Guide to Joint Development for Public Transportation Agencies: Appendices (2021)

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APPENDIX B REPORT ON SURVEY OF TRANSIT AGENCIES

Appendix B Survey of Transit Agencies i TABLE OF CONTENTS 1.0 Introduction …………………………………………………………………………………………………………………………… ……..B-1 2.0 Overview of Findings.......................................................................................................................................... B-1 3.0 The Joint Development Practice: Who’s Doing What ........................................................................................ B-6 3.1 Scope and Capacity ........................................................................................................................................ B- 6 3.1.1 Extent of JD activity (Question 1) ........................................................................................................... B- 6 3.1.2 Agency joint development policies (Question 4) ................................................................................... B- 7 3.1.3 Extent of agency real estate portfolio (Question 2a) ............................................................................ B- 7 3.1.4 Land assembly strategy when planning new corridors (Question 2b) ................................................... B- 8 3.1.5 Specialized skill-sets and capacities (Question 10) ............................................................................... B- 8 3.1.6 Approach to prioritizing stations and sites (Question 11a) .................................................................... B-8 3.2 Relationship to Other Jurisdictions ................................................................................................................ B-9 3.2.1 Enabling Act or equivalent authorization (Question 3) ........................................................................ B- 10 3.2.2 Relationship with land use and zoning authorities (Question 5) ......................................................... B-11 3.2.3 Stakeholder management (Question 20) ............................................................................................. B- 12 3.2.4 Institutional differences: stand-alone authorities versus government affiliates ................................. B- 13 4.0 Advancing the State of the Practice ................................................................................................................ B- 14 4.1 Joint Development Involving FTA ............................................................................................................... B- 15 4.1.1 Extent of FTA real property interest (Question 25) ............................................................................. B- 15 4.1.2 Agency experience with “FTA-assisted JD” (Question 26) ................................................................... B- 15 4.2.1 Collaborating with other public land-owners (Questions 12 and 22) .................................................. B- 16 4.2.2 Developer-built or funded stations (Question 21) ................................................................................ B-17 4.2.3 Non-station area transit facilities (Question 23) .................................................................................. B- 18 4.2.4 Value capture with elements of JD (Question 24) ............................................................................... B- 18 4.3 Joint Development Economics ................................................................................................................... B- 19 4.3.1 Hierarchy of JD goals (Question 9) ....................................................................................................... B- 19 4.3.2 Structure of developer selection criteria (Question 15) ....................................................................... B-20 4.3.3 Feasibility tradeoffs (Questions 13, 16, 11b) ....................................................................................... B- 21 4.4 High-Leverage Program Composition Issues .............................................................................................. B- 23 4.4.1 Affordable housing (Questions 20c, 6, 16d) ......................................................................................... B- 23 4.4.2 Parking (Questions 13, 16, 8) ............................................................................................................... B- 24 5.0 Best Practices in Project Execution ................................................................................................................. B- 26 5.1 Stewardship of Transit Assets ..................................................................................................................... B- 26 5.1.1 Site selection and definition (Questions 11a and 13) .......................................................................... B- 26 5.1.2 Land disposition method (Question 14) ............................................................................................... B- 28 5.1.3 Design and construction review (Question 19) .................................................................................... B- 28

Appendix B Survey of Transit Agencies ii 5.2 Developer Procurement and Negotiations ................................................................................................. B- 30 5.2.1 Solicitation methods (Question 17) ..................................................................................................... B- 30 5.2.2 Negotiation and closing methods (Question 18) ................................................................................. B- 31 LIST OF TABLES Table B-1: Summary of Transit Agencies Surveyed .................................................................................................. B-2 Table B-2: Outline of This Memorandum .................................................................................................................. B-5 Table B-3: Scale of JD Activity (Question 1) ............................................................................................................... B-6 Table B-4: Official JD Policies (Question 4) ................................................................................................................ B-7 Table B-5: Developable Real Estate Portfolios (Question 2a) .................................................................................... B-7 Table B-6: Strategic Acquisition Strategy (Question 2b) ............................................................................................ B-8 Table B-7: Special Features of Affiliated Transit Agencies ....................................................................................... B-14 Table B-8: Extent of FTA Interest in System Real Estate (Question 25) ................................................................... B-15 Table B-9: Experience with FTA/JD Process (Question 26) ...................................................................................... B-16 Table B-10: Structure of Developer Selection Criteria (Question 15) ...................................................................... B-21 Table B-11: Summary of Responses re Feasibility Tradeoffs (Multiple Questions) ................................................. B-23 Table B-12: Transit Agency Affordable Housing Requirements (Question 6) .......................................................... B-24 Table B-13: Park & Ride Replacement Policies (Question 13) ................................................................................. B-25 Table B-14: Agency Observations on Station Selection and Site Definition ............................................................ B-27 Table B-15: Level of Joint Development Design Review (Question 19) ................................................................... B-29 Table B-16: Use of Developer Solicitation Formats (Question 17a,b) .................................................................... B-30

Appendix B Survey of Transit Agencies B-1 SURVEY OF TRANSIT AGENCIES 1.0 Introduction The research team for TCRP Research Report 224: A Guide to Joint Development for Public Transportation Agencies (“the Guide”) undertook a targeted stakeholder outreach program. Three distinct outreach efforts were conducted in the period of March through July 2019, and they are reported in three separate appendices:1 • Appendix B: Transit Agencies (this document); • Appendix C: Private Sector Companies; • Appendix D: Local and Regional Governments. The data collected in this effort is rich in content and nuance and played a significant role in the formulation of the Guide. The research team is grateful to the 32 transit agencies, 18 local government jurisdictions, and 17 private sector developers and investors that contributed their time and enthusiasm. The completed questionnaires, comprising well over 400 pages of original data, will be archived in the project files. As we indicated to the respondents, these actual questionnaire documents were produced for internal use only and will not be included in the Guide. While the agencies and corporations that participated in this survey are listed in their respective appendices, in reporting the data individual respondents are never identified, and their agencies or corporations are identified by name only, with respect to factual information readily available on-line such as the names and key features of joint development projects, or salient features of their Enabling Acts and published policies. The team surveyed 32 transit agencies—30 in the United States, and two (Metrolinx and TransLink) in Canada. The selected agencies 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 long known for their joint development programs and others just now becoming involved in joint development projects. The four transit agencies represented on the TCRP H-57 project panel—King County Metro, Metro Transit, the Utah Transit Authority (“UTA”), and the Washington Metropolitan Area Transit Authority (“WMATA”)—were all included. 1 In addition, the leaders of three non-profit organizations were interviewed; they were selected for their roles in championing or opposing significant transit-oriented or joint development projects.

Appendix B Survey of Transit Agencies B-2 Table B-1: Summary of Transit Agencies Surveyed Co m m . R ai l H ea vy R ai l Li gh t R ai l St re et ca r * Bu s R ap id Bu s W ee kd ay Tr ip s ( 00 0) * Af fil ia te * JD P ol ic y Survey Completion (All Dates 2019) Northeast Boston: MBTA ● ● ● ● ● 1,267 ● ● In-person Interview; April 25 Buffalo: NFTA ● ● 89 ● Written response; April 11 Maryland Transit Admin. ● ● ● ● 341 ● ● In-person interview; April 9 Multiple cities: Amtrak * ●* ●* ● n/a Telephone interview; Sept. 26 New Jersey: NJ Transit ● ● ● 910 ● Telephone interview; June 4 Pittsburgh: PAAC ● ●* ● ● 213 ● Written response; April 12 Washington: WMATA ● ● 1,201 ● In-person interview; April 26 Midwest Chicago: CTA ● ● 1,541 ● Written response; April 18 Cleveland: GCRTA ● ● ● ● 130 In-person interview; March 19 Columbus: COTA ● ● 60 Written response; May 14 Gr. Rapids: The Rapid (ITP) P* ● 39 Written response; April 16 Indianapolis: IndyGO * ● ● 31 Written response: July 1 Kansas City: KCATA ●* ● ● 45 ● Written response; June 10 Twin Cities: Metro Transit ● ● ● ● 264 ● Telephone interview; May 9 Southeast Atlanta: MARTA ● P* ● ● ● 404 ● Telephone interview; May 22 Memphis: MATA ● P* ● 25 ● Written response; April 23 Miami: Miami-Dade Transit ● ● ● 294 ● ● Telephone interview; May 16 Orlando: Lynx (CFRTA) ● ● 84 Written response; April 18 Mountain and Southwest Austin: Capital Metro ● P* ● ● 97 ● Telephone interview; May 23 Dallas: DART ● ● ● ● ● 217 ● Telephone interview; May 3 Denver: RTD ● ● ● ● 329 ● Telephone interview; May 29 Salt Lake: UTA ● ● ●* ● ● 155 ● Interview/written; March 27 Pacific Coast Los Angeles: LA Metro ● ● ● ● 1,287 ● ● In-person interview; April 8 Peninsula: Caltrain ● ● 67 ● ● Telephone interview; May 17 Portland: TriMet ● ● ●* ● 315 ● Written response; May 30 San Diego: MTS ● ●* ● ● 284 ● In-person interview; April 10 San Francisco: BART ● 453 ● In-person interview; April 8 San José: Santa Clara VTA ●* ● ●* ● ● 127 ● Written response; April 13 Seattle: King County Metro ●* ● ● 426 ● ● Telephone interview; May 8 Seattle: Sound Transit ● ● ● 156 ● Telephone interview; April 18 Canada Toronto: Metrolinx * ● ● 287 ● Written response; May 15 Vancouver: TransLink ● ● 1,343 ● Written response; April 12 * See explanation of asterisked items in footnote 2 (next page).

