Note: This is being provided in an edited format. Communication Access Realtime Translation (CART) or captioning are provided in order to facilitate communication accessibility and may not be a totally verbatim record of the proceedings.

>> Good afternoon, and welcome to this FTA webinar presentation of its final Joint Development Circular.
I am Kimberly Gayle, the Director of the Office of Policy Review and Development in FTA’s Office of Budget and Policy.

Before we get started, let’s go over a few “housekeeping” matters.

1. You may submit questions throughout the webinar using the Q&A Box that will be forwarded to us here, and we will address them as time allows.
2. Any questions submitted that are not addressed today will be posted with the answers on our website as part of the FAQ document.
3. Please visit the FTA Joint Development webpage that will be provided at the end of today’s presentation.
4. And lastly, please follow along with us having the final circular readily available for your reference.

Presenting along with me today will be Sharon Pugh, Christopher Hall, Elizabeth Patel, and Mazhar Ali Awan.

Today’s agenda features:

• General introduction and background on the circular’s evolution from its proposed to final form, highlighting new requirements;
• A chapter by chapter look at the final circular, with a focus on key elements and changes;
• And last, a Question and Answer (Q&A) session during which we will address as many of your questions as possible today.

On March 6, 2013, FTA published a Notice of Availability of a Proposed Circular on Joint Development in the Federal Register, which invited public review of and comments to the docket.

FTA held a webinar on March 28, 2013 introducing the proposed Circular. Today’s webinar is in a similar format highlighting the final changes made since March 2013.

In addition to our request for general comments, we specifically solicited comments on the “fair share of revenue” criterion, seeking input on how FTA should assess whether a project generates a “fair share of revenue” and any measures or criteria that should be used.

As a result, FTA’s new policy focus of ensuring that transit agencies (project sponsors) receive a fair share of the revenue generated by the joint development project drew lots of comments.

FTA held a webinar on March 28, 2013 introducing the proposed Circular. Today’s webinar is in a similar format highlighting the final changes made since March 2013.

The final circular was subsequently developed and finalized. The final Circular portrays the new framework for FTA’s review and consideration of joint development proposals.

The highlights of this framework include:

• The requirement to conduct a baseline market analysis and certification thereto.
  • In the past, FTA presumed that most sponsors of joint development were already conducting some form of market analysis by which to assess the feasibility and potential of JD projects;
  • Now, we have made it a requirement removing any doubt of the project sponsors knowledge of the projects impact, both economically and financially.
  • Mazhar Awan will discuss the baseline market analysis later in this webinar.
• The 2nd highlighted element is the establishment of a minimum threshold value for the fair share of revenue.
  • Previously, FTA did not specify how this criterion should be satisfied.
  • Now, we have established a minimum threshold based on the amount of FTA’s investment in the joint development project.
  • This will also be discussed in greater detail later in the webinar.
• And finally, we have attempted to clarify the review process FTA will use for examining joint development proposals.
  • The last chapter of the circular provides insight into how FTA will assess the various aspects of the joint development, and how decisions will be made.

In providing you an overview of the circular,

• Sharon Pugh will present FTA’s policy, application, eligibility requirements, and review process;
• Chris Hall will present real property requirements and considerations;
• Elizabeth Patel will present the application of NEPA requirements to joint development; and
• Mazhar Ali Awan will present the baseline market analysis and certification requirements.

FTA has traditionally defined joint development in terms of the Federal interest --

• “joint development is a project constructed on real property that was acquired with FTA funds ….”
• Not any more – we’re being industry focused and have developed a more universal definition.

First, and foremost, joint development is a transit project. It’s something tangible.

• MAP-21 actually uses the term “joint development,” including it among the definitions of a capital project.
• That eliminates any question about its FTA funding eligibility.

Second, the distinguishing characteristic is that the project is integrally related to and often co-located with commercial, residential, or mixed use development.

• The relationship between transit and the non-transit development is key, whether it’s a physical relationship or a functional relationship.
• I’ll discuss this a bit more a little later.

Joint development does not require a private sector partner.

