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Cotton Belt. Innovative Financing Options for Regional Rail Southwestern Rail Conference January 28, 2011. Cotton Belt Corridor. Cotton Belt History. 1983 DART Service Plan Included the Cotton Belt. 1990 DART Purchases Cotton Belt. 2002 DFW Airport Undertakes Rail Access Study.

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Cotton belt

Cotton Belt

Innovative Financing Options

for Regional Rail

Southwestern Rail Conference

January 28, 2011




1983 dart service plan included the cotton belt
1983 DART Service Plan Included the Cotton Belt


1990 dart purchases cotton belt
1990 DART PurchasesCotton Belt


2002 dfw airport undertakes rail access study
2002 DFW Airport Undertakes Rail Access Study



Natinsky plan
Natinsky” Plan



Dart s current system plan includes express rail on cotton belt but no funding
DART’s Current System Plan Includes Express Rail On Cotton Belt, But No Funding


WhyIs Additional Funding Needed?

DART Sales Tax Trending Down

11


Regional approach
Regional Approach

All Must Be On “Same Page”

Historically Regionalism Resulted in Major Successes – D/FW Airport

Cotton Belt Potentially Template for Realization of Broader Rail North Texas Plan


N ew funding paradigm
New Funding Paradigm

Timely and Necessary

iFi Promises to be New Funding Paradigm


So additional sources needed texas local option transportation act tlota
So, Additional Sources Needed:Texas Local Option Transportation Act (TLOTA)

  • What Was TLOTA?

    • Local Option Tax to Increase Transit Revenues

    • County-based Opt In

    • Funds Raised In a Transit Service Area Stay Were To Stay In That Area

    • Includes Equity Benefit Provision to Benefit Cities Within a County Proportionally

    • No New Levels of Government


Tlota failed in legislature but its regional tone prevails
TLOTA Failed In Legislature, But Its Regional Tone Prevails

  • TLOTA Supporters

    • Legislators

    • Local Governments

    • Transit Authorities

    • Chambers of Commerce

    • Advocacy Organizations


Dart the t and ppp
DART, The T and PPP

  • Issued Joint Request for Information

  • Sought Alternative Funding

  • Coordinated with COG

    • 55 Respondents

    • All Essentially Said, “If DART Finds More Revenue, We Can Finance or Design System”

    • RFI Reinforced Need for Creative Approach

    • RFI Underscored Need for Regional Approach


Rfi process underscored need for regional approach
RFI Process Underscored Need for Regional Approach

All Must Be On “Same Page”

Historically Regionalism Resulted In Major Successes Such As DFW Airport

Cotton Belt Potentially Initial Template For Realization of Broader Rail North Texas Plan



Ifi approach
iFi Approach

  • Phase 1 – Structure Revenue Streams

    • Assess Potential to Raise Private Capital

  • Phase 2a – Construct and Commit

    • Agreements to Commit Streams to Repay

  • Phase 2b – Monetize Revenue Streams

    • Fund Project Via a Concession

    • Possible FDBOM


Ifi process
iFi Process

Started with 130 Potential Revenue Sources

Analyzed the Corridor

Interviewed Stakeholders

Interviewed Potential Investors

Considered Policy Implications

Analyzing Viable Set of Sources


Ifi structure
iFi Structure

  • Potential Revenue Sources

    • Non-geographic

      • Advertising

      • Fiber Optic

      • Enhanced Farebox Recovery/Rapid Card

      • Parking System

    • Geographic

      • Public Land Development

      • Value Capture


Value capture
Value-Capture

Appraised Value

Captured

Appraised

Value

Value After Termination

Tax Increment

Baseline Property Value

Time

Creation

Termination



Conventional development
Conventional Development

Buffers Instead of Transitions

Lack of a Transportation Network

Not Pedestrian-friendly, Not Transit-friendly

Narrowly Stratified Market

Value Drops When The Intended Use No Longer Viable


Sustainable development
Sustainable Development

Transitions Instead of Buffers

A Network of Transportation, Encouraging Choice

Broad Market (Age, Socio-economic, Race, Marital Status, etc.)

