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3. Key Building Blocks

Basic Building Blocks for Making B/E Case

1. Clear Policy Objectives
2. Potential VC Opportunity Areas
3. Overall VC Typology and Techniques
4. Relevant VC Stakeholders
5. Key VC Evaluation Criteria
6. Framework for Integrated VC Strategy

Clear Policy Objectives

Funding Related

Generating new funding sources for:

• Public improvements to support major real estate developments (local)
• Local contributions to major transportation corridor projects (regional)

Long-Term Policy Related

Meeting long-term growth and land-use planning goals:

• Job creation
• Affordable housing
• Smart growth, TODs
• Improved connectivity
• Open space, parks, bike paths
• Balanced developments/ economic growth

VC Opportunity Areas and Techniques

VC Opportunity Areas

Defining VC opportunity areas (OAs) per TOD industry best practice:

• Geographic boundary (e.g., 1/2-mi radius)
• Locational characteristics (e.g., urban, rural)
• Site-specific buildout scenarios

CTOD-Center for Transit-Oriented Development
FTA-Federal Transit Administration

VC Techniques

Select most appropriate VC technique(s) for specific OAs:

• Tax increment financing (TIF)
• Special assess. district (SAD)
• Developer impact fee (DIF) or other developer exactions
• Transport utility fee (TUF)
• Zoning incentives (density bonus, TDR)
• Contract-based (e.g., DA, CBA, JDA)

TDR-Transfer of Development Rights, DA–Development Agreement,
CBA-Community Benefits Agreement, JDA–Joint Development Agreement

VC Stakeholders and Evaluation Criteria

VC Stakeholders

Specific VC technique chosen governs who stakeholders are:

• Public agencies
• General taxpayer (TIF)
• Property or business owners (SAD, TUF)
• Developers (DIF, exactions, DA, JDA)
• Communities (CBA)
• Lenders/investors

VC Evaluation Criteria

VC evaluation criteria serve as the basis for qualitative assessment of VC techniques:

• Yield/revenue potential
• Equity
• Efficiency
• Transparency
• Administrative ease
• Political/legal feasibility
• Meeting policy goals

Framework for Integrated VC Strategy

Lessons Learned/Best Practice

Two past lessons from local experience–(1) starting too late after value given away; (2) windfall gain by existing properties at the expense of new developments

• Start early
• Use larger footprint
• Apply for longer period

Integrated Strategy

Multi-layered, multi-phased, risk-adjusted and equity-based approach:

• Engage multiple VC techniques/stakeholders
• Implement in multiple phases over long term
• Risk consideration–those who are best able bear the risk
• Equity consideration–those who benefit and can afford pay the most

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