Appendix B Survey of Transit Agencies B-3 The 32 selected agencies are listed in Table B-1 (preceding page), which summarizes some of their salient characteristics along with the method in which they participated and the date.2 Eighteen agencies were interviewed, either in-person or by telephone; wherever possible, these interviews were conducted by research team members familiar with the agency. Fourteen agencies completed the survey in writing. The quality of data between the two methods was comparable. Three versions of the transit questionnaire were used in the survey. Version A (shown in Appendix A) was administered to the 23 US agencies with commuter rail, heavy rail, or light rail as part of their service offerings (most of them also run regional bus systems). Version B, with minor differences in language, was administered to the seven bus- or bus- and streetcar-only systems. Version C was administered to the two Canadian systems. Abbreviations and acronyms. The following abbreviations are used interchangeably with their written- out terms throughout this Appendix: JD: joint development TOD: transit-oriented development TOD/JD: activities involving joint development and/or transit-oriented development FTA: Federal Transit Administration FTA/JD: FTA-assisted joint development projects, as defined by FTA Agencies commonly known by acronyms are identified by their full names the first time they are referenced in the main text or in a footnote, and by their acronyms thereafter. 2.0 Overview of Transit Agency Findings This appendix summarizes the findings of the transit agency survey, which consisted of 26 questions.3 Most of these were multi-part, open-ended queries inviting narrative responses. The dataset represented by the completed questionnaires consists of well over one thousand responses, counting answers to multi-part questions. The questionnaire is provided in Appendix A. Rather than addressing the questions one-by-one in the order that they appear in the survey, the questions are grouped into a series of topical discussions that were identified as priority areas of focus. The first theme (summarized in Section 3.0 of this appendix) is descriptive of the current state of the 2 With respect to Table 1, note the following: (a) “P” indicates a planned service. (b) Weekday trips (000s): FTA National Transit Database (https://www.transit.dot.gov/ntd/transit-agency-profiles), Metrolinx website (includes GO rail, Union-Pearson Express, and GO bus), and TransLink website. (c) “Affiliate” means a department, division, or other affiliate of a city, county, MPO, other regional agency, or state DOT. (d) Amtrak operates intercity rail that shares platform and track facilities with commuter rail. Amtrak and the Santa Clara Valley Transit Authority (“VTA”) do not operate heavy rail, but their stations include or are collocated with heavy rail service that affects the type and scale of potential joint development. (e) Streetcar: Metro Transit, the San Diego Metropolitan Transit System (“MTS”), the Port Authority of Allegheny County (“PAAC”), and VTA do not operate streetcars, but their light rail corridors include segments that run in a configuration similar to streetcars. The Kansas City Area Transportation Authority (“KCATA”), King County Metro, UTA, and TriMet operate streetcar lines owned by other entities; the streetcar ridership is not included in their average weekday trips. 3 The Canadian version, which omitted three US-specific questions, had 23.

Appendix B Survey of Transit Agencies B-4 joint development practice—“who’s doing what”. The summary then addresses the questions related to: • advancing the state of the practice (Section 4.0) • identifying best practices in joint development implementation (Section 5.0). The content of these thematic areas, and the survey questions associated with each, are outlined in Table B-2 (next page). The remainder of this appendix follows this structure; for convenience, Table B-2 previews the section and subsection numbers that correspond to this outline. In several instances, the responses to survey questions are summarized both in narrative form and with a simple table summarizing the responses. These tables should not be understood as representing the distribution of views or activities among the hundreds of US transit agencies. The 32 responding agencies constitute a small sample that is, by intent, not statistically representative. The data provide a valuable insight into the subset of transit agencies involved in joint development, including several with prolific programs.

Appendix B Survey of Transit Agencies B-5 Table B-2: Outline of the Findings Section 3.0 The Joint Development Practice: Who’s Doing What 3.1 Scope and Capacity 3.1.1 Extent of JD activity (Question 1) 3.1.2 Agency JD policies (Question 4) 3.1.3 Extent of agency real estate portfolio (Question 2a) 3.1.4 Land assembly strategy for new corridors (Question 2b) 3.1.5 Specialized skill-sets and capacities (Question 10) 3.1.6 Approach to prioritizing stations and sites (Question 11a) 3.2 Relationship to Other Institutions 3.2.1 Enabling Act or equivalent authorization (Question 3) 3.2.2 Relationship with land use and zoning authorities (Question 5) 3.2.3 Stakeholder management (Question 20) 3.2.4 Institutional differences: independent authorities and government affiliates Section 4.0 Advancing the State of the Practice 4.1 Joint Development Involving the Federal Transit Administration (“FTA”) 4.1.1 Extent of FTA real property interest (Question 25) 4.1.2 Agency experience with “FTA-assisted JD” (Question 26) 4.2 Expanding The Footprint: On-Site Versus Off-Site Joint Development 4.2.1 Collaborating with other public land-owners (Questions 12 and 22) 4.2.2 Developer-built or funded stations (Question 21) 4.2.3 Non-station area transit facilities (Question 23) 4.2.4 Value capture with elements of JD (Question 24) 4.3 Joint Development Economics 4.3.1 Hierarchy of JD goals (Question 9) 4.3.2 Structure of developer selection criteria (Question 15) 4.3.3 Feasibility tradeoffs (Questions 13, 16, 11b) 4.4 High-leverage Program Composition Issues 4.4.1 Affordable housing (Questions 20c, 6, 16d) 4.4.2 Parking (Questions 13, 16, 8) Section 5.0 Best Practices in Joint Development Implementation 5.1 Stewardship of Transit Assets 5.1.1 Site selection and definition (Questions 11a and 13) 5.1.2 Land disposition method (Question 14) 5.1.3 Design and construction review (Question 19) 5.2 Developer Procurement and Negotiation 5.2.1 Solicitation methods (Question 17) 5.2.2 Negotiation and closing method (Question 18)

Appendix B Survey of Transit Agencies B-6 3.0 The Joint Development Practice: Who’s Doing What 3.1 Scope and Capacity The first set of findings concerns the scope of JD activity in which transit agencies are engaged and several measures of their capacity to do so. These include: • whether agencies have adopted JD policies; • the extent of their existing real estate portfolios; • for those agencies planning new corridors, the degree to which their alignment, station location, and right-of-way strategies contemplate JD opportunities; • how they assemble the specialized skills and capacities required to undertake JD; and • how they go about determining which sites should be advanced as JD priorities—a capacity question as well as a policy choice. 3.1.1 The extent of JD activity (Question 1) The initial question asked whether the agency has undertaken any JD projects or is actively planning to do so, and if so, roughly how many. Respondents were also asked whether they view their efforts as an ongoing program, as opposed to a few individual projects. Among the 32 responding agencies, we found the following distribution of activity: Table B-3: Scale of JD Activity (Question 1) At least five JD projects and a stated ongoing program 13 One to four JD projects and a stated ongoing program 11 One to four JD projects but no reported program 7 No JD projects 1 This question also provides insight into how closely the reported JD activity is associated with commuter rail, heavy rail, and grade-separated light rail—the modes that typically feature park & ride lots, off- street stations, and other potentially developable real estate. This is a matter of threshold interest for this study, given the large number of small and mid-sized US transit agencies that operate primarily street-running services—buses and, in some cases, streetcars. The survey included seven bus-only (or bus- and streetcar-only) agencies. Five of the seven have undertaken at least one JD project: King County Metro, IndyGO, KCATA, the Central Ohio Transit Authority (“COTA”), and the Memphis Area Transit Authority (“MATA”). A sixth, Orlando Lynx, is planning a JD project. Three of these agencies describe themselves as either having an ongoing JD program or intending to develop one. The JD projects undertaken by these agencies involve park & ride lots, bus transit centers, intermodal centers like MATA’s Central Station, and other off-street facilities.4 4 It should also be noted that most of the 23 rail and multi-modal agencies surveyed operate extensive regional bus systems as well. However, all of their reported JD projects are associated with rail or bus rapid transit stations, including two JD projects sited on bus-related properties but in immediate proximity to operating rail stations. These are located in Miami (Miami-Dade Transit) and Carrollton, TX (Dallas Area Rapid Transit, “DART”).

Appendix B Survey of Transit Agencies B-7 3.1.2 Agency joint development policies (Question 4) The decision to publish a JD policy, or to update an earlier one, is a defining feature of an agency’s approach to joint development. Appendix G (“Review of Transit Agency Joint Development Policies”) compares the JD policies of 10 US transit agencies. The agencies used in that detailed comparison were chosen because they were known to have published JD policies. In the survey, all 32 agencies were asked whether they have an official JD policy, and if so, when it was adopted. The intent was to see how many of the smaller agencies, or those with lower levels of JD activity, have published a policy. The questionnaire made clear that to count as a “yes”, the policy in question does not necessarily have to be named the “Joint Development Policy”; a “TOD Policy” that expressly covers the agency’s joint development activities would generate a “yes” as well. As shown in the table below, just over half of the responding agencies have official JD policies, and a few others are in the process of creating such policies. Having a JD policy is associated generally, but not uniformly, with reporting an ongoing JD program. Table B-4: Official JD Policies (Question 4) An adopted JD policy (all of these also report having a JD program) 17 Currently working on a JD policy (all report having a JD program) 4 No JD policy, but report having a JD program 5 No JD policy and no reported JD program 6 3.1.3 Extent of agency real estate portfolio (Question 2a) A related but distinct question is the extent of each agency’s off-street real estate holdings. Such property is generally a precondition for undertaking “on-site” JD (JD on transit property), the most common type. As expected, a large real estate portfolio is more likely to be associated with commuter rail, heavy rail, and off-street light rail. Of the 32 agencies, 21 report large inventories of land (likely consisting of at least 10 distinct sites, based on the survey response or the research team’s knowledge of the system in question). All but one of these are rail or multi-modal systems; the exception is the bus-only Lynx system in Orlando, which reports 13 “SuperStops” where JD could potentially occur over time. Table B-5: Developable Real Estate Portfolios (Question 2a) A large portfolio, likely including at least 10 sites 21 A smaller portfolio of rail-related sites 6 A smaller portfolio of transit center or bus station sites 5 At least 16 agencies, most but not all of them in the “large portfolio” category, report multiple park & ride lots as a key component of their long-term JD potential. These include most of the heavy and light rail systems and all of the commuter rail systems in the survey. As we will see later in this report, the conversion of park & ride lots to JD is a core implementation strategy for many agencies and a fundamental consideration in asset stewardship, JD deal structure, and project feasibility.

Appendix B Survey of Transit Agencies B-8 3.1.4 Land assembly strategy for new corridors (Question 2b) In the longer term, joint development is not necessarily confined to existing transit corridors. For systems planning new or extended corridors, opportunities may arise to acquire land on which future JD could occur. With few exceptions, transit agencies are not legally able to assemble land expressly for development (see the Enabling Act discussion in section 3.2.1 below); but they can and do acquire property for construction staging, surface park & ride, or other transit uses that may not be permanent. There are situations in which right-of-way planners must decide whether to split or “sever” a large parcel in the path of a project or acquire it in its entirety. These decisions involve not only a reevaluation of the traditional practice of “minimal takings”, but an intentional strategy of locating and orienting stations so as to facilitate TOD in general and JD in particular. Ten of the 32 agencies expressed such an intentional right-of-way strategy, with proper deference to their Enabling Act restrictions.5 This strategy, to the degree implemented, could significantly increase an agency’s portfolio of developable property and its ability to generate future revenues and influence station-area development. Table B-6: Strategic Acquisition Strategy (Question 2b) A strategic acquisition strategy or intent, subject to Enabling Act 10 Not ruled out, but not disposed to do so, no budget to do so, etc. 9 Disinclined; policy is affirmatively to minimize takings 5 Not applicable for institutional reasons or lack of new corridors 8 3.1.5 Specialized skill-sets and capacities (Question 10) Joint development is a complex, multi-disciplinary undertaking, and many of the requisite skills lie outside the traditional core capabilities of American transit agencies. Moreover, even those agencies with successful JD experience often find that as their programs grow, it is impractical to fully staff them in-house. The survey asked the agencies how they divide this work, and whether there are particular components they choose to outsource. Virtually all of the agencies use a combination of in-house and consultant resources. A common theme is that overall direction of JD activities, and control of project-related decisions, are maintained by the agency staff, which is responsible for bringing programmatic and policy decisions to the board. The weight of in-house versus consultant activity is not simply a function of size. Some large agencies with substantial JD activity rely primarily on consultants, including a few that broadly outsource their TOD/JD advisory function. Several others, whose programs are emerging and growing in the current time frame, are adding staff with an eye toward operating mainly in-house. Some tendencies appear with respect to outsourcing: • Many agencies outsource “deal analyses”—market feasibility studies, appraisals, review of pro formas, and, where applicable, brokerage. These may be outsourced both because of 5 “We plan to be very intentional”, as one agency TOD director said. “No more undevelopable remnants at our front door”, said another.

