TABLE OF CONTENTS
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LIST OF BOXES
The use of value capture techniques to fund transportation projects involves a set of risks associated with value capture’s reliance on increased real estate and economic development activity that are linked to transportation infrastructure. Transportation agencies and local governments often rely on the risk management process to understand existing risks, to quantify their potential impact on a project, and to elaborate a response to the risks. The risk management process is defined as a continuous process for systematically identifying, assessing, allocating, mitigating, and monitoring risk throughout the lifecycle of a project.
The overarching goal of this primer is to assist practitioners in understanding the typical risks associated with value capture in transportation and assessing them to build resiliency into a project’s funding strategy. More specifically, the objectives of the primer include:
The following paragraphs provide an overview of the content included in each chapter of the primer to assist the reader in navigating the document.
Chapter 1: Introduction
Chapter 1 provides the goals and objectives of this primer and the definition of the value capture techniques currently available to local governments to fund transportation projects. This chapter also introduces the concept of risk in value capture and highlights the importance of managing risks.
Chapter 2: Risk Management in Value Capture
Chapter 2 provides an overview of the risk management process in the context of value capture. As part of this overview, this chapter also introduces the value capture risk categories and risk types used in subsequent chapters.
Chapter 3: Exogenous Economic Risks
Chapter 3 describes the exogenous economic risk category. There are several exogenous economic risk types that value capture funding for transportation may be subject to, but the three most common include: (1) macroeconomic risks; (2) real estate market risks; and (3) other local economic and demographic risks. This chapter describes each of these risk types and provides examples that illustrate how they may impact projects relying on value capture funding.
Chapter 4: Endogenous Economic Risks
Chapter 5 presents the endogenous economic risk category. Common risk types in this category include: (1) economic growth impact and related risks; and (2) fiscal impact risks. This chapter describes each of these risk types and provides examples that illustrate how they may impact projects relying on value capture funding.
Chapter 5: Legal and Political Risks
Chapter 4 discusses the legal and political risk category. The most common risk types in this category include: (1) legal feasibility and legislative risks; and (2) political climate and feasibility risks. This chapter describes each of these risk types and provides examples that illustrate how they may impact projects relying on value capture funding.
Chapter 6: Policy and Institutional Risks
Chapter 6 describes the policy and institutional risk category. The risk types identified in this category include: (1) social equity (including environmental and sustainability) concerns; and (2) administration and transparency risks. This chapter describes each of these risk types and provides examples that illustrate how they may impact projects relying on value capture funding.
Chapter 7: Value Capture Technique Specific Risks - Comparative
Chapter 7 summarizes a comparative analysis of risks associated with each value capture technique and of potential risk mitigation strategies applicable to each risk and value capture technique. It begins with a comparison of common risks associated with each value capture technique and the potential severity of their impact if materialized. Next, it presents a risk checklist that describes potential consequences and identifies potential mitigation measures.
Chapter 8: Building Resiliency and Developing a Risk-Adjusted Value Capture Strategy
Chapter 8 introduces the concept of resiliency and developing a risk-adjusted value capture strategy that considers potential risks in the context of their timing vis-Ã -vis different project phases and project stakeholders, incorporating appropriate mitigation strategies in each phase.
