Value Capture Webinar Series

Capacity Building Webinar:
Value Capture: Maximizing Value Capture by Leveraging Infrastructure Banks

May 07, 2020



[Please stand by for realtime captions.] >>

Thank you for standing by. The conference will begin momentarily.

Thank you for standing by. Welcome to the webinar. You are in listen only mode. Later there will be questions. If you require assistance during the webinar press star then zero. This is being recorded. I will turn this over to your host.

Thank you. Hello everybody. My name is Pepper. I would like to welcome you to today's event on maximizing value capture by leveraging infrastructure. I will help address technical problems and orient you to the webinar room. The top left you will find the audio call in information. Also a link to information about federal requirements. Below that the attendee list and in the corner is the chat in which people are using. You can post questions in the chat window during the presentation. Sasha who will introduce our self shortly will make sure the questions get answered. If you have difficulty you can use the chat by sending a private message. You can click a button in the corner and select start chat with host. The webinar will run until three. You will have 3 presenters and a presentation by the moderator. Sasha, Don Hamilton Alex and joined by his colleague Josh. [ indiscernible - low volume ] .

We will field questions for the presenters at the end of each presentation. We will address in the chat and provide the opportunity for people to ask questions by telephone. We will have time at the end for additional questions and answers. You can download the speakers presentations at the end. If you're interested in hours, credits. We will provide information at the end of the webinar.

I would like to ask everyone to fill in the questions on the screen to help us understand your affiliation as well as level of knowledge about today's topic. It looks like people have done a good job addressing those already. We have some [ indiscernible - low volume ]. You can find a little more about infrastructure banks. I will close this and turn the discussion over to today's moderator Sasha. I am pulling up the slides now. I will turn it over to you.

Thank you pepper. Thank you all for joining this, maximizing value capture by leveraging infrastructure. I will raise a couple of points introduce the topic. Hopefully it will frame the discussion. As you hear the presenters it will generate questions. You can put those in the chat and the operator will give you a chance to ask by telephone

Infrastructure banks can help finance projects at the federal, state, local level. At the federal the programs which support transportation moods serve as national infrastructure banks. At the state level there are several types. Over 30 states have developed. Donny will discuss shortly. At the local finance needs, Alex and Josh will show you shortly.

The programs are infrastructure banks providing federal support for projects that include revenues for value capture. Typically not banks. The money does not go back like a revolving. The program operated by the build America Bureau provides below-market loans for eligible projects. Roads, transit, and surface transportation elements of ports. Transit oriented development and rural infrastructure projects. Also operated, the railroad rehabilitation and improvement financing program provides financing for freight and passenger rail.

One example at the federal level of program supporting value capture projects is an example of how programs work together. It's almost a project that funded [ indiscernible - low volume ]. One funded by capture money. Capture techniques, property sales, tax increment finance, special assessments. The rest is funded sales tax, grants. The same techniques can be used for road, highway value capture projects. Maybe someday the program may finance as well.

The majority of states have established federal state infrastructure banks. In 2005, 33 states capitalized on state infrastructure banks with federal aid funds and matching. Some states created and they do not follow federal eligibility rules because they have the desire to fund other, projects outside like fiberoptics.. [ indiscernible - low volume ] the typical terms include low market interest rates. Significant back loading. Some projects not rated at or below. Good models for local. Local entities may want to pursue nontraditional infrastructure support as mentioned like utilities, fiber-optic. You will hear about shortly.

In terms of credit quality investment grade. It can be below. It's actually structured. Loan terms. To what extent will they be below-market. To attract borrowers. When it occurs the public provider. It needs to be covered.

Federal land SIB'S, maybe stay, local depending. The. Of time it takes to process, approve. In accordance.

I will turn it over to presenters and look forward to your comments, questions, afterword. Before I do that, are there any questions people have?

If you whisk -- wish to ask a question, press star 1.

Did you see there was a question in the chat pod?

Yes. What is the definition of passenger rail? I will give the overall answer and refer you. Essentially a commuter rail and intercity rail. It does not include local transit, subways. Commuter rail. It includes equipment related generally to the operations of the facilities.

Any other questions?

We will have a chance to answer questions afterward as well.

I will turn it over to Donny Hamilton.

Thank you. Can you hear me?

Good afternoon. My name is Donny. Director of finance . The Texas division office. I will talk to you today about the importance of value capture. During the presentation I will focus more about why it is important. As we get down the stretch I will get faster to find out what it is because Alex will be speaking about what you should know at the state Cocke County level. -- At the state and county level.

It's important to understand the benefits of value capture. We will talk about infrastructure bank and I will take questions and answers. I like to tell short stories. I hope I do not for you. I want everyone to be loose. No question is a bad question. Ask if you have one. My wife asked a question. What do you want to do this year that we have never done before. My son said he wanted a rocket ship and launch it in the yard. My wife said she wanted to make a cake from scratch. I said I wanted to Referree an actual high school basketball game., Referree for basketball in Texas. As we turned back to dinner they said scratch, like scratching the chair? Me and my wife had to realize we should not make assumptions. The child was thinking hey I'm scratching the chair. My wife was talking about using the ingredients to make an actual cake. Let's not make assumptions during the presentation. Just because you have been doing something in a certain way. It doesn't mean there's not another way to do it. Don't assume you are doing it wrong. Ask questions. We are here and we want to help you. Happy Mother's Day. A pre-happy Mother's Day for every mother on the line.

Every day counts. This is a state based model which identifies rapidly deployed, underutilized things. Safety, reducing congestion, environmental sustainability. What is important for you to know, they select the innovations based on the uniqueness of your community. What's going to help in your community. You want to quickly implement into practice. That's the point. It is significant, every day counts. Congress recognizes the effect and has been included by name. 80 say is in a 2 year cycle. 2019-2020. We are in the fifth round. Value capture is one that's a part of every day counts.