• The partnership may involve a public agency, e.g., local government, or a non-profit organization.
• We’ve learned that these arrangements are particularly important in fostering livability and supporting ladders for opportunities.
• There’s been an increase in transit projects being developed on publicly owned land — particularly for bus systems in the form of transit centers.
• And also with transit facilities being integrated with housing development.
• Again, the key is the relationship of the development with transit, not who is doing the development.
  All transit modes may be used for joint development.
• Joint development is most often associated with fixed guideway transit systems — either bus or rail — as part of construction, renovation or extension.
• But joint development may also be provided in conjunction with bus and intermodal facilities, intercity bus and rail facilities, transit malls, and historic transportation facilities.
• Hence, joint development can apply to all community types — even rural areas.

You see, joint development itself has nothing to do with FTA, unless you want to use FTA funds or FTA-funded assets for joint development.

• The use of Federal transit funds or assisted assets (e.g., real property) is our link to JD.
• You say, “what’s the difference?” Many of the larger transit agencies do not use FTA funds or FTA-funded assets in all of their joint development projects. Therefore, some of their joint developments will be “federalized” and some not.
• So rather than define joint development according to whether it’s “federalized”, we’ve developed a general definition for industry use.

If the joint development uses FTA funds in any capacity, i.e., direct grant, acquired property, etc., then it is federalized or has a federal interest.

• When the joint development has a federal interest, FTA rules and requirements apply.
• Only then does the circular apply.

Our policy on joint development isn’t new. We’re just finally putting in writing!

FTA has always viewed joint development as a tool for enhancing transit.

• We’ve considered it as an innovative finance technique — to generate revenue for the transit agency.
• It’s been used as an economic development mechanism — for community revitalization.
• The bottom line is — joint development enhances mobility: improved accessibility and connectivity.
• And transit is all about mobility.
• So we want to support joint development as much as possible.

The revenue a grantee receives from FTA-assisted JD is treated as program income.

• Program income is gross income the grantee receives directly from a grant-supported activity.
• It can be used for either or both transit capital or operating expenses.
• FTA has promoted program income to supplement limited direct transit funding.
• It includes fees collected from rent or other use of property acquired with FTA funding.

The financial benefit of joint development is clear. But there are other and varied benefits of joint development.

• In addition to transit revenues, there might be efficient land use, enhanced economic development, etc.
• Each community — and transit agency — must prioritize its own benefit goals.

Therefore, FTA supports the project sponsor’s ability to work with the private sector and others in pursuing joint development:

• Negotiating and contracting with 3rd parties;
• Forms of business structure;
• Determining local goals and objectives.

However, we have established a minimum threshold requirement for the amount of revenue the grantee must receive from the joint development project — aka, FSR.

Our concern is that the project meet our requirements.

Own benefit goals, therefore FTA supports the projects responsibility to work with partners in pursuing, that is negotiating and contracting with third-party and various forms of business structures and determining local goals and objectives. However, we have established a requirement for the amount of revenue the grantee must receive from the joint development project which is also known as the fair share of revenue. Our concern is that the project meet our requirements. Before we get too far along, let's clarify a few things. First, the circular only applies to joint development having a federal interest, that is only those joint development federal projects that use FTA funds or transit asset previously acquired using those funds. FTA recognizes that sometimes it can involve no FTA investment whatsoever, this circular does not apply to those cases. Like any transit project, when only FTA planning funds are used, the project is not considered to have a federal interest. FTA capital funds can be used toward development and construction of the joint development project itself as well as toward additional found additional support for facilities, on top of which the joint development project will be built. A variety of FTA funds and capital assets may be used, real property, a transit facility or a portion thereof, or any other equipment. Joint development typically includes development activity that may involve public sector or nonprofit development as well.

Unless just a reminder, there is no specific FTA funding program for joint development. Most of the FTA capital programs for example 5307, 5309, 5339 et cetera may be used to fund development projection and or related activities. Accordingly the funding requirements are applicable to the particular joint development project in addition to the joint development requirements identified in the circular. While I'm not going into great detail, it's important to note the distinctions between joint development and other activities. Specifically transit-oriented development, public, private partnerships and bicycle and pedestrians projects. With transit-oriented development the key distinction between joint development is that it occurs on transit-owned land and involved transit funding of the construction and otherwise involves use of a transit asset. It's a primary and active participant. TOD is a nontransit activity, that is, it does not involve development of or use of transit-owned assets. TOD focuses on the area around the transit and may involved different projects, it develops the transit facility itself and say usually related to a single project. Both joint development is involved in FTA funds and FTA capital funds can only be used for joint development. The participation in joint development doesn't automatically make it a public/private partnership or P3. They are a specific procurement method for delivering a transit project, P3s themselves are not transit projects. With a P3 a private entity assumes responsibility and financial liability for performing specific functions in connection with construction or development of a transit project. Joint development combines a transit project with a nontransit project development.

