Value Capture Webinar Series

Capacity Building Webinar:
Value Capture: Value Capture Implementation Manual (VCIM) Webinar - Raw Transcript

November 19, 2019



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On behalf of the Federal Highway Administration I would like to welcome you to the webinar. That will provide an overview of the new Value Capture Implementation Manual. I will be monitoring today's webinar. And I will help with any technical problems you may have. In the top left corner you will find the audio call in information. Below that is a chat box you can use to submit questions. We will also provide you an opportunity to ask questions by phone and instructions for that will be provided. If you do have technical difficulties, you could use the chat box to send a private message to me, you can start that private conversation by clicking on the button in the upper right corner of the chat window or pot, and select start chat with host. We will run until 3 PM Eastern and will feature three presenters who will introduce I will introduce shortly. We will take questions at the end of each of their respective presentations. And we will also have time at the end of the webinar for additional questions. The speakers slides will be available for download on the left side of the screen toward the end of the webinar. If you are interested in applying for professional development hours or credit for your participation, we will provide information toward the end of the webinar on how to obtain confirmation of your participation. Before we begin, I would like to ask, you to fill out these three questions showing on the screen. These help us to understand your affiliation, how many people are participating at your location, and relative level of knowledge on the topic of today's webinar. I will give you a few seconds to respond to that poll for us. Okay, it looks like the numbers are firming up for us. We have a mix of folks from federal, state and local levels as well as some private sector and nonprofit folks we welcome you all. And now I will, bring you into our main slide presentation. I would like to start by acknowledging the to co-leads of the initiative, Stefan Natzke and Thay Bishop who will be one of our presenters today. A little bit more about Stefan Natzke, he is a team leader for the national systems and economic development team and as I mentioned, he is a co-lead along with Thay Bishop of the value capture initiative here . And every day counts initiative. He is nearly 27 years of experience in a variety of policy and planning positions at U.S. DOT including economic research, into the national and industry level impacts of highway investment. Local and regional economic development impacts of highways. Multistate corridor studies. Intermodal and freight planning and congressional affairs. He was also the liaison on the panel that directed development of the national Cooperative Highway research programs guidebook to funding transportation through land value returns and recycling. That report is numbered 873. Next presenter will be Dan d'Angelo, a civil engineer with applied research Associates. He enjoyed a long career in transportation infrastructure at the New York State Department of Transportation. Serving in several senior roles. Including statewide director of design and project delivery, director of design quality assurance, deputy chief engineer, Special Assistant to the Commissioner and lead innovation coordinator. After leaving, he joined applied research Associates as a principal engineer. Focusing on project delivery, risk management, project management, and alternative contracting methods. He has served as project manager on several projects. Including the bridge preservation guide, bridge bundling guidebook, the alternative contracting methods evaluation toolset, and support for two EDC five innovations, value capture and project bundling. Arthur presenter is Mr. Sasha Page, a principal at IMT rebel advisory, financial advisory firm based in Washington DC. He has over two decades of experience advising on infrastructure and finance, project development, and public, private partnerships with transit, Road, Port, airport, and social infrastructure. He is advised on a number of value capture projects, and location such as suburban Boston, Chapel Hill, Durham, North Carolina, Denver, Colorado, Miami-Dade County, San Francisco, and internationally, using value capture techniques to fund transit, rail, highway and utility infrastructure. Previous to co-authoring the value capture the Value Capture Implementation Manual, he co-authored the value capture financing guide for public transportation projects. That guide is a handbook for transit and public agencies on optimizing real estate value capture and realizing critical transit infrastructure. That guide was published by the transit Cooperative research program. With that I will turn the webinar over to Stephane. To Stefan Natzke. Are you on? Very good.