Why is value capture needed? For 3 reasons, congestion, capacity. We want to keep people safe. That's the priority. Many people on the line, we want to keep people safe because lives matter. As we look at the slide you will say 2 out of 5 miles of interstate are congested. We waste 160 billion a year in time, fuel. It's personal to me because I have an old vehicle, 20 years old. My wife handed it down to may. She named it cinnamon. I wanted a more masculine feel. I live 10 miles from my office in Austin, Texas. I get on I-35 every day at 4:30 PM. I get home about 5:45 PM every day. My truck drinks gas. How much fuel is wasted. One out of five. We recognize highways have been underfunded. It has led to a backlog of highway, bridge, capital needs. MedSTAR repairing existing. As we look at the data you see over 36,000 people killed in motor vehicle accidents. When you look at pedestrians walking across the street. Over 6000 have lost lives. This is data. Each dollar we spend, roads, highways, bridges need improvement there is a return in investment of about $5.20. You recognize in the form of maintenance. You can get home faster. Reduced fuel consumption. Me in my truck would appreciate that. Improved safety. Reduce emissions. These are the things we are concerned about. This is important. I want to spend a few minutes. I want you to pay attention to revenues, outlays. As we look at the chart based on the Congressional Budget Office estimates. From 21-26 there is a gap estimate of from 21-26. That's the projected path. If there were an authorization Bell from 21 and 5 years in terms of an authorization bill the difference between revenues, outlays would be a 94 billion deficit. If you took that car 21 and 6 years out we are looking at a deficit. Since 2008 there's been 165 there's been 165 million transfers since 2008 into the highway trust. What are reasons revenue looks low and the outlays, expenditures. Why? Some reasons. You can make assumptions. You have to think of fuel efficiency, electric vehicles, development patterns. People are closer. People want transit. Different generations. They want to walk. They don't need a car, by cars -- tires. No gasoline. Travel alternatives. Less need for gasoline and those that contribute to the highway funds. God forbid we run to an appointment time where there is an economic downturn. We show that the highway trust fund it can be sustainable. It's important to explore viable alternatives for revenue sources. Really important slide here.

A general overview. Our definition. It should be a mix. Used by public agencies to share a portion of increased property value created from public infrastructure investment. We share in the cost. An important factor. I will ask you to think about places in your local state, community where benefit may exist due to something you invested in. When you look, if property values, economic activities to the area increase because of the road, sidewalk. Different access. We shipped thinking from an industry perspective. How do we turn that into capturing value. On the last slide, as you look at the numbers. We will have to come together and think about ways for new funding sources. This is a great way. The government makes an investment. Transportation infrastructure. Property values increase. Some of that goes to property owners, beneficiaries. A fraction in taxes. Property value return. Three dollars went to taxes. Two dollars make a to property value return. From that, you capture value that came from an increase and you are able to build a balance and reinvest. Improving the system. Another way to capture the value and economic activity generated in order to reinvest without tapping out a revenue source. The importance of value capture. We want to look at alternatives to supplement additional sources which I discussed. 3.2 million miles of nonfederal aid public improvements. Everything will not help you to sometimes get things done that you want on a local level. What's important, beneficiaries in transportation infrastructure contribute. You want to see who the people are that our users and you want to see how they can share in the cost with us. In terms of local matching. It's usually 80-20 on the federal state, local. If you use value capture it is a way to supplement your share to the federal dollar. Talking to access of low interest rate loans. They do a great job. I worked with them for 5 years. They do a great job with loan programs. I encourage you. A strong pledge to repay low interest debt. Attracting private capital. Private investors are looking for opportunities to make a profit. They may make investments based on citizenship. A lot of times they may use corporate citizenship to increase the brand and turn it over and work in partnership with a local entity and allow them to use that. Is there an opportunity to gain additional revenue by having that as a piece of something shifted over to you or share by you. Enhancing speed, delivery. These things help. A way to use infrastructure banks in order to come up with.

State transportation improvement program required in the planning process. You may have a project in year 4. With additional revenue sources that may be generated you may be able to move the project up to gear 1. You are generating a constant flow of revenue. We have to maximize. I saw projects 15 years out because they were using they were able to move them, move them up and get them done in 2-4 years. Use and infrastructure bank, value capture to do the same type of things.

When you look at the types of improvements, roads, transit. Look at the last. They are important to me because I'm an urban planner by education. I did that for a while. I'm a big advocate of those improvements. What you can do, you are able to maximize revenue at a lower cost of investment. Believe it or not people love to be in certain areas of the district where you can capture, have value capture where they like to hang out. Coffee shops, by cop pedestrian trails. You can cross the street and feel safe. The streetscape is beautiful. I want to spend time, money. Let's think about what we are doing. It is not new. How can we maximize and capture the value at a low cost. It doesn't have to be expensive.

In terms of value capture techniques, let me run through them quickly. We will have future webinars. This is a one-time charge to developers. It offsets the cost of infrastructure if somebody comes in with the new development. These are taxes, residential, business. That geographic area that benefits to the transportation facility. Looking at transportation, these are based on how much you use a transportation facility. I want to highlight and command are again and Texas. 36 transportation utility in the country. 26 and are again. And 6 in Texas. 90% of transportation utility fees used. They are working. I want to encourage you to look at techniques like this because they can be beneficial to helping you generate new revenue sources. Looking at increment growth. Basically allocated funds that go back to infrastructure for that portion of increased property value or tax fostered by infrastructure. We are transportation reinvestment zones here in Texas. I like the way they work and the way they generate additional revenue. You may go through an area and you pay some type of tax. A baseline to what's expected, estimated. Anything above, beyond what the estimated tax was for the beginning of the year. The increments can be taken off and go into reinvestment in the transportation system. A good technique, incremental. Transportation facilities. Government assets. Transferring risks to a private sector for public benefit. Naming rights on transportation facilities. If any have been to DC you will get on a bus, train. U.S. Navy contestation named after someone. That entity used the transportation facilities to market the brand. Thinking about my wife. She got just married shirts. She said he is so happy and her face would be on it. I thought 13 years later she branded herself but [ indiscernible - low volume ]. I may chat with her. She has free naming rights. I was wearing her shirt with her face. She will point to the kids and how well she keeps the family together and I'll end up sleeping on the couch. Nevermind. I don't think I will do that tonight. Beneficiaries. You should take a look at property owners. That's important. Some moon property. Houses, businesses, so fourth. An example. Birmingham, Alabama. A community north of Birmingham, Norwood. Getting ready. I used to be able to go there and buy a house for skittles and five dollars. Because of the investment being made people held onto houses. Property owners, have gone to $100,000 to over $300,000 for people trying to get homes. A lot of value captured because they will build a new stadium, restaurants, transportation. An excellent way to capture value. Infrastructure projects hit the ground for concessions, development, growth, special assessments.

