Guide to Joint Development for Public Transportation Agencies (2021)

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1   1.1 About This Guide TCRP Research Report 224: Guide to Joint Development for Public Transportation Agencies (henceforth, referred to as the guide) was com- missioned by TRB through its TCRP. The guide’s overarching purpose is to expand the successful practice of joint development (JD) in North American transit systems—in terms of the volume and variety of projects undertaken, the diversity of transit agencies participating, and the quality of outcomes achieved. The guide’s primary audience consists of transit agencies in the United States. It is aimed particularly at agency leadership and at pro- fessional staff working as practitioners in JD and the more encom- passing field of transit-oriented development (TOD). Transit agencies in Canada may also find the guide helpful and relevant, although its institu- tional elements are written from a U.S. perspective. The guide will be of interest to transit agencies regardless of their size or their prior experience with JD. It is not written solely or primarily for larger rail transit agencies with robust JD experience; on the contrary, while the research team gathered a treasure trove of insight, information, and lessons learned from such agencies, the intended beneficiaries include transit systems spanning the full range of geography, technology, and ridership, with emphasis on those in the early stages of JD activity or still contemplating it. Important secondary audiences include local and regional governments, especially those involved in planning, land use, economic development, and housing; and, on the private side, developers, lenders, investors, foundations, community development corporations, and other entities, both for-profit and non-profit, that are currently or potentially involved in JD. The guide reflects the knowledge and experience of the research team and the TCRP project panel; an extensive program of outreach to transit agencies, local and regional government, and the development community; and a wide-ranging literature review. 1.2 Navigating the Guide The guide consists of an executive summary and nine chapters. Chapter 1 sets the stage for the rest of the document. It includes: • An outline of the guide’s structure, contents, and navigational features (Section 1.2); • The definition and purpose of JD (Section 1.3); C H A P T E R 1 Introduction Abbreviations and Acronyms The following are used interchangeably with their written-out terms: JD: joint development TOD: transit-oriented development TOD/JD: policies, programs, or activities that involve both TOD and JD FTA: Federal Transit Administration FTA/JD: FTA-Assisted Joint Development, as defined by FTA

2 Guide to Joint Development for Public Transportation Agencies • An overview of the research effort underlying the guide (Section 1.4); • A roadmap to the literature on JD (Section 1.5); and • An introduction to JD best practices (summarized in Section 1.6, these practices are used as an organizing framework in this report). The core of the guide is found in Chapters 2 through 8. These are built around two broad themes: • The sequential “nuts and bolts” stages of JD planning and implementation; and • The strategies for advancing the state of the JD practice. Nuts and Bolts: Stages of the Process Chapters 2 through 5 address the JD process as a series of sequential stages. These are visual- ized in Figure 1, in which the forward arrow shape represents the sequential flow culminating in project execution. To help orient the reader, each of these four chapter headings includes the graphic in Figure 1, with the chapter in question highlighted and the others faded. The four include: • Chapter 2: Creating a JD Program; • Chapter 3: Planning a JD Project; • Chapter 4: Choosing a Developer; and • Chapter 5: Executing a JD Project, including steps that occur after construction and occupancy. The State of the Joint Development Practice By contrast, Chapters 6 through 8 address strategies that cut across the stages of the JD pro- cess. These are organized by topical areas, summarized in Figure 2. Here again, to orient the reader, each of these three chapter headings includes this graphic, with the chapter in question highlighted. • Chapter 6 addresses the role of FTA in JD. • Chapter 7 explains how to manage the economics of JD transactions—particularly land value and financial return—to better define and achieve transit agency goals, and, as part of that Chapter 2: Creating a Joint Development Program Chapter 3: Planning a Joint Development Project Chapter 4: Choosing a Developer Chapter 5: Executing a Joint Development Project Figure 1. Chapters 2 through 5: stages of the joint development process. Land value Parking Affordable housing Economics of Joint Development Chapter 7 Chapter 6 Hub stations Sister public agencies Adjacent owners JD and value capture New corridors Non-station assets Chapter 8 Joint Development Horizon Joint Development and FTA Figure 2. Chapters 6 through 8: crosscutting strategies.