Thanks again. We had a mini crisis. I'm back in my spot. Thank you everyone for joining us. As pepper mentioned we are here to roll out the Value Capture Implementation Manual, one of the products we are offering under our EDC initiative. I'm going to talk about the manual and the initiative more broadly as well. As the fight indicates, during this presentation we will talk also, the manual talks about these things in great depth. On what value capture is. On with the key techniques that you might want to consider are. Some of the implementation issues with each of them. I will talk more about the initiative, shortly. But first let me set the table by telling you what value capture is and why you may find it useful. As you probably know if you work in transportation, the American Society of civil engineers, does its annual report card. And is broadcaster news as well. She will see, it was rated as a D+. Technically, it's a biennial performance report couples of these reports, show the difficulty agencies have in maintaining highways with the current level of resources. There are a number of challenges that face agencies, at all levels of government. They are highlighted here. We have issues with congestion, about 40% of interstate highways are congested, which is not getting better. On its own. And there's a number of issues related to the condition of the current system. Both in the highway pavements and bridges, almost half of which are over 50 years old, there's a huge backlog of work that needs to be done. That in no small part is safety, safety is, even though automotive crashes have stabilized over the last few years, we do see an increase in the number of pedestrians and bicyclists who are being injured and killed on our roads. Safety remains a problem in the infrastructure. Let me highlight the challenges for funding and for paying for transportation infrastructure. These play out at all levels. But especially at the local level. As you can see on the table in the bottom right, the key mileage figure is the one that is just over 1 million miles. If you look at the highway program, of the 4 million miles of total public roads, the product category of federal aid eligibility only applies to that 1 million miles. Essentially 75% of public roads are more or less eligible for federal highway funding at all. In addition, of all total highway spending, local sources have paid for approximately one third of all total highway spending, federal sources make up only about 20%. Whereas, the problems that are highlighted in previous slides, conditions, and safety and all those things, those are funded largely at the state and local level. To state and local resources. In addition, the roads that are eligible, federal highway funds are not used for operations and routine maintenance activities. For the problem is that the federal resources have not kept pace with demand. The federal gas tax has not gone up since 1993, he remains at 18.4 cents per gallon of gasoline. If you look at the chart, the current chart displayed you will see that outlays are outpacing revenue. The reason we are not in a deficit situation yet, is because over the past decade or so, about $115 billion that were transferred from the general fund to the highway account of the highway trust fund. And an additional nearly $29 billion transferred to the transit account as well. The current spending levels, the highway trust fund will remain solvent until 2022. And the other till 2021. Something needs to be done to continue providing resources for transportation. When infrastructure is well-designed and high-performing, value accrues to the parcel adjacent. What value capture, six to reclaim a portion of the increased value of the distributable to public investment in highways, and return that and we capture, reclaimed portions of investment for future transportation projects. We want to highlight some of the positive features of value capture. Including those on the side. Value capture can generate proximally 30 to 50% of the capital cost of the project. Maybe more depending on how it is structured. Again, as shown on the sly, we are seeking to promote techniques that capture only a portion of the methacrylic we are not trying to claim all of the land value that is increased only a portion. Value capture techniques, create sustainable revenue sources. Operations and routine maintenance are not eligible for federal funds. Local governments can use funds generated through value capture for activities. Should is all mentioned shortly, value capture techniques are usable for a range of rural, urban and suburban settings. A little bit more but every day counts, is initiative sponsored by the FHA, you're familiar with it, we are currently in the fifth cycle, we are coming up on the end of the first year of the current round of EDC. Runs on a two-year cycle. And it seeks to identify and deploy proven but underutilized innovations and highway applications. Estate base model, where ideas for innovation are suggested from within federal highways are from states, and goes through a vetting process involving our state partners who identify those innovations in the cycle, the current cycle has 10 innovations. Value capture is just one of those. We will be continuing with this through 2020. I want to highlight the technical working group that was helping to prevent to produce the manuals, so thanks to those folks, you can see we had a wide diverse group of experts that helps us generate the manual we will talk about today. That helped us generate the manual we will talk about today. We are promoting value capture mechanisms, with devotees, metropolitan and rural planning organizations, local tribal governments, when they think about how to fund transportation projects. Primarily value capture is a tool to generate funding, can also be used to help support financing, but as a mechanism for generating funds for transportation projects. As I mentioned, depending on the technique used, urban, rural and suburban settings, it can generate new funds in a sustainable fashion, and it can be used for things like operations and maintenance or providing, projects, as you will see, the appropriateness of each technique is setting and context specific. This is a screenshot of our value capture page on the EDC webpage. Through this you can link to a number of resources. Read more about the initiative. It will also take us to the office of innovative program deliveries, innovative finance support page. The office Thay Bishop works out of, you can link to this manual from this page, you can find a project file. You can find recordings, of the webinar series, there's also links to enabling legislation from different states for the different techniques. That we will talk about, and the others that the use, there are many other resources. That is all I have. I'm going to turn it over to Dan d'Angelo to talk about, to give a high-level overview of the manual itself.

