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DEPARTMENT OF TRANSPORTATION
FEDERAL HIGHWAY ADMINISTRATION
VALUE CAPTURE STRATEGIES
JOINT DEVELOPMENT AND RIGHT OF WAY USE AGREEMENTS
WEDNESDAY, JULY 19, 2023,
JOB NO. 22440
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CART CAPTIONING*PROVIDED BY:
LINDA M. FROST
on behalf of
MID ATLANTIC INTERPRETING GROUP, INC.
This transcript is being provided in rough draft format. Communication Access Realtime Translation (CART) is provided in order to facilitate communication accessibility and may not be a totally verbatim record of the proceedings. Due to the nature of a live event, terms or names that were not provided prior to the assignment will be spelled phonetically and may or may not represent the true spelling.
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>> OPERATOR: Ladies and gentlemen, thanks for standing by. Welcome to the conference on value capture strategies At this time all participant on a listen only mode. Later we'll conduct a question-and-answer session. Instructions begin at that time, I now turn over to the host, Kate Flaherty. Please go ahead.
>> KATE FLAHERTY: Hi, welcome, everyone, on behalf of Federal Highway. I would like to invite everyone on Value Capture Strategies: Joint Development and Right-of-Way Use Agreements. My name is Kate Flaherty with the Volpe Center in Cambridge, Massachusetts, I will facilitate today's webinar, our webinar will run until 3:00 p.m. eastern time. We'll record the event and that will be posted to the FHWA Website. The speakers’ slides will be available for download toward the end of the webinar, if you intend to use attendant for continuing education or other training requirements, you can request confirmation of attendance at today's event. We'll provide information how to do that at the end of the webinar, now a quick orientation to the webinar room. In the top left corner of the screen, you'll find all your call-in information in case you want to listen by phone instead of through your computer speakers. If you decide to use the phone to listen to today as event you can ask questions verbally, unfortunately we can't take questions for those participating in the computer, but you can submit questions or comments during the webinar. We'll also have time for additional Q&A during the webinar. If you don't have time for the questions submitted, we'll post written responses along with the webinar recording along with the FHWA value capture Website. To view closed captioning, click on the CC icon in the bar and select show captions in the dropdown menu.
And then, before we begin, I would like to ask the audience to fill out the poll questions that are now showing on the screen. These are simply to help us under the audience today and baseline of the topic covered today. As you ask questions, I'll introduce the first presenter. Mr. Sasha page is from an advisory firm in Washington, D.C. Has two years advising on public private partnership was transportation and other infrastructure. He focused how value capture tools provide infrastructure with the FHWA program in public agencies in Boston, Chicago, Dallas, Miami, and Raleigh Durham. Past several years, Sasha has been assisting as subject matter expert on value capture, in fact a primary author on different aspects of value capture in the transportation section.
Sasha, before -- oh, yeah, Sasha, please go ahead -- I'm sorry, before you go ahead, I'm going to read the results first if that's okay. So, it looks like for what type of organization, we have most people kind of coming from state DOTs. And then -- but it's kind of a mix between a lot of different types of agencies which is great. And then in terms of how many FHWA value capture webinars we attended, we have quite a few, that this is their first time. We have about 52 percent, 53, that are back. Looks great.
In looking at whether your jurisdiction ever used value capture revenues as matching fund or Federal or state grants, a lot of people are not sure. That's totally fine. This is a great avenue to learn more about that. But we do have a couple that are, yes, they are considering it, quite a few that are no as well. Current knowledge, on joint development, we have a lot that are somewhat knowledgeable. About 30 percent that are no knowledge and have heard of it but not very much. Kind of split in thirds.
Anyway, welcome, this is a great place to learn more about this. In terms of whether jurisdiction has planned any joint development projects in the near future, a lot of folks are not sure, over half. But there are a couple that are saying yes
So, anyway, hope this is a helpful webinar to help you bring different details to that project.
So, Sasha, please go ahead with your presentation.
>> SASHA PAGE: Great. Thank you, thank you. Kate. Thanks, everyone for attending this, Senator on joint development. We have some great speakers today and look forward to your participation as mentioned in the chat room, or if you want to call in, I'm going provide an introduction to joint development, sort of setting the table here. And hopefully this will be a good foundation for thinking about joint development, from what the speaker is saying but also your experience, which, again, we would love to hear about, or share where possible.
So, defining joint development. Joint development is a concept in value capture, whereby public agencies, partner with private developers or public developers to improve land near, below, or on top of infrastructure. Transportation infrastructure in particular.
And what example is showing this map here, the cap at Union Station, bifurcated by I-670 over 20 years ago. Essentially a bridge road brought these two parts of the city together that was retailed developed, and it linked sort of a less active arts district to the downtown area. Very successful, $10 million cost when it was built. We went through some submissions which I'll mention briefly. That's one of example of these.
Currently, joint development is using very much, as a folk ounce connecting neighbors, and developing real estate and property around those connections, and also affordability issues as well.
So, joint development can increase the impact of transportation infrastructure, as well as revitalizing destressed area, or making existing area, even more strong.
So, there's some challenges about value capture. Whenever you create development, you impact the local economy, a challenge of worsening equity issues, and affecting disadvantaged communities. That's a theme that a lot of the us are grappling with today. I do want to say this presentation is based on the value capture limitation manual. We'll put a link to that in the chat box later. That's part of all value capture EDC5 effort, where there's a lot of materials available that FHWA has put together in the last several years.
So, joint development is appropriate for highway, roads, as well as transit, rail. Probably best known in transit, at grade including development including housing, excess parking that Jacob will talk about. And includes above grade as Thay will talk about, and as cam done yard, as Thay will discuss. Also include below grade, parking garage, broadband, utility programs as well. And I mentioned road as well. Early development has been service stations and Turnpike stations and there are some of those that still exist today, although those are mostly grandfathered but above grade as well, where cap project, as I mentioned, connecter projects are major focus now. And you'll hear from Lynn Yocom shortly, below grade joint development projects include broadband and other utility right-of-way usage as Utah is doing a great job in.
So, it can be applied to many modes. Funding. And implementation takes form. In terms of the uses of it, just really the transfer of it of development rights to a developer, private developer, but can also be a public developer, and the sources of this of course are some payments. A land scale or up-front lease that's being paid, or ongoing ground leases being paid in the cases of a ground lease that can last between 50 and as much as 99 years as typical.
In addition, these joint development projects often have a funding element and mansion transaction associated with them, of course to build the development, the real estate, but often to finance the actual infrastructure that is being realized as well.
Implementing joint development projects vary by the type of course, but in general, at grade, joint development is easier to implement, it is kind of goes without saying as opposed to air rights or below ground project. Air rights create additional cost. When you cap something, you can add 10 to 20 percent additional cost to the project, everything else being equal, and, of course, that is not feasible in all locations.
There are a variety of legal market and other political considerations. Again, this is call discussed in the limitation manual, but, legally, of course, if you're doing local development, zoning can be very important, density, how much density is allowed, affects the economics of the private development. And, of course, housing, rules of affordable housing, regulations affect that as well. States also provide authorization to carry out these types of projects, and enabling legislation is important.
Of course, on the Federal level, if Federal money is involved or Federal project is involved, there are Federal requirements that come with these projects as well.
As I mentioned, the market is extremely important. Is there demand for the kind of real estate or projects being developed here. They can be very complex, as I mentioned, and these air rights project, for instance, they are expensive, so, it really makes sense in large cities or areas where there's demand for scarce property. People want to be located next to a certain transportation facility or certain location downtown, so to speak. That's why it can justify increased costs.
And politically, there's going to be political resistance, public resistance, density, increased traffic, generally creates some sort of opposition, so, one has to, as a developer, as public policy sponsor has to under what those are, and try to address those, as well as equity considerations as well.