Next, what we will look at is value capture. I want you to remember, value capture summary. With the use of mixed funding to celebrate project delivery. Value capture helps you address the funding gap by using mixed funding to accelerate project delivery.
With that said, we will jump into infrastructure bank. I have a few more minutes. Alex will speak more to these.

Resolving loan program that provides access to credit enhancement tools to favorable lending terms. It's a a financing option to address local transportation improvements. You may want to ask, do I want a small federal grant or should I take a look at a large, low interest loan and I may be able to do more and leverage cash flow, amateur is Asian and that. Some advantages to using, low interest rates, flexible amateur is Asian. If you want to pay back early, low finance, interest rate by dance. Long-term loans up to 35 years. Subordinates of a debt. There are different types of state and county SIB'S they will be spoken about. Project eligibility for title 23, 49. It is both. The loans can provide assistance to any title 23 project that is eligible. Using SIB, it must go through a federal process review. When you think of federal requirements. You have to meet going through the first round depending on what SIB you have. Keep that in mind. They can be costly. It can be more complex or you can use steak, locally administered rules. It's important to know. If you challenge on what you're eligible for, console federal, highway division office and they can help you think through what you can accomplish what you like to accomplish. Federal aid, state. Capitalize. The initial loan goes into the project. It's paid back with many times with interest. The second round, you go to another project, repayment comes back with interest. You build a small balance incrementally. With actual interest. It's a good tool for additional revenue and flexible terms. Direct loan, you buy a house, you make a deal up to a certain amount. Loan guarantees for those that don't understand. My sister borrowed money from a. Maybe five dollars. She would say JR can you give me five dollars. I would let her borrow and say where is my money? She would say dad will give it to you. My dad was the loan guarantee. That's how it works. Somebody else is your guarantee if you can't pay. Credit and you draw down as needed. Interest rate by down they buy down the interest rate to save money. Here are the 4 types. National Highway, safe accountable flexible equity act. The current, fast act. Most SIB'S are pilot. Designated as pilot. The first generation of lending has to go through the federal. The second cycle does not. The federal rules where you can actually stay, locally administer. Each has different rules. Know your SIB. Talk to the division office. Know what flexibility you have. In this slide, any new would come under. It would be permanent. Any federal dollars, federal portion. You use that as SIB money even if you have an old. It converts your current to a permanent. Every SIB beyond 95. Every repayment that goes out you have to follow federal requirements. Permanent are subject to federal requirements for 2nd, subsequent lending. Here is a chart or map showing 33. We have given almost 4 times federal assistance used to capitalize. There is a lot of money to use in SIB'S. 750 million idle for use. I encourage you so you can use that up. The federal role. It provides initial setup, oversight. For accounting people. When you have federal aid and it capitalizes using a fund and there is a local match it is your project. For the revolving loan, they are managing the revolving program. For accounting. A cooperative agreement with the state. Eligibility of the project and how funds are used. There will be annual reports. We want to make sure you follow legislative requirements. As we jump to the state. We want to make sure there are non-that violate estate Constitution for entering. There should not be a conflict. You have to have neighboring legislation. Executing cooperative agreement. This is what I wanted to. You request funds to be obligated. We do that in the federal a division office. You submit payment. You provide matching fund. You have to look at policy, operating procedures. Do have a stepping office. The last two are important. Politics may be involved in this actual portion. You may have review boards that could be politically sensitive. They want this or that. It can be a touchy part. What projects get funded are really important. With that said. If anyone has questions I can take them quickly. I know Dallas and Alex are anxious to talk. Any quick questions I'm happy to take them. Thank you for your time. You can reach me here, here is my contact information. I will turn it back over to you Sasha.

Thank you. Any questions for Donny?

Press star 1 if you have a question.

Pepper provided information in the chat regarding availability of the presentation, recording. Also information about continuing education credits.

[ indiscernible - low volume ] you may not know off the top of your head. Maybe you can point us to resources that can find that.

I believe it has been responded. No federal but state. We can at the federal level find out. I believe there is a website link to the New Jersey transportation infrastructure bank. Which is probably state-funded.

Why don't we move to Dallas. If there are more people that have questions we will collect and have those available to respond afterward.

You hear me question mark


My name is Dallas. I'm with the Texas Department of Transportation. A blessing, curse having that name growing up in Texas. I get called a lot of different cities. Background. I work for Texas state infrastructure bank for 5 years. Prior, counting and consumer finance. Today I will cover background. How local governments have used value capture to enable them to fund transportation projects. A little background. Back in 1997. Capitalized with both federal and state funds. We don't have appropriations but much like the other. Repayments and interest [ indiscernible - low volume ]. [ indiscernible - low volume ] projects have to be eligible. Within that. The actual construction on the project. Since inception in 1997. It accounts for 617 million. 6 billion projects in Texas.

We currently have 30. Orange are paid off. They add up to 220. We try to be cognizant of the customer service aspect. If they come back, tells us we are doing something right. A lot of the ones we have done. If you're familiar with transportation up and down the corridor between Austin, Dallas. It's been under construction for 30-40 years. If you look over. It's more sparse. The area is less dense. More rural farming. Some is desert as well. What we have taken up in the past couple of years is to make sure we serve the needs. General education and getting in front of them to answer. We try to make a point to get out into that. Positive feedback on the community and what we need to do. We have to focus on areas in the future.

