1. www.forestcity.net Transit Oriented Development 9/20/2010 presented by Emerick J. Corsi Jr., Executive Vice President James H. Richardson, III, Vice President Forest City Real Estate Services

2. Transit Oriented Development $12 billion national real estate company – housing, retail, office and bio science Investment management and 3 rd party advisory practice of Forest City A proven legacy as a real estate investor, manager and developer, community builder and creator of economic growth. We provide our talent and experience to you. We can handle every aspect of investment, management, development and redevelopment. Who are we? 2www.forestcity.net

3. Experience Matters Metro Tech Atlantic Yards East River Tower City San Francisco Center Bayside Wiregrass Gulfstream Station Square New York Times Stapleton Victoria Gardens MIT Central Station M.K. Ferguson Plaza East 29 th Street Town Center Over 29 Projects in the portfolio with TOD

4. Transit Oriented Development Successful TOD Walkable Density Public Space Live, work, play 1.5 Million sq. ft. 4www.forestcity.net Westfield San Francisco Centre in San Francisco, California

5. Transit Oriented Development Successful TOD –Connectivity –Pedestrian oriented design –Bicycle accommodations –Regional Bus lines –4,700 Acres –13 Million sq. ft. commercial –8,000 Multifamily units –1,100 Acres of parks and recreation

6. Transit Oriented Development6www.forestcity.net Successful TOD Central Station, Chicago, Illinois 24 hour atmosphere, not just 9-5 Convenience Handle daily needs without driving Create Vibrancy Housing Retail Office Recreation Entertainment Live, Work, Play 500 Room hotel 8,500 Housing units 2.5 Million sq. ft. commercial

7. Transit Oriented Development7www.forestcity.net Unsuccessful TOD Metropark Train Station –No density –No live, work, play –No convenience –No travel options –No 24 hour atmosphere –Isolation Penn Station, Newark –Barrier –No walkability –No pedestrian oriented design

8. Transit Oriented Development Station Area Planning Physical Site Assessment Market Feasibility Assessment Public Involvement Brand development Station and Station Area Master Plan 8www.forestcity.net

9. Transit Oriented Development Station Area Planning Physical Site Assessment –Base mapping and aerial photography –Land use and zoning –Surface transportation – access, capacity –Utilities and storm water –Natural features –Environmental and cultural features –Project character and visual impact –Opportunities and Constraints –Connectivity to other modes of transportation (shuttles, buses, rental car, car services, university shuttles, bicycles, etc.) 9www.forestcity.net

10. Transit Oriented Development Station Area Planning Market Feasibility Assessment –Economic and demographic trends compare ridership to local markets to help determine development opportunities –Supply and demand analysis –Benchmark against similar projects –Assess market segments Retail, office, hospitality, residential, institutional and civic uses 10www.forestcity.net

11. Transit Oriented Development Station Area Planning Public Involvement –Interviews, public meetings, design charrettes, surveys, stakeholder meetings, public open house Brand Development –Vision/pattern book to create project identity and tie local station and surrounding development to the brand of the overall high speed rail network. In addition, market to other stations, station to station marketing program. 11www.forestcity.net

12. Transit Oriented Development Station Area Planning Station and Station Area Master Plan –Site and Land Use Plan –Infrastructure –Station rail facilities –Open space –Design guidelines –Mixed use leasable space - part of station –Adjacent transit oriented development – retail, office, residential, civic uses. –Master Development Program that indentifies individual projects, phasing, development rights, cost and financing sources. –What is the income and value created? –Jobs growth – How many jobs we created? 12www.forestcity.net

13. Transit Oriented Development TOD Principals In developing a rail station and adjacent Transit Oriented Development (TOD) there are specific principles that must be employed to create a successful development. The station area master plans will consider and utilize commonly accepted TOD principles below: Pedestrian Orientation Higher Densities Mix of Uses Urban Design and Public Spaces Live, Work, Play Economic Development Sustainable Development 13www.forestcity.net

14. Transit Oriented Development TOD Principals Pedestrian Orientation – place daily goods and services as well as recreational destinations within walking distance of residents, supporting transit use for commuting and other regional travel; orienting building entrances toward transit stops. Other focus on other forms of transportation available at station (i.e., bus, trolleys, cab, bicycle). Higher Densities - Increased population and employment densities place more potential riders within walking distance of transit stations/stops. 14www.forestcity.net

15. Transit Oriented Development TOD Principals Mix of Uses - Retail, office, residential, and public space promote concentrations of public activity around transit station/stops, increasing the physical and cultural prominence of transit in the community, as well as facilitating trip chaining linked to transit (i.e., stopping at a dry cleaners or day care facility on the way to the train during a morning commute, instead of making separate trips). Uses to match market ridership. Urban Design and Public Spaces – Make each station a place. Create a destination, make the buildings landmarks, build high quality streets, orient buildings to the street, and create public open space to emphasize the station as a public place. Create an anchor. 15www.forestcity.net