On equity considerations point, as we've seen in other places, in other projects, creating new Amenities, a new station, greater transportation facilities may create increased housing, may affect the prices and rents in an area thereby have an effect on existing residents and make it difficult for them to remain in that neighborhood. So, in general, many communities have looked at joint development policies that have strong affordable housing protections. Keep existing populations where they are, as much as possible and, you know, as I mentioned, joint development projects create opportunity, create opportunity force capping project, iH07 is one example, but Syracuse, Rochester, St. Paul, all looking or implementing projects that are eliminating or linking disparate neighborhoods together, eliminating the infrastructure that kept neighbors from each other.
In terms of Federal rules here, there are Federal funding and financing programs that support joint development. USDOT's build America mural has several financing programs that's important during development specifically the program that can be used for highways and transit, support joint development, and related activities. Can help support parking and RRIFF can help affordable housing. FHWA provides grants supportive of joint development and FTA's pilot program supports in planning.
Last, there are new changes based on the Bipartisan Infrastructure Law and other recent rule makings that foster joint development. You can, when you download this presentation, there is a link to some sources, there's affordable housing incentives that allow the FTA allows for surplus property around stations to be transferred from affordable housing uses, without cost, or without paying market prices. The EV charging rules now encourage EV charging and use of those moneys in areas, in stations or other locations that foster joint development. And Justice40 thriving cities programs pose certain requirements that prioritize projects for disadvantaged communities and encourage the projects I mentioned, the kind of capping or neighborhood linking efforts that are under way. And then on the highway side, there's guidance that encourages DOTs to develop projects that foster climate change or address climate change, and communications act, energy and liability and also reconnecting communities pilot program supports joint development.
So, these are just some policy, Federal policies that support joint development.
So, I think I'll stop there and look forward to Jacob Vallo, who will speak next, and your comments about any questions that you may have. We'll have questions after each of the presenter, and hopefully some time at the end to have discussion. Jacob, right?
>> KATE FLAHERTY: Thanks, Sasha, for that presentation. Let's see if we have any questions from the audience, operator, we'd like to open the phone lines to see if there are any questions. If you're listening by phone, you can ask questions by dialing 1 zero and while we wait to see if anyone has a question on the phone, we'll check to see if there's anything in the chat window. Looks like there is nothing yet. But we'll give it a minute or so, that's we can decide to proceed.
>> OPERATOR: No questions from the phone at this time.
>> KATE FLAHERTY: Okay, thank you.
>> SASHA PAGE: I want to say I'll put other new publications on joint development that come out from TRB.
>> KATE FLAHERTY: Great. Awesome. Somebody asked will the presentations be made after the webinar, yes, you will be able to download them after the webinar or toward the end. And this will be posted as a recording. Looks like we have a question from Rick, regarding gentrification, can we have land value increase because of infrastructure?
>> SASHA PAGE: Land value return -- yeah. I'm -- I think I'm going to hold on that and get back. Let's let Jacob go ahead.
>> KATE FLAHERTY: Okay. We'll go to the next presentation. Okay. Great. So, our next presenter will be Jacob Vallo, Jacob is in the fifth year of public service at MARTA where he is general assistant manager of real estate development and asset management within division of capital programs expansion and innovation. In his role he's responsible for overseeing offices of real estate and transit. Prior to MARTA he spent 19 years in the private sector in real estate development, investments, capital raising and asset management roles for institutional firms, just as Jamestown Rockefeller group and west side future fund. Mr. Vallo adheres to mission-oriented asset management model where he achieves both financial and social outcomes for the communities connected by the MARTA system.
Jacob, please go ahead
>> JACOB VALLO: Perfect. Thanks so much. I'm going to walk you through some of the ways in which we've implemented joint development and some innovative advanced strategies we've used. This is as a baseline for the conversation. We at MARTA, see our role in terms much joint development through the lens of obviously, as a fiduciary of public money, but really strive to achieve social outcomes for jurisdictions we serve and for MARTA, but also financial outcome, and that's done through the ground lease mechanism that we have with private development partners. But I just wanted to give a sense for kind of our approach for how we manage our land portfolio and joint development portfolio.
So, in our region, much like across the country, we're struggling to figure out ways to deliver affordable housing, and & as Sasha indicated in his presentation, we wanted to deliver projects in communities in a way that did not produce negative by-products or deepen equity issues that already exist in these neighborhoods. And we have a lot of community engagement going on constantly prior to the joint development projects and what we hear is just a need for deeper levels of affordability. Which, obviously with rising land cost, capital costs and materials, and labor costs, to achieve deeper levels of affordability, requires pretty creative and innovative financing and subsidy from the local jurisdictions, so, we've been trying to figure that out, but I'll explore that a little bit later. The development process does take a long time in this framework, so, we also -- I'm going to share with you a strategy that we're implementing to preserve units around our stations, also helps to provide or decrease volatility for those existing residents around our planned joint development.
We're also looking for opportunities to ensure that developers actually show up to the request for proposals for these projects.
In Atlanta, there's plenty of land available. So, to actually get those developers to engage with us, when there's plenty of other site as round our station infrastructure, we've got to be very mindful how to be competitive in that regard. A lot of these other ones I shared, a little rising construction cost but the complex site conditions, Sasha touched on this a little bit. Roughly 20 percent additional cost is added to the project budgets for, typically we refer to overbuild situations over the transit infrastructure. And this does create significant funding issues for these projects from the developers, and we've been working through some pretty innovative things, I think, how to solve for that to move projects forward. Much like many jurisdictions, we have a finite number of dollars in terms of subsidy, from local jurisdictions, affordable housing, and then we also want to make sure that we're selecting developers and putting Fort projects obviously to our board and jurisdictional partners that are able to be financed, and ultimately built. So, a couple of approaches that we started embarking on really late 2019, early 2020. The far-right portion of this slide is the first partnership that we created with Morgan Stanley's community development finance arm they had been operating for six years now, in partnership with national equity fund, which is an affiliated list. The large CDFI, community development finance institution, and up to that -- up to this point, we had not -- Morgan Stanley was not operating with national equity fund in Atlanta. So, we essentially expanded their existing preservation program to Atlanta, and developed a criteria with Morgan Stanley and NEF, so that preservation could be done within half mile of our station, and bus rapid transit infrastructure, and this came about -- I'm happy to answer any further questions, but this came about simply by cold calling capital sources. This partnership is the money for this commitment is coming from the community reinvestment act capital that Morgan Stanley has. One of the other features of this, if we place all of the capital, then there's more capital behind it to continue to preserve units around the station. So, so far this has been a tremendous partnership with Morgan Stanley and NEF, we've closed two transactions and invested 48 million of the funds with 52 million remaining. We preserved over 400 units.
Meanwhile, we also stood up the phase 2 portion of the strategy, which is to bring in private capital for vertical development in implementation, and that came by way of Goldman Sachs urban investment fund. The original commitment was $100 million for affordable housing with priority for minority led development project, and the first transaction in that initiative was $90 million, 250-unit affordable project. Because of the size of the project, Goldman decided to increase commitment from 100 to $200 million. They provided tax credit to the developer. And I'll touch on this in a second, there's another strategic element to this first transaction in this fund as it relates to joint development near bus rapid transit infrastructure.
So, kind of taking you through the journey, phase 1 is really important to try to stabilize those communities as much as we can around the future, prior to delivering the future joint development projects. So, we're actively investing phase 1, investing phase 2. Phase 3, we had been exploring bonding against our existing ground lease revenue stream that comes off of 17 separate ground leases that have a weighted average, lease term remaining of approximately 84, 85 years. And we've been working with a couple institutions to help us underwrite that lease revenue bond issuance could look like. We've also been exploring other ways to provide funding through the ground lease to the developer by way -- in which case the developer would pay us equal to the ground lease rent, so, it is a loan, if you will, but it is through the ground lease, so we've executed one of those, and that's been working quite well. But just to give you a sense of some of the implementation tactics we've used.
