September 24, 2013
www.forestcity.net
Innovative Finance for Passenger Rail
through Transportation Oriented
Development
presented by
James H. Richardson, III, Senior Vice President
Forest City Enterprises
Last Time We Met @ SCORT in
Jacksonville, FL 2010…
• $11 billion to fund the High Speed Rail Vision
• Multitudes of passenger rail projects were in planning
• We discussed value capture ideas as a way to provide
more funding options
Nearly 3 years later in Columbus,
OH…
• ‘ObamaRail’ vision was killed in the US House of
Representatives – Rail grants to states are dead
• PRIIA 209 is forcing higher intercity passenger subsidies
on the States
• States are increasingly committed to urban and intercity
rail expansion projects—but lack funding
Innovative Finance in 2013 – A
Program
• The country should commit to a national incremental
program to achieve an urban and intercity High
Performance Passenger Rail Network
 It needs bipartisan support!
• A clear funding program should be a part of that initiative.
We suggest:
1)Limited grants to the states be revived
2)Innovative Finance through TIFIA/RRIF
3)A Major New Value Capture Initiative
A Robust Value Capture
Initiative is the Key
• HR 1544, introduced by Republican Transit
Subcommittee Chairman Tom Petri and Rail
Subcommittee Democrat Bill Lipinski is the bill to get
behind.
What is HR 1544?
• It is bipartisan and sponsored by senior Members of
Congress who know transportation
• It will generate substantial and predictable cash flows to
passenger rail projects on commuter routes, streetcar
lines, state intercity passenger rail corridors and public
interest freight projects that will benefit communities
along rail lines
• We know it works! It is based on the P3 models
unfolding in Denver and Atlanta today
What does HR 1544 Do?
• The Secretary of Transportation establishes a
National Transportation Oriented Development
Initiative
– A national Development Planning Advisor will work with a DOT
coordinating committee to set criteria for TOD construction
projects that will contribute to rail corridor development funds.
• The program is discretionary  States and local
authorities petition the Secretary to establish TOD
areas
How does 1544 Work?
• State/Local TOD Authorities will submit qualified
projects for federal incentives
• The TOD Authority with Local neutral Planning
Developers will establish guidelines for community
planning
• At state and local levels the Authorities will create
Assessment Districts and Rail Development Funds
• Qualified commercial development projects that provide
revenues to rail corridor infrastructure and operations
will be eligible for TIFIA/RRIF financing
Why HR 1544?
• HR 1544 is the only option for innovative finance that will
provide a significant stream of revenue to expand
passenger rail service, streetcar projects, bus operations
and bicycle lanes
• Both the Atlanta Multi-Modal Passenger Terminal and
the Denver Union Station projects are living examples of
how H.R. 1544 can benefit the entire nation
How about some examples?
IMPORTANCE OF NATIONAL
TRANSIT ORIENTED DEVELOPMENT
Union Station – Denver, CO
Transbay Terminal – San Francisco, CA
TRANSPORTATION HUBS
WHAT IS THE GEORGIA MMPT?
The Georgia MultiModal Passenger Terminal, or MMPT, will bring together various ground and rail transit
services in a centralized downtown Atlanta location. It will provide passengers with greater connectivity
options to the various transit services that exist today, and serve as a hub for future transit.
The MMPT will also be a catalyst for overall development in metro Atlanta while creating jobs,
connecting neighborhoods and facilitating economic growth in the region.
INNOVATIVE P3 PROCESS
Development
Environmental
Vision
Scoping
Concept Development
Alternatives
Refinement
Impact Assessment
Implementation Plan
Approval
This process is envisioned in HR 1544 and is being implemented for the Georgia
MMPT planning, resulting in time savings (3+ years), cost savings, as well as a
more robust, market tested plan.
5 Points
CNN
Philips
Deere Lofts
Elliott St Pub
Fire Station
THE GEORGIA MMPT STUDY AREA
(ATLANTA, GA)
ONE PROJECT – MULTIPLE GOALS
 TRANSIT HUB / AFFORDABLE MOBILITY
 TRANSPORTATION EFFICIENCY
 REAL ESTATE CATALYST
 ECONOMIC ENGINE
 RETURN ON PUBLIC & PRIVATE INVESTMENT $$$
 TRANSIT HUB
 AFFORDABLE MOBILITY
Trains
Pedestrians
Streetcars
Bus
 TRANSPORTATION EFFICIENCY
Philips
COP
Mitchell
MMPT
5 Points
Elliott St. Pub
Nelson
Deere Lofts
Peters
CONCEPTUAL ROADWAY NETWORK
 REAL ESTATE CATALYST
VALUE CREATION THROUGH ECONOMIC IMPACTS
(GEORGIA MMPT EXAMPLE)
Type of Impact
Jobs
Impact - Taxes / year
66,000 Full Time
25,700 Temporary
SF Development
11.6 million SF
State Income Tax
$ 80.3 million / year
Sales Tax
Revenues
$ 11.9 million / year
Property Taxes
$ 53.7 million / year
Hotel Tax
$ 12.7 million / year
 ECONOMIC ENGINE
HR 1544 can help
realize this faster
and with benefits to
local/national
government
These and other
taxes/fees generate
$170+ million
per year to public
entities
Benefits occur w/o
raising taxes
RRIF EXPANSION TO REAL ESTATE SECURED LOANS
 RETURN ON PUBLIC &
11.8 million SF of
Development
PRIVATE INVESTMENT $
Approximately
$2.9 billion in Real
Estate at cost
Need $1.7 billion in
loans @ 60% LTV
Generates $26 million /
year in RRIF expansion
fees
HELPS PAY FOR STATION CONSTRUCTION AND
MAINTENANCE WITHOUT
RAISING TAXES
Innovation in Progress
• Let me show you a quick video on the
Georgia Multimodal Passenger Terminal…
We urge AASHTO to Study HR 1544
carefully, and become part of the
conversation on Transportation Oriented
Development Financing
Thank you!
Questions?