Appendix B Survey of Transit Agencies B-9 their specialized nature and, in several responses, as a matter of policy so as to enhance credibility and impartiality. • Agencies may use consultants to draft the content of solicitation documents (Requests for Qualifications, Requests for Proposals) and to help evaluate the resulting submittals. • Project-related legal, real estate, and engineering work may be divided between in-house departments and specialized consultants. Those transit agencies that are departments of a city or county government may have access to deeper in-house resources in these disciplines. • Some agencies procure across-the-board, multi-disciplinary consultant teams to support the staff on an as-needed, task-order basis. 3.1.6 Approach to prioritizing stations and sites (Question 11a) Transit agencies have different strategies for deciding which properties to make available for joint development at a given time. Some operate on a relatively ad hoc basis, reacting to developer interest, community support, or unsolicited proposals. Others, particularly those with large real estate inventories, take a more programmatic approach to site selection and prioritization. This choice is not only a matter of policy or philosophy, but one of organizational capacity. Programmatic strategies require in-house staffing, outside consultant support, or both. In response to Question 11a, about half of the agencies described approaches which the research team would consider programmatic. These included, among others: • ongoing industry outreach and market research; • systematic predevelopment and feasibility analysis; • real estate asset or portfolio evaluations, addressing the system’s need for each parcel and its threshold feasibility as a development site;6 • TOD readiness tools, such as Cap Metro’s TOD Priority Tool, UTA’s System Analysis Tool, and DART’s screening and prioritization process, which take into account market support, transportation network location, land availability, and jurisdiction support. 3.2 Relationship to Other Jurisdictions The scope and efficacy of a transit agency’s joint development activity is also a reflection of where they stand in relation to the other public actors in that space. This section summarizes what the team learned from transit agencies with respect to: • what their Enabling Acts or other charter documents allow them to do with respect to JD; • the agencies’ relationships with the zoning jurisdictions in their service area; • how the agency allocates responsibility for stakeholder management, JD entitlement, and community outreach; and • the team’s observations on pertinent institutional differences between the majority of US transit agencies (which are stand-alone authorities) and those that are departments or affiliates of general government entities. 6 Some of these responses are described in the stewardship discussion on pages B-26ff.

Appendix B Survey of Transit Agencies B-10 3.2.1 Enabling Act or equivalent authorization (Question 3) An Enabling Act (or equivalent charter document) establishes what an agency can and cannot do in carrying out its mission.7 The Act defines an agency’s roles and responsibilities vis-a-vis other political subdivisions. Appendix I (“Review of Agency Joint Development Documentation”) looks in greater detail at key documentary components of the joint development process, including transit agency Enabling Acts. In the survey, each agency was asked to describe some basic, high-level attributes of its Enabling Act: does it explicitly include joint development as an authorized purpose of the agency; and does the Act confer broad, flexible powers with respect to the acquisition and disposition of real property and the ability to enter into a variety of contractual agreements—basic building blocks of a JD project? Among the 32 responding agencies, 23 Enabling Acts follow a typical pattern: • Joint development is not explicitly addressed, either by name or by description. In the Act’s silence, the authority to undertake JD is implicit in the power to act consistent with, or in support of, the transit mission. • In general, agencies are given broad and flexible powers to acquire and dispose of real property, although the acquisition of land is limited to transit purposes or “public purposes”. Land may not be acquired for development, but land originally acquired for transit purposes can subsequently be sold or leased for development.8 (Of the 32 agencies, only five have Enabling Act authority to acquire land expressly for development: LA Metro, BART, Santa Clara Valley Transit Authority (VTA), Cap Metro, and Vancouver’s Translink. So is one regional planning and development authority, Oregon Metro, whose federally-assisted TOD/joint development program is allied with but separate from that of the transit agency, TriMet.) • Agencies are empowered to enter into a wide range of contractual agreements with public and private entities. By contrast, the Enabling Acts of eight agencies actually do recognize joint development, by one description or another, as an authorized activity: Bay Area Rapid Transit (“BART”), Austin’s Cap Metro, LA Metro, Miami-Dade Transit, the Denver Regional Transit District (“RTD”), UTA, VTA, and Canada’s TransLink. Four of these Acts (Cap Metro, LA Metro, VTA, and TransLink) authorize their agencies not only to engage in JD, but to acquire land for that purpose.9 Finally, four Enabling Acts include special provisions that are unusually expansive with respect to joint development: 7 Among the agencies surveyed, several have a form of legal authorization other than a traditional state Enabling Act. These include a Joint Powers Agreement (Caltrain); interstate compacts approving identical enabling laws in each state (WMATA and KCATA); county codes (Miami Dade Transit, King County Metro); Congressional Act (Amtrak); and sections of the state transportation code (Cap Metro) or public utility code (San Diego MTS). In this memorandum, the term Enabling Act is understood to include these equivalent authorizations. 8 Some of these Enabling Acts impose limitations on the agency’s right to dispose of land originally acquired by eminent domain, such as requiring that the property be offered first to the prior owner. 9 This listing is based on agency responses to Question 3 and a review of the Enabling Acts in question. A ninth Act, that of the Massachusetts Bay Transportation Authority (“MBTA”), mentions the award of Development Agreements and might thus be considered to recognize joint development as an authorized activity.

Appendix B Survey of Transit Agencies B-11 • BART’s Enabling Act was amended in 2018 (AB 2923) to substantially exempt BART lands from local zoning for purposes of JD.10 • The Miami-Dade Code creates a Rapid Transit Zone (“RTZ”), including all county-owned land at Metro stations, within which zoning powers are transferred to the county; this has the effect of exempting JD from municipal zoning.11 • Sound Transit’s Enabling Act was amended in 2016 to make affordable housing on agency land a mandated purpose, governed by a framework known as the “80-80-80” rule which requires that land be discounted or even transferred at no cost to enable such JD projects.12 • UTA’s Enabling Act amendments of 2018 authorizes the agency to engage in up to eight JD projects, with a specific statutory framework for the commercial terms of such transactions and for a multi-faceted cost-benefit analysis to be undertaken in each case.13 3.2.2 Relationship with land use and zoning authorities (Question 5) With the exceptions noted above in the cases of BART and Miami-Dade, joint development on transit agency land is subject to local zoning, a reality confirmed by all 30 of the other responding agencies. Question 5 of the survey sought to assess the “TOD-friendliness” of the zoning relationship, which ultimately determines what the transit agency and its JD partners can build, from two perspectives: the quality of the interaction with local zoning authorities, and the content of the actual zoning provisions. The transit agencies almost uniformly stated that they enjoy a collegial relationship with their host jurisdictions. Some of the responses describe an active, ongoing collaboration (a collaborative TOD zoning effort in Indianapolis, for example, using IndyGO’s FTA TOD Planning Grant); others suggest a more superficial or event-driven relationship. The TOD-friendliness of zoning codes, especially in the larger service areas, was described as varying by jurisdiction; some of the larger transit agencies have service areas with dozens of municipalities.14 In most cases, zoning in the central cities was described as being, or becoming, relatively TOD-friendly. Over a dozen transit agencies described their central cities’ station-area zoning in highly favorable terms; examples include Chicago’s TOD Ordinance and the TOD zoning adopted in Boston, Cambridge, Somerville, and other communities in the core of the Massachusetts Bay Transportation Authority (MBTA) service area. It was also noted that central cities have the staff and budgetary capacity to work closely with transit agencies, whereas smaller communities generally do not.15 10 https://bart.legistar.com/View.ashx?M=F&ID=6808667&GUID=69E99772-9051-42AF-9066-7E522AAE25BA 11 http://miamidade.fl.elaws.us/code/coor_ptiii_ch33c. In 2018, the County extended the RTZ to cover all land, regardless of ownership, within a half-mile buffer around current and future stations, including those in Miami- Dade Transit’s six proposed expansion corridors; this expansion applies only within the unincorporated county. In 2019, the County began the process of establishing a TOD overlay within this expanded zone. 12 https://app.leg.wa.gov/rcw/default.aspx?cite=81.112.350 13 https://le.utah.gov/xcode/Title17B/Chapter2A/17B-2a-P8.html?v=C17B-2a-P8_1800010118000101 14 Metro Transit, the MBTA, and New Jersey Transit have over 100 host jurisdictions. 15 Section 5.4.3 includes a discussion of the extent to which transit agencies work with local jurisdictions to “upzone” properties before they are offered for JD. Eleven agencies reported doing do or planning to.

Appendix B Survey of Transit Agencies B-12 Between lesser capacity, greater reliance on cars, and a less welcoming view of density, suburban and rural zoning was generally seen as less TOD-friendly. That said, several transit agencies cited particular suburban jurisdictions as being invested in TOD zoning, and New Jersey Transit, as co-sponsor of the state’s Transit Village Program, cited the 33 municipalities designated thus far as having, or working toward, TOD-friendly plans and codes. Agencies were also asked whether their own published JD policies or TOD Guidelines include specific standards with respect to land use, density, urban design, and parking, which would apply to JD projects unless inconsistent with zoning. Such standards may signal the transit agency’s intent to support zoning relief for JD projects, where necessary, to bring the project in line with TOD aspirations. A dozen of the 31 agencies stated that their JD policies or companion TOD guides include zoning-like standards.16 3.2.3 Stakeholder management (Question 20) A key institutional concern for transit agencies engaged in JD is the nexus of stakeholder management, public outreach, and project entitlement. These issues were addressed in Question 20 of the survey. Most transit agencies report that they engage with the host jurisdiction and community stakeholders during the planning stages of a JD project. This engagement may be substantial, addressing major planning issues that frame the future JD. The Metropolitan Planning Organization may be involved as well. The Metropolitan Atlanta Regional Transit Authority (“MARTA”), for example, engages the local jurisdiction and the community through the Livable Centers Initiative (LCI) process, funded and supported by its MPO. UTA’s Station Area Planning Phase, a requirement of its JD policy, is a partnership with the municipality and the MPO. Metro Transit, which works closely with the local jurisdiction during the predevelopment planning stage, is a division of the Metropolitan Council, which is the MPO and must review and approve municipal Comprehensive Plans.17 Once a developer is chosen, to what extent does the agency defer to them for continued public outreach and for entitlements? The developer is almost always responsible for securing permits and thus bears the entitlement risk. The developer may also be adept at the entitlement process. On the other hand, the transit agency has institutional and community relationships to protect, and if the developer is not local, it may be the transit agency that is more process-adept. Moreover, if the entitlement process becomes contentious, the developer may be pressed to make concessions that impact their ability to pay the agreed-upon land price or to meet other transit agency goals. The responding agencies were divided on this strategic question. About half stated that once the developer is designated, they essentially “hand them the keys”—not only for entitlements, but for carrying forward the public outreach process and the day-to-day relationship with the municipality. With 16 The survey included specific questions about transit agency guidelines and corresponding zoning provisions with respect to affordable housing and required parking ratios. These findings are discussed on pages A-22ff. A similar question was asked with respect to sustainability standards: does the transit agency require a particular performance standard such as LEED Certification in its JD projects, and does local zoning address this same issue. Five of the 31 responding agencies require or strongly encourage LEED Silver, and one requires LEED Platinum. All of the others said they defer to local zoning or building codes, which may or may not address this issue. 17 The Met Council TOD Office works with all of the Met Council divisions, including the one that reviews and approves municipal comprehensive plans.