A lit bit more information on both the partnership was Morgan Stanley and Goldman Sachs, like I covered most of this, there is a geography constraint. Goldman took an approach of a little larger one mile from the fixed transit. Our goal is for closer investments to be made but they had a preference to have a broader opportunity to invest. Fortunately, the first investment was literally across the street from the bus rapid transit project.
This is our first transaction for the affordable housing preservation found. I won't spend too much time on this but over 200-unit project that we helped keep affordable near our west end MARTA station.
The first Goldman Sachs transaction, as I mentioned is right across the street from the southern term nice of the first bus rapid transit line in our region. So, this is a very important transaction for a couple of reasons. Obviously, we wanted to see more density around our southern terminus. This area is rapidly gentrifying so we wanted to make sure residents could stay in the community. And also demonstrated to the development community that financial institutions like Goldman Sachs appreciate the permanency of the bus rapid infrastructure, as we continue to educate developers in the region on the permanency of the bus rapid transfer infrastructure.
So, I want to share a briefcase study with you all, the joint development here is at our Edgewood Candler Park Station, we received a surface transportation block grantor this project. And we're very thankful for that. In terms of pre-existing condition, we have a six and a half acre parking area that was roughly 20 percent utilized at the time the TOD request for proposal was released. We have three bus routes serving this station, and 463 surface parking spots, spaces. And this took eight years, eight, nine years to develop. Actually, developed in several phases. We have two multifamily developments that have an affordable component of 20 percent of the units in this first phase, and then 25 percent of the units in the second phase -- I'm sorry, reversed. This is the first phase, and this is the second phase. We also have a non-profit dance academy on the ground loose called moving in the spirit and have a mural as well as half acre park, and retail as part of this development. This has been easily successful for the agency, and also for the community. It spurred additional development around our station area. So, we -- last year received an award for this project, and super proud of the team here at MARTA for delivering this along with our development partner.
So, just some performance metrics that we track and report out to our executive management team and board. So, we have three ground leases force this project which provide over the course of the lease, roughly $60 million to the authority over those 99 years. We received approximately $430,000 a year in ground lease revenue, and our group estimated approximately 100 thousand of new fare box revenue of the additional potential demand created by this density. I think I touched on most of these other ones, roughly $100 million for both of those projects, and of course, costs have increased significantly since these projects were bought out several years ago. And then we recently were asked to begin tracking the financial return on investment from the original acquisition of this land, and this land was -- for this particular instance, was purchased roughly 45 years ago. And y'all might be familiar, that government accounting standards board doesn't require municipals to mark their land assets to mark it, so we actually currently have these assets, these land assets on our books at 45-year-old numbers. So, the ground lease is done at current valuation, and the annual yield to MARTA is quite significant. A lot of social benefits to this project, as well as financial benefit, and so, I think this concludes my Marx, I'm happy to take any questions.
>> KATE FLAHERTY: Thanks for that presentation, Jacob. Let's see if we have any questions from the audience. Operator, we would like to open the phone lines to see if there are any questions, and if you're listening by phone, you can ask questions by dialing 1 zero in the meantime we'll address any questions in the chat window. I think there's one. Andrala Walker, why were no single-family homes considered for affordable housing? Is there a long-term view of community building with the MARTA-Goldman Sachs grow for growing and older families?
>> JACOB VALLO: Sure, appreciate the question. Single family homes, if it's lower density is not helpful to our goals of increasing ridership, so, certainly sort of standalone single-family homes on our acreage is not the best-year-old for us we have been exploring condominiums on the ground lease which is quite complicated for Atlanta, I know it is done in other regions, whether New York or San Francisco. But it is very challenging for the lending community here but we're also looking for the opportunity to carve out a portion of the land area to do for sale high density product but have not executed one of those transactions just yet. Another part of the question is senior housing. We have another one that was completed and another that should have broken ground by December of last year but held up by local jurisdiction. So, we're working through that now. AD unit senior project that has 4 percent award. And then we have a second project that also should have started last year that's having capitalization issues. It's 250 units in told. 120 units are for family and 140 units for senior affordable. I hope I answered that question.
>> Thank you. Veronica asks was there any public opposition to affordability rate of this development?
>> JACOB VALLO: No. I will say that consistent with my comments about deeper affordability, we have received a number of comments from the community in other areas in our region, for deeper levels of affordability, and that have not only just listened but actually went to the board and received approval from our board for seven stations which are currently in Federal opportunity zone, and requested from the board that we -- that they approved that we seek a AMI that is tied to the ZIP code, so, it is 80 to 120 percent of the ZIP code, and that way, we are much more intentional about providing unit at the affordability levels for those that already lived in the community.
>> Okay. Another question for you I have, is, how do you feel about the effectiveness of joint development by mode? Do you feel it differs? Do you have a BRT project that other products you work with, or stations, are rail stations? Is there any difference?
>> JACOB VALLO: Yes, so, because the RT is new to our region, it is -- in fact we really just had a grand breaking for the first bus rapid transit project a couple weeks ago. There is definitely an education component to how we can market to developers and inverters. And so, you know, I think from a rail joint development, certainly people understand, you know, the benefits of -- benefits and how to work and market an Amenity like trail transit. We -- kind of the jury is still out, if you will, to see how the skyline project which is the first joint development across from our southern terminus of the project to see how successful the project is. I do think at least initially, once we announced the project, I did have several developers call me to ask what is a BRT. And so, like we have some education to do and frankly, the rail system opportunity, you know, on the development side, city in like Atlanta, where it is so car dependent, there is very little interest from the development community to be next to or adjacent on top of the rail station. It wasn't even part of the mindset, we, as a region, have moved quite a bit in the last 10 to 15 years, the development community has realized, you know, how much of an asset that public transit access is to their client base, and there's been several studies published recently. A study was published called the MARTA effect, which was a little double-edged sword, which suggested the data suggested the rents were much higher and property values were higher, if you were next to a MARTA station. The probably with that publication, many community members also read that, and so if you apply that to the gentrification concerns, it created a lot of discussion around, if in fact you're going to come into the community and deliver $300 million project, and this, quote, MARTA effect is going to happen, everyone's tax bill, going to go up and you're going to create enormous amounts of displacement, and really, the Morgan Stanley NEF partnership came out of, or was a result of what we were hearing from the community in that regard.
>> SASHA PAGE: Thank you. We have questions. Lorraine is asking, is rider ship for the station local foot traffic or is parking provided in the development?
>> JACOB VALLO: If varies by station, we do have several stations that are they heavy drive-to stations, but we also have urban station that is have no parking spaces or in some cases 15 spaces. We are really approaching it on a case by case basis, and in fact, we have a station that just we awarded a development team for the bank head MARTA station, it has 20 spaces but through the master planning process, we had done prior to, and also continuing to do engagement, after selecting the developer, we heard that there was interest from the community about more parking. To drive to the station area. So, we've been working through that with the master planner, working through that with them and ultimately be working through how many spaces Weise can add for our customers into the overall development program, recognizing it's a pretty tight site. Recognizing there's trade-offs that need to be made.
The community also wants a grocery store. We really want to deliver a grocery store because this is in a food desert and there's trade-offs for the amount of parking we can add so we're working through that. Trying to make everyone happy is what we're trying to do.
>> SASHA PAGE: Right. Alex asks, was your initiative subject to compliance with Justice40 criteria for analysis of benefit to the public? You mentioned Federal criterion recently developed in the last several years?
>> JACOB VALLO: Yeah, I don't -- we follow -- we have TRD guidelines and follow all of the FTA requirements and FTA approved of all of these projects, I have to know specifically what you're referencing. If you want to put it in the chat, I can get you a specific answer. It's really an effort of DOT. Maybe one or two more questions. Maybe if someone else has a couple more for Jacob. In your work what is some of the biggest challenges you've had. For some of the agencies what would you tell them some of the biggest challenges and how you overcome them.? The biggest issue is on the higher costs. Sasha, you mentioned several projects. It is similar in the sense that we're essentially building, you know, land in the air. A platform in the air. Who is going to pay for that becomes a big question. So, we're trying to figure that out right now, because we have several projects that are very well located. Would be great affordable housing sites but why have this sort of gap in the capital stock, that if MARTA is not able to put capital on the table for TOD, because we're constrained or spending it on, or investing it on transit infrastructure project, what other sources available and that's what is causing us to look at innovative conversations with the private sector and potentially philanthropic sources to bridge that gap to achieve outcomes that the entire region want us to achieve. I would say that's probably the biggest hurdle we have right now.