16. Transit Oriented Development TOD Principals Live, Work, Play Live-Work Overlay Districts, which allow shared occupancy of space by residential uses in combination with work activities in suitable locations. These districts are intended to assist in revitalizing areas impacted by the presence of under- utilized and deteriorated buildings suitable for re-use as live-work space. There should be direct statement to livable communities. Economic Development – creates new economic development as a result of the rail and transit investment. Increase the emphasis of economic development for value creation. Sustainable Development – This is vital to any development within or around the station. 16www.forestcity.net

17. Transit Oriented Development Criteria for Train Station Planning 17www.forestcity.net 1.Proximity and access to the tracks. 2.Identify the infrastructure cost for the location of the station. 3.Will the station be in the best location to drive economic growth? 4.Identify the economic growth that will occur within a 5 mile radius of the station and how the station location will help drive those economics. 5.Describe and identify how local stakeholders will be brought into the planning process.

18. Transit Oriented Development Criteria for Train Station Planning (continued) 6.Describe and identify how local developers will be involved in the planning process and the implementation of the master plan 7. Identify projects that can happen and what economics the projects will produce along with a time schedule. 8.Provide a market study of the master plan area that addresses the demographics, office, retail, residential and industrial market and absorption. 9.Describe how the train station will be marketed with the other stations within the communities. 18www.forestcity.net

19. Transit Oriented Development Criteria for Train Station Planning (continued) 10.Describe coordination with other commuter modes of transportation and how this station will be intermodal. 11.How will the station and the area be branded and coordinated with other stations? 12. Provide a transportation report that addresses the impact on the area and any mitigation for ingress and egress. 13.Describe how sustainability and green plans will be incorporated into the implementation plan. 19www.forestcity.net

20. Transit Oriented Development20www.forestcity.net Local Benefits of TOD Increased property values Revitalization Expanded Housing Choices Sustainable Development Economic Growth

21. Transit Oriented Development Funding Stations and Station Area Improvements Currently there is a disconnect between the investment being made in the overall HSIR system and the need and interest to provide adequate stations. As the planning moves forward, station sites are being identified by the rail planners with little to no consideration for potential future economic impacts. Communities should have a keen interest in economic development related to the stations but no specific program is in place to implement a planning strategy, to fund the planning effort or to fund the implementation of the plan. This will take significant increased allocations to the states and cities to provide the necessary station improvements. The states, cities and private real estate market are prepared to pursue alternative strategies to fund and construct the necessary station area improvements. Working with state and local governments models can be established to utilize these alternative strategies to fund the station improvements in a manner that meets the best transit oriented development practices described above. Tools and strategies to be used include. 21www.forestcity.net

22. Transit Oriented Development Funding Stations and Station Area Improvements Special Assessment Districts Tax Increment Financing Joint Development Assessed Taxes Public Private Partnership Value Capture 22www.forestcity.net

23. Transit Oriented Development Funding Stations and Station Area Improvements Special Assessment Districts – a tax assessed against parcels that have been identified as receiving a direct and unique benefit as a result of a public project. Tax Increment Financing – a mechanism that allows the public sector to capture growth in property tax (or sometimes sales tax) resulting from new development and increasing property values. Joint Development – cooperation between the public and private sectors to deliver transit-oriented development (TOD), usually involving development on transit agency owned land leased to a private concern. 23www.forestcity.net

24. Transit Oriented Development Funding Stations and Station Area Improvements Assessed Taxes – a fee assessed on new development as long as that area of development can sustain the tax burden. Public Private Partnership - a type of project financing, management and ownership sharing that is based on a long term, performance- based contract where appropriate risks can be transferred cost effectively to a private sector partner. Value Capture – Create a real estate model that includes a pro forma that transfers a portion of the net operating income (NOI) for the transit oriented development to the operation of the station, the rail line and the development surrounding the station 24www.forestcity.net

25. Transit Oriented Development TOD Model The following is a possible model which establishes a PPP (Private Public Partnership) where all parties are a true partner and share in the value created and profits from the TOD. The concept is to hire a qualified PPP Administrator that will coordinate with all partners to help locate, prepare the economic analysis and manage the TOD. 25www.forestcity.net

26. Transit Oriented Development TOD Public/Private Partnership [PPP] Administrator PPP Administrator FRA/HSIPR Host RailAmtrakRRState Local Government Developer Partnership Structure 26www.forestcity.net

27. Transit Oriented Development TOD Public/Private Partnership [PPP] Administrator Mission Maximize the income from the TOD, manage the real estate and distribute profits to the partnership. 27www.forestcity.net