Appendix B Survey of Transit Agencies B-13 a couple of exceptions, these agencies indicated that they are comfortable with their role and satisfied with the outcomes. The other half reported that they remain actively involved, continuing to lead, coordinate, or at least share the stakeholder and inter-governmental roles, and are more actively available to the developer in the entitlement process. The transit agencies that stay involved after developer selection felt strongly that their interests are better served by this approach.18 Finally, agencies were asked which issues have become contentious with stakeholders in the planning or entitlement process. Those that reported significant community issues generally agreed with the suggested list of density, affordable housing, and concerns about spillover parking. Some also identified traffic, community character, and construction period impacts. Across the 32 agencies, only a handful of JD projects were canceled or significantly compromised due to stakeholder pushback. 3.2.4 Institutional differences: independent authorities and government affiliates Of the 32 agencies in the survey, 10 were selected in part because they are departments, divisions, or affiliates of other governmental entities. (Examples of affiliates, in this context, are Caltrain, which is a Joint Powers Board representing three counties; MATA, whose board appointments and major actions are controlled by the City of Memphis; IndyGO, which has a similar relationship to the City of Indianapolis-Marion County; or the MBTA and NJ Transit, which have important connections to their respective state departments of transportation at the board level.) The intent was to see if these nine agencies have institutional advantages or disadvantages compared to independent transit authorities. The differences identified in the survey (or already known to the research team) include the following: 18 At least one transit agency coordinates the post-selection public process with funding which the developer is required to provide.

Appendix B Survey of Transit Agencies B-14 Table B-7: Special Features of Affiliated Transit Agencies Transit Agency Relationship to Affiliated Entity Observation Caltrain A Joint Powers Board consisting of San Mateo, San Francisco, and Santa Clara Counties; managed by SamTrans. • Caltrain and SamTrans JD co-managed. • JD footprint extended to SamTrans sites. IndyGO A Municipal Corporation of Indianapolis- Marion County. Of the seven-member Board, three are appointed by the Mayor, four by the Council. • City and County agency land potentially available for development; IndyGO sees this as their principal JD opportunity. • IndyGO’s FTA TOD Grant used to upgrade TOD zoning. King County Metro A department of King County. • Can rely on County legal, engineering, real estate departments as needed. • County land potentially available for JD. LA Metro All five County Supervisors sit ex officio on LA Metro Board. Mayor of LA controls another four seats. • Potential alignment of interests. • JD potential on County or City land. MATA Mayor of Memphis appoints Board, confirmed by City Council. • Major actions (land acquisition, bond issuance) approved by Mayor and Council. MBTA An affiliate of MassDOT. • Shared planning functions. • MassDOT and MBTA collaborate on JD. • Adopted joint TOD/JD Policies & Guidelines. Metro Transit A division of the Metropolitan Council, a state-enabled seven-county regional agency. Another division serves as the MPO. • TOD/JD program woven into regional plan. • Met Council approves local Comp Plans. • Met Council’s Community Development Division administers state Livable Communities grants; strong input from Metro Transit TOD Office. Miami-Dade Transit A division of County Dept. of Transportation and Public Works. • Can rely on County legal, engineering, real estate departments as needed. • County land potentially available for JD. • Partners with County Housing for JD. • County Code includes Rapid Transit Zone with extraordinary zoning powers. • County enacted corridor-level TIF to help fund transit expansion. Maryland Transit Admin. A division of Maryland Department of Transportation. • Broad access to state DOT land. • MTA has MDOT TOD mission in all settings. New Jersey Transit NJDOT Commissioner chairs NJT Board. • Close collaboration on joint NJDOT/NJT Transit Village Program. 4.0 Advancing the State of the Practice A primary purpose of the Guide is to help advance the state of the joint development practice by addressing a series of specific challenges. These include:

Appendix B Survey of Transit Agencies B-15 • navigating the subset of JD opportunities that trigger the involvement of the Federal Transit Administration; • expanding the “footprint” of joint development beyond TOD on transit agency land, through a variety of transactional models involving other public land-owners, adjacent property owners, development at non-station facilities, and new forms of value capture; • enhancing the economics of joint development and mitigating the tradeoffs that limit the ability of transit agencies to achieve an acceptable financial return and other JD goals; • bringing best practices to bear on two issues that increasingly confront JD projects in US cities: affordable housing and parking. 4.1 Joint Development Involving FTA The nexus of issues involving FTA jurisdiction in joint development is a high-priority topic and one of the stated reasons for TRB’s undertaking this project. It is at the core of the study’s definitional framework: not all JD triggers FTA jurisdiction, and when it does, the project may or may not be processed as an “FTA-Assisted JD project”. 4.1.1 Extent of FTA real property interest (Question 25) FTA jurisdiction arises where there is an FTA interest in the proposed JD property, by virtue of it having been acquired or improved with FTA funds. Question 25 seeks to identify the extent of that interest in each agency’s operating real estate portfolio. The findings, as reported by the agencies, are as follows; the total is 29 rather than 32 because this question does not apply to the two Canadian systems (Metrolinx and TransLink) or to Amtrak. Twenty-one of the 29 US agencies report that most of their operating real estate carries an FTA interest. (WMATA reports that all of its real estate has an FTA interest.) The eight responding agencies with less extensive FTA interests include, among others, three of the largest and oldest subway systems and three major commuter rail systems. Table B-8: Extent of FTA Interest in System Real Estate (Question 25) Most real estate FTA-assisted (> 75%) 21 Some real estate FTA-assisted (25-75%) 5 Most real estate not FTA-assisted (<25%) 3 4.1.2 Agency experience with “FTA-assisted JD” (Question 26) Where FTA jurisdiction applies solely through the use of land previously acquired with FTA funds (by far the most common case), the transit agency can determine, in consultation with FTA, whether to process the land conveyance as an “FTA-Assisted JD project” (FTA/JD) or as a traditional disposition of excess property. With an FTA/JD approval, the proceeds of the ground lease or sale are considered program income and remain with the transit agency for virtually unrestricted use in their transit program. With a disposition of excess property, the FTA interest must be repaid from the real estate proceeds; alternatively, the proceeds corresponding to the FTA interest may be retained by the transit agency and applied to a different FTA-approved capital project. The net dollar benefit to the transit agency in such cases is less than the full retention of proceeds under FTA/JD.

Appendix B Survey of Transit Agencies B-16 FTA is seeking to expand the use of the FTA/JD process. Question 26 asked the 29 US agencies responding to the survey which method they have preferred to pursue and why. Twelve agencies reported having used the FTA/JD model for most or all of their FTA jurisdiction projects, and most of these spoke enthusiastically about their experience with the process and the FTA Region staff with whom they dealt. There was some concern about timeliness and delay, and one comment, with respect to a single project, about finding the process confusing. Table B-9: Experience with FTA/JD Process (Question 26) Most or all FTA jurisdiction projects processed as FTA/JD 13 Agency has used both FTA/JD and disposition; case-by-case 4 Agency generally avoids FTA/JD, prefers disposition 5 N/A (no FTA jurisdiction projects; approved as “incidental”; etc.) 7 Four agencies reported having used both the FTA/JD and excess disposition methods for different projects; or having used the disposition method but being open to the FTA/JD method going forward. One of these agencies described a pragmatic, case-by-case approach to deciding—jointly with FTA— which method makes sense for a given project. Five agencies reported that they have generally used the excess disposition method and avoided the FTA/JD process. While in some cases the reasons may have been historic or incidental, at least three of these agencies stated a strong preference based on a perception of the FTA/JD process as cumbersome and time-consuming, or as intrusive by virtue of its requirements for justifying Fair Market Value. (As described in Appendix F, those provisions have been removed as of the 2020 version of the FTA Joint Development Guidance.) 4.2 Expanding the Horizon: On-Site versus Off-Site Joint Development The research team created a joint development typology that elaborates on the transaction-based definition used in the Guide (see the Guide, Chapter 1, and Appendix E, pp. E-1 – E-2). The typology distinguishes among traditional “on-site” JD projects (where the real estate development occurs on transit agency property at or in the immediate vicinity of a station) and two other potential categories: JD where the development occurs in station areas but not on transit agency property, and JD that occurs on transit agency property but not in station areas. The point is not to create a typology for its own sake, but to see if these other models are emerging in the industry and represent useful expansions of the JD horizon from a transit agency perspective. 4.2.1 Collaborating with other public land-owners (Questions 12 and 22) Partnering with other land-owning agencies is a way to expand a transit agency’s JD footprint. A relatively simple form is when a transit agency and a sister agency own land or air rights at the same station and agree to combine their holdings into a unified, developable site.19 The responses to Question 12 make clear that such collaboration is frequent. Nineteen agencies reported that they have actually 19 In this discussion, the words “combination” or “combine” do not necessarily mean that the public land-owners merged their holdings into a single new parcel; rather that both holdings were used in the joint development project. In some cases, the parcels were merged, in others they remained separate.