Introduction 3   challenge, how to tackle the complex, high-profile issues of parking and affordable housing, which have emerged as primary economic and policy drivers in numerous JD projects. • Chapter 8 explores how the JD horizon may be expanded, exploring several emerging transactional models. • Chapter 9 summarizes how transit agencies can define the desired outcomes of their JD activities—both financial and otherwise—and how they can evaluate whether actual outcomes are aligned with those goals. Appendices and References The guide emphasizes practice rather than research narrative. Detailed descriptions of the team’s underlying research findings are available in a series of nine appendices—Appendices A to I. These are summarized at the end of this guide, and the appendices themselves are provided in TCRP Web-Only Document 73, downloadable from the TRB website. The guide is designed to be easily navigable through hyperlink cross- references. These direct the reader to locations within the guide and to external sources. The internal hyperlinks are a key feature. While the organization of the guide, described above, keeps each body of subject matter together to the extent possible, individual topics unavoidably enter the discussion in multiple places. The internal hyperlinks help the reader follow the thread of each such topic. Finally, the guide includes an original glossary of over 100 technical terms, defined not only by general usage but in their particular relevance to JD. The first time each of these terms appears in the guide, it is hyper- linked to its definition in the glossary. 1.3 Definition and Purpose Definition and Typology As a first step, the guide seeks to establish a descriptive, practice-based definition of JD that can be widely embraced by those involved in it. Notwithstanding the breadth and depth of on-going JD activity, a common vocabulary for identifying and describing JD has only partly crystallized in the transit community, let alone the local government and private develop- ment sectors. The definition of JD underlying this guide is as follows: Glossary An extensive glossary of technical terms appears at the end of the guide. Hyperlinks The guide makes extensive use of embedded hyperlinks, which are high- lighted in gray. These direct the reader to related sections of the guide and to external sources and materials. Joint development is real estate development that occurs on transit agency property or through some other type of development transaction to which the transit agency is a party. Joint development is physically or functionally related to a transit facility, and it often involves the coordinated improvement of a transit facility and the affected real property. Transit agencies actively participate in joint development, generally by contributing property or funding; they benefit from joint development by deriving revenues, increased ridership, or transit improvements.

4 Guide to Joint Development for Public Transportation Agencies The terms of this definition are meant to be interpreted broadly, encompassing a range of transaction types. For example, development revenues may be in-cash or in-kind; transit improvements may refer to capital or operating improvements at a station, a cluster of stations, or a larger portion of the system. This broad, transaction-based approach recognizes that while JD often occurs on tran- sit agency property at or near a station, it is not definitionally limited to such properties. As explained below, a variety of transaction models is emerging in real-world practice involving other ownership and locational patterns. Moreover, in street-running bus, bus rapid transit, and streetcar corridors, a transit agency may own little if any off-street real estate—but need not assume that it is precluded from JD opportunities. The typology in Figure 3 helps illustrate the breadth of our JD definition. Its three columns are summarized below. They are not mutually exclusive; a project or cluster of projects could include aspects of two or three columns. • The first column consists of JD projects in which the real estate development itself occurs on transit agency property at or near a station. This is the most common type of JD, and it can involve different types of real estate assets owned by a transit agency: surface park & ride lots or construction staging areas, other land parcels, air rights, interior commercial space within station buildings, or a combination of these. By definition, these projects involve a transaction between the transit agency and a developer, chosen in most but not all cases through a competi- tive process initiated by the agency. The guide uses the term on-site JD as a short-hand name for this broad category (see Figure 4). • The second column comprises projects where the real estate development occurs in the vicinity of a station but not on transit property. Many such projects meet our definition of JD because there is a transaction to which the transit agency is a party, the development is coordinated with transit, and the transit agency reaps quantifiable benefits. Such off-site JD projects may involve adjacent developers paying for a direct connection to the station, a station upgrade, or, in a number of recent cases, a whole new infill station built from scratch. There are also diverse opportunities for transit agencies to partner with other public jurisdictions that own land around a station or along a bus or streetcar route (see Figure 4). • JD can also occur on transit agency property that is not part of a station facility. Examples include development at maintenance or fueling facilities, bus park & ride lots, utility plants, and agency headquarters or police stations. Some projects of this type happen to be located Figure 3. Joint development typology.

