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REALTIME FILE
Department of Transportation - Office of the Chief Information Officer
Value Capture Strategies: Incremental Growth Techniques and Case Studies
Wednesday, May 17, 2023
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>> Ladies and gentlemen, thank you for standing by. And welcome to the Value Capture Strategies: Incremental Growth Techniques and Case Studies. At this time, all lines are in the listen-only mode. Later we'll conduct a question-and-answer session. Instructions will be given at that time. If you need help during the call press star followed by zero. I will now turn it over to Pepper Santalucia.
>> PEPPER SANTALUCIA: Thank you very much. On behalf of the Federal Highway Administration, I would like to welcome you to today's webinar on cemental growth strategies. My name is Pepper Santalucia. I work at the USDOT Volpe Center in Cambridge, Massachusetts. I will be moderating today's webinar. It will run until 3:00 P.M. Eastern Time. We are recording the event. So that we can post that to the FHWA website as well as the slides that will be used today. Speaker slides will be available for download at the end of the webinar. If you're interested in applying for professional development hours or credit pending today's webinar, we will provide information toward the end of today's event about how to obtain confirmation of your attendance.
I'll give you a quick orientation to the webinar room. Top right corner you'll find audio information. If you want to listen to the webinar by phone instead of through your computer speakers. Lower left corner is the chat window. You can use that to submit comments through the webinar. We will field questions at the end of each presentation. And we've logged time at the end of the webinar. We will pose written responses along with the webinar recording if we run out of time, on the FHWA website. If you decide to listen to today's event by phone, you have the opportunity to ask the question by phone. And the operator will help remind you how to do that at the time. If you want to see closed captioning during today's event, can you click on the CC icon in the bar along the top of the page.
We did have a great representation federal, state, local transit agencies. We really like to see that. 15 people, this is your first webinar. Welcome. Hope you'll join us for the many others that we have planned for the remainder of the year. Thank you for our returning attendees. We appreciate your coming back. And, with that, let's go ahead and introduce our first presenter. Our first presenter will be Rick Rybeck. Rick is an attorney with a Master's degree in real estate and urban development. He served for 12 years as the deputy Associate Director for policy and planning at the District of Columbia DOT. He has been the Director of Just economics, LLC, that helps to harmonize for job creation, affordable housing, transportation efficiency and sustainable development. For the past several years, Rick has been assisting FHWA as a subject matter on value capture techniques. Rick is the primary author of the Primmer that was published in 2021. We will be making that primmer available for download toward the end of the webinar. Rick, I'll turn it over to you now. Please go ahead.
>> RICK RYBECK: Thanks, Pepper. It's great to be here today. Welcome to everybody. This is a brief outline of how we will talk about TIF today. Because most people are familiar with TIFs, in this webinar, we're just going to be very brief in the overview. If you desire a more complete explanation of TIF, its legal requirements and administrative elements, a more complete presentation will be made available for download at the end of today's program. So, what is tax increment financing? This is an illustration of the basic model. Although there are many different variations, most of them follow -- share the following assumptions and features. It's assumed that improved infrastructure, revenues for defined areas for one or more taxes are benchmarked for an improvement project. And then the TIF infrastructure project is undertaken.
And assuming that revenues do increase as a result, the difference between the benchmarked revenue and the actual revenue provides an increment, which is used to then fund the project. TIFs go by many different names. Just a few of them here. I won't belabor the point. Because there's so many different names that are used, you have to be careful. For example, in Massachusetts, they use tax increment financing the way most of us would use the term tax abatement. Make sure you're in a particular jurisdiction to find out what name they're using and what it actually means before making any assumptions.
So, why do a TIF? Well, TIFs can raise new funds for infrastructure projects. And they can also be a budgeting technique. So, typically, an infrastructure project would have to compete against other spending priorities for capital funding. However, such a project -- if it wasn't competing for funding, it would have to raise taxes. But because a TIF project is seen as generating new revenue within the existing tax structure, it does not have to compete against other spending priorities nor require increases in tax rate. So, by generating its own revenues, the TIF project can be off budget. Imagine somebody wants to come to your party. And you say, I'm sorry. But I only have enough food and drink for the guests I already invited. It would be very difficult to uninvite any of these guests. And then this person who wants to come to the party says, don't worry. I'll bring my own food and drink. Because TIF projects are bringing their own food and drink, it's a lot harder to say no to. That's sort of one of the things that makes TIF projects very attractive.
This is the outline of the presentation again. And we're going to talk about how TIFs are applied. As you can see, there are many different ways, many different types of uses for TIF projects. And this is not an exhaustive list. But they might include reduction or removal of right of way. If a railroad yard is abandoned or downsized, the result might include real estate that is available for private development. Similarly, above an existing right-of-way could generate new revenue as well. Municipal parking faculty might lead to increases in sales and sales tax revenues. Improvements in streets and intersections might also yield increases in economic activity. Sometimes toxic soil contamination. And sometimes small parcels of interest among landowners can impede development. In such cases, soil remediation or site assembly could serve as the essential catalyst for new development and economic activity.
So, now we'll talk about how to establish TIFs. Question number one, is a TIF authorized? If so, what are the criteria? We also want to identify the properties receiving a special benefit. And define the TIF district boundaries. Third, we want to identify the revenue sources to be benchmarked. Fourth, we'll need to estimate the tax increment. And five, establish a termination date by comparing the tax increment and other funding against total project cost. Including financing, if necessary. And, finally, once we've got all those criteria handled, we'll enact a TIF legislation or ordinance.
So, TIFs are authorized to all states except for Arizona. But is it authorized for your level of local government? State-enabling legislation provides establishment criteria. They might include criteria such as blight, excessive agencies, depreciation of physical assets, lack of necessary transportation infrastructure. Declining land values. A history of economic stagnation, or a finding that it's unlikely to develop without a TIF. Enabling legislation might also contain criteria for the TIF project regarding whether it will catalyze new economic activity. And whether it will generate new revenues sufficient to pay the TIF portion of the project. And we'll examine some of these criteria going forward.
So, one of the key findings that's required in many but not all states is what we call the "but for" test. If this finding cannot be made and tax revenues would have been increased anyway, then a TIF actually deprives the general fund of revenues. And diminishes resources. So, for this reason, some states require TIFs -- limit TIFs to blighted areas where development would not otherwise occur. Here the "but for" standing basically means that but for the TIF, new economic would not occur.
And the key findings that are required is that a TIF will generate sufficient new revenue to fund the TIF infrastructure project. If this finding cannot be made, additional resources will have to be found to repay the debt or the infrastructure project will be repaid. If additional funding resources are required, in all probability, the infrastructure project will compete for funding with other projects and programs. TIFs are typically predicated on an infrastructure improvement. Yet the second bullet point here raises an issue about the impact of new development on other public goods and services. If new development creates needs for infrastructure capacity expansion beyond the TIF project itself, there will be no revenue from the TIF district for such expansion. Unless the tax increment is shared between the TIF infrastructure project and other infrastructure capacity needs. And the downloadable complete presentation, the impact of the TIF-induced development on other infrastructure and its potential to reduce development elsewhere will be discussed. We just don't have time to do it here right now.
So, identifying revenue sources. If a revenue screen is designated in a TIF state enabling action for use, it can be benchmarked prior to the TIF designation. And can be deposited into an account labeled for funding of the project. This includes property taxes and sales taxes. Other revenue streams could be designated as well. Including income taxes, hotel and occupancy taxes, sales, or lease revenues from public property within a TIF district. And principal and interest payments on loans made from TIF funds.
Next, we have to estimate what the tax increment will actually be. And typically, communities hire consultants to do this work. So, we'll let the consultant deal with that. And we'll go on to the next question. Which is how to establish a termination date for the TIF district. An infrastructure project or program is identified to catalyze development. You then have to compare the yearly cost projections to the yearly tax increment revenue projections. Differences between the cost calendar and the revenue calendar, after both are adjusted for risk, will determine whether the TIF project can be funded on a pay-as-you-go basis or whether financing will be required. This analysis will also determine when the project costs will be retired. The TIF termination date often established as the day after all TIF-related costs are retired.
Finally, we have to notify the public before adopting the ordinance. And the state enabling legislation will provide rules governing the adoption of local legislation. And determine the types of public notices and hearings required prior to the creation of the TIF district. Once those are done, then you can actually enact the ordinance.
Of course, there are legal and regulatory rules. It's very important that you establish legal authority by citing the following, all the requirements in the enabling state utilize. Make the enabling finding. And beware of spend of public funds for private gain. And any activity that might invoke taking the clause of the Fifth Amendment.
