1. Joint Development Paula L. Schwach, Regional Counsel

2. Objectives Explain joint development Explain joint development List examples of joint development List examples of joint development Determine best practices for issues in joint development Determine best practices for issues in joint development

3. Historical Context Authorize grants to finance cost for the acquisition of land and the preparation of such land for urban redevelopment Authorize grants to finance cost for the acquisition of land and the preparation of such land for urban redevelopment Involve the coordinated planning and development of transportation facilities and the adjacent land to maximize the economic and social return to the public investment Involve the coordinated planning and development of transportation facilities and the adjacent land to maximize the economic and social return to the public investment Excludes the design and construction of non- transportation facilities Excludes the design and construction of non- transportation facilities

4. Exercise: What is Joint Development? You represent the transit agency which has received an earmark for joint development in connection with a BRT project. You represent the transit agency which has received an earmark for joint development in connection with a BRT project. How can you help the developer of this housing project? How can you help the developer of this housing project?

5. Joint Development Construction project undertaken jointly by an FTA grantee with another party besides FTA Construction project undertaken jointly by an FTA grantee with another party besides FTA Uses real estate in which FTA has or will acquire an interest Uses real estate in which FTA has or will acquire an interest Land acquisition is subject to the Uniform Act Land acquisition is subject to the Uniform Act Meets definition at 49 USC 5302(a)(1)(G) Meets definition at 49 USC 5302(a)(1)(G) Income retained by grantee for transit use Income retained by grantee for transit use

6. Examples of Joint Development Community Service Facility (Daycare or Health Care Center) Community Service Facility (Daycare or Health Care Center) Stations and Terminals for Intercity Bus and Intercity Rail Stations and Terminals for Intercity Bus and Intercity Rail Acquisition and Site Prep Costs for Residential and Commercial Facilities Acquisition and Site Prep Costs for Residential and Commercial Facilities Renovation of Historic Transportation Facilities Renovation of Historic Transportation Facilities

7. Site Acquisition; Site Acquisition; Demolition; Demolition; Site preparation; Site preparation; Building foundations; Building foundations; Utilities; Utilities; Walkways; Walkways; Open space; Open space; Safety & security equipment & facilities; Safety & security equipment & facilities; Facilities that incorporate community services; Facilities that incorporate community services; Intermodal transfer facility; Intermodal transfer facility; Construction, renovation, and improvement of intercity bus and rail stations/ terminals; Construction, renovation, and improvement of intercity bus and rail stations/ terminals; Transportation-related furniture, fixtures & equipment; Transportation-related furniture, fixtures & equipment; Transit parking; Transit parking; Project development activities; Project development activities; Professional services Professional services Eligible JD Activities

8. What is EXCLUDED from JD: 49 USC 5302(a)(1)(G)(ii): “construction of a commercial revenue-producing facility (other than an intercity bus station or terminal) OR 49 USC 5302(a)(1)(G)(ii): “construction of a commercial revenue-producing facility (other than an intercity bus station or terminal) OR a part of a public facility not related to public transportation.” a part of a public facility not related to public transportation.”

9. Use of Joint Development Proceeds Must be used for transit capital or operating expenses Must be used for transit capital or operating expenses Must be identifiable in the event of an FMO review Must be identifiable in the event of an FMO review If there aren’t proceeds, why should the Transit Authority do the deal? If there aren’t proceeds, why should the Transit Authority do the deal?

10. Benefits of Joint Development (Cost- & Revenue-sharing) Cost-sharing –Benefits developer by transit authority assuming some site costs entirely (in exchange for developer's assumption of other costs and “reasonable share of costs” –May involve acquisition of real estate w/new grant funds Revenue-sharing –Benefits the transit agency by securing a stream of revenue: “fair share of revenue” –May involve a transfer of real estate by JD sale or lease

11. Benefits of Joint Development (“Win-Win”) Private –Accessibility/proximity advantages of being near a transit station = higher rents or greater occupancy –Also benefits through sharing facilities constructed w/FTA funds Public –Potential to attract new riders from new development, new revenue stream from JD, and often developer’s assumption of maintenance responsibilities of the transit facility

