Guide to Value Capture Financing for Public Transportation Projects (2016) / Chapter Skim
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Pages 38-43
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From page 38... ...
However, as discussed in the following, it is rare that financing is secured solely by value capture revenues. It is typical for a major transit project to include all three funding sources.
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From page 39... ...
– State and federal grants Tax-exempt and taxable bonds Bank debt Innovative Station related – Concessions – Parking innovations – Innovative advertising Right-of-way sharing Value capture related – Joint development – Special assessment district – Tax increment finance – Impact fees/negotiated exactions – Parking fees – Naming rights Tolls from partner agencies Innovative finance – TIFIA – RRIF – State infra. bank – Tax credit loans Via a P3 delivery mechanism – Private activity bonds – Availability payments – Private equity Note: TIFIA = Transportation Infrastructure Finance and Innovation Act.
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From page 40... ...
Credit rating agencies feel more comfortable assigning investment-grade ratings to projects that are supported by existing revenue, such as the financing associated with the Dulles Metrorail special assessment district in the Washington, D.C., area (see Appendix G)
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From page 41... ...
While value capture financing can take advantage of features within TIFIA to accommodate uncertain cash flow resulting from the vagaries of real estate markets, its utility is limited by requirements that such cash flows be highly reliable or subject to a backstop. Where financing is dependent on TIF, joint development, or impact fee revenues related to new development, a backstop or other mitigation of real estate market risk may be required.
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From page 42... ...
. Creation or preservation of affordable housing near TOD, as the FAST Act's TOD Pilot Planning Grant program supports, is a public policy objective that can be hindered through the value created by public transit or helped if value capture is applied to address affordable housing needs.
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From page 43... ...
Availability payment–based P3 structures are typically used for transit projects due to the fact that typical revenue streams associated with transit projects, such as fare-box, advertising, and station concessions, are not attractive enough to offset the high capital costs associated with designing, building, financing, operating, and maintaining transit facilities.5 Formal P3 structures have not typically been employed for the real estate development portion of value capture projects. In the case of Denver Union Station, a developer served as the master developer but was not the entity responsible for station and infrastructure construction loans.
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