Bicycle pedestrians projects may also be transit projects. Bike/ped projects are eligible for you understand funding on their own, they can be stand alone transit projects or part of a larger project and require planning. Usually these are to promote the general accessibility for pedestrians and bicycle transit riders as covered under the eligibility of bicycle improvements, under federal transit law.

In a joint development bike/ped facilities would provide connectivity between the transit and nontransit development. The purposes of the bicycle and pedestrians facilities need to be considered to determine whether they apply to joint development.

When FTA is presented with a joint development project there are typically two categories of issues that we must consider. Eligibility issues associated with the use of FTA grant funds or program income for a capital project or project property and issues associated with the acquisition, use and disposition of real property that was or will be purchased with FTA funds. Typically, most FTA-assisted joint development projects involve the use of property acquired with FTA funds. Remember in using this general framework for reviewing a joint development for planning, FTA requirements, follow the FUD. Let's look at the joint development. FTA joint development remains the same, that is the project must enhance economic development or incorporate private development such as commercial or residential, enhance effective public transportation or coordinate between public and other transportation, provide a fair share of revenue that will be used for public transportation and provide that any person making an agreement to occupy space in a facility constructed for joint development must pay a fair share of the cost of the facility, the rental payments and other means. Let's take a closer look at these criteria. The economic criteria can be identified in one of two ways. The economic enhancement needs to show improvement to value occurring in close proximity to the transit facility. The second means incorporates private investment. Any joint facility that incorporates joint development will satisfy this criteria, which may involve public or nonprofit partners not just the private sector. Private investment does not need to be monetary, it may be in the form of real property to be generated initial willing or over the life of the joint development. FTA does not set a monetary threshold for private investment, the amount and form of private investment is up to the project sponsor and partners. The second try tier ya is the transit benefit. Joint development must include a transit function that will benefit from the nontransit activity. There are two ways to satisfy this requirement, either enhance the effectiveness to which the project is related or establish new or enhanced coordination between transit and another mode. For the first example, enhancing the effectiveness of the project the joint development must be related or physically or functionally to that transit project. Any reasonable projection of joint development impact that enhances a transit project's effectiveness will suffice. Examples are increasing ridership, refer transit operating and capital costs and improve transit access and mobility. To address the physical or functional relation aspect, joint development may be built separately from the transit project so long as it has a functional relationship to the transit project. A physical relationship provides a direct connection to the transit services or facility. For example, a project built within or adjacent to transit facilities or avenues of access that connect directly to transit like bike paths, pedestrians paths are projection using air rights over a facility. A joint development has a functional relationship to transit if it provides an enhanced use, connectivity with or access to the transit facility project with or without a direct, physical connection through its activity and use.

Also, joint development is functionally related if it provides a transportation-related service such as remote baggage handling or shared ticketing or if it provides community services. Considerations of a functional relationship include reduced travel time between the joint development and the transit facility, reasonable access between the two, and increased trip generation rate as a result of the relationship. A functional relationship permanents the joint development project to be located outside the structural involve of the transit facility, it may be separated by a street, major thorough fair or unrelated property but a functional relationship would not extend beyond the distance most people can be expected to safely and conveniently walk or bike to use the transit service. The second means of satisfying the transit benefit criteria is to demonstrate that the project establishes new or enhanced coordination between transit and other modes of transportation. Again, any reasonable forecast of joint development impacts that establish such coordination will suffice. The joint development must create or enhance coordination between transit and another mode. Examples include proximity or shared ticket counters, passenger drop off points, waiting areas, shared or coordinated signage, schedules, ticketing, bike paths, walkways, connecting transit to another mode. Projects that shorten the distance between transit and another mode are considered to enhance coordination, particularly in considering transfers between modes. The third criterion is that the joint development must provide a fair share of revenue to be used for transit purposes. Fair share is determined by the project sponsor transit agency and its partners. It should consider the amount of revenue that will project will generate over its lifetime. It should also take into account the project sponsors and local communities goals and objectives for undertaking the joint development however FTA has set a minimum threshold for the amount of revenue the project sponsor is to receive as its fair share which is based on the original FTA investment, this is the cost in the FTA-funded asset being contributed to the joint development project. In other words, FTA expects that a cash payment will be made to the transit agency or project sponsor in return for the FTA contribution to the joint development. The exception to the minimum threshold policy is when the joint development project includes community service or publically operated facility. In these instances the fair share of revenue should be based on the revenue generated by the service or facility. The circular uses an IRS definition for community service facility, that is a facility that provides daycare, career counseling, literacy training, education, recreation, outpatient healthcare or a similar service to local residents either free of charge or for an affordable fee. The minimum threshold policy sets the floor for the amount of joint development revenue the project sponsor is to receive. The project sponsor may negotiate with partners to receive a higher amount of revenue from a joint development project. Payment of the fair share of revenue may reflect varied terms and conditions. However, the project sponsor must have received the full amount by the end of the joint development agreement period. That is the term of the contract.

