1. An FTA Update on Joint Development Kate Mattice Deputy Associate Administrator Office of Budget and Policy

2. Joint Development Efforts at FTA Proposed Circular – To be published for public comment – Single guidance document for grantees – Incorporates MAP-21 provisions FTA Defines Joint Development (JD) Clarifies FTA Policy Provides Framework for Analyzing JD Projects 2

3. Joint Development : Defined A transit project Integrally related to commercial, residential or mixed-use development; often co-located May include public, private or non-profit development associated with transit capital investments FTA financial assistance = “a federal interest” 3

4. Joint Development : FTA ’ s Policy FTA supports the use of joint development wherever possible to maximize utility of FTA-funded projects FTA allows the revenue received from an FTA-funded joint development project to be treated as program income FTA recognizes that joint development provides multiple and varied benefits FTA will defer to grantee on business decisions 4

5. Areas of Interest to FTA When FTA is presented with a joint development project, there are typically two categories of issues that we must consider: 1.Eligibility issues associated with the use of FTA grant funds or program income for a capital project; and 2.Issues associated with the acquisition, use, and disposition of real property that was or will be purchased with FTA funds. 5

6. What is an Eligible FTA Joint Development Project ? 1. It must enhance economic development or incorporate private investment. 2. It must enhance effectiveness of transit and be physically or functionally related to transit, or establish new/enhanced coordination with other modes. 3. It must provide a fair share of revenue for transit use. 4. It must provide that occupants pay fair share of facility costs. 6

7. Enhanced economic development – – Adds value to privately or publicly funded economic development activity occurring in close proximity to the transit facility. Incorporates private investment: – Any joint development that incorporates private investment will satisfy this criteria. Remember, joint development may involve public or non-profit partners, not just the private sector. – Private investment does not need to be monetary. May be in the form of real property or some other contribution to be generated initially or over the life of the JD. – FTA will not set a monetary threshold for private investment. The amount and form of private investment is up to the grantee and its partner(s) 7 1. It must enhance economic development or incorporate private investment.

8. Joint development projects must include a transit function – existing or new. The project must have a physical or functional relationship to transit – Physical relationship: Provides a direct physical connection to transit services or facilities – Functional relations: Enhances the use of, connectivity with, or access to transit Or, the project establishes new or enhanced coordination between transit and other modes of transportation. – Examples: proximate or shared ticket counters, park & ride lots, taxicab bays, passenger drop-off points, waiting areas, shared or coordinated signage, schedules, ticketing, bike paths/walkways connecting transit to another mode – Projects that shorten the distance between transit and another mode are considered to enhance coordination. 8 2. It must enhance effectiveness of transit and be physically or functionally related to transit, or establish new/enhanced coordination with other modes.

9. “Fair Share” to be determined by the transit agency/grantee. Not limited to cash payments to the transit agency. – May take the form of an increase in (indirect) revenue the transit agency receives in its capacity as landlord, or as a result of increased transit ridership due to the joint development project. 9 3. It must provide a fair share of revenue for transit use.

10. The tenant must cover its fair share of operating and maintenance costs – Again, FTA will not define “fair share” of the costs nor will it impose any valuation methodology. – FTA will accept any reasonable valuation methodology used by the grantee to determine a fair share of the costs of the facility. 10 4. It must provide that occupants pay fair share of facility costs.

11. FTA Funding for Joint Development Since joint development is a transit project, generally all FTA planning and capital program funds are available for use! Planning Activities: – FTA/FHWA Metropolitan and Statewide Transportation Planning – Other Federal community development funding programs Capital Activities: – Urbanized Area Formula: Section 5307 – Fixed Guideway Capital Investments: Section 5309 – Elderly and Disabled Formula: Section 5310 – Rural Area Formula: Section 5311 – Bus and Bus Facilities Formula: Section 5339 11

