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The National Academies

TCRP H-57 [Completed]

Guide to Joint Development for Public Transportation Agencies

  Project Data
Funds: $400,000
Research Agency: AECOM
Principal Investigator: Dr. Alden Raine
Effective Date: 12/3/2018
Completion Date: 6/2/2020

BACKGROUND

Joint development is a value capture tool used by public transportation providers through public-private partnerships to generate revenues or achieve other development-related objectives. Joint development revenue can supplement other resources available through transit-related development of public real estate assets in the broader context of Transit Oriented Development (TOD). Many transit agencies around the country are taking a more active role in fostering TOD around their transit stations by expanding their joint development programs, while an increasing number of transit agencies of varying types have started TOD programs with specific intent to include and enhance joint development opportunities. 

Joint development projects encompass coordinated development of office, retail, and/or residential real estate, often in higher-density, mixed-use formats. For joint development to be possible, the transit agency, the municipality, or some other entity supporting the transit agency’s capital or operating program owns a portion of the real estate on which the development will occur and can make those resources available to facilitate development through sale or lease. 

While transit agencies use various sources of federal, state, and local funding in their joint development programs, many use Federal Transit Administration (FTA) grant programs to acquire property and/or develop their transit-related real estate assets. In December 2016, FTA updated its joint development guidance, previously issued in 2014, and published Circular,
FTA-C7050.1A Federal Transit Administration Guidance on Joint Development. This Circular provides guidance to FTA grant recipients on how to use FTA funds or FTA-funded real property for joint development. Since publishing its updated guidance, FTA has approved multiple joint development projects. 

With growth in the use of joint development programs, agencies in addition to FTA have updated joint development guidance and expectations, increasing their focus on value capture and related project outcomes. Based on this experience and an understanding of the complex issues involved in dealing with a wide range of joint development projects, transit agencies have increased their efforts to share best practices while recognizing a growing need for a comprehensive guide to document, expand, and improve delivery of joint development projects.

The development of real estate is a sophisticated and highly developed business process; however, it is rarely a core skill of transit agencies. Transit agencies may have real estate departments that manage and dispose of a variety of properties but not usually the development of real estate for non-transit uses, with the exception of operating retail facilities, which are often outsourced. As a result, there is a growing need to provide up-to-date research on how transit agencies and partners can engage in joint development to their best advantage, complementing and drawing on other resources, including in-house real estate staff, city staff, and /or outside consultants.

OBJECTIVE

The objective of this study is to produce a guide that facilitates and enhances the successful delivery of joint development projects. This guide may take a variety of formats but should include requirements, procedures, and tools and techniques for transit agencies that want to pursue or improve their joint development programs. The guide should serve agencies with a range of experience related to land use planning issues and/or in executing complex real estate transactions. At a minimum, the guide should include the following:
  1. A primer on joint development and its overall compatibility with and relationship to TOD as well as broader aspects of community planning;
  2. An overview of the joint development process, including but not limited to the following components: establishing program goals and objectives, evaluating asset portfolios, site selection and readiness (including market conditions), site and feasibility analysis in relation to transit facilities, working with developers, conducting developer and public outreach (including defining responsibility), design and construction reviews, and negotiating and managing direct and associated agreements;
  3. Tools and techniques that facilitate decision-making by a range of project participants, such as checklists, site-analysis matrices, cost/benefit analyses, financial models, and/or other applicable procedural models;
  4. An understanding of the requirements and expectations of the potential development team necessary to execute a joint development project with a public sector partner successfully;
  5. A targeted review of joint development project experience, including a description of lessons observed and effective practices, gleaned from a broad range of agencies with program experience (both successes and failures) and from the private development community; and
  6. Strategies for successful implementation, including local and regional approvals; navigating the federal approval process where appropriate; seeking FTA funding as part of a capital grants program; developing cost-sharing, funding and financing plans; and consideration of opportunities for working with other government agencies with similar joint development potential.
Note: For the purposes of this study, the following definition of “Joint Development” should apply: Joint development is the coordinated improvement of a transit system and the surrounding real estate managed cooperatively between the transit agency and real estate developers. Transit agencies actively participate in joint development by contributing either property or funding, and transit agencies also benefit from joint development by enjoying system improvements and/or by receiving a share of the development revenues (adapted from FTA).

RESEARCH PLAN              

In general, the research plan included the following: Phase I of the study includes an extensive library of previous TCRP, NCHRP, and other studies and addresses the following as the fundamental resources for the Guide to Joint Development prepared in Phase II:
  1. A review of existing guidance, regulations, and experience;
  2. A review of literature from industry associations, academia, and other relevant sources;
  3. Identifying and extracting lessons observed from relevant U.S. and international experience;
  4. An assessment of the organizational structure managing transit-related real estate and development programs, and how that structure interacts with the external, private development community;
  5. Input from key individuals involved in the joint development process selected from federal agencies, transit agencies, municipalities, public and private developers, the finance community, and other relevant experts; and
  6. A review of documents related to specific joint development projects.

Final deliverables include the following:
  1. A guide for joint development, including the components outlined in the objective of this study, with presentation that incorporates graphics and other useful visualizations;
  2. A final report that documents the entire research effort;
  3. An executive summary as a stand-alone document suitable for wide distribution that outlines the research findings and recommendations;
  4. A presentation, format to be determined (e.g., a Microsoft® PowerPoint, video, other), that simply and concisely explains the components and use of the guide; and
  5. A stand-alone technical memorandum entitled, “Implementation of Research Findings and Products.” See Special Note D.
Status: A Prepublication Version is available.  The final version should be available in spring, 2021.

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