More detail on who the bars are. This is a breakdown of those that borrowed and came into the program. A large portion is cities, counties. They are responsible for infrastructure, projects, outside of D.O.T. of course. I wanted to call out the water supply Corporation. It encompasses water supply Corporation. Utility districts. There are small districts as well. They represent, textile projects. Went textile comes through, work on a railway the cost falls on the owner of the utility. It's a low-cost, rather than have to pay for it up front. Economic development corporations, 5% of the loans we have done. By taking the revenue source. Sometimes the revenue source is enough by itself. Other times [ indiscernible - low volume ]. In Texas we also have regional mobility authorities. Other states may have something similar. They try to help facilitate transportation projects and a set region. In the Austin area we have the Central Texans regional that represents different counties. It tries to look at the transportation. 5 have borrowed from the state infrastructure bank. The advantages of borrowing from the Texas bank. The options local governments can have when it comes to financing or using cash. Prepayments can be made at any time. Tax revenues, they can do that pretty easily. If they want to refinance they are more than welcome to do that. No-load handling charges or fees. Also customer service. Everything from loan application to processing the loan after it is dispersed and tracking. It's handled by one office. If the bar ever has a question there is one place to go and they won't be bounced around the agency. They are at or below market interest rates. We offer discounts for economic. [ indiscernible - low volume ]. One thing we do is set the rate at time of application. Fixed rate. They know the cost of borrowing upfront. We provide that and recommend what it will cost and they can budget accordingly. As far as flexibility. We add flexibility for debt service. We offer deferments on principal, interest up to a certain point. We offer partial interest payments. Pivoting the value capture comes in handy when we talk about different methods, incremental where you build up the property tax revenue base as it is developing. Basically, we will analyze the estimated revenue, financial model and go from there. In depth into value capture as it pertains to. A couple different options in value capture. More of an incremental one. You might be familiar. Transportation reinvestment. Specific to transportation projects. Facilitate property tax revenue around the projects. Take a more focused approach. Transportation purpose. Only available, port authorities, navigation districts. As opposed to establishing the district.

Finding an innovative way to fund the transportation project. Similar to other methods, that will come along with the projects one big difference, it doesn't have to establish. It could be a little more effort, cost in that aspect it is a little bit easier. In Texas 14. A little more one of those things we are becoming comfortable with.

[ captioners transitioning ]

Talking about what we have done with the program and value capture, once again talking about the 101's you are taking a portion of those revenues and putting it toward something that increased. We have the to 19, TIRZ , TIF. They don't require $11 million loans for each other pick it just worked out that way. In the past 5 to 8 years it was kind of the inception of the program. So the highlight but our community did, so we met one or two but felt very strongly about the project along the highway and they were looking at different ways maybe they could accelerate. [ Indiscernible - low volume ] and increase the property taxes. So they performed this, which is aside from the TRZs and the talked about they had enough for the future revenue to kind of source and $8 million subway to fund the increased share. So [ Indiscernible - low volume ] 8 million towards the project and they were able to accelerated and get it done sooner. They did that by capturing the future revenues and leveraging it out. So going back to kind of the flexibility of the program, what they did, so they kind of backloaded a lot of the line in the beginning of the years and they capitalized interest on it until the TR is the revenues were estimated [ Indiscernible - low volume ] in this kind of speaking to the flexibility of [ Indiscernible - low volume ]. No that kind of sounds risky, because you're basing it off of the estimated growth. It's kind of an unexpected pandemic. So what we kind of do to eliminate that risk is generally ask for a backstop or commitment from the community to make the best service payments if the revenues don't come as expected pics of the community, there is a benefit of low-cost borrowing to get that project done, from the same perspective retentive mitigated the risk that can come with the revenue for that. Looking at what the program has done as a whole as far as pledge sites, the majority of it would be more traditional utility revenues and ad valorem taxes, so taxes. But there is 6% with the projects that make that portfolios done. They have allowed us to kind of take the risk. So with that, this is my contact information. We have a lot of information on our program that goes little bull bit more in-depth on the uses. We have an information brochure, sample applications, if you're curious to what we ask for for communities when applying for a loan. And with that, I would be happy to answer any questions. Spa thank you, and once again press star one. Any questions? And once again, press star one if you have a question.

There was a question about TIRZ in the chat room. Maybe you could just clarify for us all a little bit TIR Z to just review that again.

Yeah, so I think the big difference with the TRZ is transportation and the TIRZ in the tax increment financing don't have to be transportation related and they can be set up in different districts established and maybe there is a letter another person I can answer the question maybe then I can.

Sorry, you wanted [ Indiscernible - low volume ]. Mike I don't know if he might be in a better position to kind of expand on the specifics of those.

[ Indiscernible - low volume ] the specifics

We TIRZ versus TRZ.

We can probably take that question off-line, but there is one in the reinvestment zone, the increment reinvestment zone has more to do with going through and approval. I think it has to go through an actual board in order to get approval, versus the transportation reinvestment. I think there just has to be a general awareness in terms of public revolve in public input. I believe, if I'm not mistaken, that the body that would make that decision is able to implement it when it comes to transportation increment reinvestment zones. It does, in fact, have to go through the process that I mentioned earlier, official votes and so forth. Please feel free to reach out to me. I have information on that. I will get you the answers you are looking for with no problem.

Johnny [ Indiscernible - low volume ] in the near future be putting out a frequently asked questions document [ Indiscernible - low volume ] just check in on the capture second showing section [ Indiscernible - low volume ] resources like that. Of course is a great resource and people should take advantage of that.

Yes, thank you. So Alan has the finance caps of NHS facilities using these tools. So I believe caps are, the general is referring to covering over existing roads, highways and building other facilities, there are number of examples that are like that. They have definitely been used from value capture. One example is in Washington, D.C. where the capital crossing has been built over a [ Indiscernible - low volume ] and it's been used as a way, the city has been benefiting from the payments of the developer, they developed a very extensive corporate set of campus, essentially the parts of Washington, D.C. And so that is one example of a value capture. They did not need innovative financing tools, the gentleman asked. But there are number of those used as value capture mechanisms. There is no reason why that the tool we were discussing could not finance them. As I mentioned, the project in Denver and others, there are some projects we should use, not so much to cover, but to build upon rail facilities picked up an example of those being used. Any more questions?