Payments may be made annually, monthly or some other designated frequency or even as a lump sum. Payments need not be equal, for example, payment may be based on specific occupancy levels. Whatever revenue determination is made, that cumulative amount must be received over the life of the agreement. In presenting the fair share of revenue, the project sponsor must identify the anticipated amount to be received, the source of the revenue generation, for example, a lease payment, and the payment terms. The tenant contribution criterion is distinct from the revenue criterion. A joint development improvement must provide that a person making an agreement to occupy space in a facility constructed with FTA funds shall pay a fair share of the cost of the facility. This is applicable only when the project provides space within an FTA-funded transit facility for tenant or nontransit use. A person in this case means people as well as business entities. Basically the tenant must cover its fair share of operating expenses. And maintenance costs. FTA will not impose any methodology for valuation, it does, however, expect the agreed upon cost to be commercially reasonable. Usually these costs will be included in rental payments made to the project sponsor. If so, these costs cannot count toward the fair share of revenue criterion 3. It must be subtracted from those payments. The tenant contribution of costs is negotiable and may result in a separate agreement with a provision or payment of ONM services. As with the criterion the type of these costs should be identified.

Projects and activities eligible for FTA capital assistance are those typically applicable to the capital projects for example property acquisition, demolition of existing structures, site preparation and utilities, building foundations, pedestrians and bike access to a transit facility and parking facilities for transit. Additionally, funding eligibility under joint development extends to capital activities associated with the transit project identified through the transportation planning process. Such as open space, safety and security equipment and facilities, facilities that incorporate community services, capital projects for and improving equipment or a facility for an intermodal facility or transit mall, construction of space for commercial uses, although FTA may not fund the outfitting of a commercial space and parking facilities including parking improvements with a transit justification and use. Project development activity and professional services. Activities ineligible for FTA funding remain the same, FTA funds may not be used to outfit a commercial space. Joint development projects may include space to be used for commercial revenue-producing purposes as long as the occupant of that space pays a fair share of its costs through rent or other means. Although FTA funds may be used in the instruction of the shell of a facility, they may not be used in the outfitting of that facility, for example, display space, shelving, furniture, food preparation, or vending equipment or other specific fixtures required for the commercial purposes. The one exception is that FTA funds may be used to outfit a senior city bus or rail facility or terminal. A public facility not related to transit is the other ineligible activity. FTA funding may include a joint development project and the purpose of the public building is not necessarily determined of its eligibility for FTA funding. FTA may not fund part of a public facility not related top transit. A nontransit public building's relationship to transit must be more than mere geographic proximity. Just because a public facility is located within walking distance does not provide a functional relationship. Chris Hall will now did you say real property considerations. Chris.

>> CHRIS: We would like to talk about the joint facility projection and some of them are going to be attached and I am going to talk about how real property has to be acquired for an FTA project and second once a grant recipient has acquired the property with federal funds what is the recipient allowed to do with that property and finally, how a recipient can convey an interest in the FTA-funded property to another party for a joint development project and what's necessary to protect FTA's interest.