Introduction 5   near a station, or are served by nearby bus routes, and thus can incorporate TOD planning principles. Others are not well served by transit and thus may not be susceptible to TOD principles but still meet our transactional definition of JD. The off-site and non-station forms of JD are among the innovative practices discussed in Chapter 8. Expanding the concept of JD to include off-site and non-station area opportunities is one of the principal ways in which this guide seeks to advance the state of the practice. Joint Development in Context The scope of JD as defined in this guide is broader than the FTA’s JD program. The latter includes projects where FTA has a real property interest or helps fund JD components. It is a goal of FTA policy and of this guide to expand the use of the FTA/JD mechanism, addressed in detail in Chapter 6. Some transit agencies have had FTA financial assistance in most or all of their capital projects, and FTA is therefore involved as a matter of course in their JD activities. But there is a great deal of JD in which FTA has no property or funding interest and is simply not involved. FTA jurisdiction is therefore not a defining criterion of JD in the United States; rather, it is a subset of it. At the same time, JD should not be defined so broadly that it loses its distinctiveness as a transaction-based concept. Except for some of the non-station asset development noted above, JD is a subset of station area development, narrower in concept and footprint. These subset relationships are illustrated in Figure 5. Why Undertake Joint Development In its survey of transit agencies, the research team asked why they are attracted to JD in the first place. Three over-arching reasons emerged, as they did in much of the recent literature that the team reviewed. The first two reasons are business-related; the third is a nexus of land use- related outcomes: • To raise revenue from the JD transaction itself, thus monetizing an agency real property asset to help fund capital improvements and on-going operations; Figure 4. Joint development, on-site and off-site.

6 Guide to Joint Development for Public Transportation Agencies • To increase ridership and, consequently, farebox revenue; and • To promote TOD as a strategy for placemaking, equity, sustainability, and smart growth. JD helps transit agencies fulfill the civic responsibility, embraced by many, to advance community and regional goals. It is a foundational principle of this guide that station area JD projects (and station area development as a whole) should be not merely transit-adjacent, but truly transit-oriented. This distinction has been understood in the TOD community for two decades.1 By sponsoring and participating in JD projects that embody TOD principles, transit agencies can set the standard for station areas and corridors. There is a business dimension as well: more TOD means more ridership and revenue. To the extent that JD promotes a broader TOD out- come, the transit agency benefits at the farebox both directly and indirectly. The role of TOD as an organizing principle for JD is a recurrent theme in the chapters that follow. In Chapter 2, there are detailed discussions of agency organization models that can advance TOD and JD in tandem, and of TOD planning and design standards that should be applied to station area JD projects. 1.4 Research Effort The research team conducted three sets of surveys with the primary JD stakeholders: transit agencies, local and regional government jurisdictions, and private sector companies (developers, lenders, and investors). These were conducted in 2019, and the survey instruments are available for review in Appendix A. The transit agencies, government entities, and private companies are listed below in Table 1 and Table 2. The three sets of research findings are presented in the Report on Survey of Transit Agencies (Appendix B), the Report on Survey of Private Sector Companies (Appendix C), and the Report on Survey of Local and Regional Governments (Appendix D). These findings are reflected throughout this guide. Transit agencies. The team surveyed 32 transit agencies, 30 in the United States and two in Canada. They were chosen to represent a diverse cross-section of the transit community— different regions; different modes of transit service, including seven agencies that run bus-only or bus- and streetcar-only systems; legacy systems and newer ones; agencies with established JD programs and others just now becoming involved in JD projects. (Of the 32 agencies, 18 were interviewed in person or by teleconference; the remaining 14 responded in writing to an identical questionnaire.) The agencies were forthcoming in addressing successful JD experiences as well as cautionary lessons learned. JD: FTA Jurisdiction Figure 5. Joint development in context.