Finally, there are financing issues. As mentioned earlier, the amount and timing of TIF revenue compared to the amount and timing of spending requirements determines whether TIF revenue can be used to pay for infrastructure on a pay-as-you-go basis. Or whether it will be used to fund that service on bond. Bonds should only be used for infrastructure projects if its useful life is longer than the project life. If you would introduce our next speaker, that would be great. Thanks so much.
>> PEPPER SANTALUCIA: Thanks, Rick, for that brief overview of TIF finance. I'm excited we're now able to show -- hear from two of the leaders behind the Atlanta BeltLine Project. They will be giving a joint presentation today. One of the presenters will be Clyde Higgs, President, and CEO of Atlanta BeltLine, Incorporated. Providing oversight of the economic development, design and construction real estate development housing procurement, and human resources activities of Atlanta BeltLine, Inc. He also lends his leadership to establishing strong working relationships with private/public partners across the region, state, and nation. Clyde brings over 20 years’ experience in economic development, real estate, intellectual property, technology, strategic planning, design in real estate development, donor grant funding and government relations. Clyde joins ABI in 2015 from his position as Executive Vice President of operations and development for the North Carolina research campus, a multifaceted initiative to recruit science and technology companies to redevelop and reinvigorate a former textile town near Charlotte, North Carolina. Clyde holds his graduate degree in public administration from East Carolina University. And serves on boards, including two gubernatorial appointments.
We'll also be hearing from Rob Brawner, executive Director for the Atlanta BeltLine Partnership, a position he has held since 2016. Rob has played an integral role in the startup of the Atlanta BeltLine when he joined the organization in 2006. He is the longest tenured BeltLine employee. Under Rob's leadership, the Atlanta BeltLine has secured critical funding, including more than $200 million in philanthropic contributions. Collaborations with private, public, nonprofit organizations, the Atlanta BeltLine Partnership delivers people-focused programs to provide support for the project and economic and health outcomes for residents in the adjacent neighborhoods. He holds had an economics degree from Princeton and MBA. Please go ahead.
>> CLYDE HIGGS: Thank you very much for that introduction. This is Clyde Higgs. Again, as you heard, President and CEO for Atlanta BeltLine, Inc. We're going to give you just a brief overview of the BeltLine project. I promise you, the folks that are listening and watching on this video platform, it is woefully inadequate to really describe the magic that we describe as the Atlanta BeltLine. Physically, the BeltLine is an abandoned railroad corridor that we are repurposing for the benefit of people getting around our city in a significant way. We all know that Atlanta is, perhaps, one of the most amazing cities in the country. Our challenge is traffic. How can we reimagine ways to get around our city? Where we are prioritizing the pedestrian, the cyclist to really get around the city of Atlanta? That's what it is physically. It is infrastructure. It is perhaps one of the most ambitious infrastructure projects in the country right now. But what it is emotionally is it is Atlanta's favorite place. I'm biased. I'm going to say things like that. But truly, this is a place of civic pride for the city of Atlanta. That's what it is from an emotional perspective.
And spiritually, it is where Atlanta comes together. When this 22-mile loop is ultimately finished from a trail perspective, it will connect 45 distinct neighborhoods within the city of Atlanta. So, that is motivating to us. It's motivating to the people who live here. You have to think about what infrastructure did in the yesteryear, separating communities and going through neighborhoods. And what the BeltLine is going to do is going to bring those communities, those people back together. And be able to be connected through this infrastructure.
Physically, again, going back up there, roughly 20% of the city's population lives around the BeltLine or future of BeltLine. And as you heard the previous speaker talk about TIFs, we like to talk about TADs, tax allocation district. It covers 1600 acres within the city of Atlanta. We're not talking about suburbs. We're talking right in the middle of the City of Atlanta. Go to the next slide, please.
>> ROB BRAWNER: Clyde, I'll jump in here. This is Rob Brawner with the Atlanta BeltLine Partnership. Clyde gave some great context there. To even kind of take Atlanta even further back in history, as some of you all may know -- some others may not -- Atlanta actually exists because of the railroad. So literally two lines came together, put a stake in the ground. It started as terminus and over time became Atlanta. And as the city grew, the railroads built what they call BeltLines to bypass it. The irony, almost, is that these rail lines divided the city in many ways, right? The city grew up in overloads. And Atlanta has a history of division and things to separate. So, highways, as you can see, are certainly a catalyst for Atlanta's growth. But also cut through and cut off many communities, particularly lower income, African-American communities. Contributed to Atlanta's sprawl, despite the really gangbusters kind of economic growth that Atlanta has experienced for many, many decades.
Atlanta has been separated in many ways racially, socioeconomically. Generally, you can kind of go -- historically have been able to go from northwest Atlanta to southeast and draw a line. And you can see on both sides of that line where the wealthier, whiter neighborhoods are compared to what has historically been the lower income African-American communities. Yet the ability for lower income residents to move up economically, Atlanta has been challenged. And has appeared kind of at the wrong end of the top of some of those lists. And that has been an historic lack of access to the community.
As the BeltLine came to being, it was about connecting the city, right? Connecting where the physical barriers have been, the socioeconomic, racial barriers have been. And really came out of a desire to connect people. Connect people to opportunity, to each other, to jobs. And it initially started out of a thesis. It came out of a Master student at Georgia Tech, Ryan Rybel. And back in the early 2000s, our mayor turned to the corporate and philanthropic community, an organization called Atlanta committee for progress. To work with the city. To take this idea that was pretty widely embraced by people. And figure out how to make it happen. And part of the how do you make it happen was the creation of the tax allocation district. So, the Atlanta BeltLine Partnership, which was born in 2004. Worked with the city with investment Atlanta, our economic development authority, to get the redevelopment plan and the tax allocation district set up. That was approved at the end of 2005. Atlanta BeltLine, Inc., was created in 2006. And really took everything forward in terms of implementation.
So, Clyde has already touched on a lot of the components of the BeltLine. Clyde, I'll hand it back off to you. I know you guys have done some survey work on kind of where things are today in the minds of the people.
>> CLYDE HIGGS: Yeah. That's a good transition, Rob. And just to build a little bit more on that, again, pictures and videos will be inadequate to really draw a picture about the BeltLine. So, I welcome everybody on this call to make sure you get to Atlanta. And check us out. But just to give you a sense of traffic on BeltLine. And I'm talking about people walking, people using a bike, people roller skating. We experience at least 2 million unique visitors along the BeltLine stretch on an annual basis. Just to kind of give you a sense of scale. Again, it is one of the most popular places to be within the city of Atlanta. And people really use it as a way to get back and forth to, you know, key amenities and things that really enhance their quality of life.
So, to give you a quick stat, there is a tech company located literally right off of the Atlanta BeltLine. And they have roughly 3,000 or so employees. And a third of their employee base uses the BeltLine either to walk or ride a bike to get to their office and back home. And so, for us, that is critical. Because people are using alternative methods to get around our great city. Which, again, we know is challenged with some of our traffic situations. We'll go to the next slide, please.
And that really talks about the ambitions of the BeltLine. Most people know us as a trail network. This 22-mile loop. If you go to the next slide, you will see some information about who we are and what we do. So, you can see this loop that talks about, again, the trail. But we're also responsible for the creation of affordable housing along the BeltLine. So, as Rob and I talk about the belt line in such a loving, flowery way, we also have challenges. Making sure that people who have been in neighborhoods for decades can afford to stay in place. So, this affordable housing piece we're responsible for is critical. So, by 2030 we're charged with the preservation of 1600 units of affordable housing along the BeltLine. And even above that, you have an economic impact goal that we must achieve by the end of 2030.
And that is $10 billion of private investment will be created along the BeltLine loop by the end of 2030. And you will hear that number -- or that date, rather, throughout our presentation. Because that is when our TAD, our TIF sunsets. You heard the earlier speaker talk about the criteria with regards to a TIF or TAD in Georgia. So that sunset date for us is 2030. So, all the things that you see on this slide here, the 50,000 permanent jobs that will be created. Public art, clean-ups, construction jobs. All of those must be completed by 2030 when our TAD or TIF goes away. Rob, you may have other items you want to add here.
>> ROB BRAWNER: I know we have a lot to cover, Clyde. So, let's go to the next slide and talk about how all this work gets done.
