An assessment of transit investments that enhance real estate value and development potential, and strategies to capture value for additional transit improvements.

1. Finding the Value, Capturing it,
and Putting it to Work
Stan Wall
Partner
HR&A Advisors, Inc.
October 2015

2. Value Capture: Stan Wall
Transit must create value in order to capture value.
Transit
Improvement
Increased
Accessibility,
Lower Travel
Time
Higher Land
Values
Value Capture

3. Value Capture: Stan Wall
Value Capture Strategy Development Ownership
Joint Development New Transit Agency
Negotiated Exactions Existing/New Private
Special Assessment Districts Existing/New Private
Development Bonus New Private
Air Rights New Transit Agency/Private
Tax Increment Financing Existing/New Private
Development Impact Fees New Private
Transportation Utility Fees Existing Private
Land Value Tax Existing/New Private
Value capture typically requires new development to succeed.

4. Value Capture: Stan Wall
Value capture works where new development is feasible, with
positive land value.
FEASIBLEINFEASIBLE
COST REVENUE
LOSS
COST REVENUE
PROFIT

5. Value Capture: Stan Wall
Value capture requires real estate, capital markets and PPP capacity
to craft and execute strategies.
Healthy Real Estate
Markets
Capital Markets Public-Private
Partnership Capacity

6. Value Capture: Stan Wall
Washington Metro 2004 NOMA Station Value Capture
• Finance/Value Capture:
– DC Government Investment: $53.7
Million
– Federal Contribution: $25 Million
– Special Taxing District: $25 Million
– Total Investment: $103.7 Million
• Value Creation:
– $3 Billion Private Investment
– 8 Million sq ft of Mixed-Use
(6 Million sq ft Office, 200,000 sq ft
Retail, 1,700 Housing Units, 400
Hotel Rooms)

7. Value Capture: Stan Wall
Washington Metro NOMA Station - Value Capture Today
New Pedestrian
Tunnel & Plaza
Tax
Increment
Financing
Special Tax
Assessment
Direct
Contribution
Infrastructure that
enhances value &
development Potential
east of NOMA

8. Value Capture: Stan Wall
Washington DC Streetcar - Value Generation
No Build
Build -
Moderate
Build -
High
Extended System $484 $585 $771
Priority System $2,105 $2,607 $3,097
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
NetPresentValue($millions)
$2.6 billion
$3.2 billion
$3.9 billion

9. Value Capture: Stan Wall
Washington DC Streetcar - Value Capture
T – Transit policy goals
H – Affordable housing policy goals

10. Value Capture: Stan Wall
NJ Transit – Hudson-Bergen Light Rail West Side Extension
Bayfront
Redevelopment
Area
West Side Ave StationPotential Bayfront Station
• Cost (2011):
– Capital cost: $214 million
– Operating cost: $1.9 million/year
• Value Creation (2011):
– $160 million in value
– 6 million SF residential
– 640,000 SF office
• Value Capture Proposed:
– Negotiated Exaction

11. Value Capture: Stan Wall
First office towers under construction;
subway opened September 13, 2015
Aggressive rezoning for commercial
and residential sites, up to 33 FAR
Extension of #7 subway line and
creation of new boulevard through
synthetic TIF
Uniform Tax Exemption Policy -
property tax abatements of up to 40%
for “first-move” office towers
10 Hudson Yards
New York City – Hudson Yards

12. Thank You
Stan Wall
Partner, HR&A Advisors, Inc.
swall@hraadvisors.com
http://www.hraadvisors.com