Thank you. As you can tell, from his opening remarks, we are very excited about this is initiative and the capture manual, not only what it means for state departments of transportation but for helping assist local agencies to address challenges with funding for projects. Every project comes down to the local environment, the context, and we recognize that. For those who have used value capture techniques the manual is a great resource for furthering your knowledge on how that works. It addresses 15 different value capture techniques. As such the audience is very broad, local agencies as well as state agencies, governments, developers, and stakeholders, in a project in which value capture is been considered. Its purpose is to expand knowledge, and the bottom line to increase the use of value capture techniques. This is a planning and implementation process, the manuals divided into 13 chapters. Chapter 1 the introduction, discusses how they can select project based on project goals and objectives, chapter 2 provides guidance on developing project funding and financing plans including identifying funding sources, and determining where it may still [ indiscernible ]. Chapter V provides an overview of the techniques, and four through nine provide details of the 15 techniques, these are broken down into six categories. It provides guidance on selecting appropriate techniques based on the political legal economic market, as long as, as well as implantation considerations, considering timing and magnitude of revenue streams. Chapter 10 provides guidance on developing a business in economic case for integrating value capture into your project. It also includes guidance on holding stakeholder support, getting support for the technique, stakeholders and users. Chapter 11 discusses real estate considerations, 12 gets into the regulatory framework of the state local and federal level. And chapter 13 provides funding and financing plans and limitation Guidant. And implementation guidance. Is important to note that value capture is a couple of three traditional funding source, is not intended to replace traditional funding sources, nor is it intended to fully fund projects. Value capture is focused on partially capturing benefits. Such as the indirect and direct benefits related to transportation and the different value capture methods. Indirect, to include, developers, private property owners, residential, commercial, retail, industrial the owners. Employers and businesses in the area. Indirect beneficiaries include road users, and for transportation businesses, shipping companies and warehouses. And with that, introduction, I'm going to turn this over to Sasha Page for more details, go through each of the chapters in detail. On the bottom right corner of every slide will be a number, that signifies a chapter he is talking about. If you want to follow along for future reference you can use that number as a guide of where we are in the manual. Sauce is all yours. Sasha it is all yours.