>> CLYDE HIGGS: Go to the next slide. Under organizational structure, you will hear, again, from both of our organizations. Clyde Higgs, again, I am on the left of this slide, Atlanta BeltLine, Inc. We are lead the efforts with regards to planning, designing, and building the physical BeltLine that you saw in some of those earlier slides. We're also responsible for the affordable housing push, the economic development, the job creation. All those programmatic elements you saw on the slide earlier, that is what we are pushing. We roughly have a team of about 60 or so folks. From real estate to economic development, to housing, to design and construction. We are a fully functioning entity. That, again, is the city's agent to implement the project. Our budget for this upcoming fiscal year will be roughly about $150 million. And, again, we use those monies to, obviously, build the BeltLine. But also push those other programmatic elements forward.
>> ROB BRAWNER: And the Atlanta BeltLine Partnership -- again, this is Rob. We are the 501(c)(3) that supports the vision for the BeltLine. We have worked very closely, obviously, with Atlanta BeltLine, Inc., and numerous other partners. One thing that makes the BeltLine unique as a project is this kind of public/private partnership. And the dynamic that the two organizations have. We are a 501(c)(3). We focus on philanthropic fund-raising, much of the programming and advocacy. There are things that we are able to do as a 501(c)(3) that Atlanta BeltLine, Inc., as an entity may not be able to do. We have the three Es, enable the project, engage the public, and empower the residents. What we can do to support ABI in the city in implementing the BeltLine. You'll hear about those later. As well as some of the programming we do to help build that base of support. And help residents connect with resources, benefits, and opportunities that the BeltLine creates.
The two organizations obviously work very closely together. You can see at the bottom of this slide specific to the TAD, the TAD is a property tax base TAD here for the BeltLine. And kind of inherent in that is that the city, the county, and Atlanta Public Schools are the funders through the tax allocation district. Although there's a substantial other dollar. Which we'll talk about. That we have leveraged the TAD to secure those other dollars. The other thing I'll mention just before we go on to the next slide is the Atlanta BeltLine Partnership on this slide, BeltLine is done by two organizations. When I say there are many, many, many dozens of public/private, nonprofit community organizations that both ABI and the BeltLine Partnership work with to make this happen. I think the BeltLine, for a project this bold and broad in terms of its scope, you need federal agencies, local government, nonprofit partners, and many, many others. They're not shown on this slide. But they're absolutely critical to helping us deliver a project like the BeltLine.
>> CLYDE HIGGS: Indeed.
>> ROB BRAWNER: I'll turn it back to you to talk about the corridor itself.
>> CLYDE HIGGS: Yeah. We'll talk about the corridor. And also, let's go to the next slide, for timing sake, that says "funding the project" as well. This is critical for us. As Rob talked about, there are a lot of organizations that participate in the advancement of the BeltLine. It's ambitious. When it's all said and done, it will be north of a $4 billion investment in the Atlanta BeltLine. Having multiple funding sources is critical. And we get funding from a number of sources that includes the BeltLine TIF or our TAD. Which is the primary funding source for the BeltLine project. But we also get a number of grants from federal, state, local government authorities. And, obviously, the philanthropic funds have been significant with regards to supporting the Atlanta BeltLine. Let's go to the next slide here.
This is really what we describe as our problem state. So, you go to completing the corridor. This was kind of our theory to community. Hey, if you love the BeltLine the way you say you love the BeltLine, it's not going to be finished by time, the TAD, our TIF, sunsets. If you want the BeltLine completed by 2030, we're going to have to do new and innovative things with regards to financing. To raise the necessary funds to actually complete the trail network of the BeltLine. There were a number of efforts over the last 30 months. I bring that up specifically. Because we advanced a new funding mechanism. It is called a special service district. Many of you may know these that are just like community improvement districts or BIDs, business improvement districts. And we essentially passed one of these for the BeltLine during the pandemic. Fortunately, that was passed in less than -- a little more than two years ago. Which ultimately raised about $100 million of funding for BeltLine. And this is above and beyond our tax allocation district for the BeltLine. This was an additional tax that property owners decided to levy on themselves. Because we wanted to get the BeltLine completed by 2030. And then with that, that led into a number of other funding mechanisms. I'm going to ask Rob to talk about SSD and some of the other elements there.
>> ROB BRAWNER: Sure. As Clyde said, we were in a situation where we needed to deliver all the things that ABI needs to deliver, TAD can't do it all. What the TAD is really critical, it is first dollars in. So, the extent there's advice to give to others, that are contemplating this, you know, when we went to potential funding partners, you know, and asked them to help us complete the corridor here, they needed to know that the TAD was committed. Clyde and his team get a lot of credit by putting that initiative in on their end. That allowed us to ask property owners who wanted to see the BeltLine done -- of course, it's to their benefit -- to participate through these special service districts. And the philanthropic community as well. Who are big believers in the BeltLine. At the same time, they are not giving their philanthropic dollars so that the development community, to enrich the development community. So, it was really important that the property owners, the commercial and apartment properties through SSD. And that can be used to secure federal funds. Which the city of Atlanta has had a very good track record of securing.
The linchpin, once the TAD money was in as the foundation. I'm not going to get into the weeds here. You can roughly see the Special Service District parallels the area that is half the side of the BeltLine. It is the commercial and apartment property owners who, frankly, benefit financially when the BeltLine comes through. It was a multi-year process. But ultimately got passed by the city council. And under our previous mayor's leadership during the pandemic. And the really important thing, I think, is how do you pass a property tax during the pandemic? It was this whole vision that Clyde was describing. This was a way for Atlanta to really launch itself out of the pandemic in an equitable fashion. All those things that come from it, the jobs, the affordable housing, the health, and wellness. All of this is something we said, look, we can make an investment now. And help Atlanta continue to thrive as we move out of the pandemic and recession. By all accounts, that has absolutely been the case.
>> CLYDE HIGGS: And also, that SSD slide, this was a very robust -- we don't want to just cover this. It was just a slam dunk. We had a very robust community and public conversation with folks that, to be quite frank, didn't always agree with us on this. And I will tell you, ultimately, this was advanced through city council with the mayor's support. I think it passed 13-2. Two in opposition, 13 for it. But I don't want to suggest that this was just a slam dunk. It definitely required deep, deep conversations with community and business leaders.
>> ROB BRAWNER: One of the questions in the chat there, $350 million was what was required to finish the remaining part of the 22 miles. And the $4 billion that Clyde mentioned before, that's the entire BeltLine program. That's transit. That's trails. That's parks. It's affordable housing. Kind of all public art. All of those components of the BeltLine. This capital stack we talked about, the $350 million, was kind of the remaining portion of the trail corridor, I think prior to securing the funds. And realistically, the bulk of that $4 billion is for transit. Which is a longer-term project. There's a question about reconciling the numbers. So just wanted to clarify that.
>> CLYDE HIGGS: And I'll say really quick, Rob, another funding source to address that gap. In 2016, the City of Atlanta passed a MARTA sales tax. And if you believe the projections, that will produce over $3 billion of revenue. And a portion of that will be allocated to the future BeltLine transit.
>> ROB BRAWNER: Great. And to answer another question that's there in the chat. The Special Service District is the commercial and apartment properties within the planning area. Single-family homes, government properties and parks, we left out. That's what's driving the shape of it in this manner.
Going on here, we talk about corridor. Parks is another critical component of the BeltLine. In total, there's expected to be 1300 acres of parks and green space that includes the linear green space throughout the corridor. There have been many new and improved parks like the trails. It requires multiple funding sources. There's a couple of examples we'll share. Where different funding sources have come together.
One is Historic Fourth Ward Park, the first major park along the BeltLine to open. In its center is a detention pond. Watershed management had an investment here. And, really interestingly there, there used to be a lot of flooding in this area along the BeltLine. You can see the BeltLine corridor kind of to the right of the park. And the typical, you know, solution would have been to put, you know, separate storm and sewer underground. Instead, the community really led the charge to put in a detention pond. And at a cost savings, actually, for $25 million instead of $40 million. Department of Watershed management was able to build this pond, solve the flooding issue. And really just opened everything up for development. Of all the buildings you see in this picture, the little white one kind of at the left edge was the only one that existed around this park when it was built. And in the far distance, the former Sears factory, which is now city market. The rest of the park was built out using philanthropic dollars. City of Atlanta park improvement funding, TAD funding. It really shows how all those funding sources can come together to stimulate, ultimately, the TAD. Because all of this development has generated property tax revenue that is feeding the tax allocation district. And helping us to continue to build the BeltLine.
Another park worth noting. Again, more water. Atlanta now has a 30 to 90-day supply of emergency drinking water through the conversion of what was formerly (unintelligible) into Westside Park prior to the opening of this reservoir, we only had three days. Obviously, that was a deterrent to continue growth. We're in a much more resilient place. This park was made possible through watershed management, through the parks department. Through the tax allocation district. And then substantial philanthropic funding through the Arthur M. Blank Family Foundation.