We also have other larger sites like 30-acre sites which have no infrastructure whatsoever. Thy need road, surface, gutter. A good portion of the surface working need put in place and everything the funds for that is also critical and going back to the case study on Edgewood Candler. That's where the FHWA transportation surface block grant came in and really made the deal, because it was gap financing that allowed the parking infrastructure to be built and the probably to move forward. We were super grateful for that grant and those were the types of funding mechanisms from implementation perspective that are super valuable to us.
>> SASHA PAGE: That's great really great. Jessica's question, what steps did you take to attract private investment. I thought you mentioned cold calling. Pick up the phone and say Morgan Stanley, will you fund this? That's remarkable. How did that all work?
>> JACOB VALLO: Having spent a good portion of my career, you know, raising money and putting together capital stocks, I didn't really have a problem calling stock exchange. I actually reached out to a Morgan Stanley banker who worked on the Brightline public debt issuance. Zachary Solomon, and he was super gracious, I explained to him some of the challenge, and it wasn't just about the preservation fund. We were talking about these infrastructure lease revenue bond conversation, bonding against ground lease revenue, and he is the one that brought in his affordable housing team and then we have the conversation, and from that point, this Morgan Stanley team has been amazing. They were like, here is a menu of things we can do to help, let us know and we'll advance the conversation, and that's how that one went.
The Goldman Sachs conversation was a little different, in terms of I was talking to the local government Goldman Sachs team and general named Andrew young, former Ambassador is a mentor, friend, but he's a friend to a lot of people. But he actually spoke during the pandemic, to Goldman Sachs' leadership, and he picked up the phone and called me and said, I mentioned your name to Goldman that you also talk about advancing TOD in the region and affordable housing named Margaret who is snow longer she ran all of the impact globally. She was amazing. First call she said how can we help. Tell us where the gaps are, how can you help? Urban investment group at Goldman is impact mission-oriented investment platform. And so, it took about a year. Ultimately, we got there. Most complicated part for us. I really wanted MARTA to be part of the fund and part of the team, as well as the office. The women of Morgan Stanley, the capital, they are going to make all of the investment decisions that's something we couldn't really get comfortable with, so, we agreed on a criteria for the capital, but ultimately both institutions, Morgan Stanley and Goldman Sachs have the overall investment decision in their control.
>> SASHA PAGE: Okay. I think we have two more questions here, and then we're going to move on to Lin. Veronica asks follow-up on the opportunities you mentioned, tied to ZIP code AMI affordability. Is there Federal policy related to that or a local initiative MARTA is adopting?
>> JACOB VALLO: The latter, we adopted it in 2019, I think.
>> SASHA PAGE: And Stephen asks, have there been any case studies of partnering with local churches that you know of?
>> JACOB VALLO: So, don't have any case studies, but we are -- Mayor Dickens of Atlanta put together an affordable housing strike force, which MARTA is serving as our representative. The Mayor set up faith-based initiative for affordable housing and Reverend John Smith runs that platform. He and I have been talking trying to figure out how to work together but also introduced him to Morgan Stanley and Goldman Sachs and several other institutions that might be helpful to facilitate conversations he's having with other church, and if anyone has ever worked in the church space before coming to MARTA, with the west side future fund worked with many church, super complicated decision making in governance, we had a couple conversations with churches. The amazing thing is very land rich, and in many cases cash poor, which tend to sort of drive the way the deals being structured, but no specific case study, but certainly a lot of experience trying to move projects forward. In fact, we had a 41-story tower that's a mix of uses that we're in conversation with the neighboring church. They were trying to accomplish some things, that we couldn't just do on our small site and they learned, and we thought they were going to make some progress and they sort of decided they were going to huddle and get back us to, so, the fits and starts is a little bit challenging for, you know, private sector, lender, equity investor, developer, and to the extent that they don't have to work with kind of volatile leadership and changes and so forth, they tend not to want to partner, but I'm always looking for just a solution that helps everybody, and I love getting everyone to the table, and at least try to figure it out, even if it is complex.
>> JACOB VALLO: Okay, thank you.
>> SASHA PAGE: Okay. If there are additional questions specifically for Jacob, please put them into the chat and we'll try to address those afterward. I'll turn now to Kate and to Lin.
>> KATE FLAHERTY: Great. Thank you so much, Sasha, our next speaker will be Lin Yocome, she's UDOT's fiberoptics manager, worked with fiberoptics companies for more than 20 years. She's been successful creating public private partnership to build u DOT's fiberoptic network, serves on the advisory council and chairs the information system technology advisory board. She also enjoys teaching cybersecurity part time at high school and has been doing this for 20 years. Lin holds state office in teaching license and endorses the level of CS teacher. Lin, please go ahead.
>> LYNNE YOCOM: Thank you so much. This webinar is one of my favorite topics. I love talking about our joint development and how to capture value, especially in relationship to broadband. One of the things I did recently, I attended the Taylor Swift concert. I don't know how many of you online got to do that wonderful opportunity, but my daughter got tickets. She was actually one of the lucky ones able to get through that call menagerie, and we got to go down to Las Vegas to a wonderful surprising concert. This is coming from someone who grew up in the '80s and went to all of the concerts. This was a once in a lifetime concert. There were 65,000 people in the stadium. And the transportation effect was absolutely amazing. I have to hand it to them, they did an excellent job getting in and out, watching a lot of the other cities and what they've done to step up. And what the -- what the swift effect is on transportation. It is real. And I thought it was interesting to see the cities, what has to happen. I noticed that when we went to this concert, it was about 30 minutes in, 30 minutes out, but that was with a driver, to be coming in and getting back out. And that was actually quite excellent. Vegas has a lot of shows and bring in a lot of opportunities like this, so, they've had some good practice. And I was impressed. I was come homing in on how many partners came together for this swift event, and what did they have to do, and that was your transit, that was your DOT, city, County. This was everybody working together, and it was really wonderful to see everybody do that and come together.
Definition of a highway. We think of it as a road, a thoroughfare, it is maintained by a state or Federal Government, and designed to accommodate I would say traffic flow, heavy traffic flow. It is a main route by land or water, and it is a direct way to some objective. If you take that same definition, especially a direct way to some objective, and apply it now to technology coming to our roads, we have smart roads or smart highway. Panasonic defined this as a vehicle, a system that allows vehicles to share and receive real-time information, vehicles, pedestrian communication, vehicle to infrastructure communication, traffic management and road sensors, so, our V2X communication we're putting in with our highways is a very important component that we've been addressing for quite a while, and it's brought a whole new dimension to travel and what we do, and that communication, whether rural or urban, is real and it is needed to help manage our road. But the partnership and value that we've been picking up here in Utah, has been what can we do to leverage this right-of-way within our road, and what can we do to leverage to get the public-private partnerships to come in. Building virtual and real capacity for communities, by maximizing available funding opportunities. After reading this is what I think DOT should really focus on with fiberoptic deployments. We have virtual and real capacity for your community, and that's our transportation that's coming in, but we also have virtual for what we're doing. Education that's now available virtually in our rural communities and in our urban communities. And maximizing funding that's available right now to a lot of the funding opportunities that are out there to build this type of connectivity out to our communities and make our state become elevated in the opportunities that are available for their communities
Utah got a great opportunity with this kind of once in a lifetime funding that came in the 2020 Olympics for us. For as the Department of Transportation, we were building out and redoing road to be able to handle the capacity for the 2020 Olympics, that meant fusion of dollars that the state wouldn't have. Rebuild interstate corridor, during that time we wanted to connect traffic cameras and manage traffic management systems, and our ITS system was born. And cameras came in, and monitoring devices came in, and we put it back across fiberoptics in one location, when we tried to work with telecommunication company at this time, it didn't work. We asked fiberoptics and we were told about 1998, that they wouldn't build fiberoptics to our traffic cameras, and we didn't need a Realtime feed, and copper is all there would ever be needed. And fiberoptics it was put in, and we created what we needed to create. Laws were put out because we thought we would be major facilitator. We are a facilitator, not a competitor. There's a clear definition on that within the state statute. So, we facilitate but we don't compete. And our seed money started out with the Olympics.