When a grantee is acquiring real estate for an FTA capital project it has to be done in accordance with the uniform act, the common grant rule provisions and all those that apply to real estate acquisition and this applies to all FTA-funded projects that involve land purchases including joint developments. This is going to include the uniform act requirements such as how to make offers to property owners, how to treat displaced occupants, appraisal requirements, the RAMP plan, all the normal real estate acquisition requirements that we would be dealing with in any other can't it will project, a joint development capital project is going to be no different in this respect. So once the grantee has the property what are they allow to do with it? Certainly you have to do whatever you promised you would do in the grant agreement and beyond that we try to give grantees maximum flexibility in how they use property. Whatever they do with the property needs to be consistent with the grant purpose, in addition to whatever purpose is described in the grant, FTA's master agreement between the FTA and the grantee specifies joint developments are always a permissible use of the property even if the grant instrument doesn't specifically say anything about joint development it's always a permissible use of FTA-funded property. We have a quote up there from the common grant rule, which is that property has to be used for its originally authorized purpose and that ordinarily at least a grantee cannot take actions that will affect title to the property. However, transfers for joint development. In many cases a joint development project is going to require the grantee to convey some kind of interest in the real property to another property just tone neighborly the project to go forward. That party could be the developer, maybe a bank lien, could be pretty much anything. This is permissible with FTA's prior approval. You can convey pretty much any kind of an interest up to and including fee simple in theory at least. What FTA is going to acquire before approving the conveyance is that the assurance that the federal interest in the property is going to be secure after the conveyance. This is where the conveyance for the purpose of development and disposition are different and people get them confused because dispositions usually involve selling the property to a third party. Doesn't have to, there are ways for a grantee to keep property off a disposition but it does usually involve a sale of some kind. The purpose of the disposition is to extinguish federal interest in the property, to take the property out of the world of the grant requirements and the use restrictions and so on, and you do that in a disposition by repaying the federal government its proportional share of fair market value of the property or in the case of a sale the propositional sale of the proceed. In contrast when a grantee is merely conveying an interest in the property to another party to accomplish a joint development, the federal interest in the property remains. It's subject to the use restrictions, it's got to serve its grant purpose and so on, and the grant recipient is still going to be responsible for protecting that federal interest in the property. That's in contrast to a disposition in which you are actually removing the federal interest in the property.

Okay so how does one protect FTA's interest in the property? That is by maintaining satisfactory continuing control over the property. This is the legal assurance that FTA-funded property will remain available for its originally authorized purpose, useful life or disposition and this continuing control applies equally to personal property and equipment as it does to real property. For real property this means primarily that the grantee will retain some kind of control over the property to ensure that it will continue to serve it's transit purpose and not be used in any impermissible kind of a way, either. This is frequently accomplished through some kind of a deed restriction, like a reverter clause or covenant or an easement to allow access to the property for transit customers and transit employees. It could also be done contractually if that's a better fit in the particular deal at issue. The grantee has flexibility with its development partners to work out how this is going to happen. Then FTA will evaluate the adequacy of the control mechanism when we approve the property conveyance.

We also wanted to discuss briefly something about parking because parking decks or surface parking lots are so often used in joint development projects. Contrary to popular belief FTA does not have a requirement that parking spaces have to be replaced one for one. The requirement is as for all FTA-funded assets, if you take the asset out of service before the end of its useful life, the remaining federal interest in that asset has to be accounted for. So in a parking context, if FTA paid for 200 parking spaces at some point and your joint development project is going to destroy 100 of those parking spaces you're going to have to account for the 100 that were lost and that can be done either by paying the dollar value of that loss, whatever the dollar value of the remaining useful life in those parking spaces is, or by replacing the parking spaces somewhere else, maybe you're turning a parking lot into a parking deck but if there were 200 spaces before there are going to be 200 spaces afterwards, that may be permissible. Another important thing to be conscious of with parking is that if the parking was paid for under an agreement that's specified certain ridership levels like a new starts project, the loss of the parking will cause the grantee to miss its ridership targets, that could cause a breach of the contract and that is something that will have to be dealt with apart from the loss of useful life if parking spaces are going to be destroyed as part of a joint development project.

