Value Capture Webinar Series

Capacity Building Webinar:
Understand Value Capture Tools and Federal Resources - Presentations

June 20, 2019

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Introductory Slides -
Value Capture Overview & Federal Resources

Upcoming Webinars

Understand Value Capture Tools and Federal Resources June 20, 2019 1:00 pm - 2:30 pm ET
Value Capture: Developer Contributions Techniques and Case Studies June 27, 2019 1:00 pm - 2:30 pm ET
Value Capture: Capital Improvement Plan
July 18, 2019 1:00 pm - 2:30 pm ET
Value Capture: Special Assessment Techniques and Case Studies
July 24, 2019 1:00 pm - 2:30 pm ET
Value Capture: Incremental Growth Techniques and Case Studies
August 22, 2019 1:00 pm - 2:30 pm ET
Value Capture: Joint Development, Use ROW Agreement, and Case Studies
September 19, 2019 1:00 pm - 2:30 pm ET
Value Capture: Capture Value from Existing Assets to Fund Previously Unfunded Infrastructure Projects and Case Studies
October 24, 2019 1:00 pm - 2:30 pm ET
Value Capture: Advertising, Naming Rights, and Case Studies
November 21, 2019 1:00 pm - 2:30 pm ET

Presentation 1 -
Value Capture: Capitalizing on the Value Created by Transportation

EDC-5 Value Capture Implementation Team

Landing page of the On-Ramp to Innovation website

Introduction to Value Capture

  • Key Distinctions
  • Value capture Overview & Benefits
  • Why is Value Capture Needed?
  • Value Capture Mechanisms & Examples
  • The Federal Role
  • Funding Opportunities
  • Q&A
Logo: value capture / Every Day Counts Innovations / Federal Highway Administration

Key Distinctions

  • Revenue: Where does the funding come from?
    • Traditional: Federal-aid (HTF) & State grants
    • Innovative: Other than traditional
  • Financing: Pay-As-You-Go versus Borrowing
    • Pay-as-you-go
    • Public borrowing (Innovative Finance)
    • Private equity
  • Project Delivery: Shifting Responsibility & Risk
    • Traditional (design-bid-build)
    • Construction Manager/General Contractor (CM/GC)
    • Design-Build (DB)
  • Tax
    • Forced contribution to raise revenue for the maintenance of governmental services offered to the general public
    • Levied whether or not one uses a particular service
  • Value Capture (Fees/Assessments/Incremental Growth Tools)
    • Paid in exchange for a special service, benefit, or privilege not conferred upon the general public
    • Not a revenue measure but a means of compensating the government for the cost of offering and regulating the special service or benefit
    • Payment of a fee is voluntary (can refuse the special service, benefit, or privilege)

Value Capture Overview

What is Value Capture?

"Value capture" refers to a toolbox of strategies used by public agencies to recover a portion of the increased property value created as a result of public infrastructure investment.

Value Capture: Gov't invests in > transportation infrastructure and services > which increase nearby property values. > This increase in value goes to > property owners as profit > a fraction is paid in taxes & Property value return fees are paid.
Examples of Transportation Improvements that Create Value
  • Roads and bridges
  • Transit improvements and expansion
  • Complete Street improvements
  • Bicycle and pedestrian connections
  • Street trees and landscaping
Example Beneficiaries of Infrastructure Projects
  • Developers
  • Property Owners (residential, commercial, retail, industrial)
  • Employers
  • Businesses
  • Investors
  • Land owners
  • Road Users
  • Transportation Operators/Users
Importance of Value Capture
  • Provide alternatives to supplement traditional sources
    • Fund 3.2 million miles of non-federal-aid public Improvements
  • Achieve Value Capture of transportation benefits
    • Beneficiaries of transportation infrastructure contribute to its cost
  • Local matching share to State & Federal Grants
  • Access to Federal low-interest rate loan programs
    • TIFIA/RRIF, TIFIA-SIBs (rural), Sec.129 Loans, State Infrastructure Banks, Private Activity Bonds
  • Attract private capital
  • Enhance and speed-up project delivery
Value Capture Summary

Value Capture is ...