We have a lot of state agencies that participate with us in our fiberoptics network. We have division state technology which is IT decision. A lot of people thought IT would be the ones to take over fiberoptics and how this was going to be a hostile takeover, and it wasn't. There's a lot of complexity that happened with the rights-of-way and with roads, and felt that everything should stay with the DOT, because of rights-of-way in the leveraging that we've done on our public-private partnership to make it go under IT services would be problematic, and then it would also be problematic for the coordination of projects, and future road projects and relocations, for that reason it stayed with the DOT and has grown with our DOT, and I'm a firm believer that's a great place for fiberoptics going across roads to be.
Our Utah education and telehealth network is another great partner. They provide all of the communications out to our schools, and to our telehealth throughout the state and to our library, we connect back on their network, a bunch of traffic signal, because by about every urban school, has traffic signal and crossing walks, we connect 95 percent of signal, and crossing walk, signal crossing walks statewide into one system and helps with clean air, especially with CMAQ, it really helps, because the topography sucks in the because we're a big bowl, unless the wind blows it out. Cars, getting that done, with fiber on ticks will do that. Especially the big announcement that came out, the fund that came out. Working together how the money is spent and budgeted. We also work County, cities and tribals to make sure they are connected. They are really great facilitators to be able to get the fiber from one city to another city, and to be able to help you connect up, and to be able to get that last mile built within your city. A lot of them are like, how can we connect city buildings or how can we connect what we have at County. Connect County signal, building, fire department, public safety, we will bring them back across the network, because we feel they are an integral component of what we do with the communities and will help tribal entities connect. And we're working very closely with several of our travel entities. You need to have like 20-plus different tribal entities within our state boundaries, and a majority of them are majorly underserved and helping to get that big middle mile connection out to them to be able to connect our communities and provide benefit of our smart road is extremely important.
This just shows a whole section of nice graphics, shows a lot of communities of partners that we work with on our public side.
Next is our private partners. We work with a whole bunch of telecommunication companies. Last check it was almost 30 different companies we have worked with over the last 20 years, and our current partners. We also work with some of the power companies. If they are digging once, in our road, we would like to not have to come back and disturb the pavement again. For a long time in Utah, seemed like we laid down fresh pavement and gave the developers oh, now is the time to build. I think black pavement inspires. They want to dig it all immediately.
Our big once is not necessarily a policy. Within broadband we say that we will share and UDOT will get everybody in the same trench. We like to call it dig once practice, if they are doing trench, putting in water sewer project, you need conduits as well. Then leverage back to the telecommunication companies. We are a big component of that. We share standards, we share engineering firms that know how to do that contracting. We're very much about holding hands with them and making sure they get in what they need to get in.
Other dig once practices that we use, we leverage our STIP, state width implementation plan that we put together, we take that out to the telecommunication companies and utility companies and say this road is opening up. We've got this project. Is there something which you need to do while you're doing this in this area, and we meet with them twice a year. We have one big conference we meet with and meet with them individually also. So, one is, hey, this is our overall STIP plan coming up. I think there's areas you invested in. And one-on-one, to say what areas are you looking at. Sometimes telecommunication companies don't want other telecommunications to know what they are doing, we need that one-on-one time to know what it is they are doing. That's the one-on-one and kind of the big message out. And get everybody talking. When we get everybody in the room, we find joint opportunities not only between the public entity like UDOT, but the private entities can find ways where they can also do joint development together, and maybe our joint development is going to be those companies and UDOT together helping them get service right away and promote competition. UDOT being a neutral host, we cannot discriminate, and we don't. If you have something that you've become valuable for us, we will help you get to your communication goals with that. We don't care if you're a small mom and pop or big sentry link within our state. That's really big. We feel Utah is really set up nice for economic opportunity out to the developments.
When you're thinking joint development and thinking affordable housing, and you're thinking transportation in, broadband is right up there with water. And if you're looking for locations for businesses to develop, they are going to come in and ask about water access, natural gas access, power, and they're going to ask about broadband connectivity, and they are not going to ask if there is one connection, they are go going to ask if there's multiple route in and out of that development, and we're working with that all of the time.
It's kind of known by the state if you're trying to figure out what the fiberoptics is for any of these big projects, I think I have it memorized statewide. So, that's very helpful.
Here's a look at some of our fund partners that we've worked with over the years.
Canyons are unique. Place to be able to partner in Utah, our canyons do more than just recreation, and more than just a way to get from place A to B. Our canyons are a big economic factor because of our ski resorts and recreation within those canyons and transport lines to reach other cities in the state that go through canyons.
To date, we've done three major canyon, Cottonwood, that's two. And American Fork, Ogden canyon, and getting ready to build the rest of Logan Canyon. In that we partnered with cellular service, we had Crown Castle that we did a public-private partnership with, and they provided distributed antenna system or small cells all of the way up and down the canyon along with power. With ITS devices we need power or we're going to have to put up something really ugly in that canyon than those solar panels that would make it through the forest service.
So, we ran power with our conduit and that's a real good idea that we hadn't considered until that partnership. That's the hardest thing to get through our ITS equipment is power.
Water project in the American Fork Canyon we piggybacked off and engineered the trench, so we had a separate shelf that the fiberoptics went on that was above the water line and off to the side slightly but very close. When coordinating utilities with project, a lot of times they want seven feet to decide this amazing amount of clearance that they absolutely have to have. And we have challenged that over and over. This are like, this is fiberoptics, it is not a power line coming through per se on that, and if you hit it, we're going to give you immunity from hitting it. We are not going to put you into that risk of when you dig in a trench that you're gracious enough to give us access in, that we do liquidated damages on you, so we sign off on an agreement that we hold each other harmless but agree when we dig that trench.
Water is important. We're not worried about any corrosion in the pipe because we're an HTPE and we have a little sand buffer between us and them. That worked out extremely well. We give them transport and management back on fiber optics, they get access to everything that's happening on that line, alarm systems and everything else.
Our last project, we are hoping to finish building with capital project funds, broadband that came to the state, formula fund that came to the state. We're ready for the treasury's last bit of approval. Two more questions came in for me to answer yesterday, I'm trying to figure that out really quick. But we're including power from one of the Pacific coasts we're in talks with them right now, because of mitigation with fire.
We have poles, our power is on poles going up that canyon for ten miles, if we can bring that power underground, we can reduce that fire mitigation from lines sparking and creating a fire in that beautiful forest. So, that's a major win, we think, and we think it's going to work extremely well with what we're doing with broadband. It is also going to be reaching last mile. This is unserved area in this canyon. It doesn't have service going out to any of the residents, to any recreation, we have about 60 homes in this canyon that could be connected on either side of the canyons within the community’s middle mile will be running past to unserved areas and we pick up another 2,000 homes. UDOT will not build that last mile. We'll bring the middle mile in. We lined up partner, telecommunication agencies to be able to come in and build that last mile. We're doing what I call stacking on the phones. They're using connect America, maybe RDOT. They are coming in with CPS and leveraging funds together on that.Here's a picture of our Cottonwood canyon, you can see it's a very windy Cameron and here are all of the stakeholders. This is all of the stakeholders we had with this one project, Na we had to coordinate with on a regular basis when we built this project. This is showing the type of road, this is called the S curve going up. It is showing the type of technology that we're installing to go up these roads with the connected vehicle program. And this is -- whenever somebody wrecks and they say at the S curve big Cottonwood, you know exactly what they're talking about. People like to think they can take this a lot faster despite the sign, warnings, and flashing lights.