Thank you very much Dan. As you see on the next light, I would like to show how value capture can complement existing traditional funding sources as well as financing techniques, as Stephan and Dan have said, if you look on the slide, the upper left quadrant, is are direct system revenues, that help fund the infrastructure. To the right of that, is other indirect funding sources such as grants, and taxes, underneath that, in the innovative row, we would place value capture. And it is, indirect, it tries to capture the benefits, of activity, and use it to complement, I like to use the analogy it really is one of the ingredients in the funding lasagna. For major projects. Value capture also works with financing mechanisms, again, if you look in the upper right quadrant, those are mechanisms that are more traditional, revenue bonds, bank loans, but value capture can also work with and has worked with some of the innovative finance mechanisms the U.S. DOT offers. As well as state infrastructure, in some cases also public-private partnerships. On the next light, you will see the grouping of the six major categories of value capture. And then some of the detailed mechanisms after that. We will go through some definitions of these in more detail. First of all their developer contributions, using techniques that generate revenues by collecting usually one-time fees from developers, [ indiscernible ]. The second category, or transportation utility fees. Which is somewhat unusual because they generate revenues by levying fees on property owners were building occupants as a regular ongoing fee to pay for operations and maintenance costs. The same way as a homeowner pays for an electric utility. The third category, special taxes and fees, includes techniques to generate revenues by imposing or capturing additional taxes or fees, on a designated district recorder. That includes special assessment, business improvement districts, land value taxes, and a sales tax district. The fourth major category is Texan credit financing, which captures incremental growth of tax revenue in a specific district. This is one of the most heavily used value capture sources. The fifth category is development, which leverages land or air rights, for commercial purposes, and it can include the leasing of right-of-way for utilities, transportation providers. Last but not least is naming rights, which includes techniques that generate revenues for product or agency by selling the right to name that entity for a period of time. Often at least five years. Which is common for support [ indiscernible ]. These value capture techniques very, they have key features. They vary in context as well. In general, most of them can help fund capital expenditures, but also ON them as well, there generally available for highways, roads and streets, and other service transportation like transit and bike trails. Each one will vary in terms of how much money it can generate, often special assessments, or financing districts, generate significant revenues. Versus naming rights. But that should not mean that you would not want to pursue many or several of these, because we believe it makes sense to consider everyone, as long as the transaction costs, the administered of costs are reasonable. Also so these techniques provide different funding, and different types of projects at different times of the lifecycle. Such as impact fees, which may generate funds earlier in the process, or tips which make take a longer time to implement. These are easier to implement in terms of administered requirements. Impact fees are relatively easy to implement, whereas, [ indiscernible ], maybe land value taxes, which is an idea to separate the tax on the building, versus the property, maybe a little more, probably not understood that wealth by the public. Although it is very well used in Pennsylvania communities. Now going to go through a couple of many cases where I talk about some of these major techniques. First of all, developer contributions, as I mentioned, these are the best exemplar impact fees, which are fees imposed on developers by municipalities to help fund additional infrastructure or transportation facilities. Required as a result of the new development. A great example is this County, which was really excellent originally a rural county and middle Florida just south of Orange County, Roskilde County, were a number of themepark success. It is seen an enormous amount of development pressures in the 1990s. The county was able to use impact fees to help generate over $1 billion in funding for highways and bridges and address that rose in an orderly way. Is we found out in that County and other places, impact fees create a level playing field that offers, [ indiscernible ] creates a mechanism to develop a new infrastructure. These are some of the impact fees, fees that are paid as a result of a one-on-one negotiation between the developer and the city or more complex projects. Will talk also, will talk in the next light about transportation utility fee. These are like a utility fee paid on going to church property owners for their share of the operations and maintenance costs of transportation, that they generate. There often paid on a monthly basis, they are imposed on an entire area, they may be determined by the number of parking spaces a facility has. The square footage of the gross floor area. There used for road maintenance, or local roads, which are not eligible for federal aid or highway funding. This is an approach used number of Oregon counties, and that County, they created six nonresidential fee groups, plus an all-encompassing group and apply the average to various uses. This be, and all these, they rely on the Institute of transportation engineers, which describes the impact of different land uses and the fees are correspondingly set based on that. Special taxes and fees as I mentioned, I think the one that is most appropriate, that is intriguing for financing, special assessment districts, these are where a sponsor, a public sponsor, organizes property owners in the district, and an additional fee is charged to the property tax. That is used to pay for, infrastructure, and many cases can also leverage financing. The financial markets except in general, special assessment fees as a solid credit source. In general special assessments do not require backstop from a government source. In the chart here, we see an example of the streetcar in Seattle, this is roughly a $56 million streetcar project. Which is funded about half of it from a special assessments, the property owners in the area. To make this kind of a technique work, in general you need 51% of landowners to approve. There are also business improvement districts, and special tax districts which work in the same way, special improvement districts are usually, covering a downtown area, and help fund O&M type Cosco sidewalk cleaning, security facilities and sometimes studies for major road or transit projects. Sales tax district as well, sales tax district can fund a corridor, we have nice example of the manual of U.S. 63 in Missouri which help fund a road improvement in a role part of that state. Tax increment financing, is a common approach, that is where the incremental tax revenues in specific districts is used to pay for specific infrastructure the benefits the area. One very good example is a process that is used in Texas, it is allowed what is called transportation reinvestment zones, which allow the opportunity to develop a corridor based TIF to fund important improvements. That's the case here, you see Hays County, between Austin and San Antonio, which set up a TRZ to build the 13 mile 110, you see in the picture, that is a reliever for the congested I 35. Is an innovative financing technique, to capture, the capture those revenues but then finance that by using a infrastructure bank loan, and this loan was secured only by the future increment in the corridor. To help reduce the risk, there was an innovative sweep mechanism, used to prepay the [ indiscernible ] thereby reducing the duration of the loan and Texas Department transportation risk as well. Joint development is a method to develop land here, below the ball well above the facility, in conjunction with a private developer. Those revenues help the public sponsor's pay, when use after other public purposes. In this example, capital Crossing in downtown DC, the developer sought to cap the i3 95 highway, to reconnect Capitol Hill and downtown DC, that were cut off. By a highway in the 1960s. The District of Columbia granted the developer writes, yielding them $120 million as well as ongoing property taxes. The developer had to build that which was expensive, and then they were able to build a commercial office space above that. As I said, these projects are more expensive. But because this is a well located piece of property in downtown DC, they can pass on those additional costs to other, in terms of higher lease costs. Which is not always the case in all locations. The last major category is naming rights, this is again where a public agency sells the rights to name a facility, in this case the Ohio DOT has named their emergency vehicles, State Farm, as of 2014, other examples of naming rights are West Virginia, has sold its rights of all 43 of its rest areas for $2 million per