  • A set of powerful funding tools that can help address funding gaps (USDOT supports Value Capture)
  • Can be part of the mix of funding sources for transportation improvement solutions
  • Can accelerate project delivery, enhance safety, and save time and money when done properly

Steps to a Successful Value Capture Project

  • 10-year Impact fee CIP
    • Completed
    • Underway
    • Future Projects
Capital Improvement Plan flow chart

Text of implementation flow chart:

Capital Improvement Plan

Identify Needs > Long-Range CIP Strategic Plan > Identify Funding & Financing > Five-Year CIP plan > Annual Capital Budget > Implement Projects & Programs > repeat ...

Why is Value Capture Needed?

photos of various traffic issues
Capacity & Conditions Funding Challenges
  • Two out of every five miles of America's urban interstates are congested
    • Cost the country $160 billion in wasted time and fuel
  • One out of every five miles of highway pavement is in poor condition
    • $836 billion backlog of highway and bridge capital needs
  • 35,092 people killed in motor vehicle crashes
  • Pedestrian deaths on US roads increased 11% since 2015; (5,977 in 2017)
Condition and Aging of the Bridges
(FHWA, 12/31/2018)
Year Built Age Total   Poor
No Value No Value 25 25
1899 and earlier 119 or more 1,731 514
1940-1949 109-118 5,876 1,840
1910-1919 99-108 5,692 2,055
1920-1929 89-98 17,923 3,895
1930-1939 79-88 41,275 7,057
1940-1949 69-78 25,487 4,034
1950-1959 59-68 63,159 7,664
1960-1969 49-58 99,041 260,209 8,996 36,055
1970-1979 39-48 81,671 5,390
1980-1989 29-38 78,112 3,043
1990-1999 19-28 81,393 1,486
2000-2009 9-18 71,666 449
2010-present 0-8 43,445 91
Total   616,496 46,914
Condition of Roads (D+)
  • 45% of America's major roads are in poor or mediocre condition
  • 15% of U.S. rural roads are rated in poor condition, while 21% are in mediocre condition
Ownership Federal-Aid Highways (miles) Non-Federal- Aid Highways (miles) Total (miles)
Rural 668,082 2,280,612 2,948,696
Small Urban Area 71,792 151,935 223,7327
Urbanized 287,974 723,310 1,011,285
Urban 359,767 875,245 1,235,012
Total 1,027,848 3,155,858 4,183,707
Highway Trust Fund is Unsustainable
Revenues and Interest are far less than anticipated Outlays and the deficit increases over time