There is kind of a showing the canyon and kind of alerts we're looking to put out on our connected vehicles.
This is showing what the canyon looks like and one of our biggest challenges. These are avalanches happening right there in that picture, and, you're seeing, yes, that's a Howitzer, that is used for some Avalanche control on what we're doing, and we also use technology where this goes out with sensors or blasts of air, or things like that that will help bring the Avalanches down. One winter this year we had 14 Avalanches on one day in that canyon. Everybody was in a stay order inside where they could not come out. If you were visiting that canyon, you missed your flight coming down because everybody was shoved into the buildings and not allowed out of the buildings until we could make the canyon safe. And if we had not had cellular service, there would have been a much more hostile environment than we had. We had good service. This is showing one of the Avalanches coming down. This is showing a skier who should not have been skiing there. That avalanche came up to him. That does not look quite as ominous, it is kind of a powder cloud, but it did completely engulf him.
This is showing you how much of an impact it has on the road, and why we were sheltering in place. We received record amounts of snow.
We were the most ski -- Utah had the most ski area on the earth for a long time. Clear up until was it May? May we held that record. The powder is beautiful and deep. Everybody wanted to get to it. All of the transportation wanted to get to it, and it was dangerous too, at the same time.
So, here's the project summary. We have a project estimate of 5 million that it costs to do, and we had 35 poles, 24.5 miles fiberoptics, we had 7200-volt electrical system, cameras chain-up. Improved communications in that canyon right now, avalanche operations center and future ITS expansion program that we're doing with our connected vehicle.
Now, I want you to look at that price tag. This is several years ago. Our similar program we're doing in Logan canyon, is going to cost close -- just for the fiber conduits not the power line, it is going to cost close to 20 million, 20, 21. We finished one project. By the time we do the whole canyon, it will be closer to 25. It has been the escalation in construction cost has been huge. This was five years ago, and now the construction is significantly higher, which everybody is finding out, and within fiber optics and conduit and depending on the terrain, it is going to go up exponentially with it.
But what do we get when we start to connect these rural communities? What is the payoff and what are the other partnerships and stakeholders, perhaps that we're not thinking about? Education is huge, telemedicine is huge. We did a recent kind of small survey that we were trying to figure out for elderly, what was the biggest use of broad band especially when saying, hey, I don't need that connection, I don't want it, but where are they actually using the technology? They were actually using it at medical clinics. It is really fantastic, you can go to a medical clinic, and you might be there with your local doctor. Perhaps you're going through cancer treatments, et cetera, and able to get on a telehealth call at your local clinic without having to drive in for your care, perhaps 200 miles from rural Utah to get that care and you can actually talk to the cancer institute participating in what they are doing, they don't have to drive in. And elderly really love that benefit. They love the telemedicine, but they love it, because somebody else got it set up and connected for them within the clinic, within the community. So, connecting the community, you may not be grappling of the problem, what are we doing with the elderly that don't want it, actually they really do. They want it in their clinics. They want it in everything that participates and has somebody that can do that hands-on for them, to be able to help them with that technology. It's a huge benefit.
Here are our rural communities that we're looking at. And they are beautiful, and you could see the cost to bring connectivity to a rural community its k be quite expensive. When you do private-public partnering and help leverage rights-of-way on the road, you can reduce the costs of getting to this community drastically. At transportation we end up with a great plus because we get part of that infrastructure for transportation, the community that's part of that infrastructure through telecommunication company, that's partnering with us, they come in and finish these build-outs.
This is a nice picture across our San Rafael flow, this is one of the most rural places in Utah, this is crazy. This is BLM right away for us. When it is BLM right-of-way, our road has transportation on it for -- for highway purposes to cross that section, I guess is what I was trying to get at. We have a prescriptive kind of right-of-way. We don't own the title. Most of UDOT's road are fee and title. We own straight up. Except when we cross another Federal agency. BLMs here, that means Federal BLM is the agency on that right-of-way. We have it for highway purposes. Now, the telecommunication company wants to come in here they also have to permit with BLM. We can come through, build for highway purpose. I can put in extra capacity. That means when telecommunication company comes through, they are not disturbing soil. This goes back to the dig once practice. The infrastructure is in, they permit with BLM for that communication line that's going in across BLM's right-of-way and with the UDOT section, because we are managing that right away. And it goes across there. It speeds up permit time drastically, we have done all of the EIS and we filed all of those documents and did the original construction. We are quite efficient at doing that. We partner with BLM by prepping most of all the document through the contractors in the project and finding out where BLM needs help.
In a recent meeting with BLM, we found out through IIJA dollars and broadband infrastructure, that they didn't get partnered with very well, they've got a ton of committees to try to help get agencies get a lot of this infrastructure built out, and they got zero help on additional staffing. I thought that was pretty rough. I was like, would you, that should have been something that was considered. I give them a plug wherever I can. To say BLM might need just a little bit of help staffing-wise to help get through some of these requests. We help them by offsetting that to our contractors that come through to specialize in work that they do.
Here's an example of one of our communities, this is going into how. You can see our conduit configuration we have here, with the green brown, those are the first wiring color, we group our conduit by the wiring scream. This is more conduit we're putting in the town, often the infrastructure project. We got an opportunity to use cares funding to get connected, unserved communities very quickly. Could we do it quickly and a lot of telecommunications companies say we can't get clearances, we can't get through everything. As a transportation company, as a DOT, we have the rights-of-way next to the interstate. Instead of going to right-of-way, what if we come off edge of pavement? What if we come in close? What's the risk? What are we offsetting. What if we develop a new project method? What if we -- what if the DOT assumes the risk and what if we pay for exactly what people putting into the road. What if we go out to procurement bid contracts, take a look at who comes up with the best bid pricing and pay exactly for what they are doing and inspect it and run those numbers daily, I know exactly where we're at. We did that on these proms. We built 167 miles in four months, and we were able to get it in the ground and be able to connect communities and bring them up that didn't have any connection, that's a wonderful experience and a way to do something we've never done before. And then we got a nice surprise at our UDOT conference that year, we got innovation of the year award for the project and for our partnering that we've done in the fiberoptics.
The town of Hell is almost completely filled out with fiberoptics to the home. The box elder project was able to partner with the telecommunication company with us to bring fiber to the home to almost all of the rural cities within their County and it started by the DOT providing that big middle mile backbone connection across the interstate. Making that interstate more than just transportation highway. It is a communication highway as well.
This shows us using that right-of-way. This is a little different use on that right-of-way. Notice the interstate. Everybody goes to this outside sections. We had a huge space section here in the middle. And we're like, why not go down the middle. The region liked it. We liked it. We're not expanding a lane any time soon out here. And you can see, here is our edge of pavement, and this is where we stuck it in. Close to the road. That means when we have to surface this, I don't have to go clear and leave tire tracks, I'm able to pull off in an area, and it is a lot easier to get to and to take care of.
With our projects we also brought in and partnered with division of technology services to bring free public Wi-Fi spots. We've been doing this all across the state. So, we've done temporary sections where we didn't have any communication. We put up a Wi-Fi spot to let you know, what is the same of the network they're looking for, and how to access it. The division of technology services we thought was going to be very against trying to get us connectivity. We are trying to figure out how we got connectivity to all of these local people. We took every UDOT shed, every shed we got across the state of Utah, which is about 46 sheds that help our snowplow, maintenance, et cetera, we turned them to public spots where they pull up against the fence, we put in powerful Wi-Fi. Partnered with Cisco on that. Public safety, highway safety can pull up to one of the sheds and their computer systems connect automatically and they are high speed. They can download camera feeds, and it's a secured state network. And they can log on to IVN, and everybody else logs on to cat net which is a filtered service and that's good.