I'm going to start moving quickly. I realize we're coming up on time. Clyde, do you want to touch on public art?
>> CLYDE HIGGS: Yeah, just really quick. We'll be brief with the remaining slides. But the public art is also one of the responsibilities for BeltLine. When it's all said and done, you will see just a smathering of art opportunities around the loop. Murals, performing artists along the BeltLine. We can collude our arts program on an annual basis typically with something called art on the Atlanta BeltLine. Which is what we describe as the BeltLine parade. All of those who have been to New Orleans, think about a very family-friendly Mardi Gras along the BeltLine. With tens and tens and tens of thousands of people that come out, really, to celebrate Atlanta. And so that is a stated goal for us.
We can move to the next slide and talk a little bit about the economic development piece of BeltLine. I think maybe we -- there you go. And so, people don't realize this. But we have invested over $700 million of monies into the BeltLine to date. And what we've seen is almost a $9 billion private investment impact into the BeltLine. And this is not a multiplier effect number. This is direct investment. So, I just want you to kind of sit on this slide. So, you really have a 10-1 return on investment for this infrastructure project. And, to me, that is pretty impressive. We can go to the next slide, please.
And so, one of the stated goals for BeltLine is the creation of roughly 50,000 jobs by the end of 2030. That number was originally 30,000 permanent jobs created by the end of 2030. But just because of the economic impact of the BeltLine over these years, we actually turned up that number. And made the new goal 50,000 permanent jobs by the end of 2030. And we are roughly at half that number right now. And we are also doing significantly well on the construction jobs that have been created along the BeltLine. And we are over 60,000 construction jobs. Our original goal was around 40, 48,000 construction jobs. We're just blowing that one out the door. Go to the next slide.
>> ROB BRAWNER: Clyde, one thing quickly I'll mention here. There's a very intentional programmatic effort between Atlanta BeltLine Partnership and Atlanta BeltLine, Inc. Because you can create the jobs. At the end of the day, how do you use BeltLine as an equitable development tool in addition to being an economic development tool. It's really about who gets the jobs. Working with a host of partners. Including employers. There are very intentional pipelines being set up so workers can get the training they need and secure the jobs coming into the communities.
>> CLYDE HIGGS: Well said, Rob. Being very surgical and intentional about making sure that community has access to those jobs early on. Also, another piece, when we talk about equitable development. Future BeltLine transit is so key. Because ultimately you have to think about people who live in, let's say, perhaps southwest Atlanta. And their job is in city market. Those are great opportunities. But not everyone can ride a bike. Not everyone can walk on the BeltLine. Then what about weather challenges? That's why the transit component for BeltLine is critically important as well. Ultimately, what we're trying to do is get a vehicle expense out of people's households. That's why we get into this whole subject of housing affordability. You'll see on this slide we are charged with the creation or preservation of 5600 units of affordable housing along the BeltLine by the end of 2030. We are roughly at about 3100 units to date. You can see that number on the right. And then there's generally just another 1700 units that have been created that are just close to the BeltLine. But not necessarily in our TIF, in our tax allocation district. So, we use our counting methodology -- not to get to esoteric here. But we can only count units in the TIF or the TAD. That's why you have these two numbers out here. That is critical. It's important.
But the things that we're really doing that will be beneficial to the long-term health of our city from the affordability perspective -- we can go to the next slide here. Is making sure that we acquire key sites along the BeltLine loop by the end of 2030. And I'm not sure if we have housing experts in the audience. But you know that controlling the land is key from a long-term and median income goal. As an organization, we've essentially tripled the land that we've acquired for future housing affordability over the last three years or so. But controlling the dirt is absolutely critical to making sure that you can deliver affordable housing units to people that are restaurant workers, entry level firefighters, and that's what we're trying to do.
That's not just the right thing to do. It's also an economic development strategy. Because do you really want your child's teacher to have to drive a mile or an hour outside of Atlanta? Or live an hour outside of Atlanta and to drive into the city to teach your child? That's not really what we want to do. Again, that just continues to give back to the whole traffic strategy there. So, making sure that people can remain in place. Thrive because of the BeltLine is key. That's why that land acquisition strategy is important. But also, the BeltLine partnership is doing some key things around programming that will help residents as well.
>> ROB BRAWNER: Yeah. So, as TAD -- sorry, as Clyde said, the affordable housing, Atlanta BeltLine, Inc., and where it can spend its money has to be inside the geographic boundaries of the tax allocation district. Certain things in Georgia that you cannot use TAD funding for. One of them is to help people pay their property taxes. So, as the BeltLine comes into communities, a lot of those neighborhoods, there's a much higher demand to live there. And that can cause appreciation in home values. Particularly for long-term residents or seniors who may be on fixed income, that increase in property taxes can really give a burden that could potentially have -- where they need to sell their home and leave.
Just as the BeltLine is coming in and adding improvements to quality of life. Our legacy resident retention program is a philanthropically funded program. Where we will cover the increase in property taxes for long-time residents in BeltLine communities. Particularly in lower-income communities on the south and west side of Atlanta. And that allows them not only to stay in place. But more importantly, to build wealth. How can the BeltLine be used as an equitable development tool? As property values increase, probably few assets in the U.S. are appreciating as a home on the BeltLine. It will enable a lower-income resident to hold on to that asset. Can really make a big difference from a wealth creation standpoint. We have educational workshops that help residents lower their housing cost, their property taxes. And we actually earlier in the BeltLine created an organization called the Atlanta Land Trust.
If you may be familiar with community land trusts or CLTs, this is a way to create permanent affordability. As Clyde said, that's critical on getting that land under control. This has helped on the single-family aspect of affordability. The way at least the BeltLine tax allocation district was drawn, it was generally industrial/commercial properties. Not single-family homes. So, through philanthropic funding and other partners, we're able to have a strategy that helps keep single-family homeowners in place as well.
>> CLYDE HIGGS: One of the things is that wealth creation piece. And that is key for us. We'll go down to the next slide that talks about BeltLine Marketplace. For lack of a better description, BeltLine Marketplace is essentially the BeltLine's first small business incubator with the focus in really helping minority entrepreneurs land on the BeltLine. Just from the commercial affordability perspective. And so those that are familiar with your Atlanta geography, we have downtown, midtown. And we have Buckhead. Buckhead historically, perhaps, has been the high-rent district from an office perspective. That is no longer the case, comparatively speaking. You're getting some of the highest office rents now off the east side trail of the Atlanta BeltLine. So, what we're doing is being very proactive. And making sure that we are standing up opportunities for small businesses, legacy businesses to win because of the BeltLine. So, that's what you see here on this BeltLine Marketplace slide. Is just us converting these shipping containers, if you will, into spaces for these entrepreneurs to locate along the BeltLine. To ultimately create wealth. And help them to grow their business. You can go to the next slide, please.
All right. Rob touched on this earlier. One of the things we promised during the whole Special Service debate for the BeltLine was additional support for small businesses around the BeltLine. So, one of the things that we've done -- and this is actually a grant we received from EDA for about $187,000. That's to essentially support the thousands of small businesses along the BeltLine with all the wrap-around services that you could think about to help a business to grow. We also provide grants for these businesses, these long-time businesses that have been in BeltLine neighborhoods to apply for facade improvement opportunities. Where they can freshen up the facade of their facilities. And get ready for all the economic activity that's going to come because of the BeltLine. We can go to the next slide.
That's on the community engagement side. Community engagement for BeltLine, Inc. is perhaps our largest department. We do not chew gum without having a conversation with the community. And I think the same thing with BeltLine Partnership. Rob, you may want to round off. And just talk more about the educational seminars you have for the community and conversations.
>> ROB BRAWNER: Yeah. Where the two organizations, obviously, collaborate very heavily, but also have distinct roles, right? Clyde's team is getting that resident input into what the BeltLine is going to be as they build it out. The engagement work we do with the BeltLine Partnership is activating the BeltLine. We have the largest free fitness class series. We have 5K, 10K races. We put on events. It's also educating people about the BeltLine. Bus tours, walking tours, table events. Trying to expose people to the project. If they want to get more engaged with Atlanta BeltLine, Inc., they can certainly do so. And obviously mobilizing residents.
