This document discusses potential partnerships and funding strategies for developing the Cotton Belt rail project in the Dallas-Fort Worth region. It proposes establishing a special district to oversee the project and share tax revenue increases from development around stations. Key phases discussed are analyzing value capture opportunities, issuing a request for proposals, negotiating agreements, and establishing governance structures. The analysis estimates the funding gap could be reduced to $151-500 million through tax increment financing, special assessments, fare revenue, advertising, and other sources.

1. The Cotton Belt
The New Economy
New Partnerships

2. The Cotton Belt
13 Cities, 3 Counties, DFW Airport

3. DART Availability Payments Trending Down

4. • Shifting to development patterns driving
transportation, rather than the opposite
$50 Billion in highways removed from 2030 Plan in
updating 2035 Long Range Plan

5. Value Capture Opportunity (Lost)
Arlington,
Virginia
31% of
taxbase
In 7% land
area

8. • Phase 1 (completed)
– Analyze the ability to narrow the gap through value
capture to repay a private investment group
• Phase 2 – Unsolicited Proposal/RFP (SB 1048)
• Phase 3 – 18-month exclusive period
– Construct and commit revenue streams to maximize
tax exempt debt and to repay investors for financing
balance made up by private equity/debt
– Go/No-Go
• Final Phase – Finance/Design/Build/Maintain/Operate

10. Courtesy Russ Preston

11. Courtesy Russ Preston

12. We examined almost 9,008 acres, parcel by parcel, not
relying on arbitrary walking radii

15. Bush/Central TOD

16. Conventional zoning was stunting development

17. New zoning
Form-Based Code

18. Tying together zoning and complete streets
TOD Street
Type ‘A’

19. 5+ Million Square Feet
of walkable urbanism

20. Share the growing pie – Tax Increment Finance
Appraised Value
Value After
Captured Termination
Tax Increment
Appraised
Value
Baseline Property Value
Creation Time Termination

21. Fiscal impact of build out
• Value capture potential for IFI just from 57 acres

22. Creating 13 City, 3 Transit Agency Special District

23. Share the growing pie – Special Assessment Subdistricts

24. 7% Discount; 2.39% Inflation; 35% Local Tax Share
Present Value ($Millions)
Cash/Current Commitments $342.0
New Starts (The T) $305.0
Sales Tax
Capital Funding Gap Grapevine (@ 3/8 cent sales tax)
4B (@ 10% of collections)
$123.8
$40.1
Analysis DART Contribution (PV of sales tax starting yr 2036) $214.3
Fare box (@ $0.14 / mile) $191.8
Gap reduced down to
Non-Geographic
$151- $500 Million Naming Rights $28.8
Advertising $30.8
on a $2+ Billion Fiber Right-of-Way $89.3
Project Tax Base Value Capture
City Property Tax $224.2
County Property $80.4
(Analysis does not include Sales Tax
Hotel Tax
$22.3
$28.5
non-tax exempt cost of Special District $55.3
money) Land Value Appreciation $262.3
Total Revenue $2,039.0
Capital Costs (orig. DART cost + 2% financing cost) $1,573.4
Operating Cost (20% savings – alt. delivery) $617.1
Total Costs $2,190.5
Difference ($Millions) -$151.6

25. Cotton Belt Summary Schedule
Dec 2012 –
Jan 2013 Special District
Pre-Proposal Phase Established
Procurement
responsibilities
• Define business Unsolicited transferred to District
approach Proposal Apr-May
• Stakeholder Submittal
communication
2013
• Consensus building RFP Phase
• Define procurement Jul-Sep
strategy • Receive unsolicited
2013
• Execute inter-local Preliminary May-Aug
proposal
agreements • Validate proposal Agreement 2014
• Develop procurement
assumptions
processes, policies & • Prepare RFP
Pre-CDA Phase
procedures • Issue RFP
• Confirm legislative • Validate proposal assumptions Comp Dev
• Receive competing
authority to receive •Land use planning/TIF 2016-
proposals Agreement
proposal • Issue Preliminary
• Negotiate local agreements 2017
• Define governance • Environmental approvals
Development
structure
Agreement/Interim Award
• Financial agreements Project Delivery
• Develop governance • Establish governance structure
framework • Preliminary engineering & design • Finalize overall work program
• Define legislative • Negotiate and execute final CDA • Validate proposal assumptions Operation
requirements • Final engineering & design
• Initiate legislative • Execute D/B contract
processes • Execute O&M contract
• Develop and finalize • Execute EPC
proposal • Deliver project
• Begin Service

26. Key Consideration Benchmarks
• Preparation
 Regional Planning and Initial Framing
 Local Planning and Reviews
 Innovative Financing Analysis
• Enablement
 Initiate NCTCOG as Responsible Governmental Entity (RGE)
to support assessment of private sector proposals
– Initiate local support to seek state legislation that enables future
establishment of a regional Municipal Management District
(MMD) to organize revenue and contractual obligations
• Actions
– Consider and act on local funding support considerations:
• TIF Support
• Special District Support
– Final Agreement with Private Team

27. www.cnu21.org
www.gatewayplanning.com