28. Transit Oriented Development PPP Administrator Duties & Qualifications Duties Sets criteria for TOD Establishes value created based on TOD location Sets up development program for location Establish partners [partnership in TOD PPP] Oversees development Sets up management team Manages the property/real estate Distributes proceeds to the partnership 28www.forestcity.net

29. Transit Oriented Development PPP Administrator Duties & Qualifications Qualifications Development and Management Company with mixed use experience. A.Experience in: 1.Master Planning 2.Development expertise in mixed-use development a.Commercial b.Office c.Residential 3.Management expertise in mixed-use development a.Commercial b.Office c.Residential 4.Public/Private Partnerships 5.Projects in excess of $100 Million 6.Projects in excess of 1,000,000 square feet 7.Have completed TOD Development(s) 29www.forestcity.net

30. Transit Oriented Development TOD Income Needs to be established based on location (PPP Administrator to perform analysis) Sources Commercial Income (i.e., 100,000 sf x $30 psf = $3,000,000 NOI @ 10 Cap = $30,000,000 (value created) - $20,000,000 ($200 – 100,000 sf) costs = $10,000,000 net value created.) Residential Income (200 units/cost $20 Million/$180,000 - $200,000 NOI – at a 7-10 Cap is $2-$8 Million in value.) Real Estate Taxes (i.e. $50,000,000 development would generate taxes at $600,000 per year or $6,000,000 value at a10 cap) Sales Taxes Payroll Taxes Assessed Taxes Station Revenue 30www.forestcity.net

31. Transit Oriented Development Train Study Concepts A 31www.forestcity.net

32. Transit Oriented Development32www.forestcity.net Train Study Concepts

33. Transit Oriented Development33www.forestcity.net Train Study Concepts

34. Transit Oriented Development34www.forestcity.net Train Study Concepts

35. Transit Oriented Development Development –65,000 sf train station 15,000sf station and circulation 50,000 sf commercial real estate. –250 unit apartment complex –Surface parking for 500 spaces or garage deck for 500 spaces Economics of a Prototype 35www.forestcity.net

36. Transit Oriented Development Cost –Train station 65,000 sf @ $200psf = $13,000,000 15,000 train/50,000 commercial –50,000 sf commercial space [build out] @ $100 psf = $5,000,000 –250 unit apartment complex @ $80,000 ea. = $20,000,000 –Surface parking [5 acres at $5 psf $2,200,000] –Garage 500 spaces [@ 15,000 ea. = $7,500,000] Economics of a Prototype 36www.forestcity.net

37. Transit Oriented Development Income –Commercial Real Estate 50,000 sf @ $30psf =$1,500,000 –Apartments 250 unit = $2,400,000 –Real Estate Taxes$ 500,000 Based on approximately $40,000,000 value, taxes estimated $500,000 per year. –Train station revenue TBD –Other taxes, payroll, special assessments, etc. TBD –TOTAL REVENUE $4,400,000 Economics of a Prototype 37www.forestcity.net

38. Transit Oriented Development Scenario A [surface parking] –Train station $13,000,000 –Commercial Real Estate$ 5,000,000 –250 Unit Apartment Complex$20,000,000 –Surface parking – 500 spaces$ 2,200,000 $40,000,000 –Less Federal subsidies of 50%$20,000,000 –Net Cost$20,000,000 Recap of Cost and Income 38www.forestcity.net

39. Transit Oriented Development Scenario B [garage] –Train station $13,000,000 –Commercial Real Estate$ 5,000,000 –250 Unit Apartment Complex$20,000,000 –Garage parking – 500 spaces$ 7,500,000 $45,500,000 –Less Federal subsidies of 50%$22,750,000 –Net Cost$22,750,000 Recap of Cost and Income 39www.forestcity.net

40. Transit Oriented Development Revenue vs. Cost –Total revenue of $4,400,000 @ 10cap $44,000,000 –Less net cost of Scenario A$20,000,000 –Value Created$24,000,000 Based on a 10 cap, $24,000,000 of value created or a net cash flow of $2,400,000 per year. –Total revenue of $4,400,000 @ 10cap $44,000,000 –Less net cost of Scenario B$22,750,000 –Value Created$21,250,000 Based on a 10 cap, $21,250,000 of value created or a net cash flow of $2,125,000 per year. Recap of Cost and Income 40www.forestcity.net

41. Transit Oriented Development Location, location, location means value. This model will provide economic support to the cost of the station and surrounding infrastructure through the PPP Administration process. The station economic package will provide support to: –Cover the cost of operating the station. –Creating a minimum development program with the station. Will be a catalyst for further economic growth, which will happen quicker vs. build the station and wait for development to occur. –Value is created for all of the partners. –Jobs will be created faster due to the minimum development occurring at the time the station is built. –Federal subsidies could be repaid. Closing 41www.forestcity.net