At this time there are no phone questions.

I have one question for you. Have you [ Indiscernible - low volume ] the project goes one jurisdiction to another jurisdiction and whether the TXDOT tool will allow that to be financed between jurisdictions?

I think it's kind of based on two moving parts. We are talking about a TRZ , I think the community that's establishing it has to have the jurisdiction on it. I'm not sure they're able to get into an agreement with a local community to allow them to do that. Basically they would be crossing into another tax authority. But as far as the program, say one community does full finance of the project that [ Indiscernible - low volume ] per se, we have asked that question of the Council before and they said they would be able to do the [ Indiscernible - low volume ] kind of a signed agreement that acknowledges that and allows them to get that project done.

Okay, thank you. All right, why don't we move on then to Franklin County? And Alex Perez and Josh Brock will give a presentation.

Thank you. Hello, everybody. This is Alex Barrett from Franklin County, Ohio. I just want to reiterate that we are going from the 85 and over tab in Texas to the 65 degrees, call him, so cool and socially distance Ohio. So we want to welcome everyone. We are very proud of Columbus and Franklin County. But we know that other people still have a hard time. We are the largest county in Ohio, the state capital. We are not the Rust Belt, we love Cleveland and Detroit and Pittsburgh and our surrounding neighbors, but we are a much younger city based on a lot of healthcare, state government and financial resources. So really we are growing in Ohio. Something real quickly, last year in the New York Times, we were one of the 52 places to visit and awakening in Columbus, that's our new national veterans Museum. So we salute our veterans on the phone today. And it's a great place to visit when you are in Ohio. And coming through, hopefully when we are allowed to again. So once again, Alex Beres, assistant director of the Franklin County economic developing department. I went off for a number of years into working for a private civil engineering firm for infrastructure funding and financial consulting. And then I came back as the assistant director. I'm joined by my colleague Josh Roth who serves currently has our infrastructure bank administrator. He will be joining here on some of the details as we move forward. Just real quickly, our department, this is typical kind of economic development planning department. You see our economic development department really could still do a lot more fun and what people consider innovative work when it comes to our infrastructure bank and value capture programs. So that's why we are so excited to have this program, value capture. It's something we really take to heart and internalize as kind of a goal. And that's this idea, the economic development should create value and some of that value should be captured and should make investments that are justified. That's kind of what's going on when it comes to why we started the infrastructure bank and also how we structure a lot of our incentives and other deals, different ways may be that some of the other economic developing departments in different areas of the country that you may work with do things. When we talk about value capture, a lot of people and infrastructure bank at Franklin County are telling us that we are being so innovative. But really, our thing is we are just stealing gray income and ideas of the past and moving them up to the present. You know, simply things that have been forgotten, or might be hidden in plain sight. This is Henry George, who is kind of the Godfather of land value tax. I will talk about him, I won't talk about him anymore, otherwise he would be sleeping on your couch. But the real road, the transcontinental railroad value capture and [ Indiscernible - low volume ] came through to be able to pay for those railroad improvements. Same thing here of the regional ideas that the national Highway system does. That's the map there with [ Indiscernible - low volume ] who some of you guys know. Historian and very helpful to me in my studies. But just an idea from FDR was maybe this never happened, because after we won the war and we had a lot of money, they do really was self liquidating highways so we could build a high land on either side that could be leased or sold back to self liquidate the financing of the highways. So once again, this is just something, and when we talk about value capture to our constituents and businesses and developers, it's nothing new. It's something virtually ingrained in our past and we are just bringing back for the. So why a county level infrastructure bank? In 2013 our County commissioners voted for a sales tax hike, mainly to find a new jail and morgue, which are both being completed as we speak. But also, with the new economic development programming issues, we only had a five year temporary hike in sales tax. So what can we do that we could invest and have, you know, come back to in a revolving nature? So we look at infrastructure bank, something we have asked about a lot of times to participate in infrastructure funds, as well as the efficiency financing for building retrofits. This is, once again, just going back to our value capture initiatives. Economic developments should create value and you should be able to capture it and reinvest it. You don't really look forward to giving away grants and incentives at Franklin County. We want to see it justified and see the value created when we do these things. The other thing is that the state of Ohio has a very good federal infrastructure bank that's well used to the point of where sometimes you are strapped for cash on projects and they are looking to hold off and save a little bit for some of the underrepresented areas in the rural parts of the state. So we need the ability to Max match and leverage their products as well. And everyone said in the past, at the last global presentation, accelerate projects because of economic development gains. The our focus is on different type of development incentives, date values, capture values and these target initiatives that we go through. So the last thing I will say is that thinking through scale. Obviously Franklin County is a big County in Ohio at least, it is not the state or federal government. We don't have money for everything. Without, in terms of actively scale and maximize their own capacities, is a little link there people want to look at it. Is a little link we kind of have a threshold. We can be a bigger fit in the couple million dollar range. If it's higher than that, if the projects already received some other grant funding and other sourcing, it just needs to have that final piece to get going to accelerate the project. We can come in and complete that. So, that's kind of how we think about this. And if you go to Josh, in 2014 he started with a capital injection of 3 1/2 million dollars and that was going to keep going and had actually kept going up until the present day. So with that I will handed over to my colleague Josh Roth for some details.