12. JD Project Proposal Process Grantee submits application to Regional Office: (a) new FTA money = grant application; Grantee submits application to Regional Office: (a) new FTA money = grant application; (b) no new money = approval of real estate encumbrance. (b) no new money = approval of real estate encumbrance. Joint Development Checklist Joint Development Checklist Certificate of Compliance (or Alternative Certification if land to be encumbered) Certificate of Compliance (or Alternative Certification if land to be encumbered)

13. The Joint Development Checklist

14. JD and NEPA Compliance Grant w/ JD --apply NEPA. Grant w/ JD --apply NEPA. Grant w/ unknown JD—test is reasonable foresee ability. Grant w/ unknown JD—test is reasonable foresee ability. Grant w/ transit element later amended to include JD—expect additional NEPA analysis to be required. Grant w/ transit element later amended to include JD—expect additional NEPA analysis to be required.

15. Joint Development Double Takes –JD transfers v Property Disposition –JD v TOD –JD v. PPP –JD v. Incidental Use –JD v Shared Use Facilities

16. JD v. Property Disposition Joint Development Proceeds can be used for Capital and Operating Costs Proceeds can be used for Capital and Operating Costs Proceeds don’t have to be used on another FTA-assisted project, just on transit capital or operating. Proceeds don’t have to be used on another FTA-assisted project, just on transit capital or operating. Section 5334(h)(4) Proceeds can be used only for Capital Costs Proceeds can be used only for Capital Costs Proceeds must be used on another FTA- assisted grant project. Total Capital Costs of the project are reduced by the proceeds, and then the federal/local share ratio is applied to determine the new federal grant amount. Proceeds must be used on another FTA- assisted grant project. Total Capital Costs of the project are reduced by the proceeds, and then the federal/local share ratio is applied to determine the new federal grant amount.

17. JD v. Property Disposition (con’t) Joint Development Policy may be applied even to assets currently in transit use Policy may be applied even to assets currently in transit use Principles of the JD policy can be applied even if a project is not technically a JD project Principles of the JD policy can be applied even if a project is not technically a JD project –TOD’s Section 5334(h)(4) Section may only be applied if property is no longer needed for any transit purpose Section may only be applied if property is no longer needed for any transit purpose

18. JD v. Property Disposition (con’t) Joint Development True JD projects must meet technical req’ments in 2/7/07 Fed.Reg.Notice True JD projects must meet technical req’ments in 2/7/07 Fed.Reg.Notice –Written proposal to Regional Office –Demonstration that criteria have been met –Grantee must establish SCC –Some Federal cross- cutting requirements apply (fact specific) Section 5334(h)(4) Section has few technical requirements Section has few technical requirements –Written request to Regional Office outlining proposed disposition and how funds will be reused Section is in addition to those outlined in the Common Grant Rule and 49 USC 5334(h)(1-3). Section is in addition to those outlined in the Common Grant Rule and 49 USC 5334(h)(1-3).

19. Transit Oriented Development v. Joint Development Transit Oriented Dev. Conventional Transit Project

20. Joint Development v. Incidental Use Subject to the following considerations: Subject to the following considerations: – Property Acquired for Transportation Purpose – Actively Used for Transportation Purpose – Grantee Controls—not even a JD transfer –Additional Use Does Not Interfere with Transit Use

21. JD v. PPP or P3 JD Actual development on, over or adjacent to a transit project or strong functional relationship to such a project. Actual development on, over or adjacent to a transit project or strong functional relationship to such a project. Public-Private Partnerships Pilot Program Innovative procurement methodology Innovative procurement methodology

22. Joint Development v. Shared Use A particular kind of capital project A particular kind of capital project Another user is benefiting from transit expenditures and all use is a transportation use by definition Another user is benefiting from transit expenditures and all use is a transportation use by definition Uses are integrated physically or functionally Uses are integrated physically or functionally Any capital project Any capital project Another user is paying for the portion of the facility that is non-transit Another user is paying for the portion of the facility that is non-transit Uses are separate Uses are separate Uses, method of cost allocation approved at the time of grant making Uses, method of cost allocation approved at the time of grant making