Think of all the volunteering from a beautification standpoint. And having advocates that go out, being the ambassadors, to help us spread the word and build that base of public support. And things like the Special Services District, if they didn't have literally hundreds of thousands of residents calling in, saying we need the BeltLine. You have to pass this. I'm not sure it would happen. Clyde referred to the more MARTA sales tax in 2016 for transit. The residents who really want that BeltLine transit to go to the polls. That's critical. We're fortunate to have a mayor who loves the BeltLine. And is fully behind it. That's a big piece of that public support. So, different types of programming. But obviously working together.
I think we're down to our last slide, Clyde, if you want to talk just a second about the equity tools that you all have.
>> CLYDE HIGGS: Yeah. Absolutely. And so about five years ago, we hired our first equity inclusion officer for BeltLine, Inc. That's Annette Sykes. The goal is to make sure as we deliver this project with community that all residents will benefit because of these investments. And we all know that, yes, there is the great upside to the projects like the BeltLine. Or projects like the BeltLine across the country. But you have to, obviously, make sure you're having impact in a positive way on all communities. And so, one of the things that we are doing is we're partnering with the Atlanta Regional Commission and Neighborhood Nexus. In making sure that we are tracking data in places where we make investments. And so, people, obviously, say things about BeltLine with regards to gentrification. That comes up from time to time.
I think the appropriate word is not gentrification, but it's displacement. Gentrification, to me, is almost disrespectful. Because if you're suggesting that communities that have been historically marginalized don't deserve a park, don't deserve a grocery store, don't deserve green space or other amenities, to me, that falls as disrespectful. I think we need to make sure we're using the words displacement really as the output that we're trying to prevent. So, by tracking and using data tools, we're really able to get a better sense if our investments from the BeltLine perspective are really having the intended effects that we want. So, we're doing a number of things that are data focused. But also, things that, again, emotionally, and spiritually just feel right because of who we are from an Atlanta perspective. We are very open and bold when we talk about helping communities that have not seen investment for decades. And that's something we don't shy away from. Even the BeltLine Marketplace we talked about earlier on. With the focus to make sure the wealth that's been created by BeltLine is felt by all. And not just the well healed.
>> ROB BRAWNER: Great. I realize we have taken maybe a little bit over. I do want to point out, Clyde, I don't know if you can see these. There are a couple of transit questions in the feed. When will the transit system be complete? You spoke earlier with the MARTA sales tax. I think that goes through 2040, is that right?
>> CLYDE HIGGS: Yeah, roughly. And to your -- when will the system be complete? We are looking at -- this is a 30-year program when it's all said and done. So, the transit component of the BeltLine will not be completed by 2030. But there is one segment that MARTA is advancing. We're at roughly 30% design right now. That's the east extension. So, that will take the existing streetcar in Atlanta. And take it to the east side trail going north to Pond City Market. That's what MARTA is sharing with us from a timeline perspective. That could essentially be in operations by 2030. But in full transparency, we have a number of things that we have to work out with MARTA, and with the city. And as Atlanta BeltLine, Inc., being the city's agent on that, just a number of things we need to iron out before that project stars to advance.
>> ROB BRAWNER: Great. And, Clyde, there's another question about what happens if, you know, Atlanta BeltLine hasn't met the economic development and jobs goals by the time the T a. D expires? Obviously, we will meet the corridor affordable housing, economic, and jobs goals. Those are all on track to be met by 2030. But there are pieces, transit being one of them, that may go beyond 2030. I know you all are working on the strategic implementation plan right now that's kind of plaguing some of those issues.
>> CLYDE HIGGS: Yep. Yep. Yeah, great question. As Rob mentioned, we are in the throes of completing what we describe as our completion bible. It's the strategic implementation program, the SIP. So, with all the new funding realizations, we are trying to develop this business plan on what he we can finish by 2030. And what will be left as a remaining responsibility after 2030. And, ultimately, you know, practice has that question is then what happens to the TAD? Will it really sunset? That is mostly a political question. You have to get our TAD partners. That's the City of Atlanta, Fulton County government and the Atlanta Public School system to participate in that. And that is a heavy and hefty conversation to have. But, you know, those decisions will probably be made in the next, you know, five years or so, is my guess. But that's mostly a political conversation. But thank you for those questions.
>> PEPPER SANTALUCIA: Great. Thank you so much, Clyde and Rob, for that presentation. The project is ambitious. It's multifaceted. We could spend a lot of time talking about it. And we look forward to having you back for an update. But in the interest of time, we're going to move along to our next presenter. We want to give you a couple of looks at the use of TIF in different parts of the country. Next, we'll be hearing from Gwendolyn Tillotson-Bell, who is in the Mayor's Office of Economic Development. In her role she's responsible for developing and implementing policies that strengthen Houston's competitiveness in attracting investments across key industry sectors. Gwendolyn has been working 17 years in leadership roles, advancing economic development, workforce development, and strategic implementation within the public sector. Gwendolyn has a bachelor’s degree in accounting and MBA. And is a certified public manager. Gwendolyn, please proceed. Thank you.
>> GWENDOLYN TILLOTSON-BELL: Pepper, thank you for the opportunity to share some information about Houston's TIF program. And the different applications of tax increment financing deployed by the City of Houston. Primarily to finance the construction of critical infrastructure, support affordable housing, and also improve access to employment centers. I appreciate the opportunity to present. You can go to the next slide, please.
So, in Texas -- and we talked a little bit earlier about the legislative requirements that regulate TIF. In Texas, TIF is authorized pursuant to Chapter 311 of the Texas Tax Code, which describes the criteria for the use of TIF through the creation of a Tax Increment Reinvestment Zone. Texas may be the only state or one of few states that actually refers to the geographic area or the zone by which to represent sort of this TIF concept. But basically, the zone is the actual boundary where the TIF calculation is applied. The statute limits the value within TIRZs. Not more than 25% of the taxable value within the municipality may be comprised and the aggregate of all the TIRZs. Here in Houston, we have -- I think this is our most utilized economic development program.
We have definitely maximized the program. We are probably at 22% of the city's total taxable value being contained within TIRZs. We are looking at developing policies that will allow us to adjust boundaries in the areas that are under-performing. So that we have some capacity. Because at 25%, it's not likely going to increase any higher. The other restriction is that not more than 30% of the boundary of a TIRZ may include residential. And for the purposes of the statute, residential is defined as five or fewer housing units. Of course, that's not a problem here in Houston. Because we typically are way, way under the 30%. We recognize that this school is primarily for the support of commercial areas. So, we usually don't have a problem meeting that 30% restriction.
A little bit of a nuance here in Texas, the statute does not limit the term for a TIRZ. The first TIRZ we created was created for a 40-year term. TIRZ being created for 30 years. 30 years works well for Houston. It allows the TIRZ enough time to generate increment that's sufficient enough to be able to issue long-term debt, to make investments, and finance critical, very costly, high-capital cost infrastructure. The other, I think, nuance is that the state does give municipalities the ability to extend the life of a TIRZ. We have the opportunity to evaluate whether or not a TIRZ has met its objective. Or whether or not additional time may be need had had in order to reach its objective. We can actually do that through the normal process of extending. Very similar to the process for creating the TIRZ.
Just like you heard before, in Texas, it's a very transparent and public process. It does require public notification and a public hearing. Most of the council-related activities or actions does require some kind of public notification. So, you know, again, it is very transparent. We do hear a lot from constituents. We are very actively involved in the engagement process. To ensure we have support from the community prior to moving forward with any creations, extension, or annexation. The statute defines the TIF. Primarily we're referring to public works related projects. Public buildings. Any land acquisition associated with a public action or transaction. Remediation, demolition. So, the statute is very clear on how the financing may be used. And the types of projects it may finance and fund. So, it's not sort of a random use of public dollars. Next slide, please.
So, in -- for the entirety of the TIRZ program, the first one was created in 1995. There are 29 TIRZs that have been created since that time. And the first one was created for stabilizing land values. And also, to restrict the type of development that could occur within the boundaries of the TIRZ. I don't know, many people may be aware, some not. But Houston is the largest city that does not have formal zoning in place. Zoning has been brought to the attention of the constituents and the voters. And has been voted down three times. There are certain types of regulations that are governed by the planning and development department. But in terms of having formal zoning. So, the TIRZ has capabilities of restricting the type of development. And was first used for that purpose.
It has since been expanded to allow for primarily infrastructure development. The most recent TIRZ created was created last year. And it was to support significant investment that was occurring within the Texas Medical Center. TMC's institutions are investing in excess of $2 billion for their life science operations and activities. So, we felt that now was the ideal time. I'll just say this. This is the first time that we were able to create a TIRZ in the TMC. The Texas Medical Center is a nonprofit complex. And does not generate property taxes. But there was a revision to their restrictive covenant that allows at least the investments associated with life science to actually be available to the public. Or have public partners. Which, in turn, made that -- those investments private investments. Therefore, there will be taxes generated. This was the first time in the history of the TMC that we have been able to even consider a TIRZ.