Designed To Endure

Value Holds When The Current Use Is No Longer Viable


We ve ignored value capture in transportation investment
We’ve Ignored Value Capture in Transportation Investment

The long term impact of delinking design of transportation and cities

is pulling the current American funding system down onto its last leg.


Trends suggest a new opportunity to rely again on value capture
Trends Suggest a New Opportunity to Rely Again on Value Capture

40 million housing transactions expected over the next 40 years, providing an opportunity to speak to the new generation who want urban living

Millennials and Boomers


Market Common

Clarendon, Arlington VA

Recently in the Wall Street Journal –

“Gen Y housing preferences are the subject

of at least two panels at this week's [NAHB]convention.

A key finding: They want to walk everywhere. Melina Duggal, a principal with adviser RCLCO, [said a] whopping 88% want to be in an urban setting; but since cities themselves can be so expensive, places with shopping, dining and transit such as Bethesda and Arlington in the DC suburbs will do just fine.”


Sustainable development1
Sustainable Development

Arlington, VA

31% of taxbase

In 7% Land Area

Structuring Greater Value Aggregation


Is ifi realistic
Is iFi Realistic?

Potential Investors Confirm Value Capture Approach Is Sound and Viable


Value capture applied to corridor
Value Capture Applied to Corridor

  • Typology Examples

    • 12thStreet (redevelopment)

    • Bush Central (infill greenfield)

    • UTD (public lands development)

    • Cypress Waters (existing TIF, MMD)

    • North Richland Hills (redevelopment)

    • Summer Creek (new greenfield)


12 th street
12th Street


Bush central
Bush Central

Courtesy of GFF and Gateway Planning


View to Bush Central Station Plaza






Other key revenue sources
Other Key Revenue Sources

Fair Fare Structure

Rapid Card Opportunity

Railcar Manufacturing Facility

Coordinated Multimodal Leveraging


Fair fare
Fair Fare

What is a Fair Fare and Where Are Your Partners?


Rapid card opportunity
Rapid Card Opportunity

Enhanced Farebox Recovery

Evolving Technology

Multimodal Possibilities

Competition for Franchise

Implications for Partnerships


Rapid card elements
Rapid Card Elements

  • Distance

  • Destination

  • Time of Day

  • Class of Fare (i.e. Student, Disabled, Economically Disadvantaged, etc)

  • Regional Equity (In-system Resident or Out-of-system Resident)


Rapid card a systematic approach
Rapid Card – a Systematic Approach

  • Transit

  • Toll Systems

  • Parking Concessions

    • Cities

    • D/FW Airport

    • DART station areas

  • Retail Vendors (station areas, card “recharge” locations, rental vehicle concessions, etc.)

  • Taxis

  • Limousines


Manufacturing facility
Manufacturing Facility

National Opportunity for Local Economic Development

DFW as National Rail Development Leader


Multimodal operations and leveraging of funding
Multimodal Operations and Leveraging of Funding

Transportation and Land Use Can No Longer Be Viewed In Separate Silos

Mobility 2035 Plan Relies On More Balance of Rail and Roads, Embracing North Texas 2050 Growth Scenario

Sustainable Economy


When will we s ee the results special sauce
When Will We See the Results?(Special Sauce)

INGREDIENTS: NAMING RIGHTS, TOLL REVENUE, FEDERAL FUNDING, LOCAL OPTION GAS TAX, LOANS & GRANTS, ADVERTISING, FAREBOX RECOVERY, SMART CARD, VALUE CAPTURE, PUBLIC LAND DEVELOPMENT, FIBER OPTIC, PARKING, TAX REVENUE SHARING, VEHICLE REGISTRATION FEE, IMPACT FEES, TIF, OTHER NATURAL FLAVORS


Private delivery of public functions a new model
Private Delivery of Public Functions: A New Model?

What Are The Implications for Attracting Private Investment?

What Efficiencies of Cost Optimization Can Be Achieved?

Can This Business Model Translate Beyond the Cotton Belt?




But dart sales taxes were projected up
But DART Sales Taxes were Projected Up

Finance Department


Additional Downward

Revision: $2.7 Billion

Finance Department


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