Appendix B Survey of Transit Agencies B-17 undertaken, or are currently advancing, at least one JD project involving land assembly partnerships with other public agencies. Several more said that they are interested in pursuing such opportunities. To cite four interesting examples among many: • The MBTA has executed several JD projects in which the site was assembled in combination with a municipality. These include North and South Stations and Ruggles Street (in Boston) and Wonderland (in Revere). The MBTA and the Massachusetts Turnpike Authority combined adjacent holdings to create a series of successfully developed parcels near North Station. The MBTA has also been involved in two projects in which the station site was donated by a public agency which then sponsored high-volume TOD on its adjoining land: the Massachusetts Port Authority in the Seaport District, and the Somerville Redevelopment Authority at Union Square. • UTA’s Central Square Station Area Plan calls for combining its own property with lands owned by the city and the Salt Lake City Redevelopment Agency. Each partner’s equity share will reflect the appraised value of its contributing. UTA envisions a similar collaboration in West Jordan with the city and the school district. • DART and the City of Carrollton agreed to combine their adjacent parcels at Trinity Mills Station to form the largest publicly owned TOD or JD site in North Texas and to jointly issue a developer solicitation. A master developer was selected and the development term sheet is in negotiation as of this writing. • The Denver RTD has undertaken complex JD projects in Arvada and Boulder; in each case, the site was created by combining adjacent lands owned by RTD and the municipality. A somewhat different concept could occur along a bus or streetcar line, where the transit agency itself owns little or no land (because the service runs in the street) but another agency owns or is assembling land around the transit stops. Is there a transactional model through which the transit agency can benefit from this development, beyond gaining ridership and farebox revenue? This was the point of Question 22. A few agencies indicated that they are exploring this concept, or would be actively interested in doing so, along one or more particular corridors. This question is related to the value capture discussion in section 4.2.4 below. 4.2.2 Developer-built or funded stations (Question 21) There is an emerging business model in which an adjacent land owner or developer agrees to fund (in whole or in part) a new transit station, a replacement station, or a significant station improvement. The developer agrees to do so in order to “unlock” the value of its property as a TOD site. Although the development itself does not occur on transit agency land, such transactions—in which the transit agency receives the value of the new or improved station as well as the enhanced ridership and farebox revenue—falls squarely within the Guide’s transaction-based definition of joint development. In many cases, the parties agree that the developer will not only fund the station, but also design and build it under transit agency oversight. Nine transit agencies indicated that they have undertaken such projects or are actively negotiating them. Among the recent examples cited by respondents are: • the MBTA’s new Assembly Square and Boston Landing stations, Lansdowne Station improvements, Lechmere Station relocation, and proposed new River Works station;

Appendix B Survey of Transit Agencies B-18 • Cap Metro’s two proposed Red Line stations near The Domain development district and Austin’s new major league soccer stadium; • the new Niagara Frontier Transportation Authority (“NFTA”) light rail station headhouse built by SUNY Buffalo as part of its Allen Medical Campus expansion. In addition, several agencies indicated that they have allowed adjacent developers to construct new or enhanced entrances into existing stations. The developer generally pays for the cost of such connections and may be charged an additional fee as well. WMATA has negotiated numerous such connections. 4.2.3 Non-station area transit facilities (Question 23) Many transit agencies own “back-of-house” facilities that, while not including passenger stations, might nonetheless lend themselves to some type of development. These may be park & ride lots at locations with good highway access; yard and shop facilities; or headquarters buildings in locations that have become valuable in the real estate market. In some cases, these facilities can be relocated, freeing up a development site. In other cases, new facilities are needed to serve system expansion or a modernized fleet, and the option to have them delivered as part of a JD project, or a public-private partnership with a JD component, may be attractive. A new maintenance facility, or the upgrade of an existing one, may require “masking” or “wrapping” in order to gain community acceptance. While such projects do not necessarily represent TOD opportunities (unless they happen to be within walking distance of a station or high-frequency stop), they are certainly examples of joint development. Question 23 asked agencies if they have undertaken such projects or would be interested in doing so. Fifteen agencies indicated that they are actively exploring such opportunities, and several have gone forward. Recent examples include, among others: • Sound Transit’s new East Link light rail Operations and Maintenance Facility in Bellevue, WA, with significant portions of the site designed for future JD; • Metro Transit’s sale of its outdated police headquarters site in South Minneapolis to a local food producer, a site served by bus and nearby light rail; • WMATA’s sale of its decommissioned Navy Yard chiller plant for residential mixed-use development; • COTA’s partnership with the City of Columbus to build a CNG fueling facility for city vehicles at COTA’s McKinley bus yard; the facility is also open to the public. 4.2.4 Value capture with elements of JD (Question 24) The term “district value capture” refers collectively to the many varieties of tax increment financing (“TIF”) and special assessment districts. Most applications of district value capture involve the flow of revenues to the municipality or other taxing jurisdiction. Even if these revenues are used to fund TOD- related infrastructure that results in new ridership, absent a direct transactional benefit to the transit provider such value capture does not constitute joint development. The purpose of Question 24 is to see if there is a subset of district value capture that flows at least in part to the transit agency or is used, by agreement, to fund transit improvements. If the value capture district is closely tied to station area land use, and if the transit agency is a partner in the associated land

Appendix B Survey of Transit Agencies B-19 use planning, then this transaction arguably constitutes a form of joint development or at least closely resembles it. Fifteen of the 30 US agencies reported some application of district value capture that was used, or will be used, to directly fund transit agency infrastructure in TOD settings. These innovative applications include: • the special assessment district created two decades ago to help finance WMATA’s NoMa- Gallaudet infill station;20 • the overlapping TIF and special assessment districts created at Denver Union Station to help finance RTD’s multi-modal transit hub; • the use of TIF districts to fund DART stations that were deferred until their development markets were ready to support station construction; • Pittsburgh’s East Liberty Transit Revitalization Investment District (“TRID”), which includes a tax increment finance mechanism that helped fund the PAAC’s major station improvements; • the use of Community Investment Districts (“CIDs”) in Atlanta to help fund MARTA station improvements; • the Transportation Infrastructure Improvement District (TIID) created by Miami-Dade County in 2018 to help fund Miami-Dade Transit’s six expansion corridors; • the City of Indianapolis-Marion County making TIF investments in two of IndyGO’s three bus rapid transit (BRT) lines; • the City of Chicago’s creation of a corridor-scale TIF that will flow directly to the Chicago Transit Authority (“CTA”) for the Red-Purple Modernization Program, as well as station-specific TIFs that will flow, in part, to CTA for station improvements. 4.3 Joint Development Economics The research tea identified a nexus of issues affecting how a transit agency estimates the potential value of a JD site, and how it manages the tradeoffs among competing goals that affect the bottom-line return. Several related questions in the survey seek to probe this nexus, particularly: • how an agency ranks the potential hierarchy of joint development goals; • the basic structure of the agency’s developer selection criteria, which presumably reflect that hierarchy; • and how the agency manages complex feasibility tradeoffs involving in which their JD goals may be in conflict. 4.3.1 Hierarchy of JD goals (Question 9) A threshold consideration is how a transit agency understands and prioritizes the potential benefits that it might wish to achieve. In Question 9, these are presented in two categories: 20 In underlying logic, the NoMa-Gallaudet case resembles later infill stations supported by single land owner/developers (such as the MBTA’s Assembly Square and Boston Landing). The difference is that because NoMa-Gallaudet involved multiple property owners, an assessment district structure was required to allocate and collect the appropriate shares.

Appendix B Survey of Transit Agencies B-20 • financial goals, including monetizing the real property asset (the actual sale or lease proceeds from the JD project), generating ridership and farebox revenue, or off-loading costs by assigning them to a developer; • non-financial goals, such as producing affordable housing, enhancing station-area safety, influencing development in the larger station area, and gaining a seat at the table with local or regional planners. Respondents were asked to characterize their financial and non-financial goals, and to state how they rank in importance from the agency’s perspective. As expected, there were common themes in the answers, but the answers were not uniform. Eighteen agencies identified monetization, or the combination of monetization and ridership, as the top goal of their JD activity. Two others cited cost avoidance as their top goal—capital cost avoidance in one case, O&M in the other. The remaining 12 respondents expressed a more blended set of financial and non-financial goals. Two reported an explicit policy requirement that any JD project merely be budget neutral. Several indicated a strong policy interest (and in the case of Sound Transit and King County Metro, a legal basis) for prioritizing affordable housing in preference to maximum monetization. It should be understood that virtually all of the responding agencies—including those that ranked monetization as their #1 goal—expressed some degree of support for non-financial goals as well. In addition to affordable housing, respondents mentioned station area safety; gaining a seat at the planning table; fostering density and TOD (with their obvious relation to ridership); promoting job growth, economic development, and job access; supporting regional smart growth plans; creating ground-floor presence for local businesses; and promoting union construction work. Some respondents acknowledged that the hierarchy of goals may vary between the staff and the board, or among board members. How agencies translate their JD goals into the criteria for selecting developers, and the business terms of development agreements, is addressed in the next two subsections. 4.3.2 Structure of developer selection criteria (Question 15) In making property available for JD, a transit agency must determine the criteria it will use to evaluate competing bids and select the winner. Is the agency required by its Enabling Act, by other legislation, or by official policy to select the highest responsible bid? Or, in the language of Question 15, is it allowed to (and does it) judge “best value” across a range of factors including price? And even with multi-criterion best value, is the agency required by law or policy to obtain at least Fair Market Value (“FMV”)? Twenty-four of the 32 agencies reported using “multi-criterion best value”, including Denver RTD, which in 2018 published a set of Evaluation Guidelines that are reflected in each developer solicitation.21 Of these 24 agencies, 15 must obtain Fair Market Value, usually determined by appraisal, while nine have no such threshold requirement.22 Comparing these responses to those in section 4.3.1 above, it is likely 21 http://www.rtd-denver.com/documents/tod-evaluation-guidelines-2018.pdf 22 Of the agencies that do require FMV, several stated that their reason for doing so, in whole or in part, is that FTA requires it. To the extent that these agencies use the FTA/JD model, the proposed 2019 FTA Circular change (under

Appendix B Survey of Transit Agencies B-21 that among the agencies choosing “multi-criterion best value”, some use criteria that focus primarily on price, ridership, and other agency-focused considerations, while others also include extrinsic criteria like affordable housing or overall station area development. Table B-10: Structure of Developer Selection Criteria (Question 15) Multi-criterion best value, provided they obtain Fair Market Value 15 Multi-criterion best value, with no Fair Market Value requirement 9 Can or must discount for affordable housing; otherwise FMV 23 2 Sometimes or always required to select highest responsible bid 24 2 Does not apply or incomplete response 4 Even when multiple criteria are used, virtually all JD solicitations require a proposed bid price which can be compared, on an “apples-to-apples” basis, across the competing proposals. The composition of that bid price is an important aspect of an agency’s selection criteria—particularly if the bid price is required to at least match the site’s FMV. Agencies were asked about two practices. • On JD projects with long-term ground leases, does the agency seek to participate in the development’s future revenues, and is the estimated present value of that participation treated as part of the bid price? This feature is commonly used by public agencies sponsoring development on their land; most of the agencies in our survey have done so or intend to. • When developers propose in-kind contributions of either capital or operating costs, how are such contributions recognized and counted? Two distinct approaches were reported. At some agencies, in-kind contributions are not counted as part of the bid price. If specific contributions are required under terms of the solicitation (for example, a park & ride replacement garage, station improvements, or an O&M agreement), the agency may instruct its appraiser to take the cost of these required contributions into account, lowering the FMV by a roughly corresponding amount. Alternatively, some agencies prefer to have the appraisal ignore in-kind contributions, leaving the valuation at its “natural” level and then treating the present value of the in-kind contributions as a credit against the bid price. 4.3.3 Feasibility tradeoffs (Questions 13, 16, 11b) A set of inter-related questions addresses the tradeoffs involved in making a JD project mutually feasible for the agency and the developer. If the transit agency and other jurisdictions impose unrealistic expectations or cost premiums, the deal will fail—or the solicitation will go unanswered in the first place. And if a deal is infeasible unless the transit agency makes major concessions on land value or which FTA would no longer impose a threshold definition of FMV or require associated documentation) could affect their policy going forward. For transit agencies that require FMV because of state law, the FTA Circular change would not affect this underlying requirement. See https://www.govinfo.gov/content/pkg/FR-2019-04- 18/pdf/2019-07812.pdf. 23 Sound Transit and King County Metro, per recent Enabling Act amendments. 24 The MBTA Enabling Act requires that Development Agreements be awarded to the highest responsible bidder “unless the authority shall find that sound reasons in the public interest require otherwise”. The MBTA sometimes uses multiple best value criteria, sometimes “highest responsible bidder” with key project goal requirements stated in the RFP and thus applicable to all bidders.