12. Activities Eligible for FTA Funds Standard capital project activities: Standard capital project activities:  Property acquisition,  Demolition  Site preparation  Utilities  Building Foundations  Walkways  Pedestrian/bike access  Renovation and improvement of historic transportation facilities Open space, site amenities, streetscape elements Open space, site amenities, streetscape elements Parking that links to transit use Parking that links to transit use Standard capital project activities: Standard capital project activities:  Property acquisition,  Demolition  Site preparation  Utilities  Building Foundations  Walkways  Pedestrian/bike access  Renovation and improvement of historic transportation facilities Open space, site amenities, streetscape elements Open space, site amenities, streetscape elements Parking that links to transit use Parking that links to transit use 12 Construction of new or improvement to intermodal transfer facility or transit mall Construction of new or improvement to intermodal transfer facility or transit mall Facility that incorporates community services such as daycare or health care Facility that incorporates community services such as daycare or health care Construction of commercial space Construction of commercial space  FTA funds cannot outfit the space Safety and security equipment/facilities Safety and security equipment/facilities Project development activities Project development activities Professional services Professional services Construction of new or improvement to intermodal transfer facility or transit mall Construction of new or improvement to intermodal transfer facility or transit mall Facility that incorporates community services such as daycare or health care Facility that incorporates community services such as daycare or health care Construction of commercial space Construction of commercial space  FTA funds cannot outfit the space Safety and security equipment/facilities Safety and security equipment/facilities Project development activities Project development activities Professional services Professional services

13. Activities Ineligible for FTA Funds Outfitting commercial space – Except for intercity bus and rail stations/terminals Public facility not related to transit – Only public facilities having some physical or functional relationship to transit may be eligible for FTA funding as a joint development project. – The purpose of the public building is not necessarily determinative of its eligibility for FTA funding. – FTA may not fund a part of a public facility that is not related to transit. Note: A non-transit public building’s “relationship” to transit must be more than mere geographic proximity – – A de minimis connection is insufficient to be considered joint development. – Just because a public facility is located within walking distance to transit does not provide a functional relationship. 13

14. Can I do Joint Development on an Existing Park and Ride ? FTA policy does not prohibit development of a parking facility constructed with FTA funds The only requirements are that: 1.FTA must approve of any change in use (or disposition) of an asset before the end of its useful life. 2.The change in use from parking to joint development must benefit public transportation. (i.e., higher ridership) 3.If project was constructed under the New Starts program, the new use for the parking spaces does not negatively impact the user benefits that were promised in the FFGA. 4.A change in use from parking to joint development may trigger the need for additional National Environmental Policy Act (NEPA) analysis. FTA policy does not prohibit development of a parking facility constructed with FTA funds The only requirements are that: 1.FTA must approve of any change in use (or disposition) of an asset before the end of its useful life. 2.The change in use from parking to joint development must benefit public transportation. (i.e., higher ridership) 3.If project was constructed under the New Starts program, the new use for the parking spaces does not negatively impact the user benefits that were promised in the FFGA. 4.A change in use from parking to joint development may trigger the need for additional National Environmental Policy Act (NEPA) analysis. 14

15. Joint Development and Real Estate Joint development projects often involve real property – in which there is a federal interest – that is transferred or leased by the transit operator to a third party. Real Property requirements: – Primarily governed by the Uniform Act (Uniform Assistance and Real Property Acquisition Policies Act of 1970, as amended), 49 U.S.C. 4335(h) and the Common Grant Rule. – Strict regulations on acquisition, use and disposal 15

16. Real Estate Requirements and Regulations Subordination of Federal Interest Allows JD financing to be at market rates, with real property used as collateral FTA would continue to retain a federal interest Incidental Use of Property Is permitted as long as it doesn’t interfere with intended transit use Satisfactory Continuing Control Property must remain available for its intended transit purpose and be able to be accessed by the transit agency/grantee at any time Land Banking Grantee can hold onto property for original transit purpose or for future transit purpose 16

17. Other Cross - Cutting Federal Requirements  Planning  Environmental (NEPA)  Procurement  Leases and conveyances  Civil rights  Labor protection  Other All covered in the proposed circular 17

18. FTA Review of Joint Development : Eligibility – Like any other transit project, FTA will review and approve any joint development activities to ensure the elements are eligible under FTA law. – This may involve providing FTA project-specific documents Use of Real Property – Insofar as the joint development project uses real property, FTA will need to concur that the acquisition, use, and disposal are consistent with real estate laws and regulations. 18

19. FTA Review : Proposed Process ? FTA is seeking idea on how we conduct our review process: – What will work? – What won’t work? – What areas should we provide technical assistance and/or sample documents? Submit your ideas! 19

20. Joint Development Circular : Next Steps Federal Register publication – Proposed Circular – 30 day review and comment period – Submit comments on proposed circular – Submit suggestions for joint development project review process Industry listening sessions Issue Final Circular Outreach and Technical Assistance 20

21. Questions / Comments ? Contact your regional office FTA’s Website: – www.fta.dot.gov/livability www.fta.dot.gov/livability Legal Questions: – Jayme Blakesley jayme.blakesley@dot.gov jayme.blakesley@dot.gov Policy Questions: – Sharon Pugh Sharon.pugh@dot.gov Sharon.pugh@dot.gov 21