A baseline market analysis evaluates the viability and expected outcomes of a joint development. As with any business transaction, a project sponsor should fully understand its relative position in participating in local/regional economic development activity and in negotiating the terms of the joint development based on the value of its contribution to the project. FTA requires that a baseline market analysis is conducted to ensure that the project sponsor makes a good faith effort in determining the amount of revenue to be received from the joint development project. FTA does not prescribe which specific studies and analyses are required, nor who is responsible for developing them. However, the results of the baseline market analysis should, at a minimum, identify the following information:

• Fair market value of any FTA-assisted property or assets contributed to the project;
• Expected amount of revenue generated by the project and the share of the revenue the project sponsor will receive; and
• Estimated total cost of the project and the parties responsible for each of them.

Other information identified by the results of the baseline market analysis may include:

• Existing conditions of the project property;
• General economic and market conditions of the region/area;
• Current and planned economic development activity for the region/area; and
• Development risks and benefits to the project sponsor.

FTA only requires that a project sponsor identify the baseline market analysis conducted when submitting a formal project request to FTA. Project sponsors are not required to submit the baseline market analysis documents along with their joint development project requests, unless requested by FTA.