For this project, the primary focus was around resiliency and public safety. This is a 1400-acre carper campus. One of the major projects that was very instrumental in the decision to pursue and create the TIRZ was an investment in a water solution system that would make the TMC less dependent on the city for water supply. And mitigate the risk in the event of a natural disaster. Of course, Hurricane Harvey created opportunities for many, many lessons. This being one of them. Over the life of the TIRZ, a 30-year term, we are projecting about $500 million on TIRZ revenue to be generated to be put back into that general area. Only one TIRZ has been terminated to date. That TIRZ was terminated primarily because it met the objective of the project plan. There were no other projects that were identified in the other tax jurisdiction partners all agreed and had consensus that we should proceed with termination. So far, only one has been terminated.
There are a couple that are being considered for termination. But that has not occurred yet. Here, you know, we have our TIRZ. But rather than the city attempting to operate, administer and manage 28 active tax increment reinvestment zones, we create a parallel local government corporation. Which is referred to as the Redevelopment Authority. The TIRZ and local governments are parallel agencies and share the same board members. Until the local government corporation is created our office at the mayor of economic development, we are responsible for the full administration and operation of all of the fiduciary responsibilities as it relates to the TIRZ. At the time the local government corporation is created, we create a separate agreement. We refer to it as a five-party agreement that basically transfers those responsibilities from the city directly to the local government corporation. And our responsibility becomes more of the governing entity. So, we govern all the activities associated with all of the TIRZs. And we facilitate and present all counter-related actions. As well as we have the final approval on major agreements and all debt-related instruments as well. Next slide, please.
So, TIRZs, there's two ways TIRZs may be created here in Texas. The first, and the one that is utilized most in Houston is that it can be created by the city. So, at the request of the administration. We often get city council members advocating for the creation of a TIRZ to support their communities. As well as other members of other agencies, governmental agencies. And so, one of the TIRZs was created for the benefit of the county to make substantial investment within a certain area. If a TIRZ is created by petition, which is the second way that TIRZs may be created, it has to represent 51% of the passible value associated with the boundary that's being proposed. There are some, you know, thresholds that have to be met before a petition may be submitted to the city for consideration.
There are only seven TIRZs of the 29 that have been created so far that were created by petition. The huge benefit and value to the city and to the community regarding petition TIRZs is that any TIRZ that is created through petition has to set aside or allocate one-third of the revenue that is generated within that TIRZ for the purpose of supporting affordable housing. There is very limited description of how those funds may be used. Which does allow some flexibility for the municipality to determine the best way in which to utilize those affordable housing dollars. It only pertains to the largest counties within Texas. The largest cities are subjected to the one-third requirement. And so just to try to quantify that, between FY 14 and FY 22, more than $140 million has been generated and allocated for the purpose of affordable housing here in Houston. And they have been -- those dollars have been used to support affordable housing in a variety of ways. Next slide.
Because of the substantial revenue generated for affordable housing, it was important for the city to create separate funds to better manage the affordable housing activities and transactions. But also, to track and monitor the affordable housing. To see how those funds are being used and to be able to determine the implication or impact of those. The fund, by ordinance, is managed by the Housing and Community Development Department. So, they have full access to utilize these resources. They use those resources in a variety of different ways. They're partnering with affordable housing builders on either the single-family or multiple-family side. But they also use those dollars to cover the administration cost associated with their grants. Many of the grants they receive from HUD. Because the housing department receives very little general funds. That TIRZs affordable housing dollars is a critical resource for the housing department to be able to effectively administer and manage those grant funds. There are two TIRZs that actually do not contribute to the affordable housing fund. And this was through a negotiation with the administration at the time. That they actually are put in a position to self-manage their affordable housing program and develop a policy around those affordable housing programs. And the largest is the area that is located in Midtown Houston. Next slide, please.
So, in Midtown, which is just slightly south of downtown, they've invested more than $40 million in a variety of different kinds of initiatives. So, I think the most impactful is the partnership with affordable housing builders. Whereby the TIRZ acquires single-family lots. Sometimes they acquire those lots that are scattered lots. Under instances, they're able to aggregate multiple lots to be able to support larger development. And rather than making those investments and acquiring the lots within the Midtown area, the cost in Midtown has skyrocketed. It's very, very expensive to buy land and maintain some level of affordability. So, Midtown has acquired land just south of Midtown in an area called Third Ward. Where they have been able to really maximize those affordable housing dollars to buy more lots.
Those lots are then conveyed to home builders. And there are two different types of home builders that they work in partnership with. The first is the nonprofit builders or community development corporations, CDCs. If they are conveying to either one of those types of agencies, the lot is conveyed at no cost. And so, you know, we talk about trying to create affordability. Sometimes you have to get really creative and absorb those costs. And so, we work in transferring those costs. We recognize there's limitations on CDCs and nonprofit builders. A private builder, affordable housing builder, the lots are conveyed at a significantly reduced cost of $1.50 per square foot with those builders.
Now, we do recognize that when we are creating affordability, the goal is to maintain and control affordability for an extended period of time. To assure affordability and to prevent a home buyer from acquiring a home and a quick sale to cash in, there are restrictive covenants that run with the land. That also includes occupancy for how long the home buyer must maintain home ownership in that unit. And have to meet the affordability terms in terms of the (unintelligible). Every home buyer, when they close on their home, they also sign a forgivable note. So, they execute a deferred payment, forgivable promissory note. They also have to execute a subordinate lien of trust. As well as occupancy restriction. That term is specifically 20 years. That home buyer must remain there for 20 years.
I think there's only been two instances so far where the homebuyer was not able to reside in the home to meet that entire 20 years. One case it was because of a life-threatening situation. But they were able to engage back with the TIRZ. Because that's part of the requirement. That's part of the restricted covenant. They engaged with the TIRZ. They were able to identify with the TIRZ a second homebuyer that was able to move into the home, meeting the affordability guidelines. The homebuyers are also vetted to ensure they meet the criteria from an income perspective. And that home was then sold to that second homebuyer. And that second homebuyer is now required to remain in the home for the duration of the term. It doesn't start over. But they must remain in the home for the duration of the term. Next slide, please.
So, another application in which the TIRZ uses affordable housing dollars is by actually making the initial investment or construct costs to be constructed, infrastructure associated with affordable housing. So, they could either finance the basic infrastructure. We're talking about water, wastewater, roadways, sidewalks, as well as some landscaping, some lighting. The key is that in order to use the resources from the TIRZ, the project has to be in the public realm. And so, we cannot actually make investment on a private site. So, any eligible improvement or infrastructure that is eligible under Chapter 311, TIRZ can make those investments. If that's the case, they manage the entire project. TIRZ, from the preprocess, through completion, they manage the entire project. And because of the TIRZ's inability to fund or finance any type of infrastructure more recently, TIRZ have partnered with our housing department. Whereby the housing department is able to use HUD funds to cover the costs for on site. On site water taps, wastewater taps. And it actually helps to improve or enhance the affordability of the home for the homebuyer. We're starting to see -- we're going to explore that as a potential model as we move forward to support more affordable housing development. Next slide, please.
So, just kind of shifting from Midtown. Uptown is another TIRZ that is a petition TIRZ that has set aside affordable housing dollars. We transfer the affordable housing increments to the affordable housing fund. And while the increment fluctuates from year to year, at the highest level, the TIRZ annual appropriation was more than $13 million. So, this is just one TIRZ that was allocating $13 million to the affordable housing fund for the purpose of supporting affordable housing related transactions. The way that -- again, I mentioned that they use the TIRZ funds to cover non-graft costs associated with the receipt of HUD funds. But they also use those funds for their home ownership assistance program as well as their home repair programs. There are other programs, like homelessness, that also are eligible for the use of TIRZ funds.
The housing department really, truly maximizes those resources to support traditional housing as well as nontraditional housing when it comes to homelessness and costs associated with homelessness. In addition to that $13 million allocation, the other option we have through the local government corporation I mentioned is to issue long-term debt instruments. So, last year, Uptown actually secured $100 million in those bond proceeds. It was then transferred to the housing department to give the housing department much-needed resources to create, you know, these long-term partnerships. The challenge, though, when that happens is that the $13 million that the Uptown TIRZ was previously transferring to the affordable housing fund, has been reduced because the debt service has to come out of that fund before any of those dollars may be transferred for discretionary use. So, you know, that's the key takeaway. If there's a debt instrument issued, then recognize the implications to the fund. And how that could potentially impact the department potentially relying on those funding sources. Next slide.