Going to a few more slide pictures going through on that. Last piece I'm going to wrap up with, I'm going to talk about monument valley here. This is the Forrest Gump hill going down into monument hill. This is us plowing fiber with it. Lin, a friendly request we want to leave time for the next presentation, if you could complete your presentation in a couple of minutes. Appreciate that.
>> LYNNE YOCOM: Thanks. This is somebody's dream of an electric vehicle connecting. After doing this, and EIS, I know this will never happen, because this is such a nice protected area. That might be something in the partnering that we don't think about when we're thinking, hey, this would be a great place to build something. You want to maintain those vistas and views and what you're doing and making sure you're taking care and digging once and we are not having to come back through this area a second time.
So, thank you so much. There's another slide sections on there if you want to look at it, but it's been great presenting, thanks.
>> KATE FLAHERTY: Thank you, Lin. Let see if we have any questions from the audience. Operator, we would like to open the phone lines to see if there are any questions. If you're listening by phone, you can ask questions by piling one zero. And, yeah, Sasha, feel free to jump in with any questions you might have.
>> SASHA PAGE: Yeah, I'm thinking -- I want to make sure we have enough time. I would like to collect the questions here for Lynne and others and make sure we have time for Thay's presentation, and we'll ask questions after that.
>> KATE FLAHERTY: Okay. Perfect. All right. Great. So, our next presenter will be Thay Bishop. Thay is senior adviser for FHWA financial support. In nearly 20 years she provided technical assistance, led capacity building efforts In Innovative Finance. Prior to that she was Director for Corporate Finance and Treasurer for Metropolitan Atlanta Rapid Transit Authority. Thay, please go ahead.
>> THAY BISHOP: Good afternoon and good morning to all of my friend who have been with us for a while. I'm going to share with you everything I know about the famous I395 Capitol Crossing project in District of Columbia. The project used value capture strategy air right development, it is a mixed-use development and is a biggest effort community revitalization project in the downtown of Washington, D.C.
Before I get into the Capitol Crossing project development plan, I thought it would be a great to give you a brief history of the project. The Capitol Crossing located just a few blocks from both Union Station and the Capital One Arena, used to be Verizon Center where all of the entertainment and high-end retail and restaurants. It is also within walking distance to the nation’s capital. The district owns the land around the freeway and the air rights above the I-395. The excess land is located at Massachusetts Avenue East Street, Second Street, and Third street and exclusively of F and G streets. Those are the real important streets to reconnect the neighborhood.
The decked area is about 7.5 acres was one of the largest remaining undeveloped sites in downtown Washington D.C. The project objective is very clear from the beginning and over several decades is to reconnect the Capital Hill and the East End areas that we were cut off from each other by the construction of I-395 in the late 1960’s.
The development provides the new connection between the two neighborhoods. This is not new, the district has long to find a way to connect the neighborhoods include the development of the platform over the I-395. The idea of decking over I-395 dated back to 1989 when Mayor Marion Barry was in the thirst term. On December 28, 1990, the Mayor awarded the right to develop on top of the highway to the local developer. The plan called for 45 million air right value, three office buildings, 300-room hotel and 266 apartments. By 1995 the construction had not started. The developer requested extension by two years, which was approved by district City Council. However, by 1999, there are no progress had been to the project. The district City Council sued to evict the developer from the I-395 property and compelled the developer to pay for the lost rent. And, of course, the developer file counter sued, so the deal ended in litigation, and it was settled in 2003. The district had to pay 8.4 million and accrued interest.
In 2005, the New York based Property Group Partners, the group had been active in DC for several years. It offered to pay the settlement in exchange for the right to buy the property from the district at the fair market price. The project later was resurrected in 2007 by the property Group Partners.
So, the property route partner and district engaged in a lengthy negotiation. In June 2012, the Property Group Partners closing the development deal with the District, so the developer actually purchased the right to develop over the recessed portion of the I-395 in downtown Washington, D.C. The deal also transferred the excess right of way to the developer, so it allowed the developer to clear the final hurdle to 2.2 million square feet of the mixed-use development.
So, decking above the highway also connected the Judiciary Square and the East end District. The project broke ground in May 2015. The developer and its general contractor, I believe, Balfour Beatty had underground work that included utility relocation and site preparation that began in 2014. The completed installation deep caissons supported beam filled with the concrete to support the three-block deck over I-395. And the concrete was poured, I think in 2016. To support the buildings, the huge concrete footings, about 8 feet in diameter that was sent 100 feet into the ground. The reason they had to go so deep because the area uses to be old stream bed. That is why the caissons had to go so deep.
The entire project was scheduled to complete in late 2021. And completed build-out in 2022. I have included several videos at the end of the presentation, it is very fascinating how they constructed the project deck.
All right. This is the aerial view of the development, so, what you see right here, is the first of the four-office building, I'm trying to see if I can get the arrow-- okay, the first building, this building right here, in 200 Massachusetts building was the first building to complete in 2018. All right. So, you have noticed the lane of traffic missing from the I-395what you didn't see, the I-395 run through the downtown district, because the Capitol Crossing development sit on top of it. Okay?
The entire project development costs at least 1.3 billion, and was 100 percent funded by the private investor and developer. There were no Federal, state, or local taxpayer money used to support the development of that project. All right. The 7 acres decked development site above the I-395 created 2.2 million square feet of building space and covers three city blocks.
The entire project is in downtown and bordered by E Street and Massachusetts Avenue NW with Second and Third Street NW to the East and West. And right here, is the third street and E street is back here. And the location also central to the union station, and the I-395 with an awesome view to the capitol and Washington Monument.
All right. Let's talk a little bit about the development plan. The plan -- this is the area -- aerial view of the development area. The plan called for five Platinum Leadership in Energy and Environment Design refers as LEED Certified for the mixed-use buildings to be built on the site. The -- let's see. The building right here on 600 second street is the residential building. There's about 150 units, at least 30 percent of the housing will be affordable. The remaining four office buildings between Massachusetts Avenue and two on F street, okay, this right here, these two, those for office buildings, going to build to the maximum of 130 feet. 20 percent of the site are public space, and also the very important is the restoration of the F and G street grid, because the street is connecting the two neighborhoods. If you notice, all the buildings have green roof garden top, and it's going to be the first of its kind eco-district in the nation’s capital design with sustainability features. Each building also had a ground floor designed for the restaurant, retail, and all of the service amenities to the tenants. Below is also the four level of the parking garage that accommodates about 1,146 car parking spaces and 440 bicycle parking spaces as well as 70 parking spaces for vehicle efficiency.
So, the subset of the Capitol Crossing probably is the 3rd street project. This project costs about 270 million in transportation improving, and fully paid by the developer. The developer doing all of the urban infrastructure work, including a newly designed pedestrian and vehicular corridors, that will connect the Capitol Hill and East End communities, update the traffic pattern, and deliver a new pedestrian and bicycle safety feature to the community, with many safety features. The most important is also restoration of the original street grid network F and G streets. Those streets are connected to neighborhoods. The G street connects across the highway as a pedestrian only street. Â The F street connect the highway as a fully functional street. That means it accommodates all of the mobility. Also, reconfiguration of the I-395 ramp at Second and Third Street NW. So, what you see is all the right of way area shown in red has been affected by the project and had to be modified and paid by the developer. The traffic control plan and construction are inspected and approved by the district the Department of Transportation.
Okay. And here, what is the value that the district captured from this project? Well, the entire project cost at least $1.3 billion was paid by the private investor and developer. The district received $120 million. The developer also funds $270 million Third Street Tunnel project improving, such as enhanced vehicular, pedestrian, and bicycle connections around and across the I-395.
In term of the Economic Benefits, when completed will generate about $40 million in new property tax revenues. As much as 1 billion for the next 25 years. Those additional revenue sources available for the District for transportation improving.
