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Making the Business and Economic Case for Value Capture

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2. VC Implementation Process

Overall VC Implementation Process

The overall VC implementation lifecycle broadly entails feasibility/evaluation, preparation, formation (institutional), financing, lifecycle administration, and stakeholder coordination phases. The BEC can be made early in feasibility/evaluation phase to help make decisions on whether to proceed with one or more VC techniques, where the assessment would be more qualitative in nature. More detailed quantitative assessment can be performed in subsequent phases, in particular to provide input in developing the overall VC financing plan.
Source: FHWA B/E Case Primer (2021)

Implementation Issues for Different VC Techniques

Tax Increment Financing (TIF) - Buy-in from City and/or County regarding the extent of local tax revenue sharing

Special Assess. District (SAD) - Determination of whether assessment is tax or fee—affects voter approval requirement

Development Impact Fee (DIF) - Nexus and fee studies to determine legally defensible and market feasible fee levels

Often each VC technique is considered separately, not an integrated approach;Processes differ depending on applicable State and local laws

Community Facilities District (CFD) Example

An example of processes involved in implementing Community Facilities District (CFD), a form of SAD used in California, demonstrating the level of complexity involved. Because most VC techniques-especially those that are government-sponsored such as SAD and TIF—would likely involve issuing tax-exempt bond backed by the government, the process can be quite rigorous with multiple layers of regulatory and institutional requirements as shown here.
Source: LA Metro Value Capture Assessment Study (2020)

CA Community Facilities Act of 1982 (Government Code 53311-53368.3) established CFDs and their implementation processes


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