>> Great. I'm Elizabeth Patel and I'm going to review the environmental considerations in a joint development project. NEPA is one of the foremost cross-cutting requirements that project sponsors are concerned with in pursuing joint development. The application of NEPA top joint development depends on a few items, one is federal control over a project. For FTA this means whether FTA is providing federal funding for a project, NEPA may be — other federal actions that require environmental review such as whether a project needs a federal permit, use of property, federal control and responsibilities may extend to other elements of the project regardless of whether these elements use any federal or FTA assistance. If those other elements are integral to the project receiving FTA funding so that's something to consider with joint development projects. Another consideration for review is the degree to which the joint development project is reasonably foreseeable. In some cases there may be joint development associated with a project and that joint development may be considered to be in need for review to the degree in which it's reasonably foreseeable. Whether it's reasonably foreseeable is the degree to which a public statement has been made with regard to the project, the degree to which zoning and other public ordinances allow for such development to occur. Again, emphasize if a NEPA review is triggered, it would be done so tore any project or joint development project receiving FTA funding. In addition to NEPA, there are other federal environmental requirements that may apply to a proposed joint development project so it's important to keep in mind considerations for Section 106, the national historic preservation act, considerations for endangered species, water requirements and so on.

The circular discusses some common joint development scenarios and how NEPA should be applied for approached and this table highlights some of them. These items are related to the degree of federal control and whether any federal funding is involved. I'm not going to go through all of them but just to provide a couple of examples, on row No. 2, the example joint development project description is when proposed joint development is known and would be co-located with an FTA project or the FTA project is designed to accommodate future non transit development the degree to which the joint development is analyzed in the NEPA review is the degree to which is known about the environmental project and the environmental impact. In a lot of cases joint development is considered within our indirect and cumulative affects analysis and oftentimes it's a qualitative discussion. Another example, on the table, joint development scenario, where joint development is unanticipated during the environmental review but it is identified as a possibility during conduction and — construction and it would be located or connected to the portions of the FTA-assisted project meaning that the FTA-assisted project would make you change. An example is when a joint development project is proposed or construction adjacent to a property initially intended to be used for a surface parking lot. Because there is an grant open on the project and the changes are caused to the FTA project the office may need to evaluate the proposed change to see whether additional NEPA and environmental analysis is required. Generally unanticipated development that does not cause changes to the FTA-funded project does not trigger further environmental reviews during construction. For guidance and other scenarios that we won't get into here, I recommend calling your regional office for guidance. Next slide. Lastly, the circular discusses procurements, conveyances and civil rights and the master agreement covering the project will determine all specific requirements.

>> The FTA review has been revise to do facilitate the development in accordance with the FTA requirements. We have established a review process acknowledging the sponsor's needs and seeking technical assistance from us. A preliminary review facilitates discussion between the project sponsor and our regional offices about the project requirements and FTA processes for — that will be required for the joint development and these are intended to ensure that there is a mutual understanding of the project itself as well as the expectations and requirements particularly time frames of both parties. Regents and the FTA and the project sponsors. The joint development project request form is the only submission that's required for preliminary review and this is going to be discussed later in the webinar. However project sponsor may submit an agreement to ensure terms comply with FTA requirements. There could be multiple preliminary reviews and it can be an interactive process before the project sponsor is ready for a formal review. Formal review is conducted when project sponsor has met all FTA requirements both criteria and general legal requirement for the joint development. Also a complete joint development package is required for a formal review and that includes the project request form the certificate of compliance and the joint development agreement. Those three documents submitted with the formal review are required for approval of a joint development project in other words there needs to be a signed certificate of compliance which certificate guys that it has met requirements of the circular, it's eligible, and conducted due diligence, is within the real property requirements and will comply with all requirements and other legal stipulations. The joint development project request form replaces the joint development checklist provided with the 2007 guidance. It provides the same information but more. The project sponsor is to indicate that they've met the criteria but also to provide information on how they have done so. This is more than just fill out a check box, we want to know — we want to gain some insight on the project itself. And the joint development agreement provides terms for satisfying the general FTA requirements for property use, and may cover joint eligibility requirements and terms of revenue or cost payment. It identifies provisions for providing protection of the federal interest and to ensure that the transit function is not compromised. You may also submit additional documentation and if you do we ask that you identify that and particularly the element to which it is referring. One thing to note for real property if the FTA asset development is real property an appraisal and review appraisal is required. Is going to discuss baseline market analysis.

