Innovative Finance for Passenger Rail through Transportation Oriented Development

1. September 24, 2013 www.forestcity.net Innovative Finance for Passenger Rail through Transportation Oriented Development presented by James H. Richardson, III, Senior Vice President Forest City Enterprises

2. Last Time We Met @ SCORT in Jacksonville, FL 2010… • $11 billion to fund the High Speed Rail Vision • Multitudes of passenger rail projects were in planning • We discussed value capture ideasas a way to provide more funding options

3. Nearly 3 years later in Columbus, OH… • ‘ObamaRail’ vision was killed in the US House of Representatives – Rail grants to states are dead • PRIIA 209 is forcing higher intercity passenger subsidies on the States • States are increasingly committed to urban and intercity rail expansion projects—but lack funding

4. Innovative Finance in 2013 – A Program • The country should commit to a national incremental program to achieve an urban and intercity High Performance Passenger RailNetwork  It needs bipartisan support! • A clear funding program should be a part of that initiative. We suggest: • Limited grants to the states be revived • Innovative Finance through TIFIA/RRIF • A Major New Value Capture Initiative

5. A Robust Value Capture Initiative is the Key • HR 1544, introduced by Republican Transit Subcommittee Chairman Tom Petri and Rail Subcommittee Democrat Bill Lipinski is the bill to get behind.

6. What is HR 1544? • It is bipartisan and sponsored by senior Members of Congress who know transportation • It will generate substantial and predictable cash flows to passenger rail projects on commuter routes, streetcar lines, state intercity passenger rail corridors and public interest freight projects that will benefit communities along rail lines • We know it works! It is based on the P3 models unfolding in Denver and Atlanta today

7. What does HR 1544 Do? • The Secretary of Transportation establishes a National Transportation Oriented Development Initiative • A national Development Planning Advisor will work with a DOT coordinating committee to set criteria for TOD construction projects that will contribute to rail corridor development funds. • The program is discretionaryStates and local authorities petition the Secretary to establish TOD areas

8. How does 1544 Work? • State/Local TOD Authorities will submit qualified projects for federal incentives • The TOD Authority with Local neutral Planning Developers will establish guidelines for community planning • At state and local levels the Authorities will create Assessment Districts and Rail Development Funds • Qualified commercial development projects that provide revenues to rail corridor infrastructure and operations will be eligible for TIFIA/RRIF financing

9. Why HR 1544? • HR 1544 is the only option for innovative finance that will provide a significant stream of revenue to expand passenger rail service, streetcar projects, bus operations and bicycle lanes • Both the Atlanta Multi-Modal Passenger Terminal and the Denver Union Station projects are living examples of how H.R. 1544 can benefit the entire nation

10. How about some examples?

11. IMPORTANCE OF NATIONAL TRANSIT ORIENTED DEVELOPMENT

12. Transbay Terminal – San Francisco, CA Union Station – Denver, CO TRANSPORTATION HUBS

13. WHAT IS THE GEORGIA MMPT? The Georgia MultiModal Passenger Terminal, or MMPT, will bring together various ground and rail transit services in a centralized downtown Atlanta location. It will provide passengers with greater connectivity options to the various transit services that exist today, and serve as a hub for future transit. • The MMPT will also be a catalyst for overall development in metro Atlanta while creating jobs, connecting neighborhoods and facilitating economic growth in the region.

14. INNOVATIVE P3 PROCESS Development Environmental This process is envisioned in HR 1544 and is being implemented for the Georgia MMPT planning, resulting in time savings (3+ years), cost savings, as well as a more robust, market tested plan.

15. 5 Points CNN Philips Deere Lofts Elliott St Pub Fire Station The GEORGIA MMPT Study Area (Atlanta, GA)

16. ONE PROJECT – MULTIPLE GOALS • TRANSIT HUB / AFFORDABLE MOBILITY • TRANSPORTATION EFFICIENCY • REAL ESTATE CATALYST • ECONOMIC ENGINE • RETURN ON PUBLIC & PRIVATE INVESTMENT $$$

17. TRANSIT HUB

18. AFFORDABLE MOBILITY Trains Streetcars Pedestrians Bus

19. TRANSPORTATION EFFICIENCY Philips MMPT COP 5 Points Mitchell Elliott St. Pub Nelson Deere Lofts Peters Conceptual Roadway Network

20. REAL ESTATE CATALYST

21. VALUE CREATION Through Economic Impacts(Georgia MMPT example) HR 1544 can help realize this faster and with benefits to local/national government These and other taxes/fees generate $170+ million per year to public entities Benefits occur w/o raising taxes • ECONOMIC ENGINE

22. RRIF EXPANSION TO REAL ESTATE SECURED LOANS • RETURN ON PUBLIC & PRIVATE INVESTMENT $ 11.8 million SF of Development Approximately $2.9 billion in Real Estate at cost Need $1.7 billion in loans @ 60% LTV Generates $26 million / year in RRIF expansion fees HELPS PAY FOR STATION CONSTRUCTION AND MAINTENANCE WITHOUT RAISING TAXES

23. Innovation in Progress • Let me show you a quick video on the Georgia Multimodal Passenger Terminal…

24. We urge AASHTO to Study HR 1544 carefully, and become part of the conversation on Transportation Oriented Development FinancingThank you!Questions?