So, another TIRZ that has been very successful in creating affordable housing units in partnership with developers is the Gulfgate TIRZ. In partnership with seven different affordable housing builders, they've actually construct or reimburse costs for the housing-related infrastructure. The TIRZ Gulfgate area was an area that was truly lacking private investment. It is in close proximity to the airport. There was a lot of blight and a lot of distressed properties. But over the last five years, this TIRZ has been super, super effective. They are going to be creating more than 2,000 single-family affordable housing units through those seven partnerships.
In addition to working with the TIRZ, in some cases where there has been a lack of investment even in the event that a TIRZ is there to help support the cost associated with infrastructure, TIRZs sometimes are not by themselves able to meet all of the need or the demand for infrastructure. And so, in the case of Gulfgate, it required an agreement and partnership with the City of Houston Public Works Department that has affordable housing infrastructure to cover some portion of the cost that was required. There is an in-city municipal utility district that is also a partner. As well as a public utility district. Case in point is TIRZ sometimes is not enough. I think we heard from the previous example that it requires multiple partnerships, philanthropic dollars, other public entities in order to meet the needs of communities that have been under-invested for so many years. That was the case here in Gulfgate. But we're seeing tremendous success. Next slide.
So, just a slight shift from TIRZ's support of affordable housing to the leveraging capabilities of the TIRZ. Which here in Houston, one of the key factors, I think, that elevates this economic development program above other programs that we have access to in our toolbox. All tax jurisdictions with the exception of school districts may participate or contribute tax revenue to the TIRZ by an agreement. An interlocal agreement executed between those partners and participants representing the percentage of property tax revenue they're willing to contribute to the TIRZ. Prior to 1999, school districts were able to participate. Which is why you see a reference to the school district. After 1999, by legislation, they were prohibited from participating in TIRZ. If a TIRZ already entered into an agreement with the school district, those TIRZs were grandfathered. And the school district was able to participate in those TIRZs until the term expires. In all of these agreements there's an expiration or termination from the participating jurisdiction in terms of the amount of time that they're willing to contribute. Very few other partners contribute for the extent 30 or 40 year.
This is an example here about the power of incremental value of having multiple jurisdictions participate. When you look at this slide here, the city is contributing about $5.3 million. And this is just fiscal year 22. The total increment being used to invest in city-related projects that were ultimately conveyed to the city, city assets is $15 million. TIRZ is really in a prime area to revitalize. It's in close proximity to the airport. Has access to very good infrastructure. In terms of highways. The land cost is relatively low. There have been, you know, a lot of movement. There's just been a lot of companies that have moved away from the Greenspoint area. Which has caused some of the distress and blight in the area. Next slide.
So, in addition to leveraging local jurisdictions and partnering to have additional resources to make those investments, our TIRZ program -- these are probably five or six of the largest TIRZs. They've been very successful and effective at using the local TIRZ dollars as matching funds or administrative funding to access and get additional funding from the state or federal government. In 2019, $25 million was awarded to the Memorial TIRZ for the full reconstruction of two parallel corridors. They're one-way corridors. And then just the next year, they were able to access and get $40 million additional funds from to complete the entire segment of that corridor. So, this is just one example. Our TIRZs, in aggregate, have secured hundreds of millions. Probably 300 plus million in state and federal grants.
If not been for the TIRZs ability to get additional funding, we would not have been able to have been successful as we had been. Because we would not have been able to fund these types of capital projects that have been invested or plan to be invested. Anyone who is considering the creation of a TIRZ. If you're currently utilizing a TIRZ, I think it's really critical to consider the ways in which you can create these partnerships. And get local participation. Even here in Houston, there may be restrictions on how the other jurisdictions may want to use this revenue for certain types of projects. But, again, the value add is that those projects dollars are still being invested by business owners in Houston. And ultimately are accessed by the city. Next slide.
>> PEPPER SANTALUCIA: Gwendolyn, this is Pepper. I want to ask if you could hit the highlights on your remaining slides. So, we have time for our next and last presenter. Sorry to do this to you. We want to make sure we have time to hear from everybody.
>> GWENDOLYN TILLOTSON-BELL: Um, sure. So, just here, just some examples of the economic impact of TIRZs in the Uptown area, which is our Galleria area. It just shows the impact to the taxable value from the base year to the current value. And the percentage change. Which is very substantial. And so, we recognize that this is one instance of successful TIRZ. Next slide, please.
And this is a slide that represents the change in population. So, between 2010 and 2020, we show the change in population. But we also show the change in the affordable housing units that have been constructed or are available to support the growth of the population. Next slide.
Another impact or example of economic revitalization is for an area called historic Fifth Ward. Created in 1999. I really want to highlight here is that a TIRZ without investment is a TIRZ without investment. It doesn't have value unless there's private investment. More recently, we annexed an area of about 150 acres. Which has attracted a $2 billion investment from Midway Development. Which will allow the TIRZ to finally make that critical investment infrastructure. Next slide.
And another example in terms of how accessibility to employment centers. Uptown using TIRZ resources to construct a rapid transit lane as well as a terminal. Again, it leveraged its resource to get access to federal dollars to make this $170 million investment. Next slide.
Another TIRZ was more creative. In partnership with the City of Houston for downtown. Which significantly lacked population. We created what's called the downtown living initiative. It's the economic development program that incentivized multi-family developers to build and construct multi-family units downtown. And we reimbursed them $15,000 per unit. In combination with all the different entities, it's a $75 million investment. And it's closed. And we now have the majority of those apartments now occupied. And our goal was to achieve 150,000 daytime population. Next slide. I think that's it. Okay.
>> PEPPER SANTALUCIA: Gwendolyn, thank you so much. Thank you for that presentation. We do have some questions about your presentation in the audience chat. And if you have a chance to address those in the chat, that would be great. If not, we'll follow up with you afterwards to get answers for our audience. We want to turn now to our last presenter.
We have Andrea Miller, the Chief Financial Officer of the Transbay Joint Powers Authority in San Francisco. It's a position she assumed in January of this year. She has over 25 years of experience in accounting and finance. She has worked in local government for over 17 years. Most recently serving as the controller for the East Bay Utilities District. She served as finance director for the city of Anol. And the director for city of Pleasanton and administrator for the City of Richmond. Andrea has a Master of Public Administration degree from Goldengate University. And from Cal State Hayward. Andrea, please take it away.
>> ANDREA MILLER: Thank you for that introduction, Pepper. And for the opportunity to share the information about the value capture strategies that Transbay Powers Authority utilized for our project. A little historical background. The funding strategy. TJPA, Transbay Joint Powers Authority, we operate a Salesforce transit center, including a 5.4-acre rooftop park in the heart of San Francisco. TJPA was created 20 years ago, after the passage of Prop H by San Francisco voters. Which has to extend the northern terminus of Caltrain from the south of downtown to the new transit station at the site of what was the existing Transbay terminal. We connect nine transit systems in eight Bay area counties. We're committed to working with our transit partners to deliver on the important services riders depend on daily. And at the bottom of the slide is Joint Powers member agency.
The Transbay program, former Transbay Terminal was built in 1939 for East Bay trains. After World War II ended, gas rationing was eliminated. The terminal began a decline as people started to drive their automobiles. As a result, in 1958, lower level of the bay bridge converted to automobile-only traffic. And by 1959, the Transbay terminal was converted to a (unintelligible) facility. In 1989, the Loma Prieta earthquake damaged the Transbay terminal. There was much discussion whether it should be removed, remodeled or rebuilt. It was under-utilized and blighted. More than 40 years later, you see the lower part of your screen, the Transbay program is reconnecting the region and its systems with world-class transit center. In 2005, San Francisco established the Transbay redevelopment area. Which encompassed the portion of the area surrounding the transit center. With that came zoning changes when the redevelopment was adopted. Zoning changes came later.
Planners envisioned what they wanted, the antithesis of the old Transbay terminal with more light, more air, easier to get around and attract people to visit and stay in the bay area. They want to make it so that people want to take transit as well. And part of a larger vision of a walkable dynamic urban center that includes homes, offices, and shops around a mobile transit center. The project consists of two phases. Phase one of the transit center is complete. A result of hard work, advocacy, and participation of all of our partners and stakeholders. It opened in 2018 at a cost of $2.25 billion. The multimodal facility in downtown San Francisco includes the below-grade two-level train box. Which was complete with $400 million in the American Reinvestment and Recovery Act funding received in 2010 from the Obama Administration. That was also coupled with a total 744 million with local matched dollars. Again, you see the concept on the left there. In the middle is the built transit center, aerial drone view. Looking down on our rooftop park. And to the right is the below train box.