Value Capture Mechanisms & Examples

Value Capture Techniques Summary
Developer Contributions Special Assessments Fees Incremental Growth Joint Development Concessions Advertising and Naming Rights
One-time charges collected by local governments from developers to offset the cost of infrastructure and services necessitated by new development. An additional fee or tax assessed on businesses or residents in specified geographic areas benefiting proximity to a highway or other transportation facility or corridor. Similar to a utility fee, transportation fees are assessed based on how individual businesses and households use transportation facilities. A mechanism allocating back to infrastructure from some specified portion of increased property tax revenues fostered by new infrastructure - often for a specified period of time. Sale or lease of land or air rights on or adjacent to transportation facilities. This can include donations of land or other in-kind resources from the private sector in ongoing commercial operations. Sale or lease of government owned assets - such as toll roads or bridges - to private-sector investors/operators. Sale of advertising space or naming rights on a transportation facility. Note: Commercial uses within Interstate Highway System right of way, including rest areas, is prohibited by law; however, they may be allowed on toll facilities and in transit stations.
Value Capture Techniques
Category Technique Purpose Fund or Finance
Developer Contributions Impact fees Capital Expenses Fund
Negotiated Exactions Capital Expenses Fund
Special Assessments Special Assessment Districts Capital Expenses Fund or Finance
Business Improvement Districts Capital or Maintenance Fund or Finance
Sales Tax Districts Capital or Maintenance Fund or Finance
Land Value Taxes Capital or Maintenance Fund or Finance
Fees Transportation Utility Fees Operations and Maintenance Fund
Incremental Growth Tax Incremental Finance Capital Expenses Fund or Finance
Transportation Reinvestment Zones   Fund or Finance
Tax Allocation District   Fund or Finance
Joint Development At Grade Capital Expenses Fund or Finance
Below Grade Capital Expenses Fund or Finance
Above Grade (Air Rights) Capital Expenses Fund or Finance
Concessions Asset Recycling Capital Expenses Fund or Finance
Advertising & Naming Rights Advertising Capital or Maintenance Fund
Naming Rights Capital or Maintenance Fund
Developer Contributions / Impact Fees
  • A one-time fee assessed on new development
    • Intended to pay the cost of expanding & extending public services resulted from new development
    • Assessed at the time a building permit is issued and are paid prior to the issuance of a Certificate of Occupancy
  • Rational nexus required
  • No voter approval is required
  • Covers the cost of new capital facility capacity
  • Used for roadways, less frequently used in transit
Osceola County Road & Bridge Program, Florida
  • Value Capture: Impact Fees
    • Created in 1987
    • Covering 1,506 square miles
  • Scope: Bundled 11 road projects with 13 bridges in Osceola County
  • Project Cost: $350 million
  • Funding: 100% locally funded by impact fees
  • Benefits: Nine out of every 10 construction dollars going to local contractors. Speed up delivery and save money ($36 million saving)
traffic on freeway
Special Assessment Districts
  • A special fee imposed by a local government to property owners to pay for infrastructure development
  • Creates zone or geographical area
  • Property owners pay an assessment for specific improvements or services
  • The assessment represents a portion of the estimated benefit to properties in close proximity to the public project
Virginia Route 28 Transportation Improvement District
  • District formed in 1987 jointly by Loudon and Fairfax Counties
  • Covers 10,204 acres of land, in an apprx. 14-mile-long corridor
  • Maximum tax rate of $0.20 per $100 of assessed value
  • Raises ~ $23 million in revenue
  • $138 million, 14 - mile widening from two to six lanes completed in 1991
  • District and State share project costs 75/25
Route 28 Tranportation District area map
Lake Shannon Road Improvement, Tyrone Township, MI
  • Petition for repaving roads in exchange for a 10-year tax assessment
  • Assessment will be paid in 10 annual installments starting in 2018
  • Total cost $1,310,000 in special assessment bonds
Lake Shannon area map
Source: Lake Shannon Assoc.
Fees/Transportation Utility Fees
  • Applies to all residents and businesses
  • Paid by property occupants rather than property owners
  • Based on the estimated number of roadway trips generated by a property
  • Fees are typically added to city utility bills
  • 36 cities levying TUFs in five states: Oregon (23), Texas, Colorado, Kansas, and Utah
    • All of the cities have populations under 100,000 people, and nearly half have populations below 10,000
City of Newberg, Oregon
  • Used Transportation Utility Fee to pay for street repairs, routine maintenance, and pavement preservation
  • Adopted the fee in May 2017
  • Fees
    • Single Family: $4.99/month
    • Multi Family: per unit
    • Non Residential: 6 classes based on vehicle trips generated, per sq. ft.
  • Generated approximately $1.2 million for road maintenance
Incremental Growth: Tax Incremental Finance
  • Uses the incremental increase in property tax revenues to finance new infrastructure and services
  • Authorized by state statutes in 49 states and the District of Columbia
  • Requires the "but for" test - no growth/development would happen but for the use of Tax Incremental Finance
  • Offers a source of long-term revenues and generates significant "gap financing"
  • Flexible, powerful tool to foster high quality development and redevelopment
Atlanta Beltline Project
  • Value Capture: Tax Allocation District (TAD)
    • Adopted in 2005; Sunset in 2032
    • Length: 25 years
  • Scope: Redevelopment 6,500 acre area
  • Project Cost: $4.8 billion
  • Funding:
    • TAD: $1.75 billion
    • Federal: $1.45 billion
    • Private: $0.28 billion
    • City/State: $0.34 million
    • City/Park: $0.18 million
    • Others: $0.80 million
  • Finance: Tax-exempt bonds
Atlanta Beltline area map
Text Box
I-10/Loop 375 Americas Interchange, El Paso, TX
  • Value Capture: Transportation Reinvestment Zones
    • Texas Legislation, 2007
    • El Paso established TRZ in 2008
  • Scope: I-10/Loop 375 Americas Interchange in the city of El Paso
  • Project Cost: $146 million (phase I)
  • Funding:
    • $96 million from ARRA
    • $30 million in SIB Loan
    • $5 million from TxDOT
    • $15 million from Border Infrastructure (CBI) funds
Joint Development
  • Involves a partnership between a public entity and a private developer to develop certain infrastructure assets
  • At Grade - Development on the land near the facility or at the facility
  • Below Grade - The ROW is leased to private sector
  • Above Grade - The public agency sells or leases the air rights for development
  • Plays key role in some urban projects
  • Often practiced in transit agencies
Capitol Crossing Air-Right Development Project, Washington, D.C.
  • Value Capture: Above Grade - Air Right
    • Sold the right to develop the property to Property Group Partners (PGP) in 2012 for $120 million
    • Generate $40 M in new property taxes when completed
  • Scope: Seven-acre decked development site above I-395
  • Project Cost:
    • $1.3 billion development
    • $270 million transportation improvement
  • Funding:
    • 100% paid by developer
Capitol Crossing building sketch
Concession: Asset Recycling
  • A long-term lease of existing highway facility (i.e. toll facility) and use of the lease revenues to pay for other highway improvement needs
  • U.S. experience with infrastructure asset recycling is limited
  • In Colorado, state sold the prison facilities and leased it back for 20 years, generating $545 million to funds for rural highway projects
Flow diagram: Asset recycling
Source: Atkins Acuity