year. The number of transit as well, they are a nice way to add additional revenues and the cost of the naming, those are all born. In terms of some of the major implementation steps that need to be taken, chapters 9, 10, 11, 12 talk about for major issues, one is a need to develop a business case, to us understand the real estate market well, three is to bring in regulatory issues and make sure that the project understand that. And four is developing financing. In terms of, it's very important that we value capture a mechanism that is integrated into the policy goals of the local community, and fits in, it needs to have cut to take advantage of a clearly articulate a policy, that has broad stakeholder buy-in, both public stakeholders and also for-profit ones. We think that is very important. And one example we have is the Belgrade subarea, a project developed in Washington state, the city of Bellevue, they developed a master plan for developing an underused region, or section of the city. And the master plan set up their goals there, and it was essential in helping to develop a light rail station, newer chillier streets comparably improvements, signals, bike lanes, sidewalks, and street lighting. As part of that master plan, the city also imposed impact fees. It did not fund the entire project. The impact fees were implemented as part of the overall policy business plan. For many of these value capture mechanisms they depend on real estate. We think it's very important that we have a chapter on this, and sponsors really understand the real estate risk, understand the markets that they are working with, and address the potential for ups and downs of the real estate markets. We know all about the recession in 2007, 2009, various markets move in different ways. Just a very important, and a financial plan, and a [ indiscernible ] plan to help mitigate future risk in the real estate market. Examples, for instance, there's been a big increase in the last decade for housing and urban areas, a demand for greater density. And developments, they have an impact on developers, who want to build. The Austin market working has had an impact on attracting startups. And existing firms want to take advantage of the greater flexibility that co-working allows. Also, real estate prices move in cycles. As you can see in this chart, this is the assessed value of the corridor through which the rail in Washington DC traverses. In general, the value of these properties has gone a. But it is also dipped as well. Due to the recession. And various issues, regional economic issues. boom and crash. And of course the recession as well. But because of the general positive regional economy, the Metrorail project was able to find and finance almost $1 billion of that $5.6 billion program. Using a special assessment district that was only secured by those future revenues from the special district. There was no backstop from the local government. Those lows are performing well. Those loans. Is important that the value capture sponsors take into account or understand the regulatory framework, they need to understand what our local regulatory issues, with zoning, and other issues got to make sure they are supportive of the kind of real estate that is been developed. And you have to understand, that there are state laws that need to be considered, that may or may not allow certain times of mechanisms. Of course all projects, major transportation products projects need to understand environmental issues and mitigate for any impacts that are identified. Of course there are number federal rules, that effect captures well suggests taking a property that was bought with federal monies and using those for commercial purposes. In general, sponsors have to be very careful about charging along that to private partners. Often value capture is used to fund projects but also in some cases it can finance and. Is important that we discussed this in chapter 12, that sponsors take steps to establish a robust funding plan. They need to assess the financing options available, they need to project value capture revenues over time. To develop a financing plan, make sure the revenues are there. When expected. And take account of risk, financial risks as I mentioned with the real estate sector. The chart on the right shows the funding plan, the sources and uses, for the almost $500 million Denver unionization project. Which was a value capture funded project. This project took advantage of a special assessment district, tax with financing and joint development, to realize this is very successful project that is not only cut enhance transportation, but also help develop, part of Denver, downtown Denver. So with this project, the public sponsors receive a partial backstop from the city and County of Denver, to help structure that, the project was developed after the recession. And so there was concerned about real estate risk. That concern has been unfounded. Is been very successful. And the roads have been repaved. So we have developed, in this manual, and we read about a number of cases here, there are other cases, that will illustrate for you when you read this. Some of these concepts in more detail. They are focused primarily on roads and highways. It also have cases on multimodal transportation transit. Rail, by, pedestrian, as well. And we tried to find a mix of urban, suburban and rural cases as well. So now I'm going to spend a little more time on some of the cases and I'm probably going to jump to this second case. One good example of a special assessment district in a suburban like case is the root 28 special tax district. This is an early example of value capture, if the primary artery in northern Virginia. It was supported by a majority of landowners in the region who really saw that the development, was essential to allow them to develop their commercial properties for their highest and best uses. The state issued bonds that were secured by a special assessment on this road. Unfortunately in the early 1990s, there was a recession in the properties did not develop as expected. So the state did have to step in to provide a support for the attainment of summit that. But since then, that the 2001, essentially the debt has been paid by special assessments and the project has moved on as it is quite successful without any state assistance. Of the Kappa Union Station is a good example of a small joint development project, this is a project that occurred in clubs Ohio, the cap at Union Station project. We connect divided neighborhoods. The project occurred when the city wanted to expand I 670, as it goes through the heart of Columbus. They argued that they needed to knit together to neighborhoods that were cut off by the original structure, I 670, that northern community, that northern neighborhood in the arts district, was cut off from the more southerly business and convention district. And so the city sought to build a bridge, with retail activity, that would help connect the two neighborhoods and make it a traffic for pedestrians. And also traffic, in normal vehicles. So as part of this project they had to develop clear title, to erect above the highway which is not something that was contemplated originally. Had to work with the developer to study improvements. And they had to negotiate the overall terms so they met the requirement, that the developer was paying, and had to satisfy some Ohio D.O.T., there was no signage. On the outside of the road to make sure it followed highway beautification rules. The developer was able to lease these retail facilities to restaurants, and other types of activities. That created a incentive for traffic during the day as well as at night. Let me talk about the Atlanta beltline, this is a project which consists of a trail and road improvements, individual streetcar line, that was circled, indent Alanna for, and a 22 mile freight line. In the 2000's, I got an idea from a Georgia Tech grad student, it was embraced by the community, or its benefits both transportation, redevelopment, and park benefits as well. Earlier, because of real estate risk, the project funding plan took a hit because of the recession. And the $4.4 billion funding plan had a hole in it, because, because of reduced financial revenues or in this case allocation revenues. Which is what they used in Georgia for that term. That were lower than expected. That's a risk. That all entities have to face. As a result of that, there was several years of discussion, between the city of Atlanta, the beltline, and schools, because the revenues were not adequate to pay for the school system. In the beltline. But eventually the disagreement about funding was resolved, to everyone's satisfaction. And the product is underway, it's a wonderful project. Anchorage anyone who visits Atlanta to visit this and enjoy all the wonderful biking and walking and eating along the district. The fact that municipalities need to think about how to allocate TIF revenues and make sure they consider other public uses such as for schools, and police and fire. Because these are future tax revenues that are being used for the projects. And also it underscores how important it is to have a coalition to come together, as in this project for they share a vision about what needs to be in what the funding sources are. For that project.

