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VALUE CAPTURE STRATEGIES 
FOR TRANSIT 
Nadine Fogarty 
Principal/Vice President 
Strategic Economics 
September 23, 2014
Q: Value Capture: Myth or Reality? 
A: Yes. 
§ Limited use of value 
capture to date 
§ Success stories thus far: 
§ St...
Steps to Develop a Value Capture Strategy 
1. Demonstrating Value 
2. Identifying Tools 
3. Estimating Revenues
Demonstrating Value
Property Value Benefits of BART 
San Francisco Bay Area, CA 
BART 
Station 
Areas 
2% 
Land Area 
Assessed Property Value ...
BART’s Residential Property Value Impacts 
§ BART contributes an estimated $17.3 billion in added 
property value to for-...
EXAMPLE: 
Downtown/Riverfront Streetcar Project 
Sacramento and West Sacramento, CA
Estimated Benefits for Property Owners 
$1.3 Billion in Additional Property Values by 2035 
Growth in Property Values Over...
Property Value Benefit by City 
Streetcar Benefit to Property Value as of 2035 
in 3 Block Area (2013 dollars) 
$14M $159M...
Identifying Tools
Value Capture Tools: 
The Devil is in the Details 
§ Availability of tools varies 
from state to state 
§ Who has the au...
EXAMPLE: 
Potential Central Subway Extension 
San Francisco, CA 
Mechanism Revenue Source Voting Requirements Nexus Requir...
Estimating Revenues
Estimated Value Capture Potential 
(Illustrative, not actual results) 
$600 
$400 
$200 
$0 
Infrastructure 
Financing Dis...
Estimated Annual Revenues 
(Illustrative, not Actual Results) 
Annual Revenues (Current $) 
Infrastructure Finance Distric...
Key Takeaways 
§ “Making the case” is key for value capture 
strategies 
§ Start with the value proposition for property...
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RV 2014: Value Capture: Myth or Reality? by Nadine Fogarty

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Value Capture: Myth or Reality?
Capturing the value of public transit investments can be a tricky business. Everybody has a vested interest. Everyone wants a piece of the pie. Value capture strategies include joint development, special assessment districts, tax increment financing and development impact fees. But how much of the value actually makes it back to the transit agency? Where have these strategies been successful and why? What does the FTA think about value capture? Explore the concepts of value capture, learn from real projects and hear the latest thinking directly from the FTA.
Moderator: David M. Levinson, Professor, Center for Transportation Studies, University of Minnesota, Minneapolis, Minnesota
Nadine Fogarty, Principal/Vice President, Strategic Economics, Berkeley, California
Dan Ngo, Program Analyst, Federal Transit Administration, US Department of Transportation, Washington, DC
John Howe, Vice President of Strategic Consulting, Parsons Brinckerhoff, Toronto, Ontario

Presentation from Rail~Volution 2014

Published in: Real Estate
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RV 2014: Value Capture: Myth or Reality? by Nadine Fogarty

  1. 1. VALUE CAPTURE STRATEGIES FOR TRANSIT Nadine Fogarty Principal/Vice President Strategic Economics September 23, 2014
  2. 2. Q: Value Capture: Myth or Reality? A: Yes. § Limited use of value capture to date § Success stories thus far: § Streetcars § Infill stations § Extensions to existing lines § Major multimodal projects
  3. 3. Steps to Develop a Value Capture Strategy 1. Demonstrating Value 2. Identifying Tools 3. Estimating Revenues
  4. 4. Demonstrating Value
  5. 5. Property Value Benefits of BART San Francisco Bay Area, CA BART Station Areas 2% Land Area Assessed Property Value BART Station Areas 13% EXAMPLE: § BART station areas generate $750 million each year in general property tax revenues for local governments; value in these areas is growing faster than the region as a whole
  6. 6. BART’s Residential Property Value Impacts § BART contributes an estimated $17.3 billion in added property value to for-sale residential properties in Alameda, Contra Costa, and San Mateo Counties 15.0% BART Price Premium Condominiums Single Family 10.4% 7.4% 1.3% 10.7% 9.6% 5.4% 4.6% Within 1/2 Mile 1/2 to 1 mile 1 to 2 miles 2 to 5 miles
  7. 7. EXAMPLE: Downtown/Riverfront Streetcar Project Sacramento and West Sacramento, CA
  8. 8. Estimated Benefits for Property Owners $1.3 Billion in Additional Property Values by 2035 Growth in Property Values Over Time Existing & New Development within 3 Block Area (2013 dollars) $9 $8 $7 $6 $5 $4 $3 $2 $1 $0 2013 2018 2023 2028 2033 Billions Baseline Streetcar Benefit (Midpoint) Streetcar Opens
  9. 9. Property Value Benefit by City Streetcar Benefit to Property Value as of 2035 in 3 Block Area (2013 dollars) $14M $159M $560M $567M $800 $600 $400 $200 $0 West Sacramento Sacramento Millions New Development Existing Development
  10. 10. Identifying Tools
  11. 11. Value Capture Tools: The Devil is in the Details § Availability of tools varies from state to state § Who has the authority to implement tools, eligible transit uses, ability to issue bonds, etc. also differs § Tools are subject to changing laws and shifting legal interpretations
  12. 12. EXAMPLE: Potential Central Subway Extension San Francisco, CA Mechanism Revenue Source Voting Requirements Nexus Requirement? Infrastructure Finance District (IFD) Increases in revenues from the existing property tax rate (tax increment) 2/3 of property owners or registered voters No Mello-Roos Community Facilities District (CFD) Additional property assessment 2/3 of property owners or registered voters No Special Assessment District Additional assessment (usually of property) 50% plus one of property owners (weighted by amount) Size of assessment must be proportional to “special benefit” received by property owners Development Impact Fee One-time fee on new development None May only be used to mitigate impacts on transit system caused by the new development
  13. 13. Estimating Revenues
  14. 14. Estimated Value Capture Potential (Illustrative, not actual results) $600 $400 $200 $0 Infrastructure Financing District Community Facilities District Special Assessment District Millions Total Estimated Revenues (Current $) Estimated Financing
  15. 15. Estimated Annual Revenues (Illustrative, not Actual Results) Annual Revenues (Current $) Infrastructure Finance District Community Facilities District Special Assessment District Source: Strategic Economics, 2014.
  16. 16. Key Takeaways § “Making the case” is key for value capture strategies § Start with the value proposition for property owners in the specific context, then consider the tools § Be realistic about market strength and development potential – timing of revenues is key for financing up front improvements
  17. 17. Thank you!

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