That's not talking about the economic activities going to be generated from this development as well. The project also creates about 4,000 construction jobs and 8,000 permanent jobs and at least 51 percent of those new jobs are going to be filled by district residents. In terms of the social benefits, the district really accomplished its long for reconnecting the community by expanding the F and G street over the freeway. It also not just reconnecting the community, but what comes after for the communities, and create a livable community and environment friendly, providing pedestrian connection between downtown East End and Capitol Hill, the two neighborhoods, as well as all of the infrastructure improving. And also supports the higher density development without demolishing existing structure or displace the residents. In terms of environmental benefit. This is the first Eco District of its kind in the nation's capital. The project was designed with many sustainability features which I'll go over in the next slide. You can say that this project also considers Asset Recycling because it generates an ongoing revenue stream from the unused right-of-way or unusable asset to use for other infrastructure improvement,
All right. Here is the sustainability features design for this development. The project went beyond the leadership in energy and environmental design standards. Normally you hear the LEED by recycling water capture on site right here, this is a water sustained system that captures and treat about 90 percent of the stormwater runoff and centralized recycling on site, and certainly that will be less strain on the water system for the district, right? The Capitol Crossing’s water also recycled on site and filtered on site and pumped to rooftop cooling towers. Through the rooftop where the some of the water will be used on its green roofs garden. And also, some of the water also pumped throughout the floor,
The eco-chimneys filtration system to clean the air, this is right here. And there are several systems as round the development area. And, basically, designed to filter the air from the parking garage, and pump the fresh air to the public areas. The Capitol Crossing also has a -- its own power plant, onsite cogeneration using the combined power and heating system. That this yellow area right here, that runs along the I-395, generates enough power and heating for 2.2 million square feet development. This is a win-win situation here. The tenants save money, and the district collects a new tax revenue.
Let's talk a little about the key successes. They are fundamental key elements that have to be happened in order for the project success. I always have been looking at the big projects to learn from innovations are key from that project and make it my own determination.
Okay. The first one is a very important. It has to have a clear objective. I mentioned earlier, the Capitol Crossing held very clear objectives to reconnect the established neighborhoods, the East End and Capitol Hill, by not only reconnecting them, but it creates the community -- livable community with many safety features created. A place where they can live, work and play. It also created 8,000 jobs and upgrade many neighborhoods infrastructure for the future development
The project success is a resulted for several decades of the planning, working together, collaboration, and partnership of community leaders, district planner, district government, federal highway administration, and the district residences.
The market analysis -- the implementation also needs to be considered to minimize the negative impact to the public. In this case, the developer asked to close more than half mile of I-395 over more than a year to save 18 months of construction time was declined by the district. But the district working with the developer, to close temporary lanes and ramps, but mostly during the off-peak hours. You heard, the market analysis and must consideration and is very important, because it is basically looking at the market, demand for that development, like if you're going to be built an office building, residential building, and so on.
All right. The funding and finance plan also should be taken seriously. Analysis of the long term economic activity, also taking a serious look, or review of the developer experience and history of successful develop similar projects as well as developer balance sheet to make sure the developer can survive to the recess economy, because at this time, the development has gone on for 10, 15 years, while on this topic, I want to let you know August 3rd, we're going to have a webinar on the economic shock. If you haven't registered, you need to learn how to handle the economic downturn such as the recent pandemic.
This is a great project, but I want to share with you, because this project is the ideal. However, it is very important key takeaways that taking a lot of effort to achieve, and the project is a Capstone of the economic development, in Washington, D.C. It is really achieving what the district government has to do for several decades by turning the desolate space in an economic engine.
This slide provides you the example of the development view in highway, by different type. There are many more on the value capture Website. This slide provides you examples of the development in public transportation system or transit by different types of development, but again, there are many more projects. We have about 500 of them on the value capture Website. And so, if you have questions, there are, you know, very concerned about the displace of the residential, the -- one of the projects that I want to point out, are basically the Capital Beltline project-- the project that generates future revenue from the TIF district and cities, using some of their money, actually, include the business community to fund for -- to assist the legacy resident to be able to stay for the duration of the TIF-- in the area.
All right. I mentioned earlier, there were three videos. I really enjoyed them. It is really fascinating how the developer build the deck-- to cap the freeway.
So, this is the relevant resources for the webinar topic. There are much more resources available on value capture Website, relevant to development. They are much more. We have developed many, many resources that is available for you, and is really can take you from cradle to grave when you decide to implement value capture. This is my contact information. I am happy to answer all of the questions you might have, and if I can't answer, I will make sure that you get the answers to the e-mail. But, anyway, so that basically concludes my information to share with you about the I-395 Capitol Crossing project.So, with that, I'll turn it over to Sasha or Pepper.
>> KATE FLAHERTY: Thank you, Thay. Thank you for that presentation. I'll go to Sasha in a minute. Before we tackle questions, I want to point out that you should see a file share window or pod that has today's presentation slides as well as some other resources available for download. Those include FHWA special assessment primer which was the basic for which presentation. Also available is frequently asked questions document about session assessment district. If you like to download one of these files. Hover your mouse over the file name and share the file, in the file share window, and you should see an icon with a downloading pointed arrow. Clicking that should start the download process. You can also click the three dots in the upper right-hand corner of the file share window in the menu that pops up. And you should be able to download them all at once.
I'll defer to Sasha if you have any questions.
>> SASHA PAGE: Thanks, Kate. We are almost toward the end here, I'm trying to see if there are any questions that are -- let's see. Sorry, there's -- um, I don't see any additional questions that we have here S. I really appreciate all of the folks that have joined here. I mean, if we have -- I guess one thing I would like to ask, and we can be very brief about this, of the three presenters, is how do you deal with stakeholders, outside stakeholders? Because all of these projects deal extensively with stakeholders, within their organization, and of course outside, and are there any tips that you have, and I'm going to say, everyone should -- in 30 second or less, give us top one or two or three. That's, I know, a bit of a challenge here, maybe, Jacob, start with that?
>> JACOB VALLO: Yeah, appreciate the question, it's a Cornerstone element of our program. Listening is, you know, Paramount, so, that's one meeting people where they are is another one. Having multiple opportunities for stakeholders to engage, whether through online or in person. Otherwise, those are the top three things we're focused on. And delivering on, you know, what we hear, so that we can build the trust with the community thanks.
>> SASHA PAGE: Thank you. Lynne?
>> LYNNE YOCOM: Be fair, be consistent, and be clear.
>> SASHA PAGE: Great. Thank you. Thay, any thought from capital crossing?
>> THAY BISHOP: I think that outreach and communication, well prepared, and bring all of the stakeholder including identify the stakeholder for the project and bring them in from the beginning. And as well to -- working with them along the way. That's very important, because almost every single highway project, is touching the local and the communities. So, it's a very important that you have to bring them in from the beginning and listen to what they share with you of their perspective.
>> SASHA PAGE: Great. Thank you. I think we're almost -- have to end our session. I see Jacqueline has a question. I'll read this, are examples of plans for binational value capture? I don't know any but were some Pacific Northwest that may include binational value capture. I see there's bridge, canal, waterways between the two countries, but as far as I know they are north directly value capture projects. I'm sure if there are some, we will share those with you.
I think I'll turn it over to Kate and Pepper.>> KATE FLAHERTY: Okay, great. So, to wrap up today's webinar, we would like to remind you of the upcoming webinars in this series. As you can see, we have several more webinars planned before the end of the year, you need to register for all of these webinars using the link shown on the screen. It should come up. There you go, at this point, we invite you to provide feedback using the evaluation tool that you should now see in the center of the webinar room. If you would like confirmation from FHWA of your participation today, please e-mail your request to value capture@DOT.gov. Value capture is all one word. This e-mail is dress is in the upper right-hand corner called evaluation. You can also provide feedback if the evaluation tool does not work for you. We like to thank you the presenters and like to acknowledge the ongoing support of FHWA's web conferencing and every day counts program. This concludes today's webinar, thank you so much for joining.
>> OPERATOR: Thank you, ladies, and gentlemen, that does conclude your conference, we do thank you for joining. You may now disconnect.
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