Phase two is a train box below the center for a matter of when, not if, the rail service will come to the transit center. We estimate $1.5 billion in escalated cost for the construction of two-level train box part of phase one. The construction of phase one was completed with 80% local and 20% federal dollars. In terms of the important services provided to the community, I mentioned the 5.4-acre rooftop park. It's 1400 feet long and spans four city blocks. It includes 13 botanical gardens. More than 600 trees. The transit center has commercial businesses, including restaurants, a gym, a dentist, and other health and different offices. And additional park programming is also available free daily. We encourage people to come and visit our neighborhood parks.
I mentioned there are two phases to the Transbay transit center. Phase two of the project is the downtown rail extension. Also known as the portal. This slide shows the alignment of the project. It consists of two new stations. Which will connect to Caltrain's 77-mile system. And ultimately to the California high-speed rail system to Los Angeles and Anaheim. The single-most important is the type B rail system at the northern terminus for the state rail system. It's a key regional rail connection. And foundational investment in the Bay area mega regional transportation system. As well as preparing for the second Transbay link. It closes the gap to downtown San Francisco. And will connect ultimately 11 regional local transit systems. It will provide important job and housing access from the East Bay to the peninsula, South Bay, and the rest of the state. Sorry, didn't get my slide there.
It promotes sustainability by facilitating an option to driving, reducing traffic congestion and greenhouse gas emissions. The portal is recognized of state, region and local importance in the California rail state plan, metropolitan regional transportation plan. California high speed rail authority's business plan. And the San Francisco transportation plan along with the safety project of national and regional significance.
The portal benefits the environment, the economy and creates equity between communities by reducing climate change impacts. By improving air quality. And reduces 305 million vehicle miles traveled along U.S. 101, one of the most congested corridors in the Bay Area. Expanding access to the larger Bay area employment opportunities. And will allow employers to draw from a larger pool by connecting Caltrain and California high-speed rail services directly to 11 other regional transit services. This project created over 21,000 local jobs and 41,000 jobs nationally. It creates two new rail stations in the area with highest expected population growth and within one-half mile of 10 equity priority communities and areas of persistent poverty.
Here is a view of the project schedule for phase two of our project, now known as the portal. The portal project has been environmentally cleared since 2019. Received its federal transit decision in 2018. It has been accepted into the federal grants program in project development phase in December of 2021. Participation of our MOU partners including Caltrain, California high-speed rail authority, San Francisco County transportation authority, and the city of San Francisco, and the metropolitan transportation commission. We've been able to meet accelerated project schedule to bring us where we are today. Relocate facilities and right of way preservation in spring of 2024 and general construction can start as early as 2025 depending on funding. In February 2023, we requested entry into the engineering phase into the capital investment grant program. And are awaiting the submitted request for grant agreement in the fall to begin in 2025. And we anticipate being revenue ready for service in 2032.
Okay. In terms of our funding and financing for capital projects, as I mentioned earlier, the 1989 Loma Prieta earthquake resulted in the demolition of several elevated freeway structures near the terminal. And a cooperative agreement signed in 2003, the state of California agreed to transfer approximately 12 acres of this state-owned land for the benefit of Transbay program. Including the transit center. And the portal. And in 2007 California transportation commission authorized transfer of seven parcels. The final step in conveying the land for the program. And the cooperative agreement limits the use of the land sale revenues to Transbay program construction costs. The sale of the formerly state-owned parcels generate nearly $678 million in construction funds for our program.
As Rick already touched on earlier in the presentation, tax increment financing is primarily a financing tool for redevelopment projects. Tax increment financing is based on the idea that redeveloped area that will generate additional tax property not through higher tax rate but through higher tax values. Specifically, it's every year to 45 years based on increases above the base year set valuation. Base year when the board of supervisors adopted the Transbay redevelopment plan, the total set valuation was approximately $881 million for the base year, which reflects value on nonstate-owned parcels, which were tax exempt at the time of adoption.
In terms of land sales, again, we've already mentioned TJPA has seven parcels transferred by the state. This slide shows where the parcels are. Five of the development parcels have been completed. Blocks five, six, eight, nine and parcel T. One parcel has been sold but not yet developed, parcel F. And one parcel has not been yet sold, block 4. Together, the tax increment income and land sales proceeds make this one of the most successful public/private transportation projects in the country.
To highlight some of the more significant land sales. Parcel T, Salesforce Tower. 61 floors, tallest building in San Francisco. Over 1.4 million square feet of office space. Direct access to the park on the roof. Over $2 billion in AV. The middle picture, block 5, Park Tower, 43 floors. 767,000 square feet of office space, 50,000 square feet of outdoor space, over $1 billion in AV. And block 8, the Avery, 56 floors, 118 for-sale condos, 279 market rate apartments, 17,000 square feet of retail space, 151 affordable units and over $600 million in AV.
The Transbay Redevelopment Plan, as I mentioned, was adopted in 2005. And portions of the surrounding area (unintelligible) have been generated for the development of the formally state-owned parcel has been directed to the portal and transit center. A base value of zero dollars when the resale area was established. The full value of the new development, which approximately $2.3 billion adopted in 2019, is included in the calculation of the net tax increment. Funds available during the phase two design and construction schedule will depend on the development and financial market. The net tax increment has supported a federal loan. And tax allocation bonds issued by the ACTA. Encourage net tax increment of approximately $26 million per year. And the TJPA net tax increment, we have state-owned parcels, a 45-year agreement through 2050.
Mello-Roos Community Facilities District. The plan was adopted in 2012. It's a comprehensive plan around Transbay terminal. It includes a comprehensive plan for the area around -- sorry, which includes mechanisms to direct any increased development values to help fund the construction of the transit center program in addition to public improvement. We talked about the development of a number of very tall, high-density buildings. Which are subject to special taxes. Established as part of the Mello-Roos Community facilities district or CFD. The plan uses under-used state land which was sold to create a new tax increment revenue stream. Providing significant funding for the program. It also increased density significantly. The Mello-Roos special taxes are levied in addition to basic property tax rate. At the time of adoption, property taxes were 1.15% of AV and proposed special tax was 3.5%. Properties seeking to achieve higher densities and heights than they are currently allowed would require to join the Mello-Roos CFD for approval. And those not seeking to participate in the higher density and heights would not be required to participate. CFD was established with a termination date of 75 years after commencement. Any individual building would be subject to special taxes for only 30 years from construction of that individual project. The 75-year termination period ensures any new development projects in the next 45 years would pay the full 30-year value of special tax.
Other funding sources include, again, much of phase one, which is complete. Phase two is under way. Federal stimulus funding of $400 million as we mentioned earlier to build the train box in 2010. Federal transportation infrastructure finance and innovation act, TIFIA loan, $171 million, was secured to help with phase one. And will be repaid with net tax increments through 2050. The city and metropolitan transportation committee -- commission provided interim financing to complete phase one with net tax increment CFD bond proceeds were used to repay the loan. Mello-Roos assessment $600 million through 2025. Tax increment of $1.2 billion through 2050. And local sales tax measures of San Francisco local sales tax measures and San Mateo local sales tax measures which generated $198 million and $23 million respectively. And just for operating revenue, there's only two I'll highlight here. One being the Salesforce naming rights agreement in the amount of $110 million over 25 years. And then we also have a park committee benefits district. Which pays 70% of the park expenses. With that, that concludes my presentation.
>> PEPPER SANTALUCIA: Thank you, Andrea. And apologize to our audience for taking us right up to the end of the presentation -- to the 3:00 end time. I was hoping we would have more time for questions. Andrea, there are some questions coming in right now about the naming rights. And we'll get responses from you. And share those with the webinar recording and the slides. I just want to point out, there is a file share pod there now. For downloading the slides and also the TIF primmer and TIF FAQs on the side -- left side of the screen. And we really want to thank our presenters for giving us a really detailed look at three different uses of tax increment finance. Again, applying or requesting confirmation of your participation in the webinar by emailing valuecapture@cio.gov. We would like to acknowledge the ongoing support of the FH web conferencing office. And the support of FHWA everyday accounts program. And, with that, we'll have to wrap up today's webinar. And hope to see you at our next one. Thank you very much.
>> Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation. Thank you for using AT&T teleconference. You may now disconnect.
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Communication Access Realtime Translation (CART) is provided in order to facilitate communication accessibility. CART captioning and this Realtime file may not be a totally verbatim record of the proceedings.
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