Thanks, Alex took my name is Josh Roth, I am the ED program coordinator and infrastructure bank administrator from the County. And Alex just mentioned, each year we are allocating 3 1/2 million dollars from the county's general fund. And that is with the purchase of exhilarating public infrastructure projects to facilitate economic development. Program functions, we have a seven member advisory board, which makes recommendations on projects for two or three County commissioners. The members of that port are local experts in fields of civil engineering, bond financing, law and economic development. We typically take a pledge of nontax revenues with the backs that payment source, but value capture tools are often a component of the repayment plan. One of the benefits of this is that we avoid general obligation and as a result have no real effect on bond capacity of our borrowers. Today we have made eight loans for a total of $7.7 million, we have leveraged a little over $16 million in total job commitment. From those borrowers it's been a little over thousand, 1007 and the borrowers that are currently three war in job creation reporting, they are exceeding our expectations and so we are very pleased with that. So far it's what's good. Are eligible borrowers are [ Indiscernible - low volume ] in the county, municipalities , we are currently in discussion on some projects that bring in our first Township and the County transportation improvement District, which I think Alex is going to be talking about little bit later.

Past three and associated economic development project, and this is because, as a county, we are losing our authority to what is allowed by the Ohio revised code. One of the benefits of that is this economic development requirement pairs naturally with the value capture tools available to our borrowers, like tax increment financing. So as our municipal partners start thinking a little bit creatively about value capture as well. When it comes to eligible infrastructure and loan terms, flexibility is the name of the game perk because the infrastructure banks capitalize by the general fund, there is [ Indiscernible - low volume ] financing programs. Sometimes we will approve a project because of the impact of the economic development component. Like in the case of a village with a few hundred residents the need to increase the capacity of a waterline so that one employer can expand. That's an example of one of the first projects that we did. And sometimes we use the economic development component as a reason to invest in infrastructure, because of its other benefits, quality-of-life, environment, environmental or financial sustainability, things like that. So we help pay for your traditional infrastructure like roads, water, sewer lines, drainage. But the program parameters were written as broad as possible, including things like energy generation and transmission. But so far, the quote crazy things that we finance are things like street skating, complete Street components, minor park improvements, municipal [ Indiscernible - low volume ] , which I will talk about in a minute. These are the types of things that add value to a community that allow it to be captured for future investments. The loan terms are anywhere from one year to 10 years. Our rate is set 25 basis points below the tenure monitor. Earlier today when I looked, we were looking for a 10 year loan at an interest rate of 1.01%. So it's pretty cheap. Right now we have only made long-term loans, but we are also a little excited to try grants for bond anticipation financing. All in the interest of trying to accelerate infrastructure products. One of the interesting developments as the program has found a niche in municipal fiber networks. It belongs to three communities for a total of 139 miles of fiber and we are currently in discussions with two other communities about networks for them as well. Initially their loans were to facilitate a specific economic project and add five requirements, but because of the financing we were able to provide, those communities were able to leverage and that opportunity was made significant, regional and communitywide improvements. Not only do these municipalities intend to use these networks to generate revenue to pay back their loans, but also using fiber as an economic development incentive, all that is on top of the Internet cost savings to the governments, the local governments in their school districts. [ Indiscernible - low volume ] anticipated $1 million in cost over 10 years for their school districts. What I want to do here is go through a couple of projects to highlight a value capture perspective, the city of Whitehall was presented with an opportunity when the local community bank was going to relocate the 10/4 to the site on the Northeast gateway to the city. The total project cost was $2.8 million and included a variety of street improvements. Our $550,000 loan helps fill a unique gap, which included aesthetic improvements to the rail bridge, other gateway improvements into the city, complete Street components and some improvements that were adjacent to the site because the park had been disturbed for access to the project site. Made some park improvements Sydney Graham new Heights project was part of an older commercial and investment corridor. It's adjacent to the yard, which is a massive development of the distribution facility into mixed-use revenues. The total project cost was 2.7 million, of which the infrastructure provided 1 million and the cities repayment source was a test on the yard redevelopment. So that's just a great example of value capture and what it can do to help propel in the community pick the city project involves industrywide water upgrades [ Indiscernible - low volume ] including 24 emergency room beds, the total project cost was 5.1 million, of which the county provided $1 million loan. The city pledged to repay the loan with nontax revenue. What made this project interesting was that the rest of the project cost was financed by the medical facility operator itself to be reimbursed by TIF on their home project site. This is one example where value capture, you can put another capital stack, but is facilitating a different source of financing and infrastructure. The kind of project I want to talk about is the city of Reynoldsburg. And included it because it's pretty unique and seems to be evolving. That the phase redevelopment on East Main Street in Reynoldsburg, but it didn't really start that way. The project was because of the Kroger marketplace that required a new traffic signal. They needed roughly $300,000 and they didn't have access to it immediately picked didn't even have access to the [ Indiscernible - low volume ]. What we did is we expanded the scope of the project and turned it onto a corridor project to include some things to reach out to some of the adjacent streets. And so we expanded the total project to just under 2 million and our loan was $750,000. But with the city has been able to do in the meantime, as they have taken the whole $2 million program is a local match, because our infrastructure bank qualifies as a local match for a lot of state and federal programs, and they were able to convince the state Department of Transportation to accelerate their complete construction of route 40, which is East Main Street, like three or four years. And so it turned into a much more impactful project just by trying to look creatively at how to leverage value capture to get an immediate need done. Spa thanks, Josh. I appreciate your examples there. I will just finish up with a couple of things just how value capture continues to influence our offense. One of the influences is our new review affordable housing as part of our build infrastructure and public infrastructure board as well as what we additionally consider transportation and utility infrastructure.'s were actually investing in a land trust, where a nonprofit owns the land underneath a new housing project. The house was sold, but at a subsidy rate so that our income restricted family can buy that house, but the land actually, the value of the land stays with them on the nonprofit and public enemy. Further than that they usually have political housing projects that give a tax abatement for 15 years, so that an initial buyer or renter doesn't have to see those tax bills come. You know, when it comes to a land trust, this is a nine-year agreement. We just didn't think that the first family should have [ Indiscernible - low volume ] we are using structures for affordable housing, even where the tax increment financing dollars, there captured in value, the new house bill can go back in and fund additional affordable housing. It's kind of a pay it forward project that we are implementing. And the last thing is Josh, to our transportation improvement district, it was founded in 2019 in Ohio and they simply allow an enemy to accelerate in an aggressive nature when it comes to transportation infrastructure projects. One of which, as excess of right away purchasing. We are likely to be one of the first to actually make it as we purchased our first corner land parcel to the state interchange or intersection and we are going to see major improvements over the next 5 to 10 years in terms of county engineer in the Ohio Department of Transportation. We know that the value likely will tremendously go up. So we purchased excess property and the thought that we are going to hold that with the improvement through the transportation improvement district will likely be 5 to 10 years and will slowly sell off, or was sold off in a chunk, or altogether, to capture some profits to put back in. It just goes right back to the whole idea of those historical examples on value capture where we are talking about this to our constituents. This innovative and we are getting back to it. So with that, I really appreciate your guidance on this, but if anybody has questions, Josh and I are more than happy to answer those. We really appreciate your participation today and listening to us.

