1. Capturing the value Parramatta Light Rail
Theo Psychogios, Partner, Deloitte Access Economics
8 June 2016

2. The heart of the matter
Value capture is not new, but is re-emerging as the way forward for prioritising Australia’s growing infrastructure backlog within a tight competition for public funds
Concept means different things to different people as it represents a range of funding mechanisms
Links those who contribute to whose best positioned to benefit, thereby ‘optimising’ the supply of network infrastructure
Viewed by landholders as a contribution towards joint value creation – not a payment system
Vital land-use, amenity and sustainability role for local government in maximising value creation on projects
Through collaborative value creation, can be led by communities or local government, rather than ‘top down’ state or federal government solutions.

3. The value creation framework
Densification
Rezoning
Proximity to Infrastructure

4. Before Parramatta Light Rail
Parramatta, located 26 km from the Sydney CBD, is planned to be the city’s “second CBD” and is critical to catalyse sustainable economic growth across broader Western Sydney
Light rail was chosen by the NSW Government support Parramatta achieve “second CBD” status – with multiple routes into the Parramatta city centre yet to be determined
The Olympic Corridor (between Parramatta and Homebush), lying on valuable lands running alongside the Parramatta River, has been dominated by traditional heavy industrial uses in need of significant rejuvenation.

5. Towards a radial public transport network
Parramatta Light Rail
Towards a radial public transport network
Parramatta

6. Parramatta Light Rail
Billions of dollars of public and private investment is occurring in or around the corridor
Business and community stakeholder groups within The Corridor support growth and development.
Already nominated as a State Govt. Priority Growth Area, including the funding of two Priority Precincts.
Currently 120,000 workers in the area and more than 10 million visitors to Olympic Park Precinct annually.

7. The Olympic Corridor
The Olympic Corridor delivers on the government’s plan to establish a growth area between Parramatta and the Olympic Peninsula.
Rezoning coupled with enabled infrastructure will serve as a key trigger to unlock future growth.
Over 2,000 hectares in size including a diverse range of industries, communities, centres and institutions.
Key Success Factors
Few large land holders
Council and land holder collective action
Integrated lane use planning
Present an uplift sharing model

8. Economic enablers in the corridor

9. Greater than the sum of its parts
The value uplift

10. Private Sector Support
Major land holders of the WestLine Partnership have expressed their support to fund enabling infrastructure based on density uplift incentives.
Private sector approach has the flexibility to be applied at a targeted or general level and works by applying a rezoning assumption to the estimated land available for reuse.
It is estimated that if all density uplift opportunities were exercised, voluntary contribution funding of between $1.6 billion to $2.9 billion could be generated.

11. Homebush Bay Bridge Model
Changes to government’s DCP for Wentworth Point peninsula to allow increased height and density for landowners provided the basis for funding for the costs of the Homebush Bay Bridge
Planning uplift was ‘determined on its merits’ by the Dept. Planning in the light of the increased transportation capacity enabled by the Bridge.
Homebush Bay Bridge is expected to be delivered by the end of 2015

12. The steps to creating value
Value Capture
The steps to creating value
1. Stations
Based on 16 stations between Camellia and Sydney Olympic Park, including a line in Rhodes.
2. Radius
A radius ranging between 150m to 300m around each station is identified.
3. Area
Under current condition and assuming approximately 50% of identified land is reserved for parks, utilities and services
A net useable area of 1,468,695 sq. metres of uplift can be achieve.
4. FSR
Apply an uplift to the identified useable area as part of a negotiated voluntary agreement.
Uplift in FSR ranges from 0.5:1 – 4:1.
5. Rate
Apply a rate to the uplift
Rate ranges from $300 – $600 per sq. metres.
6. Funding
Potential value created ranges between $545m - $1,090m.

13. Camellia – Sydney Olympic Park (incl. Rhodes)
Value Capture
The Station Radius Approach
Indicative Uplift
Stations
Camellia – Sydney Olympic Park (incl. Rhodes)
Radius (M)
150 – 400
Useable Area (sqm)
15,708 – 251,327
Uplift FSR (Extended x:1)
0.5 – 4
Rate per sqm for uplift FSR
$300 – $600
Estimated Funds Per Station from Uplift
$212.2m – $226.2m
Total Potential Funds
$545m – $1,090m
The approach is based on a voluntary contribution mechanism from FSR uplifts around a transport orientated development, in this case based around light rail stations and a radius around those stations.

14. Camellia – Strathfield
Value Capture
The Corridor Approach
Indicative Uplift
Precincts
Camellia – Strathfield
Area for uplift (sqm)
422,480 – 1,791,751
Rate per sqm for uplift FSR
$600 – $1100
Estimated Funds Per Precenct from Uplift
$349m – $1,075m
Total Potential Funds
$1,627m – $2,859m
Existing contributions would still apply to the currently zoned components of the lands in the corridor.
The voluntary contribution applies to the additional square metres that are in the uplift amount.

15. The role of local government
Three key points
Ensure the success of densifying precincts through delivering greater neighbourhood amenity and sustainability
Local Government’s role
Text
Value capture infrastructure projects can be community-led, putting local governments in a lead role in project inception, development and financing (compared with traditional infrastructure delivery)
Local government has a unique role in driving greater and densification and rezoning in land-use planning, which is shown to be the biggest enablers of opportunities for value capture.

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