We are doing really want time. I want to ask you expect to go back and do the first case study. So we are going to take some questions over the phone line as we conclude. So please about any questions you have pick in the meantime you can type them into the chat pot and we can get a head start on answering some of those. Let me mention also that these case studies have a lot more detail obviously in the manual and on the website that I mentioned. I think the Kappa Union station, that case study, is really interesting where if you look at a street view of the facility, it was designed to look like the historic train station, it's very masterfully done. Totally integrated. A lot more detail and information in our case studies.

With that I encourage you to type in questions and I will turn it back to Sasha.

And want to describe this, use of value capture, in a major highway, this is in the Denver region, which is a circular, like a Beltway counterpart of the beltway around a suburban Denver, in this project, a number of value capture mechanisms were used to realize the project. They include vehicle registration fees that were applied to residents to live within the project corridor, there are very important funding sources in early years of this project, because it is a toll road, and while the tolls rack racked up the value capture monies the moderation fees were important source of funding to keep the authority going and to be available overtime as well. Second, there was highway expansion fees, you can see the impact these. Which were imposed upon new developments, buildings, houses, commercial developers, along the corridor. And they also helped funding, they played a smaller role, the overall funding plan. In addition developers donated right away for the project, and were strong advocates. Which is important in these complex projects. To complement the public stakeholders. Furthermore, once the project is going, solar panels, cell towers, that help with additional revenues to defray some of the O&M, of the authority. I think it's a good example of the number of different value capture mechanisms that were used here, I should say that this was a toll road, and tolls essentially funded the majority or 94% of the project. So it's another illustration of how value capture can complement other funding sources. This is a very successful project, all of the loans that we were financed in part secure by some of these value capture have not paid back for help they benefit from very high ratings. Want to give you, value capture resents an opportunity to meet funding challenges for transportation projects at local or state levels and deliver on policy objectives. That's one of the key messages we want to get across. They can contribute significantly to revenue to projects for both capital and operating needs. Again, supplements, funding sources, is a key ingredient, in that funding plan lasagna. As the example show, it can capture between 20 and 30% of a major project capital plan. Is definitely very material. Hopefully we showed in a couple of case studies, it's very important for stakeholders who use these techniques, sponsors to involve stakeholders, and fostering public involvement. Were to reach out to nonprofit stakeholders, developers, and affected communities to make sure that the product make sense. And then, with that, the understanding in general, of the value capture mechanism. Is very important to be aware of the economic, legal and in various techniques. Economic legal and deliver implications. I will conclude my section and look forward to addressing any questions you may have.

Thanks. We do have quite a bit of time left. We do have ample time for questions.