Thank you, Alex and Josh. Really appreciate that. And we have a question right now and we hope people will, again prepare questions or press star one. We have a question immediately from [ Indiscernible - low volume ]. He asked , what does it take to set up your County infrastructure bank? What were the regulations you had to satisfy? Maybe you could give us the background a little more on that, please.

Yeah, sure I can take that. So, it's a process of about a year. We had initial ideas about an infrastructure bank, but it really took a long time, because in Ohio, counties are creatures [ Indiscernible - low volume ] meeting we can only do things that the state legislation and code explicitly says we can do. So one of the things we found, was that under the economic development laws of Ohio, the director of a development office is allowed to provide loans or grants for infrastructure projects that will create jobs so in terms of regulator satisfying, we constantly have to satisfy Ohio state law in terms of how we spend the money. So that's when Josh, my colleague, hinted to the idea that you generally have some kind of job creation tied to the infrastructure project. And that is to show that all of the projects in the city of Ohio are doing with economic development projects and it allows us to hone those projects. And I think that the other thing was is that we have a lot of questions in terms of how are they, do we underrate the loans? Whose expertise are we handling? I think, honestly, Josh and I have seen enough of these that we feel pretty comfortable. We also use a municipal adviser that underwrites and helps us work through the loan packaging so it makes it a lot quicker, we are able to get the dollars out very quickly, but also the financial adviser is the same one used by the state of Ohio infrastructure bank. We didn't want to reinvent the wheel, so we are able to kind of leverage a lot of that institutional knowledge.

I just want to add onto that about the financial adviser, our contract with them is consented heavily procured, but it's not a direct cost to the county. Maybe there are services for the loan closing, which is typically 1% of the project cost, but is capped at $15,000. So really affordable closing costs.

Do we have anyone in Q on the phone?

Actually while we are away I will pose a question. I put myself on mute. One thing that struck me as you have flexibility to apply the infrastructure bank to a lot of loads beyond transportations like housing facilities, [ Indiscernible - low volume ]?

Interesting question. It's pretty broad and we kept it that way for reason, to do complete, complete projects. We, you know that's about what Josh listed before and what you just listed. I would just go back to the idea of the fiber-optic side, because there is no other public financing or funding for Ohio right now that's really helping our municipalities do their fiber-optic networks. And so it's something that we've had to mention because with all of the abstention of smart fees and technology rolling out, at the end of the day the first thing you have to have is a reliable fiber network that you have some control over. So I just go back to that. And that was, I will just say that something we have to go back and forth on, a lot of our new counsel and other folks, as we were setting this up, is fiber something we really to finance and I was happy to go over the eligible use.

And as far as what we may or may not consider, we rely on the county office and also the one advisory board. You know, they are very experienced and have seen a lot of different types of projects throughout Central Ohio, so we really trust their judgment on some of these things we have seen a little bit, like 100% design costs. With that be something we are willing to finance? We don't know, we'll take it along the advisory board and get their opinion on it.

Thank you.
Okay, questions directly for Alex or Josh?

At this time there are no phone questions? Hey guys, there's a couple of chat questions here, one is can anyone address [ Indiscernible - low volume ] I'm going to open that up to everybody here. Because including myself we do not have contact. We will get information. If not at the end of this, we will share this with you. We do have a [ Indiscernible - low volume ], but I'm not sure it is in operation. There is another question about, has value capture ever been used to cover operating expenses for transit services? Or is it typically restricted to capital projects? Okay, I will take an initial response to that. [ Indiscernible - low volume ] presenters here as well. It has been used as an example in Denver. It shows you for mostly capital expenditures, I believe there is some ongoing mutterings but come from the tax financial district in the [ Indiscernible - low volume ] district and they may be used for maintenance. But primarily those were used for capital. The salesforce trans Bay terminal in San Francisco is a related example of where [ Indiscernible - low volume ] writes our funding costs for that multimodal transportation facility in the Bay Area. And I think that's a 20 year arrangement. Salesforce has its name on this transit center and they pay a fee every year over 20 years, which goes to the maintenance of that facility. And I believe that there are other examples of naming rights as well in Denver as well as in BART in Cleveland. And I think Lowell Clary as a response as well in the chat box.

Yeah, this is Alex. Another example in Ohio as well as the DART in Cleveland, and Cincinnati there is a streetcar development that links downtown to the over the Rhine district, which is kind of an upcoming cool neighborhood of Cincinnati and with the city of Cincinnati does, is it offers a tax abatement for improvements along the corridor of the streetcar. But then, but because the state of Ohio does not allow for value capture for operations of transit, it's not clear really and I remember digging through this on my private-sector time, offer and abatement to the buildings along the corridor in exchange for the developers to enter into a yearly agreement to monetize just a portion of that abatement to go back to the nonprofit of the streetcar. So that's how, I don't know if it covers all the costs, but it's something Cincinnati was very concerned about. How do we continue to face the operator of the streetcar?

And another example, and if I could, when one example, the capital crossroads special improvement District in downtown Columbus, it's a collection of building and property owners within the food of downtown. They voluntarily elected to assess their own property taxes to pay for a fee that would go to coda to provide free bus passes to an employee who works downtown. So that might be something worth looking into.

