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Finding the Value, Capturing it,
and Putting it to Work
Stan Wall
Partner
HR&A Advisors, Inc.
October 2015
Value Capture: Stan Wall
Transit must create value in order to capture value.
Transit
Improvement
Increased
Accessibility,...
Value Capture: Stan Wall
Value Capture Strategy Development Ownership
Joint Development New Transit Agency
Negotiated Exac...
Value Capture: Stan Wall
Value capture works where new development is feasible, with
positive land value.
FEASIBLEINFEASIB...
Value Capture: Stan Wall
Value capture requires real estate, capital markets and PPP capacity
to craft and execute strateg...
Value Capture: Stan Wall
Washington Metro 2004 NOMA Station Value Capture
• Finance/Value Capture:
– DC Government Investm...
Value Capture: Stan Wall
Washington Metro NOMA Station - Value Capture Today
New Pedestrian
Tunnel & Plaza
Tax
Increment
F...
Value Capture: Stan Wall
Washington DC Streetcar - Value Generation
No Build
Build -
Moderate
Build -
High
Extended System...
Value Capture: Stan Wall
Washington DC Streetcar - Value Capture
T – Transit policy goals
H – Affordable housing policy go...
Value Capture: Stan Wall
NJ Transit – Hudson-Bergen Light Rail West Side Extension
Bayfront
Redevelopment
Area
West Side A...
Value Capture: Stan Wall
First office towers under construction;
subway opened September 13, 2015
Aggressive rezoning for ...
Thank You
Stan Wall
Partner, HR&A Advisors, Inc.
swall@hraadvisors.com
http://www.hraadvisors.com
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Finding the Value, Capturing it, and Putting it to Work

An assessment of transit investments that enhance real estate value and development potential, and strategies to capture value for additional transit improvements.

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Finding the Value, Capturing it, and Putting it to Work

  1. 1. Finding the Value, Capturing it, and Putting it to Work Stan Wall Partner HR&A Advisors, Inc. October 2015
  2. 2. Value Capture: Stan Wall Transit must create value in order to capture value. Transit Improvement Increased Accessibility, Lower Travel Time Higher Land Values Value Capture
  3. 3. Value Capture: Stan Wall Value Capture Strategy Development Ownership Joint Development New Transit Agency Negotiated Exactions Existing/New Private Special Assessment Districts Existing/New Private Development Bonus New Private Air Rights New Transit Agency/Private Tax Increment Financing Existing/New Private Development Impact Fees New Private Transportation Utility Fees Existing Private Land Value Tax Existing/New Private Value capture typically requires new development to succeed.
  4. 4. Value Capture: Stan Wall Value capture works where new development is feasible, with positive land value. FEASIBLEINFEASIBLE COST REVENUE LOSS COST REVENUE PROFIT
  5. 5. Value Capture: Stan Wall Value capture requires real estate, capital markets and PPP capacity to craft and execute strategies. Healthy Real Estate Markets Capital Markets Public-Private Partnership Capacity
  6. 6. Value Capture: Stan Wall Washington Metro 2004 NOMA Station Value Capture • Finance/Value Capture: – DC Government Investment: $53.7 Million – Federal Contribution: $25 Million – Special Taxing District: $25 Million – Total Investment: $103.7 Million • Value Creation: – $3 Billion Private Investment – 8 Million sq ft of Mixed-Use (6 Million sq ft Office, 200,000 sq ft Retail, 1,700 Housing Units, 400 Hotel Rooms)
  7. 7. Value Capture: Stan Wall Washington Metro NOMA Station - Value Capture Today New Pedestrian Tunnel & Plaza Tax Increment Financing Special Tax Assessment Direct Contribution Infrastructure that enhances value & development Potential east of NOMA
  8. 8. Value Capture: Stan Wall Washington DC Streetcar - Value Generation No Build Build - Moderate Build - High Extended System $484 $585 $771 Priority System $2,105 $2,607 $3,097 $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 NetPresentValue($millions) $2.6 billion $3.2 billion $3.9 billion
  9. 9. Value Capture: Stan Wall Washington DC Streetcar - Value Capture T – Transit policy goals H – Affordable housing policy goals
  10. 10. Value Capture: Stan Wall NJ Transit – Hudson-Bergen Light Rail West Side Extension Bayfront Redevelopment Area West Side Ave StationPotential Bayfront Station • Cost (2011): – Capital cost: $214 million – Operating cost: $1.9 million/year • Value Creation (2011): – $160 million in value – 6 million SF residential – 640,000 SF office • Value Capture Proposed: – Negotiated Exaction
  11. 11. Value Capture: Stan Wall First office towers under construction; subway opened September 13, 2015 Aggressive rezoning for commercial and residential sites, up to 33 FAR Extension of #7 subway line and creation of new boulevard through synthetic TIF Uniform Tax Exemption Policy - property tax abatements of up to 40% for “first-move” office towers 10 Hudson Yards New York City – Hudson Yards
  12. 12. Thank You Stan Wall Partner, HR&A Advisors, Inc. swall@hraadvisors.com http://www.hraadvisors.com

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