Text of Asset Recycling flow diagram

  1. Divest existing assets
    • Proceeds from monetizing existing assets
  2. Reinvest in new infrastructure
    • New infrastructure
  3. Recycle assets in the future
    • Existing assets
Indiana Toll Road, Indiana
  • 175 mile toll road across in northern Indiana
  • Owned by the State, but leased to concessionaire for 75 years - $3.8 billion
  • Funded 10 transportation plan
  • Retained all public employees
  • Performance Based Maintenance Standards
  • As of 2013, over $300 million has been invested in improvements to the ITR
Photo of traffic on the Indiana Toll Road
Arizona Land Sale
  • ADOT sold a 21-acre parcel of land along the north side of Interstate-10 near Phoenix Sky Harbor International Airport for $28.7 million
  • Proceeds will be used for the I-10 widening project
News article about ADOT's land sale
Advertising/Naming Right
  • Naming Right/Sponsorship: A financial transaction and form of advertising whereby a corporation or other entity purchases the right to name a facility or event, typically for a defined period of time.
  • Advertising: Revenue derived by selling space on transportation facility assets such as inside/outside transit vehicles, transit stations, bus stops, and roadway billboards
Virginia Rest Areas Sponsored by Geico
Gieco sponsored rest area signage, map of Virginia rest areas

Federal Roles

Federal's Role in Value Capture Strategies

Text of Federal's Role in Value Capture Strategies chart

Universe of Land under State Legal Authority

  • Land owned/Regulated by City/County
    • Depends on the local's policies
    • Decision at the City/County Level
    • State DOT and FHWA have no direct influence
  • Land owned/Acquired by State DOT with State Fund
    • Decision at the State level
    • Federal has no direct influence
  • Land Purchased with Federal Fund
    • State DOT and Federal have direct influence
    • US DOT support value capture
Value Capture Implementation Team


  • Thay Bishop, FHWA Office of Innovative Program Delivery
  • Stefan Natzke, FHWA Office of Planning, Environment, and Realty


