capture within the agency regularly with senior manager.


I do think you make an excellent point about local governments watching what her peers are doing and mimicking those innovations. In doing I entered analysis the role that it can play key projects maybe you need funding. Revenue potential in the ways of the lead Would be critical. Business economics case posted on the webpage you and check out the other value capture. I don't see any other per se what I would like to see presenters want to give just a quick summary that would allow maybe a cup then we will wrap. The overall topic what you heard from the other speakers. This isn't, we really need to demystify this and realize these tools and concepts are not new. Some parts that are new and so forth, but they have around can do that. Trying to figure out value capture and build off of that. Not the United States but were celebrating in Columbia it is not an insignificant source of their infrastructure project and I'm sure we can find cases here as well. The point I want to come across some of the nuances and issues that they have been talking about with the risk especially with property tax if you're looking at the property tax capturing some part of them, and not on the capital investments cover those valuable the property tax and effective tool effective tool for covering the value those risks that mentioned are very true if you rely on one of think we need to do more to fight this urge communities to do it, there's some experimentation and one the things I appreciate about Julie's work is really helping us understand the legal opportunities that sometimes on opportunities to be proactive and creative use of land value capture in their communities.


Any other presenters want to have the last word I wrap up


This is Matt the only thing I was saying major infrastructure development is important. Taking the time to study and understand the long-term and interregional impact of the decision are made. Making sure that those longer-term impacts are playing a part in the underlying decision-making


That is our and I would like to thank the audience for all of your one thing we wanted to know so the federal highway value technical training for those municipalities and agencies interested in additional information you should reach out to Bishop with federal highway reminding you about valuation with you


Before we the evaluation even though Marcy and a series you can always go back and in addition, we also recorded our 2020 also on a range of captured on our next series of online event always get caught up there. What is regard to the series we welcome suggestions on the web one stop should cover. Submit your ideas and suggestions in the evaluation could also send them the email to the email address that you can see now really was directions in the corner of the screen. It is all one word, value capture. That is also the email address is you are seeking confirmation. That is where you can find a compilation of slides that have been shown today and local incentives guide that discussed during his presentation you will see a pop-up on the middle one with a downward pointing arrow is the one to click to download the files or if you want to download all three you can simply click that three dots in the upper right corner of that file share window that is just one way to get all three files at once. We want to thank our presenters here once again in 2021 also the web conferencing offense for their drawings of work. With that we will close out the webinar and thank you once again for attending.


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