Appendix B Survey of Transit Agencies B-22 other business terms, its Enabling Act might or might not allow such an outcome, and the board might or might not accept it, depending on the agency’s hierarchy of JD goals (see section 4.3.1 above). Over half of the agencies, and virtually all that have undertaken complex JD projects, agreed that they have “encountered tension between the agency’s desired compensation, on the one hand, and project feasibility from the developer’s standpoint, on the other” (Question 16a). Many respondents added that such tension between public landlord and private developer is ubiquitous and normal. Some attributed it to issues of in-kind contribution requirements and how to recognize them in the transaction (as discussed in section 4.3.2 above); some attributed it to the internal subsidy costs of affordable housing; and others to overall expectations of risk and compensation. The findings from this interesting set of questions may be summarized as follows: • In response to Question 13a, 16 agencies reported that the conversion of surface park & ride lots to JD sites is a current or anticipated strategy; for those with large park & ride inventories, it is often identified as a core strategy. Replacement garages are very expensive, and while there are alternative approaches for where to place this cost in the transaction structure and how to “count” it (as outlined in section 4.3.2), agencies understand that at the end of the day, much of this cost must be absorbed, directly or indirectly, in the value of the sale or lease. The extent of that absorption is a key negotiating issue. • Question 13 also asked about JD projects that require the replacement or improvement of station facilities other than park & ride (such as busways, pick-up/drop-off areas, pedestrian plazas, bike stations, vertical circulation, and so forth). In the responses, such requirements we`re common, but somewhat less so than park & ride replacement. From the research team’s experience, replacement garages are typically the most expensive category of station site premiums. • Agencies were asked (Question 16c) if they have provided funding of their own, or pursued federal, state, or local infrastructure funding or development finance incentives, to enhance a project’s feasibility (and thus potentially mitigate the pressure on the agency’s side of the deal). Ten agencies answered affirmatively; the funding in question included FTA grants, state infrastructure grants, TIF funding, and grants from metropolitan planning organizations for implementing livable communities or TOD plans. • Agencies were asked (Question 16d) if they use land price discounts to make affordable housing or other public purpose more feasible. Eight agencies reported that they use such discounts explicitly; these include Sound Transit and King County Metro, with their statutory mandates to write down land for affordable housing, as well as others that choose to do so. An additional six agencies stated that, while not explicitly providing discounts for affordable housing, they recognize that when their solicitations require a specific affordability outcome, the appraised valuation, or a FMV defined in the market, will presumably be reduced in light of this requirement. • Question 11b inquires if agencies have sought to change the value equation of a particular site by working with local land use authorities to have it “upzoned” prior to putting it on the market. This is a different, more proactive strategy than expecting the developer, once selected, to seek zoning relief. Eleven agencies stated that they have worked with local authorities to get sites upzoned or have a specific strategy for doing so. Two of these agencies—BART and Miami-

Appendix B Survey of Transit Agencies B-23 Dade—have zoning powers of their own with respect to their own JD properties (see the Enabling Act discussion in section 3.2.1). Another, the CTA, indicated that the City of Chicago’s TOD Ordinance has obviated much of the need for upzoning. Table B-11: Summary of Responses re Feasibility Tradeoffs (Multiple Questions) P&R conversion/replacement a JD strategy (Question 13a) 16 Provide or pursue gap funding to enhance feasibility (Q 16c) 10 Explicit discount or implicit price drop for affordable housing (Q 16d) 14 Seek upzoning to enhance value prior to JD RFP (Q11b) 11 4.4 High-Leverage Program Composition Issues The research team identified two issues—affordable housing and parking—as complex, multi- dimensional policy issues that are increasingly likely to affect joint development projects across the country. They are salient issues in that they combine high-profile public policy dimensions with substantial implications for economic feasibility. The latter set of implications was introduced in the preceding discussion. 4.4.1 Affordable housing (Questions 20c, 6, 16d) In affordable housing, one key public policy issue is whether the transit agency, as a land owner, should adopt an inclusionary requirement for JD projects with residential components. Such requirements would be applicable in municipalities that lack inclusionary policies or have less demanding ones. Unless local zoning authorities prohibit the inclusionary outcome proposed by the transit agency, the latter is free to require it on its property. This is a complex issue, and many transit agencies have spent time and political capital to address it. In the discussion of stakeholder relations, several agencies reported community pressure either resisting affordable housing, demanding more of it, or both (Question 20c). In response to Question 6: • Nine of the 32 transit agencies in the survey currently have affordable or inclusionary requirements of their own: BART, Caltrain, LA Metro, MARTA, MBTA, Miami-Dade Transit, San Diego MTS, Sound Transit, and VTA.25 In all eight cases, at least one of the central jurisdictions in the agency’s service area also has an inclusionary zoning or similar policy at the local level. • Among the 21 agencies that indicated they do not have an inclusionary policy of their own, and thus defer to local requirements (or the absence thereof), the landscape varies considerably. Some transit agencies are deferring to strong jurisdictional policies; examples include CTA (City of Chicago), King County Metro (Seattle and Bellevue), WMATA (District of Columbia and Montgomery County), and NJ Transit (the individual affordable housing obligations applicable to 25 The “top line” requirements of the policies are as follows. In most cases they apply to projects of at least ten units; where there is a portfolio-wide target, it is accompanied by project-specific requirements which may vary. BART: a portfolio target of 35% affordable units, a minimum of 20% by project. LA Metro: 35% of portfolio. Caltrain: at least 30%. MARTA: 20% of portfolio. MBTA: 20% of each project, reducible to 10% if necessary for feasibility. Miami-Dade Transit: within the Rapid Transit Zone, 12.5% workforce. San Diego MTS: 20% per project. Sound Transit: “80-80-80”—on 80% of parcels suitable for housing, 80% affordable at 80% of Area Median Income (“AMI”). VTA: 35% of portfolio.

Appendix B Survey of Transit Agencies B-24 each municipality under New Jersey’s Mount Laurel litigation). Some transit agencies explicitly incorporate local inclusionary requirements into their RFPs, and others report that, while lacking an official policy, they encourage affordable housing in their JD projects. Table B-12: Transit Agency Affordable Housing Requirements (Question 6) Agency has adopted its own affordable housing (AH) requirements (in all cases, at least one major jurisdiction also has requirements) 8 Agency does not have AH requirements but at least some locals do 12 Neither agency nor locals have AH requirements 9 Not applicable 3 With respect to feasibility, in some projects the affordable units are subsidized largely or entirely through established public financing programs—low-income debt from state housing finance agencies, federal Low Income Housing Tax Credits, state and city housing trust funds, and so forth. In projects where such external subsidies are unavailable or inapplicable, the affordable units must be cross- subsidized by the market-rate units; this often detracts from the residual land value payable to the transit agency.26 Question 6d asked whether the transit agency supports its JD developers in pursuing public financing or subsidy programs. Ten agencies indicated that they do so to one degree or another. This support ranges from MARTA’s active participation in the Transformation Alliance, an “eTOD” (equitable TOD) partnership focused on implementing affordable housing at MARTA stations, to several agencies that try to align their JD projects with write supportive letters A second feasibility issue is whether the agency will ultimately allow a land price discount to support affordable housing. This is a potential focal point of tension among competing JD program goals. As reported in section 4.3.3 above, 14 of the responding agencies indicated either that they explicitly write down the price of their JD sites if needed, or that affordable housing requirements are likely to be reflected in the appraised or market-based valuation. 4.4.2 Parking (Questions 13, 16, 8) Joint development raises two distinct but overlapping parking issues—appropriate park & ride capacity for transit customers, and appropriate parking ratio requirements for the TOD components. The park & ride question is especially important in cases where the JD site is to be created by repurposing a surface park & ride lot and replacing some or all of the affected capacity in a parking structure. As discussed earlier in section 4.3.3, this common strategy is at the core of several agencies’ JD programs, representing a majority of their potential opportunities. The cost of replacement parking and its allocation is a frequent obstacle in JD negotiations; one agency called it “the biggest hurdle”. Underlying the cost and transactional impacts of park & ride replacement is the policy question of how much of the station’s nominal capacity actually needs to be replaced. If the lot is substantially under- utilized, this is a less difficult question, although there may be an internal or external constituency for anticipating future growth in demand. If the lot is heavily used, the potential trade-off is more complex, 26 Many local jurisdictions that require or strongly encourage inclusionary outcomes also offer density bonuses, parking relief, and other zoning-based incentives to that end. These incentives work in combination with any financing subsidies.

Appendix B Survey of Transit Agencies B-25 involving not only the revenue from the park & ride itself and its associated ridership, but the revenue and ridership to be generated by different TOD scenarios and the cost of the replacement garage. Question 13 asked the agencies how they address the replacement issue. Only three said they maintain a 1:1 replacement policy, and these agencies are introducing some flexibility in cases where the lots are underutilized or where the replacement parking can be shared with new development. Ten or 15 years ago, a firm 1:1 policy was common; joint development, the rise of alternative first- and last-mile solutions, and the Federal Transit Administration’s clarification that it does not require 1:1 replacement have combined to change industry thinking.27 Fifteen agencies stated that their policy is not to start with a 1:1 presumption but to make a case-by- case determination. Of these, 11 suggested an intention to replace at less than 1:1 where possible, placing park & ride at a lower priority than feeder bus, shuttle, bicycle, and pedestrian access. Several have developed spreadsheet-based tools that enable them to compare revenue and ridership outcomes across alterative combinations of park & ride replacement and JD buildout. Examples include BART’s original 2005 parking replacement model and Caltrain’s new Station Management Toolbox.28 Among the many examples of JD projects with park & ride reduction at the heart of their plans are BART’s current Lake Merritt project (where the RFP stated that all 200 existing park & ride spaces are expected to be eliminated) and Metro Transit’s Fridley Station project, where a 330-space commuter rail park & ride lot is being reduced to 80—few enough to be provided at-grade.29 Table B-13: Park & Ride Replacement Policies (Question 13) 1:1 replacement policy, with some flexibility 3 Case-by-case determination, with intent to reduce where possible 11 Case-by-case determination, with mixed intent ..4 No stated policy or not applicable 14 Separate from the question of how much park & ride to replace, the agencies were asked whether they prefer to have the developer design and build the replacement garage, as opposed to using proceeds from the JD transaction to build the garage themselves. Of the 11 agencies to whom this question was applicable, all but two preferred to have the developer deliver the garage. They cited, to varying degrees, the advantages of more efficient construction, the ability to more readily “off-load” garage operation and maintenance costs onto the developer, and the potential (with a developer-built and operated garage) to share spaces between park & ride and off-peak TOD uses, reducing the project’s overall cost burden of structured parking. 27 Two agencies are in process of shifting from a 1:1 policy to a case-by-case policy, at least for underutilized lots. 28 In addition to their respective interviews, see https://todresources.org/app/uploads/sites/2/2016/06/2005_access_policy_methodology.pdf and https://railvolution.org/wp-content/uploads/2018/11/Melissa-Jones-TOD-Parking.pdf. 29 See Lake Merritt RFP (https://www.bart.gov/sites/default/files/docs/Lake%20Merritt%20RFP%202018-05- 25%20web.pdf) and Fridley (https://railvolution.org/wp-content/uploads/2018/11/Pierce-Canser-TOD-Parking- RVPGH.pdf).