  • Jennifer Ahlin, Virginia Department of Transportation
  • Janine Ashe, FHWA District of Columbia Division
  • David Cohen, FHWA Office of Project Development & Env. Review
  • John Duel, FHWA Office of Planning, Environment, and Realty
  • Kathleen Hulbert, FHWA Infrastructure Office
  • Chip Millard, FHWA Freight Management & Operation
  • Diane Mobley, FHWA Chief Counsel Office
  • Kevin Moody, FHWA Resource Center
  • Ben Orsbon, South Dakota Department of Transportation
  • Jill Stark, FHWA Office of Planning, Environment, and Realty
  • Lindsey Svendsen, FHWA Office of Planning, Environment, and Realty
  • Jim Thorne, FHWA Office of Planning, Environment, and Realty
  • Bingxin Yu, FHWA Transportation Policy Studies
VCIT Focus Areas
  • Communication - Developing the tools to help FHWA staff and others promote Value Capture to local public agencies (Value Capture Implementation Manual)
  • Technical Assistance - Providing technical assistance to agencies interested in pursuing Value Capture (Peer Program)
  • Clearing House (website) - Identification of best practices and lessons learned and promoting further discussion on innovative funding options for local public agencies, lessons learned from past and current efforts, etc.
Clearinghouse for best practices/lessons learned
EDC-5 Funding Opportunities

State Transportation Innovation Council (STIC) Incentive

Accelerated Innovation Deployment (AID) Demonstration

Questions & Answers

Thay Bishop:
E-mail: or
Tel: 404-562-3695

Presentation 2 -
Sugarloaf Community Improvement District: The Role of Community Improvement Districts in Value Capture

What is a Community Improvement District (CID)?

  • CIDs are self-taxing districts that allow commercial property owners to invest infrastructure and other improvements.
  • There are 27 CIDs in Georgia.
  • Area investors agree to be a part of the CID and then elect their own Board of Directors.
  • The directors set a millage (tax) rate to generate funding; matching funds can then become available.
  • CIDs have a six year lifespan.

CID Formation Requirements

  • Property owners sign a consent form to join
  • Only commercial properties are eligible
  • Consenting owners must be a majority (50% + 1) and represent 75% of total appraised value of parcels in a given area

What can CIDs do?

What can CIDs do?

Text of CIDs graphic


Sugarloaf CID Context

Map of Sugarloaf Community Improvement District
Logo: Sugarloaf Community Improvement District
  • Formed in 2016
  • 71 parcels
  • Millage rate: 3.5
  • Business and entertainment district:
    • 23,544 jobs
    • Infinite Energy Center (over 1M visitors each year)

New development underway

artists rendering of Sugarloaf new development
Task #1: Identify initial projects for SPLOST funding opportunities

Over $7M leveraged for intersection and pedestrian projects in our CID

CID intersection and pedestrian projects on an area map
Initial projects completed
right-turn lane built through Gwinnett

Right turn lane built through Gwinnett DOT quick fix program at no cost to the CID

three sidewalk projects completed

Three sidewalk projects completed with SPLOST funds

Project underway: Sugarloaf at Satellite intersection improvements
  • Additional lanes/turn lanes funded by SPLOST ($4M)
  • Aesthetic upgrades funded by CID (cost TBD):
    • Mast arms
    • Pavers
    • Landscaping
Highlights of improvements along Satellite Blvd
Loop Trail
  • Regional trail project connecting the Sugarloaf CID to parks, cities, and the Gwinnett Place CID
  • $100,000 grant from the Atlanta Regional Commission for a feasibility to advance the project - the CID is contributing $12,000 for the local match
  • Project is in partnership with Gwinnett County DOT
Sugarloaf Livable Centers Initiative Master Plan
  • Funded by the CID and Gwinnett County
  • Projects in the plan are eligible for grant funding
Photo - Sugarloaf "livable community" artists rendering

BRT Corridor Study

  • $400,000 grant to plan for land use and development for bus rapid transit service connecting Jimmy Carter Boulevard to Sugarloaf Parkway
  • Connects three CIDs
  • Local match:
    • $325,000 from Gwinnett County
    • $25,000 from each CID
Sugarloaf area at night - artist rendering

Other CID initiatives

Security, landscaping, and signage

solar light post

CIDs are critical champions for advancing projects.