Introduction 7   Local and Regional Government. Eighteen local and regional entities were interviewed in person or by teleconference. These entities were chosen to represent a diversity of geography, size, and jurisdictional types, so as to identify best practices and institutional relationships that a range of jurisdictions might adapt to their circumstances. Eleven of the 18 are municipal planning and/or community development departments; three are multi-purpose planning and development authorities; two are counties involved in transit and TOD; and two are Metropolitan Planning Organizations (MPOs). Private sector. Seventeen private companies were interviewed. All are based in the United States and engaged in TOD; most are involved in one or more JD projects. The companies were chosen to represent a cross-section of experience—developers, investors, and companies that do both; companies that focus on market rate housing, affordable housing, or mixed-use development; smaller regional developers and national developers. The list includes privately held companies, three real estate investment trusts (REITs), two non-profit developers, and a national real estate firm that advises both transit agencies and developers in complex JD projects. Most of the local and regional government entities are located in markets whose transit agencies were also surveyed as part of this effort. All the private companies interviewed have worked in at least one transit system represented in the survey. These overlaps allowed the research Transit Agencies Interviewed Transit Agencies Completing Questionnaire Amtrak Central Florida Regional Transp. Authority (Orlando) Capital Metropolitan Transportation Authority (Austin) Central Ohio Transit Authority (Columbus) Central Puget Sound Regional Transit Authority Chicago Transit Authority Dallas Area Rapid Transit Indianapolis Public Transportation Corporation Denver Regional Transportation District Interurban Transit Partnership (Grand Rapids) Greater Cleveland Regional Transit Authority Kansas City Area Transportation Authority King County Metro Transit Department Memphis Area Transit Authority Los Angeles County Metropolitan Transportation Authority Metrolinx (Greater Toronto-Hamilton) Maryland Transit Administration Niagara Frontier Transportation Authority (Buffalo) Massachusetts Bay Transportation Authority (Boston) Port Authority of Allegheny County (Pittsburgh) Metro Transit (Twin Cities) Santa Clara Valley Transportation Authority (San Jose) Metropolitan Atlanta Rapid Transit Authority South Coast BC Transportation Authority (Vancouver) Miami-Dade Transit Tri-County Metropolitan Transportation District (Portland) New Jersey Transit Utah Transit Authority Peninsula Corridor Joint Powers Board (Caltrain) San Diego Metropolitan Transit System San Francisco Bay Area Rapid Transit District Washington Metropolitan Area Transit Authority Note: Interviews and written surveys were conducted in 2019 by the TCRP H-57 research team. Table 1. Transit agencies surveyed.

8 Guide to Joint Development for Public Transportation Agencies team to compare transit agency perspectives to those of their local government counterparts as well as private developers. The map in Figure 6 shows the geographic reach of the surveys, as well as the extent of regional overlap among transit, local government, and private sector respondents. Local and Regional Government Private Sector Companies Atlanta Regional Commission (MPO) AIMCO (REIT) Boston Planning and Development Agency Brandywine Realty Trust (REIT) Carrollton, TX, Planning Department Bridge Housing Corporation (non-profit) Charlotte, NC, Planning Department Columbia Ventures LLC Denver, CO, City & County Planning Enterprise Community Partners (non-profit) Hennepin County, MN Federal Realty Investment Trust (REIT) Hayward, CA, Planning Department Gerding Edlen Kansas City, MO, Planning Department HYM Investment Group LLC Los Angeles, CA, Planning Department Integral Group LLC Montgomery County, MD Jones Lang LaSalle LP, Inc. Northwest Indiana Regional Development Authority LCOR Oregon Metro (MPO) Lowe Enterprises Pasadena, CA, Planning Department McCormack Baron Salazar Phoenix, AZ, Planning Department Pennrose Pittsburgh Urban Redevelopment Authority RMS Investment Corporation Quincy, MA, Planning Department Related California San Diego, CA, Planning Department Trinity Financial LLC San Jose, CA, Planning Department Note: Interviews and written surveys were conducted in 2019 by the TCRP H-57 research team. Table 2. Local and regional governments and private companies interviewed. A note on the pandemic. The research was undertaken in 2019, before the advent of COVID-19. The guide was written in 2020, as the pandemic was decimating every aspect of American life. While it is likely that real estate markets and transit ridership will take time to recover, the research team and the project panel believe that the findings and recommendations presented in the guide will transcend current public health issues. 1.5 Roadmap of the Literature The reader is encouraged to explore written and on-line materials beyond this guide and its technical appendices. To that end, the research team surveyed the relevant literature, not only to gain information for use in preparing the guide but to provide readers with a roadmap for their own use. A particular goal was to survey and map the literature through the eyes of the transit agency practitioner. Practitioners need to understand not only the content of the JD literature, but how to define that literature and where to look for it. The research team found that JD literature is loosely defined and overlapping, as illustrated in Figure 7, with the much broader and more inclusive body of work on TOD in general, as well as more specific bodies of literature on value capture, parking, and affordable housing. Moreover,