>> I'm going to talk about how a baseline market analysis fits within the scope of a joint development project. This process is to ensure that the grantee is receiving positive revenue for their participation in the project, above a minimum revenue for established by a criterion 3 of JD circular. This is not to impose our expectation of what the figure might be we leave that up to the negotiations between the FTA and the partners. The baseline market analysis is to ensure that the grantee and for that matter the partners are full Al wear of the financial and the economic values of the traction. We do not list precisely what might or might not be done in terms of due diligence and the development of the data to inform decision makers that is outside of the scope of the circular. However, deference would dictate some data was gathered, analyzed and assessed. Data such as current and fair market value of the FTA asset being contributed, current and fair market value of the complete asset, general market conditions of the region area, current and planned economic development activity for the area, project site conditions, estimated total costs of the joint development project, anticipated overall revenues from commercial housing other components generated by the joint development project. Joint development partners' equity in the joint development project and the general risks and the risks to project sponsors. Essentially our expectation is that the data studied is preserved and can be made available upon request to regional and headquarters staff in the review process of the JD request form. The regents and headquarters review — the region and headquarters review can occur for a number of reasons. As for baseline market analysis, if the revenue is less than the fair share of revenue threshold there might be added scrutiny given parameters of the JD project. Note here that there are exceptions for community service projection as mentioned earlier. We want to see that you relied on economic and financial data for your decision making process. Therefore, the following could trigger added scrutiny. Limited or no market analysis cited in the submission form, the cited market analysis is not robust or has information gaps such as missing occupancy and vacancy rates. Omitted average rental rates, no competitor analysis, no revenue projections.

Other things that could trigger added scrutiny would be not accounting for economic development plans or reliance on a biased or singular source.

>> KIM: Thank you. I will now discuss briefly the new project request form. I stated earlier the project request form replaces the joint development checklist and will ask sponsors to provide concrete information about the project. To demonstrate how the project meets the requirements of the circular. The sponsor or FTA grantee submits forms to their regional office, specifically the form will ask for information about the project description and overview, how the project meets eligibility criteria requirements, real property considerations, the baseline market analysis and any additional information and documentation. Currently the project request form is being formatted for the web site and it will be available very soon for you to review. Speaking of the web site, please take note that the webinar will be available at FTA's joint development web page at the address listed on the screen as well as a transcript of today's proceedings.

Before we conclude our webinar I would like to move to some of the questions that we have received. Please remember if you have questions you may enter them into the Q and A box. Meanwhile let's start with the questions that we have.

I will take the first bun one. If a grantee is considering a joint development project, who should they meet with to discuss the project to get a sense of FTA's reaction. The answer is always the regional office for the location where you are. If you need assistance in identifying who your regional office is you can go to the web site and find your location and the regional office will be the corresponding office for that location. Next question I will have Chris answer.

>> CHRIS: If there is an end date to a joint development project, is there a continuing FTA interest?

FTA's interest follows the money into whatever asset the money was used to acquire. It will persist until that asset is disposed of. So common example, if the underlying real property, the land was purchased with federal money, the federal interest is going to persist until we dispose of that, at which point the proportional federal share of the market value will have to be accounted for. The exception to that is when we are talking about equipment if the equipment that is disposed of that is less than $5,000 per unit then the federal interest does not have to be accounted for.

>> KIM: Elizabeth?

>> There is a question on early acquisition. In row 3 the info seems to conflict with early acquisition provisions, however — was only allow believe for FHWA and not FTA. FHWA does have statutory requirements and it is in 49 state code and federal highways have other requirements so there may appear to be conflict with the federal highway allowance.

>> KIM: The effective date of the circular is barely one month, has FTA thought about extending that deadline. We understand that there are projects underway and working together headquarters with the regional offices to identify these projects. There will be a provision for grandfathering projections that are currently in the pipeline however please work with regional offices on the status of your joint development proposal so we can identify those projects. Next question. No. Joint development is a tool for capturing publically created land including transit but typically transit agencies control only a small portion of land that benefits from transit improvement. To what extent is FTA exploring value capture that can recapture a robust proportion of publically created land value? I would say that FTA's promotion of joint development through the circular that we're discussing today is a first step in promoting greater awareness of joint development as a value capture mechanism. We're also exploring broader use of mechanisms for research. In fact, last year we had a round table where we engaged private sector, other partners highlighting the use of value capture and how it can be used to promote transit projects so stay tuned as we continue to your research and information will be provided in the future.