Let me just mention that this is a very high-level overview of the 200+ page document. We did brush the surface. In every sense of the word. On some very complex topics. I invite you to download the manual and read it in depth. We've been presenting this in a couple of regional workshops. Those were today workshops. In the course of an hour we ran through what we covered in two hours, work separatist but said this is great but is not in depth in a. Don't feel bad if you feel like, we just brush the service because that's what we did. We do have a couple questions in the chat. They both deal with right-of-way issues. Will talk about those in a second. We had a Realty expert in the room and he just left for another meeting. So just our luck in that regard. I know just enough about this to get myself in trouble. What I tell you is inadequate, reach back to me and we can put you in touch with the actual expert. The first question says, this value capture available in federally funded Browns? How do you get around the prohibition against commercial use of the right away? As I mentioned in my introductory remarks, value capture, depends on the context, on the setting. You can use value capture to generate [ indiscernible ], they can participate in a federal project. Given limitations of federal requirements on projects. The short answer to the first question is yes it can be used on federally assisted highways. The second question of the prohibition on commercial roost use, replace generally to the interstate system. Those prohibitions are still in place. It is, except in Jakarta sponsorships. If you look at section 111 of the U.S. code, it basically highlights some of those. In general, the regulations that deal with the use of right away, are in the Code of Federal Regulations 23 of the CFR section 710. I will type those into the chat. I know if you're not from Washington, and reading Mohn regulations, it's not your favorite pastime. Software the information will be. So we were reach back to you directly Heather. Spectre is a question prior to Heather's.

RTC SMB? Did I miss something?

That's when I was thinking of.

The cautions about charging market rates. These are things that are covered in section 7. Dakota figure better regulations chapter 23. That's basically the Realty regulations. When title 23 got basically highway funds were used to construct the highway, there's rules for, when you dispose of the property and how you do that. Or if you use the right away. That sort of clarity, can charge fair market rents for that. That's essentially the explanation for that.

And I think, in the old Columbus project, and I mentioned, that was an issue, that they had to address. To ensure that the type of ranger they had, resulted in them, their market, they developed a way to share profits got to make it effective, given the developers unique risk and having parking spots, was not more expensive to build. But something to accommodate, and ODOT was comfortable with it.

The expert on the topic stepped out of the room. If you have further questions you can reach back to us. Or John will reach out to you. Okay so J but ask, could you please reiterate or show the link to download the manual? Okay, I'm going to type that into the chat. To that right now.

This is pepper, I beat you to it.

Pepper has already entered that. When you download the slides, those links will be there.

We could check and see if there's anyone who prefers to ask a question, by phone. If that's okay with you.

Jessica we see if anyone would like to answer the question by phone. Will thank you. Ladies and gentlemen, absolutely. Of USS question please press * then 1. You may remove yourself from the queue at any time by pressing the transit * followed by 2. If you use a speakerphone please pick it up before answering the digit. Once again, please press * wondered at this time.

We do have a webinar on the 21st. To address some of the things we talked about. There should be links and the should be space. You do need to register.

And Lindsay will be on the first part, John will be on, [ indiscernible ]. Spectre we have any questions over the phone line?

Not at this time. Once again please press * and then 1 if you would like to ask him questions, * and then 1.

In the meantime we do have a question from Scott Baker. What is your sense of whether the air rights development expected that public cost of the highway or [ indiscernible ].

I think the answer probably is that it was an essential element for the widening project. It was not a major revenue generator or net revenue generator for the community. Of course enhancing the community created more business, they could access the district, the restaurant there, there was additional tax revenues. But it really was a community product to enhance acceptance of the project and help get the together these two neighborhoods.

In the meantime I typed in, I mentioned 23 USC 23 CFR 710 and 23 USC 111.

Is or anything over the phone?

There are no fun questions at this time.

I would love to see my city utilize this resource. For real station and surrounding duty.

In general, development has been more broadly used here. In transit. The and highway settings. We do have several examples in the transit world we are able to mention.

Okay I assume there must be legislation ... approaches such as TIF.

As I mentioned, resources we do have , legislation for different states. SS imaging, these the most broadly used forms. Value capture, that are used in every state and DC and Puerto Rico as well. With the exception of Arizona. We just of this workshop in Arizona and a gentleman from Tucson said Tucson, [ indiscernible ]. It is usable in every state straightly speaking. They been in existence since 1952. Started in California. And they are used very probably. Think of to commit to continue Sasha?

I think that's a common technique. It can often be used in conjunction with other techniques. As I mentioned previously, not all techniques can be financed. Can secure financing. There are often developers and public sponsors they will combine a TIF with the special assessment district, and as a way to backstop the TIF district in the early years when development is occurring. And there is question about whether the debt service can be repaid. Therefore the special assessment is an important backstop in that instance.

Wondering if joint development can include the construction of local roads, associated services and needed [ indiscernible ].

