Mn/DOT and Economic
Development
ACEC Annual Meeting
March 2, 2010
Outline of Discussion
• Mn/DOT’s Economic Development Objectives
• Challenges
• Solutions
– Innovative Finance
– Public Private Partnerships
– Transportation Economic Development initiative
Mn/DOT’s commitment to Economic
and Community Development
• “Transportation is critical in supporting economic
vitality and quality of life in Minnesota.”
− 1st sentence in the Minnesota Statewide Transportation
Policy Plan 2009-2028
Mn/DOT’s commitment to Economic
and Community Development
• Support local efforts to increase jobs, expand
housing, and improve community livability
through more coordinated planning,
complementary design and timely
communication among land use and
transportation authorities.
– Policy 8 of Minnesota Statewide Transportation Policy
Plan 2009-2028
Investments Needs 2009-2028
~$65 Billion
Traveler Safety
$3.1 B
5%
Infrastructure
Preservation
$16.3 B
26%
Mobility
$42.6 B
69%
Investments to Meet
Performance
Targets = $62 B
+
Regional & Community
Improvement Priorities
= $3 to $5 B
($ in Billions, Year of Construction)
Projected Revenue : $15 B
Construction Expenditures (Millions of Dollars)
1200
Chapter 152 Other Bond Funds
1000
Chapter 152 Bridge Bond Funds
800
Federal Funds
600
400
200
Buying Power of the SRC
State Funds
0
2009
2019
State Fiscal Year
2028
Investment Plan for Projected
2009-2028 Funding: $15 Billion
Right of Way,
Consultants,
Supplemental
Agreements
$370 M
2%
Regional &
Community
Improvement
Priorities
$580 M
4%
Other Bridge
Preservation
$2,600 M
17%
Chapter 152 Bridge
Preservation
$2,520 M
17%
Pavement
Preservation
$5,840 M
40%
Greater MN Trade
Centers Mobility
$60 M
0%
Twin Cities Metro
Area Mobility
$890 M
6%
Interregional
Corridor Mobility
$80 M
1%
Capacity
Improvement Roadway
$620 M Enhancement
$780 M
4%
5%
Other Infrastructure
Preservation
$640 M
4%
($ in Millions,
Year of Construction)
“Traditional” Economic Development and
Transportation Infrastructure Funding
Sources
• Federal STP, Enhancements, CMAQ
• Department of Commerce Economic Development Administration Public Works and Development Facilities Program
• USDA Community Facilities programs
• State DEED Programs
• State and local funding from HUTDF
• State bonding
• Local Road Improvement Program
• Transportation Revolving Loan Fund
One tool to narrow the gap:
Innovative Finance
• Innovative Transportation Finance is the practice of
exploring, developing and implementing the
following to accelerate transportation
improvements:
– New and non-traditional revenue streams
– New financing tools and techniques
– New methods of utilizing existing revenue streams and
financing techniques
– New types of financial partnerships between state,
regional, local and private entities
Innovative Finance Concepts
• Revenue Generating Concepts
Private
Contribution P3
Opportunities
Toward Zero
Death (TZD)
Surcharge
10
MnPASS HOT
Lane/Shoulder
Expansion
Asset Revenue
Enhancement
Ideas
Toll Bridge
Project
Concepts
Transportation
Improvement
District
Approaches
Mileage Based
User Fees
Addressing the Public Infrastructure
Funding/Financing Gap
Funding / Financing Strategies
Traditional
Finance
Innovative Finance
Public Only
Strategies
Innovative
Finance
Public/Private
Strategies
Public Private Partnerships (P3)
Private Financing P3
Private Contribution P3
Mn/DOT Innovative Finance
Initiative Activities
IF Methods/Approach
Development
IF Project Identification
IF Program Integration
IF Communications
IF/Planning
Coordination
• Identify "non-traditional" funding opportunities, including
"value capture"
• Evaluate IF method suitability for Minnesota
• Obtain legal authority to implement
Innovative Finance
Program Mission:
• Establish project screening process for potential IF projects
• Determine project feasibility based on costs, risks,
operational variables, etc.
Mn/DOT will work with
transportation partners
and the public to
explore, identify,
develop, and implement
financing approaches
that enable access to
non-traditional sources
of revenue and new
financial approaches
that provide a
maximum, sustainable
level of transportation
services to the citizens
of Minnesota.
• Develop internal tools for IF project consideration and
application
• Propose business processes/procedures to advance IF
strategies
• Identify key messages and target audiences
• Conduct meetings, workshops to promote IF
implementation
• Meet with partners to develop IF project strategies
• Identify and engage partners in land use and transportation
planning relationship
• Particiapte in state, regional, and local long range planning
efforts
Benefits of Innovative Finance
(Policy Rationale)
• Better Alignment of Transportation Use/Benefit and Financial
Responsibility
– Some IF strategies can better link the costs of a transportation improvement
with those who use or benefit from the improvement (e.g. toll projects, private
contributions to specific projects, value capture strategies).
– When benefiting users and property owners are required to pay closer to the
real cost of transportation improvements, revenue increases for some projects,
demand decreases for other projects, and improvements can become more
financially sustainable.
• Economic Development and Growth
– Job Creation and Preservation
– Tax Base Growth
Benefits of Innovative Finance
(Cost/Operational Efficiency Rationale)
• Project Acceleration Benefits
– Inflation Savings
– Accelerated Public Benefits
•
•
•
•
•
•
Safer Commutes
Improved Ride Quality
Less Congestion/Travel Time and Greater Reliability
Better Access and Greater Travel Mode Choice
Reduced Emissions and Environmental Improvement
Enhanced Livability and Quality of Life
Transportation Economic
Development (TED) Initiative
Transportation Role in Economic
Development
• Carefully targeted transportation infrastructure
improvements will:
– Stimulate new economic development and business
expansion
– Create and retain jobs
– Increase state and local tax base
– Provide better/safer access to markets
– Provide more opportunities for employers/employees
– Improve livability and sustainability
Other State DOT Economic
Development Programs
• Iowa - Revitalize Iowa’s Sound Economy (RISE)
program
• Wisconsin – Transportation Economic Assistance
(TEA) Program
• Illinois – Economic Development program (EDP)
• Michigan – Transportation Economic Development
Fund (TEDF)
• Massachusetts – Public Works Economic
Development (PWED) program.
Mn/DOT P3 Vision: Transportation
Economic Development “initiative”
Fundamentals
•
•
•
•
•
Transportation / business development / jobs creation
Multi-agency collaborative effort (DEED, PFA, Mn/DOT)
Public Private partnerships/collaboration
Multi-modal, multi-jurisdictional
Project proposals to be evaluated on the basis of economic
development potential, level of private investment, safety,
and mobility factors.
• Complimentary loan component (ROW Acquisition)
Potential “target” industries:
•
•
•
•
•
•
•
•
Manufacturing
Technology
Warehousing / Distribution
Research and Development
Agricultural processing
Bioscience
Tourism
Mixed use, high density multi-modal development
Strategies to Identify Transportation
Economic Development Opportunities
• Public Outreach
– Formal and informal meetings to discuss potential
project ideas
• Project Screening
– Review of state and local plans/programs
Thanks very much!
• Brad Larsen
Director of Traditional and
Innovative Finance
(651) 366-4821
• Matt Shands
Transportation Economic
Development Program
Director
(651) 366-4893