An FTA Update on
Joint Development
Kate Mattice
Deputy Associate Administrator
Office of Budget and Policy
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
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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”
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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
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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.
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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.
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1. It must enhance economic development or incorporate
private investment.
• 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)
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2. It must enhance effectiveness of transit and be physically or functionally
related to transit, or establish new/enhanced coordination with other
modes.
• 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.
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3. It must provide a fair share of revenue for transit use.
• “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.
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4. It must provide that occupants pay fair share of facility costs.
• 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.
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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
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Activities Eligible for FTA Funds
 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
 Parking that links to transit use
 Construction of new or
improvement to intermodal
transfer facility or transit mall
 Facility that incorporates
community services such as
daycare or health care
 Construction of commercial
space
 FTA funds cannot outfit the space
 Safety and security
equipment/facilities
 Project development activities
 Professional services
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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.
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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.
2.
3.
4.
FTA must approve of any change in use (or disposition) of an asset
before the end of its useful life.
The change in use from parking to joint development must benefit
public transportation. (i.e., higher ridership)
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.
A change in use from parking to joint development may trigger the
need for additional National Environmental Policy Act (NEPA)
analysis.
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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
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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
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Other Cross-Cutting
Federal Requirements
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Planning
Environmental (NEPA)
Procurement
Leases and conveyances
Civil rights
Labor protection
Other
All covered in the proposed circular
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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.
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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!
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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
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Questions/Comments?
• Contact your regional office
• FTA’s Website:
– www.fta.dot.gov/livability
• Legal Questions:
– Jayme Blakesley
jayme.blakesley@dot.gov
• Policy Questions:
– Sharon Pugh
Sharon.pugh@dot.gov
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