I think the example that Sasha gave, basically, one of the purposes of that project was to reknit the streets that had existed it back into the urban fabric, and re-create those roads. That were able to connect those two. That have been bisected used to be one city that was to parts. Kind of brought the things together. And there's definitely parking as part of the project? Spectre definitely is. That's a good comment. There's a number of other road projects, turning highways and boulevards, to help fund the, often, sponsors will sell some of the property that is freed up to make it more livable and walkable. Along the corridor. You see that in many communities. Expect anything over the phone yet?

There are no fun questions. Once again, please press * and then 1 if you would like to ask them questions. There are no fun questions at this time.

Will give it another couple of minutes. To see if anybody types in a question. The meantime I would invite others in the room, they have anything to contribute. Were anything to add.

This is Dan. I just want to reiterate the main goal, it is the last lot of information describes all the value techniques, best practices for selecting corporate techniques, helps with the developing business case, Sasha pointed out, and the biggest, it does include in numerous case studies, a lot more detail, we are trying to cover all the techniques and how those projects were successful. And lessons learned. A lot of information. Can't possibly cover that in an hour. But I encourage you to, if you have an interest in the technique, it's a great resource, educational material country studies are really valuable. We do have contact information on this case studies for that. Just wanted to recap me extent of the manual information in it. And reemphasize that the case studies come make it all real. Expected you have a question that came in the chat?

Are transportation utility fees generally just leveled on commercial properties? Or on other land uses as well.

I will take a crack at that. The examples that we highlighted generally from Horgan. They are used in the small towns. And the fee is charged to those who pay it through kind of their monthly utility bill. Is charged based on the type of property. Homeowners do pay a monthly fee for it. The examples I have seen are eight or nine dollars per month. But those very based on whether it's a multiunit structure. Then they are charged per unit. And a different rate. In terms of commercial retail and other uses, those are charged, Sasha indicated, based on the Highway capacity manual, that estimates the usage of the roads by facilities or different types. Those fees are set basically on the type of facility. The examples I've seen, they do actually have information but they have, different rates than say senior housing. They are generally not charge. They also have exceptions for somebody expressing hardship or unemployment or double the vehicle or transit rider for the property is vacant. They provide some relief. Generally, [ indiscernible ].

Think you covered it.

While waiting for a couple more questions if there are any, I would underscore sales tax districts as a helpful, capture technique, especially for rural areas. As the example shows, your 63 which I encourage you to read, it's a nice example of how a community was able to fund an important road improvement, that was much sought after, but was not high up on Missouri's priority list. And through implementing a local sales tech district, additional sales tax, community was able to realize that project in a much shorter time. That's a nice example for areas where perhaps a special assessment district or TIF district is on appropriate but nevertheless sales taxes are a way to fund the projects in the financial markets. And they are very accepting of those things.

Less call for questions. All right.

I'm sorry sir. There are no questions at this time. I just wanted to say, again, it is * 1 and just everybody a chance to signal on the phone , that is * 1.

Thank you. I was going to conclude by saying that if you want to reach out to us directly, we do have email addresses. Again we are the co-leads. We are certainly willing to answer and help address any questions you have.

There are no additional phone questions are.

Thank you.

Thank you.

This is pepper. I have put up some, nine questions. There kind of tough to recall you can use the scrollbars to pick an appropriate response but these will give us the information about the relevance, and appropriateness of the content today. And help us improve future webinars and materials, related to value capture. As Stephan mentioned there will be another webinar this Thursday the 21st. From 1 to 3 PM Eastern on advertising and naming rights. That link is available in the slide deck which is also now available for download on the web must screen. In the file share window. You can highlight the file and then click the button in the upper right there, you will have an opportunity to download it. As I put into the chat pod, you are also able to receive confirmation of your attendance for today's webinar. If that will help you get professional development credit. You can send that to your request to value With that I think we thank you for your attendance today. And we thank Stephane Sasha and Dan for presenting today. And with that I think that I do see someone is typing in the web room. Let me just see. The slides, are available just above the chat pod for download. There will be a webinar recording in the slide deck posted to the federal highway value capture webpage. That will be another way to access the slides. They are available now for you to download.

James are you able to cut use that email address or no? We will have to look into that. That is 81 us. Sorry for that.

We do have, we will consider your message in the chat pod as a request for confirmation of your attendance.

I think that's it. Before heading up to commission out to Ben. He is been a key player in this whole value capture process. He was key in getting this off the ground. And the is a real he piece of implementation of so. Thanks for participating.

Again we appreciate your feedback through these evaluation questions. We invite you to take part in our last value capture webinar of 2019 which will be taking place on Thursday. With that I think we can conclude today.

Thank you. That concludes our conference for today, thank you for your participation and for using AT&T teleconference service, you may now disconnect.

[Event concluded]