Yes, thank you very much. That was a great example. And Lowell Clary has pointed out that in Miami the the [ Indiscernible - low volume ] can be used for operating costs and additionally pointed out that in a similar way in Atlanta the sales tax in those jurisdictions can be used for operating and maintenance cost. I believe that's also the case in Kansas City as well but there streetcar. So those are some good examples. Thanks for bringing that up. I think, we had a question before the presenters. We are talking about federal, state and local infrastructure banks and in general they are islands of themselves. But as you've also mentioned, sometimes they work together and you mentioned that at least sometimes Ohio didn't have money, so that's why North did, that makes a lot of sense. Even talked about how you have worked in conjunction with the example of Franklin County with Ohio, or Dallas, or maybe as.and you know how the typical program has worked with the states then and what it would be with these two different infrastructure banks working together. [ Indiscernible - low volume ] like to start?

,I will take a shot here. Thank you for answering my question. I haven't been with [ Indiscernible - low volume ] for a few years now, but I know is I was exiting the fast act was enacted, there tends to be a focus in the shift to little project to roll projects. It was [ Indiscernible - low volume ] and different from the NHS transit and highways. So the focus was the target outside of urbanized areas, which are pretty much rural areas and that the population no with anything outside of the population later than 150,000 or more. In the target was 10 million to 100 million. You could really say hey, it's looking out for the little guy instead of these huge metropolitan areas that are getting enough alone to deliver projects. They issue loans to private entities and the advantage of using a save, and I really want you to listen to me here, is typically a policy goes up to 33%. The law permits 49%, but by general policy it is typically 33%. However, if you were able to leverage your TIF, you actually have two ways of getting credit assistance. One would be a direct loan from 2010 to 100 million. Usually that's her business having a possible discounted interest rate. Versus a regular daily government rate, or you can actually have a direct loan for your projects to your state. The advantage here is that you could have federal funding capitalizing [ Indiscernible - low volume ] and you can get a project off the ground at 80% coverage! Versus if you want to TIF directly now it would be 33% that they can fund. So there are advantages there. I really encourage you guys to reach out to the build America Bureau or the office, because this to me is a really great strategy that involves small projects and roll projects and the ability to get them done and the flexibility it offers. I don't think it's being utilized. I can speak for them in that sense, but I'm really surprised with an advantage like that that capitalizes TIF with flexible loan terms. I really do think locals and states, blaming particularly locals and counties, should really be taking advantage of.

Thank you, thank you. I'm going to turn to Alex and then I think I want to respond to this one chat box question. And that may be, given the fact that we are so close to our time here. Alex?

Thanks, Doctor. Yes, we have definitely looked at working with our Ohio State infrastructure banks, because obviously because of the funding sources, federal sources and then the state gasoline pack sources. It can only go, by law, to certain and uses. So we have, we are still considering a couple of projects that have slowed down a little bit because of numerous reasons. Part of it can be financed for the Ohio infrastructure bank. But parts that are ineligible to be financed with in Franklin County infrastructure bank on the other nightly news is that we are more than happy to structure our loan to pair with the state and that's actually quite easy. And we can have some discounts on origination fees, because we use the same financial advisers. So one of the things, although it's always good to get whoever is best, one of the reasons why we chose our municipal adviser for our infrastructure bank, the same one for the state of Ohio, so it's those, if there's some kind of teaming arrangement restructuring did arise, we were talking to the same team. And so we definitely thought about that.

Okay great, thank you. Dallas, do you just want to jump in here for a short minute?

Sure. So yeah, kind of a quick main example, I know it may be done it once or twice with a pretty large scale project with some funding gaps, but they use a [ Indiscernible - low volume ] and conduction with the [ Indiscernible - low volume ] loan to try to manage the risk for these programs. Able to work in conjunction with the program to do that.

Great, thank you. I'm going to respond to one chat box question we have to wrap it up. Jeff asked, have there been examples where jurisdictions have been prepared a blanket valuation of transportation assets and then use these value capture methods to create general lifecycle maintenance fund?

One I don't know any the rift program does accept the evaluation of assets as a credit, whereas other infrastructure banks generally look at the cash flows. It does allow [ Indiscernible - low volume ] development with its charter. But could be a possibility to use rifts as a financing tool for some projects. We turn it over to pepper to close up.

Thank you, Josh. I want to thank the presenters for their time today and all of the information, also tower, to our folks who are pitching in on the chat window to help us answer questions. What I'm showing now on the screen is the schedule for upcoming. Exchanges. We have one coming up next week, a week from today on transportation utility fees and in the same time window. We hope that you can join us for that one and for the ones that follow, we will have about one a month thereafter. There is a link on the slide here for you to register for those events. And next I'm going to pull up just a couple of pole questions for you. And also in the file share window on the left here you should notice all of the presentation that were given today, as well as a fact sheet about value capture, the activities of everyday accounts and promoting value capture. In addition, the flyer that you see at the end of that file share window contains the same information I just showed about the series of registration links. Though if you will highlight one or more of these files that you want to download, you just click on them and click download file in a new browser should open up on your computer and you will have an opportunity to click the download and you should be able to download the files. As a reminder, the recording of today's webinar in these slides posted on the value capture website. I do appreciate folks trying to get responses to these pole questions. And we offered an opportunity for folks to request confirmation of their participation today, in today's event. If you want to have that confirmation, you can send us in email at Buts I'm typing it into the chat pod so you can see that. And I'm also now going to open up a little plug-in that will allow you to provide feedback on today's webinar. As I understand, you should now be able to submit select responses on the screen and hit submit and it will take you through a short set of questions. And with that, again I love to just think the presenters for giving us their time today and also to federal highways for promoting and providing all of these resources on value capture.

Any other remarks?

No, thank you very much for attending and as Pepper said, there are a lot of materials on the website and I think also some contact information if you have further questions about this.

Great. Well with that, I want to wish everybody a good rest of the day and please join us next week for another one of these events on transportation and utility fees. I think we will call it a day, thanks everybody.

That concludes our webinar for today. Inc. you for your participation and for using AT&T teleconference service. You may now disconnect.

[Event concluded]