Introduction 9   useful literature on JD is found not only in academic and other peer-reviewed research, but in popular and governmental forums as well: • Policy documents issued by public agencies, particularly FTA and individual transit agen- cies; and • Case studies published or presented by practitioners. The literature review was therefore developed as a package consisting of four parts; together, these provide a roadmap of relevant work and an overview of its content. • A traditional Literature Review (Appendix E), consisting of an annotated bibliography of 40 academic or other peer-reviewed sources published since 2002 and a narrative review of Figure 6. Distribution of transit, government, and private sector surveys. Figure 7. Locating joint development literature.

10 Guide to Joint Development for Public Transportation Agencies those sources by topic. The year 2002 was chosen as the starting point because a comprehen- sive literature review on TOD and “transit joint development” was published by TRB in that year (Cervero et al., 2002).2 • FTA Joint Development Policy and Its Evolution (Appendix F). This summarizes the key features of the FTA’s JD policy, tracing its evolution from initial issuance in 1997 through subsequent versions issued in 1998, 2007, 2014, 2016, and the current official guidance, issued in 2020. • Review of Transit Agency Joint Development Policies (Appendix G). This is a compara- tive review of the official JD policies published by 10 U.S. transit agencies, which together comprise a principal source of guidance for agencies considering adopting or amending such policies. The 10 agency policies are summarized and compared across 11 different characteristics. • Index to Practitioner Case Studies (Appendix H). This includes a description of two on-line TOD newsletters that are rich in JD-related case study material, and a bibliography of selected individual case studies published on the websites of FTA, FHWA, the Urban Land Institute, the American Public Transportation Association, and Rail∼Volution. 1.6 Best Practices Throughout the guide, the reader will find an explicit focus on best practices. Best practices are those that have proven effective in real-world application, minimize risk to transit agency interests, advance widely accepted JD goals, and are consistent with good public policy. Identifying best practices involves expert judgment that is in part subjective. The best prac- tices identified in this guide reflect the research findings, the literature, the judgment of the authors, and the review of the project panel, many of whom are JD thought leaders and accom- plished practitioners. Best practice discussions in the guide are highlighted by the icon shown at the left. This focus on best practices is bounded by several common-sense considerations: • Individual practices are not universally applicable. One size never fits all, and an agency is not expected to change a successful policy or practice just because this guide identifies an approach used successfully by others. • JD is an art—complex, multi-disciplinary, and multi-jurisdictional—as much as a science. The guide identifies best practices at a conceptual level. The details, nomenclature, and precise sequencing of those practices will be adapted by agencies, as a matter of course, to suit local needs. • For some topical areas, the guide does not choose a single best practice but rather a range or menu of practices that have worked, in the view of the authors, to advance the desired outcomes. The best practices identified in this guide are summarized in Figure 8 and Figure 9, which correspond to the organization of the guide. Taken together, they may be seen as a model best practice program; it should be understood, however, that not every practice will be applicable to the circumstances of every agency. Getting Started Figure 8 also serves as a checklist and high-level flow chart of the entire JD process. For agen- cies new to JD, it answers an obvious question: where do we start? For an agency seeking to create a JD program, the foundational steps in Chapter 2 underlie everything that follows.

Introduction 11   Figure 8. Summary of best practices: stages of the joint development process.

12 Guide to Joint Development for Public Transportation Agencies Figure 9. Summary of best practices: strategic crosscutting issues.

Introduction 13   Figure 9. (Continued).

14 Guide to Joint Development for Public Transportation Agencies For an agency contemplating a single JD project, Chapter 2 is still the place to start—in par- ticular, making sure the agency has the legal ability to undertake the project, the specialized staff or consultant skills to tackle it successfully, and the support of senior agency leadership. The relevant predevelopment planning steps outlined in Chapter 3 should then be followed, setting the stage for developer selection, described in Chapter 4. Even if the project originated with an unsolicited proposal (as first projects sometimes do), these basic steps apply. Endnotes 1. California Department of Transportation, 2002; Cervero and Murphy, 2004 (see Appendix E). 2. Cervero et al., 2002 (see Appendix E).