Appendix B Survey of Transit Agencies B-26 As for residential and commercial parking, the TOD development community, many transit agencies, and an increasing number of zoning jurisdictions have come to broadly agree that traditional minimum parking ratios are excessive; they take insufficient advantage of the transit resource and impose unnecessary costs on station-area development. Because much contemporary TOD is mixed-use, there is also an opportunity to design shared parking and to anticipate trips that will be made on foot; traditional zoning may ignore these possibilities.30 Transit agencies undertaking JD may have both a philosophical and a financial interest in pushing TOD parking requirements as low as the market will accept, with as much shared parking as is practicable for a given project. Question 8 asked the responding agencies if, in their JD projects, they encourage or require reduced ratios and shared parking; and if so, to what degree their position is consistent with zoning or requires relief. Twenty agencies indicated that they encourage, strongly encourage, or require such outcomes (to the degree consistent with zoning). Some (including MARTA, the MBTA, and PAAC) have published recommended parking standards, while BART and Miami-Dade, with their unique statutory control of JD sites, have adopted such standards as of 2020 or intend to do so. The extent to which these agency parking policies are compatible with current zoning varies considerably across service area jurisdictions. A number of central cities were described as having progressive, TOD-friendly parking policies, at least in certain districts. On the other hand, several transit agencies characterized their service areas as still fundamentally automobile-oriented, with little progress on reduced and shared parking; these agencies were more likely to report not having a TOD parking policy of their own and deferring to their local jurisdictions. Several reported that fear of “spill- over parking” from joint development and TOD is a limiting factor in progressive zoning change. 5.0 Best Practices in Project Execution The final focus of the transit agency survey was to explore best practices in the “nuts and bolts” of how agencies execute projects in the public interest. The two areas of focus were stewardship of system assets and the procedures used to solicit developers and negotiate with those are selected. 5.1 Stewardship of Transit Assets In undertaking joint development, a transit agency faces a series of decisions that affect the physical assets of the transit system. These decisions involve: • how to prioritize stations for JD, select specific sites, and define the premises being offered for development; • whether to convey JD rights through sale or long-term lease; • when and how to review design and oversee construction to ensure the safety, proper operation, and appearance of the transit facilities. 5.1.1 Site selection and definition (Questions 11a and 13) In Question 11a, respondents were asked how they go about evaluating their real estate holdings to identify sites that are ripe for joint development (see previous discussion in section 3.1.6). In Question 30 The question of parking ratios was addressed in the outreach interviews conducted with developers, investors, and local government entities; these results are discussed in the Private Sector and Local Government parts of this Technical Memorandum.

Appendix B Survey of Transit Agencies B-27 13, they were asked how they define a particular joint development site with respect to park & ride or other operating facilities (sections 4.3.3 and 4.4.2). In responding to these questions, agencies had an opportunity to indicate how they address system stewardship and operational issues in the JD context. Several of these observations are worthy of mention.31 Table B-14: Agency Observations on Station Selection and Site Definition Considerations in Prioritizing Stations for Joint Development (Question 11a) Multiple agencies include programmatic criteria related to transit operations and maintenance or future improvements; for example: • ensuring that sufficient right-of-way is preserved for future track expansion, even if this makes specific parcels off-limits for JD; • taking the age of stations into account, given the likelihood that older stations are more likely to need improvements associated with JD. Multiple agencies maintain real-time site inventories of park & ride usage, enabling the agency to identify where JD opportunities do or do not conflict with customer demand. Considerations in JD Site Definition (Question 13) An agency with a major JD program has engaged an in-house civil engineer, not only to oversee construction (section 5.1.3 below) but to ensure that stormwater management is built into site definition. An agency is implementing “refreshed standards that minimize the station footprint” without downgrading operational values. Multiple agencies state that when station facilities will be impacted in a JD project, the standard is not only to relocate and replace them but to improve them. Multiple agencies observe as a “lesson learned” that reconfigured pedestrian circulation can affect the passenger experience either positively or negatively, and that this we32q be anticipated starting in the site definition stage. Multiple agencies stated the need to plan for a safe and comfortable ped-bike environment at stations with heavy bus operations; this should be addressed starting at site definition rather than left for design review. Multiple agencies stated the need to involve both operations and public safety staff in the site definition and planning process from Day One. An agency observes that there is an owner responsibility for the streets and pedestrian amenities bordering the station. An agency with a major JD program observed the need to plan at the outset for building loading and servicing. Multiple agencies cited emerging mobility hub and first/last-mile concepts as critical in site definition—planning for ample bike facilities (which may be delivered and operated by the developer), and for ample shuttle and ride-share drop-off. 31 Questions 11a and 13 addressed broader issues, and not all respondents offered observations of relevance to this section. “Multiple agencies” means two to five.

Appendix B Survey of Transit Agencies B-28 5.1.2 Land disposition method (Question 14) An important question in asset stewardship is whether the transit agency should maintain ownership of its joint development properties through long-term lease, rather than selling them outright. Continued ownership may confer a financial advantage, in that a long-term lease enables the land owner to participate in the project’s downstream revenue performance. It also supports stronger measures of “continuing control”, as required by FTA.32 Citing these reasons, 19 agencies expressed a clear preference for ground lease transactions, including one agency that will not sell properties for development and several others that will sell only as a last resort to make a project feasible, or in disposing of small remnants. A twentieth, UTA, uses a unique transaction model in which it forms project-specific joint ventures with its designated developers, contributes its land as equity, and retains a corresponding ownership stake in the JD project. No agency expressed an outright preference to sell development sites as a matter of policy. However, as noted previously in section 4.1.2, five agencies reported that when pursuing development on parcels with an FTA property interest, their preference is to process these transactions as dispositions of excess property (a method that leads to outright sales) rather than FTA/JD projects.33 5.1.3 Design and construction review (Question 19) A final aspect of stewardship addressed in the survey is the extent to which transit agencies review the designs of their JD partners and supervise their construction activities. Design issues can have long-term consequences for stations or other transit facilities, while construction issues have the potential for both short- and long-term consequences. Question 19a asked about design review. In projects where a developer is designing a facility for the transit agency, or a building that will revert to the agency at the conclusion of a ground lease, the review is typically detailed and comprehensive; often such designs must meet specific standards maintained by the agency’s engineering department. With respect to on-site residential and commercial development, however, the prevalent pattern— articulated by 16 of the agencies—is that they perform design review for safety, operations, and accessibility, generally at a level of detail commensurate with the degree of proximity to actual transit facilities. In their responses, several of these agencies emphasized that their reviews are specifically intended not to duplicate or intrude on those done by local zoning and building officials in the 32 While several agencies cited FTA policy as a reason for their own preference to lease rather than sell, FTA’s Joint Development Policy states clearly that land with an FTA interest can be sold as part of an approved JD project as long as “satisfactory continuing control” is maintained through easements or deed restrictions acceptable to FTA. (See Technical Memorandum, Task 2, Part C, FTA Joint Development Policy and Its Evolution.) A similar situation affects Metro Transit, which, for state constitutional reasons, is restricted in how it can dispose of land for development if that land was acquired using state bond funds. Such parcels are sold, with continuing control maintained through deed restriction. 33 It should also be understood that many transit agencies own a combination of parcels that have an FTA interest and parcels that do not. Regardless of any limitations or preferences in dealing with “FTA land”, agencies are free to sell or lease non-FTA land as they choose.

Appendix B Survey of Transit Agencies B-29 entitlement and permitting process. (As one respondent said, “we don’t get into the plumbing or the aesthetics.”) That said, among these 16 agencies, several did indicate areas of interest beyond the narrow limits of operations, safety, and accessibility. The topics mentioned included: • consistency with the agency’s TOD Guidelines; • consistency with the quality of construction in one or more agreed-upon reference projects; • most importantly, consistency of master plans, site plans, and massing with the plans approved as part of the developer selection and negotiation process. Eight agencies went further, indicating that they conduct a more comprehensive design review, that they participate in the comprehensive review by local officials, or that they are actively working to achieve this. Table B-15: Level of Joint Development Design Review (Question 19) Review for ops, safety, accessibility, etc., but not comprehensively 16 Conduct a more comprehensive review or participate in local review 9 No response or not applicable ..7 Some agencies volunteered “lessons learned” from their design review experience, including: • It is crucial to involve the relevant internal staff departments in the design review process from the outset (and preferably to have involved them in the earlier site definition stage). • If transit facilities, JD buildings, and public circulation areas are being designed in parallel (particularly if by different teams), it is imperative to coordinate them for optimal compatibility. • When the developer is designing and building a shared-use garage, the transit agency has an interest in understanding from the outset where the park & ride spaces will be located and how they will be accessed and operated. Question 19b asked about construction adjacent to operating transit facilities, as is the case with many joint development projects. Virtually all of the agencies have established policies and procedures for review of adjacent construction, whether JD on agency land or third-party construction on land owned by others. These procedures typically include safety and operational design review as outlined above, with specific engineering standards as applicable for the type of transit facility and the degree of adjacency involved. Adjacent construction procedures also address safety and maintenance of operations during the construction period, with field supervision as appropriate. For large transit systems with rail stations and extensive guideway segments in immediate proximity to existing buildings or buildable land, the adjacent construction review process may evolve into an entire division or program, such as CTA’s Adjacent Construction Division or Translink’s Adjacent and Integrated Development Program. Several agencies indicated that in addition to their policies and procedures, they maintain and publish adjacent construction manuals in which all relevant processes and standards are compiled; these include the MBTA, LA Metro, WMATA, Miami-Dade Transit, and Caltrain.