Presentation 3 -

How communities can leverage local funds for transportation projects

Logo: Texas Department of Transportation plus collage of transportation photos

Date: June 20, 2019


What is a Transportation Reinvestment Zone
  • Transportation Reinvestment Zones are a tool that were created in the 2007 legislative session (Senate Bill 1266) as a value capture method for transportation projects where VC revenues are set aside to finance a project
  • House Bill 563 (2011) - introduced significant changes that increased implementation flexibility. Previously tied to Pass Through projects, but have steadily gained interest since the tool became more flexible.
  • Statute Governing Transportation Reinvestment Zones (TRZs): Texas Transportation Code Chapter 222 Sections 106-111
  • What exactly is a TRZ:
    • A TRZ is a specific contiguous zone around a planned transportation project that is established as a method to facilitate capture of the property tax increment arising from the planned project
  • Currently there are three taxing entities that can create a TRZ in Texas: County, Municipality, and Port Authority/Navigation Districts
Value Capture Mechanism
Chart - Appraised Property Value formulaHidalgo County TRZ No 2
area map of Hidalgo
What is a Transportation Reinvestment Zone
  • Why use a TRZ and how to find the appropriate project:
    • Allows a community to capture both existing economic growth as well as expected growth generated from the transportation project.
    • A TRZ can be used in conjunction with other financing mechanism to fund a transportation project.
  • Why haven't they been used more?
    • Has only been detached from Pass Through Toll project since 2011
    • Communities are familiar with TIRZ/TIF
  • What's the difference with a TIRZ
    • TIRZ/TIF typically used to support non-transportation tools, primarily seen in urban areas
    • A TRZ does not require a board
What should be included/considered in a TRZ feasibility analysis

The following are recommended items to include and consider in the preparation a TRZ capacity analysis:

  • Clear overview of the zone, map, zone delineation, parcel listing (if available)
  • List of Participating local governments considering a TRZ for the project (city, multiple cities, etc.)
  • Assumptions of the study:
    • The percentage of the property tax value increment in the Zone that is under consideration by the local government
    • Number of years included in the analysis
    • Assumed base year of establishment of the TRZ
  • Parcel analysis, including zoning types considered and current breakdown of zoning included in the potential TRZ (e.g: residential, commercial etc.)
  • The netting out of existing properties that would not contribute to the revenues (ie: other TIRZ, TIF, abatement agreements, or tax-exempt property)
  • 30 years of revenue estimates, including a cash flow table in both nominal and NPV figures
  • Historical property value growth trend analysis, based on Central Appraisal District data
  • Multiple Economic growth models, i.e. pessimistic, base and optimistic revenue estimate scenarios


Can a TRZ finance a transportation project in its entirety?

  • A local government with a created TRZ can use the captured funds directly toward a transportation project or as a pledge for a method of financing (for cities and ports that could include bond issuance)
  • Tax Increment Bonds
    • Tax increment bonds can have high costs due to ratings when compared to other municipal debt mechanisms
  • TxDOT State Infrastructure Bank Loans
    • The SIB program allows borrowers to access capital funds at or lower-than-market interest rates.
    • GO backstop required
    • Work eligible for the program's funding includes: planning and preliminary studies; feasibility, economical and environmental studies; right of way acquisition; surveying; appraisal and testing; utility relocation; engineering and design; construction; inspection and construction engineering.


TRZ Implementation Process

Initiation > Zone Formulation > Adoption > Implementation > Monitoring and Evaluation

  • Project identification
  • Preliminary feasibility analysis/ Research of property values under consideration
  • Developing stakeholder relations
Zone Formulation:
  • Define boundaries, zones, parcels
  • Establish benchmark year for tax increment collection
  • Refine feasibility study
  • Public hearings - 30 days before proposed adoption, and 7 days notice before the hearing
  • Ordinance (Municipal TRZ)
  • Order of the Commissioner's Court (County TRZ)
  • Determination of TRZ financing aspects
  • Establish mechanisms for funding/partnerships (Inter-local agreements, partnerships with RMA's etc.)
Monitoring and Evaluation:
  • Establish monitoring of TRZ to optimize revenue and payment streams
  • Monitor estimated increment revenue vs. actual
  • Dissolution of TRZ :
    • December 31 of the year of compliance with contractual requirement or
    • December 31 of the 10th year after establishment if not used for the purpose


To learn more about funding options for Local Governments, visit:

Julie De Hoyos
(o): 713-802-5114
(c): 512-923-9518