Appendix B Survey of Transit Agencies B-30 5.2 Developer Procurement and Negotiations The mechanics of soliciting joint development proposals and concluding agreements with developers is critical to successful project execution. In Appendix I, the research team examines a sampling of procurement documents and development agreements, so that examples of successful practice can be noted in the Guide and made available to readers. In the survey, we were looking for a high-level breakdown of how agencies approach these tasks. We also asked about policies with respect to unsolicited proposals, a frequent occurrence in the industry. 5.2.1 Solicitation methods (Question 17) Agencies were asked what type of solicitation documents they use—Request for Qualifications (RFQ), Request for Proposal (RFP), Request for Expressions of Interest (RFEI), or combinations of these. The responses indicated a wide range of practices: • The most common method is a one-step RFP, which 13 agencies said they now use most or all of the time or intend to going forward. • Seven agencies said they use (or intend to use) one-step RFQs—short-listing, interviewing, and selecting from that single submittal. • Seven others indicated that they use a two-step RFQ/RFP process (short-listing on the basis of the RFQ and then issuing an RFP to those bidders). • Four agencies have used RFEIs, by one name or another, to initiate solicitations, transitioning into an RFQ or RFP based on what they learned. Table B-16: Use of Developer Solicitation Formats (Question 17a, b) 34 One-step Request for Proposals 13 One-step Request for Qualifications or equivalent 7 Two-step RFQ/RFP or equivalent ..7 Request for Expressions of Interest to initiate a solicitation(s) 4 It is clear from the actual responses that many agencies with multiple JD projects or ongoing programs have experimented with different solicitation formats; that some are comfortable choosing the most appropriate format on a project-by-project basis; and that hybrid formats are common (such as RFPs that include Statements of Qualifications or RFQs that include preliminary proposal concepts). Also clear is that to the extent agencies are trying to accommodate the preferences of the development community in establishing a solicitation format, the messages are mixed. Some agencies view their development communities as preferring a two-step RFQ/RFP process because the initial investment of time and resources is limited; the major investment does not occur until and unless the developer is shortlisted. Others report that developers have urged them to adopt a one-step process (even if that step is a full RFP), because the two-step process is significantly more time-consuming. Among those transit agencies that use a one-step process, some prefer an RFQ, which affords them greater flexibility, while others prefer an RFP, which may be more effective in winnowing out developers. 34 Agencies reporting recent or on-going preference for two different formats were counted in both.

Appendix B Survey of Transit Agencies B-31 The agencies were asked (Question 17c) if they have official, published policies with respect to unsolicited joint development proposals. Fourteen agencies reported that they have such a policy, and five more responded that they are actively working on drafting one. The most elaborate unsolicited proposal policies are those of LA Metro and Denver RTD.35 The agency policies vary considerably; a frequent but by no means universal paradigm allows the agency to make an initial evaluation as to whether the unsolicited proposal is timely and of interest. If not, it is rejected; if the agency is interested, then in most cases it may proceed by issuing some form of RFP to see if there are advantageous competing proposals. If the unsolicited proposal comes from a public agency or a uniquely situated adjacent property owner, some agency policies allow a direct negotiation rather than a competitive solicitation. 5.2.2 Negotiation and closing methods (Question 18) Finally, the agencies were asked if there is a particular contractual format they use to govern the crucial stage of negotiations between the initial election of the developer and the final land disposition and development agreement that includes or accompanies the ground lease or deed of sale.36 Of the 29 agencies with at least one JD project undertaken, 22 used some form of contract for this purpose. The names vary, including Exclusive Negotiating Agreement (“ENA”, the standard term in California and some other states), Development Agreement, Joint Development Agreement, Letter of Intent, and Memorandum of Agreement. Agencies that do not use an interim agreement may rely on other mechanisms to bind the selected developer to the negotiating process. As one agency explained, the terms of the interim agreement may be included in the RFP, with language indicating that in submitting a proposal, the developer accepts those terms. Upon selection, the developer may then be required to post a non-refundable deposit as a disincentive to abandoning the negotiations. 6.0 Summary and Transition As explained in the Introduction, this report on the survey of 32 transit agencies constitutes one of a series of three inter-related appendices: • Appendix B: Transit Agencies; • Appendix C: Private Sector Companies; • Appendix D: Local and Regional Governments. Appendices C and D include cross-referenced discussions of how the responses of local government jurisdictions and private sector actors, respectively, correspond to those of the transit agencies on the same or similar questions. The key findings of this report on the survey of transit agencies may be summarized as follows. 35 http://media.metro.net/projects_studies/joint_development/images/jdprocess_201701_finalattachment_a.pdf and http://www.rtd-denver.com/documents/businesscenter/Resolution16_Series2015_UnsolicitedProposal.pdf 36 In this discussion, the term “agreement” refers to a binding agreement and is used interchangeably with the term “contract”.

Appendix B Survey of Transit Agencies B-32 The Joint Development Practice: Who’s Doing What • Most of the agencies surveyed have undertaken or are actively planning one or more joint development projects. Most have undertaken or are planning multiple projects, and most consider their JD activity to constitute an ongoing program, requiring specialized technical capacities. Two-thirds of the agencies have adopted an official JD policy (or, in a common pattern, a TOD Policy that explicitly distinguishes their joint development work). While this level of JD activity, program formation, and policy adoption cannot be assumed to prevail in the US transit community at large, it suggests that once an agency undertakes a JD project, it will likely seek to expand the scope and sophistication of its JD activity if circumstances permit. • The reported JD activity includes not only the multi-modal agencies that operate light rail, heavy rail, or commuter rail services, but the typically smaller agencies that operate bus systems only (or which also operate streetcar services on behalf of a municipal owner). This finding is important because so many US transit agencies fall in the bus-only category. • Many agencies control a portfolio of potentially developable sites, including but by no means limited to park & ride lots. Prioritizing sites for development may involve a range of strategies, including a formal or informal assessment of market readiness and an evaluation, from a stewardship perspective, of which sites (or portions of sites) are legitimately available for the long term. • Among agencies planning new or extended transit corridors, some recognize an opportunity to make station location, access, and right-of-way decisions (consistent with Enabling Act limitations) in a way that expands the potential joint development opportunity. This approach is emerging but not yet prevalent. • A transit agency’s Enabling Act (or equivalent charter document) determines what it can and cannot do in the field of joint development. Most Enabling Acts empower their agencies to acquire and dispose of land and to enter into a broad array of contracts, but are silent on JD per se, allowing it only implicitly. A significant minority of the Enabling Acts represented in our survey, however, do explicitly authorize JD, including in some cases the power to acquire land for this purpose and, in two exceptional cases, to control zoning on joint development sites. • While most of the agencies in our survey are structured as stand-alone, quasi-independent authorities, several are departments or divisions of city, county, regional, or state government, and several others have a board-level affiliation with the state DOT. These distinctions were catalogued in this memo and their implications for JD practice will be discussed in the Guide. • Transit agencies generally report that local land use and zoning jurisdictions are prepared to work collaboratively on TOD and JD. In many instances, zoning is reported to be moving in a “TOD-friendly” (and thus JD-friendly) direction. As one would expect, transit agencies with large, multi-municipal service areas report that the TOD-friendliness of local officials and actual zoning codes varies widely by jurisdiction. Broadly speaking, central cities and other transit-rich communities tend to be the most TOD-friendly. Transit agencies have diverse strategies for interacting with the local planning and zoning process and related stakeholder engagement, both before a developer has been selected for a given project and afterwards. Advancing the State of the Practice • Most US transit agencies report that most of their operating real estate, or at least a significant part of it, was acquired with FTA funding and thus carries an FTA interest. When seeking to

Appendix B Survey of Transit Agencies B-33 develop such sites, agencies have a choice (in consultation with FTA) of how to address the FTA interest: either by engaging the FTA-assisted joint development (FTA/JD) review and approval process, or by declaring the affected property excess, selling it to the developer, and accounting for the FTA interest in the manner prescribed by regulation. A majority of the agencies in the survey report that they prefer, and normally follow, the FTA-JD procedure. Some, however, prefer to avoid this option, and some decide on a case-by-case basis. The Guide seeks to elucidate the FTA-JD process. • The survey explored three emerging models for expanding the “footprint” or “horizon” of the joint development enterprise. Most widespread is the willingness of transit agencies and sister land-owning agencies to partner, in one way or another, to create significant development sites and market them for development. There are many instructive case studies of this practice. A second model is the agreement by an adjacent developer to fund some or all of the cost of a replacement or infill station; while not as widespread, this concept offers a number of real- world examples in multiple transit markets. The third model is the extension of the joint development concept to transit agency properties outside of traditional passenger locations— maintenance facilities, satellite park & rides, agency headquarters space. • A somewhat unexpected finding was that half of the agencies in the survey have been involved in local value capture districts where some or all of the proceeds were directed to the transit agency for transit improvements. In the research team’s view, when such value capture mechanisms are closely tied to one or more station areas and the transit agency is a partner in the planning process, the transaction closely resembles joint development as defined in the Guide. Joint Development Economics • Transit agencies undertake joint development for a variety of reasons. The two pre-eminent goals are to monetize the affected real estate assets and to generate new ridership and farebox revenue. Many agencies also seek to avoid specific capital or operating costs by off-loading them to a developer. Alongside these financial goals is a set of broader public policy goals that many agencies share to one degree or another, including placemaking, equitable development, and smart growth. • Most transit agencies base their choice of joint development partners on a multi-criterion “best value” selection, rather than a simple “high bid”. It is common, but not universal, for agencies to have a threshold requirement of obtaining Fair Market Value for their property. • It was widely agreed that JD transactions have to overcome a fundamental tension between the transit agency’s expectation of land value and the developer’s expectation of market feasibility. In addition to normal buyer-seller divergence, the economics of a joint development project are often burdened by the cost premiums associated with in-kind obligations (such as park & ride replacement in costly garages) and, increasingly, affordable housing. Aside from accepting a concessionary land price, a transit agency’s options for mitigating this basic economic tension may include securing third-party gap funding and increasing the site’s development envelope through upzoning or other local action. • The survey called out parking and affordable housing as issues that not only affect project economics but are rooted in high-visibility policy issues. It is increasingly common for either the local land use jurisdiction or the transit agency itself to establish “inclusionary” housing

Appendix B Survey of Transit Agencies B-34 requirements. Nine transit agencies in our survey, including several of the largest systems with the most robust JD programs, have done so. The parking issue is two-fold: park & ride replacement, and the parking ratios required for joint development and other TOD. For park & ride, agency policies are evolving toward case-by-case, “all-in” comparisons of ridership and revenue implications, rather than automatic 1:1 replacement. For development, transit agencies often advocate for zoning changes that reduce the required parking ratios and encourage shared parking. Best Practices in JD Execution The survey explored in depth how transit agencies address the “nuts and bolts” of implementing joint development projects. This aspect of the study included: • How agencies select sites for development and define the premises being offered and any required transit facility outcomes. • The preferred method of conveying JD real property and development rights (the great majority of agencies prefer long-term lease rather than outright sale). • How agencies conduct the developer solicitation process, including a variety of preferences among one-step Requests for Qualifications, one-step Requests for Proposals, and two-step “RFQ/RFP” selections. • The extent to which transit agencies require design and constructability review for JD projects on their property, particularly when the project is in close physical proximity to operating transit facilities. • How transit agencies conduct the process of “closing the deal”—negotiating with a tentatively selected developer to finalize the project parameters and business terms, achieve key closing conditions, and conclude the lease or sale.