Next question.

By emphasizing revenue over community benefits the circular effectively disallows projects with other sound public policy objectives. Catalyst projects, urban renewal, economic development, safety or place making will not pass muster when revenue is a threshold measure.

I would say that the fair share of revenue threshold is set at the lowest level, which is the same level as the original federal investment contributed to the project. In other words, FTA is not asking for the current market value, only what the original federal investment was of contributing to the project. In the circular FTA has made allowances for community services so those projects that may be adversely impacted by the threshold have been accommodated for. FTA's policy supports the fair share of revenue in the transit agency in order to provide income and sit the policy is in affect and supports transit as well as any other type of joint development project. Another question? I think they're coming in fast, be patient, we're working on responses.

>> Please clarify or elaborate where it says a recipient is the a stake holder but may not be a partner in TOD. This is an FTA policy issue for us. We make a distinction between joint development and TOD. Not all transit agencies do and in fact they consider joint development — what we consider joint development is covered under their TOD policies. But the transit satisfying a stake holder in both TOD as well as joint development. The distinction we make is when the transit owned asset is in use for example generally real property. If it's owned by the transit agency then it is considered joint development. If it's simply adjacent to transit-owned property or across the street or within the block or something like that, it's considered to be transit-oriented development and we recognize it's a fine distinction but we're looking at the asset and therefore the investment that we have within the project itself. I hope that clarifies. We do recognize that many of our grantees collapsed TOD and joint development as one and the same. For the purposes of the circular we're talk about the property that is owned by the transit agency and that has a federal interest in it. And they both serve community development purposes.

>> CHRIS: Why can't disposed property be used in a JD. I'm going to turn this over to Sharon because she is the expert on that.

>> SHARON: The policy rule is, again, we need to elaborate. There is joint development with a federal interest and with no federal interest. Disposed of property can be used for joint development. It cannot be used for joint development with a federal interest. The reason being, when you dispose of the property you extinguish the federal interest in that property. However there are property disposal mechanisms, one of which is the transit agency can repay the interest in the property and retain title to the property and in that case they can do joint development just not involving FTA. They may be doing nonfederalized joint development on that property. So it is joint development, the difference is whether or not it has a federal interest.

We got a question on affordable housing and this was of public interest in the public comment, would affordable housing qualify as community service for a publically operated project. Would other forms of after Fordable housing qualify? Such developments provide a service to local residents either free or for an affordable fee as listed in the definition of community service facility. And in high demand areas near transit, affordable developers forego a significant amount of money than what the market would bear. We are applying this in the circular and it doesn't include housing. One of the things we want to point out is that it is not the type of developer that is doing the project. In other words, it doesn't matter if it's nonprofit private for profit or public development. The key is that it provides a service but that service is really being provided by the local government and not from the transit agency itself. So the service we are looking at is related directly to transit. We do know that this is a controversial issue for us. I think it was recognized and acknowledged in the in FTA's new starts guidance and rules that affordable housing within whatever the parameter is, of the transit corridor is given credit for mobility improvements as well as economic development. However that is a discretionary program subject to evaluation and rating. We're not rating these projects. We do review them and we do not use — there is no funding that is applicable to joint development per se so any federal funds can be used. Affordable housing would give you credit if you're doing joint development as part of a new starts project you gain on both ends, you're gaining on the land use effectiveness, the economic development as well as on the mobility improvement but there is no special consideration for affordable housing and joint development.

Describe the difference between bike/ped and JD which includes bike/ped integrated in joint development. Bicycling and pedestrians are modes of transportation. Therefore, because they are also modes of transportation in general, projects related to a transit facility that involve bicycle and pedestrians facilities are eligible on their own for transit funding. You do not need to do joint development. For instance, if you have a transit center and I don't have the policy offhand, I believe we go three miles for the transit facility for bicycle access and a quarter mile for pedestrians access.

>> That goes to our determination of whether the pedestrians or bicycle improvements are transit related. Within a three-mile radius — there is a presumption that the bicycle improvement is transit related. You can have improvements beyond that 3 mile radius, they just don't fall under the presumption.

>> And those are stand alone as a transit project or with joint development. I think the other case there is you're doing the general — general access, providing general access to the public by means of bicycling or walking to that sick transit facility. But the nontransit development to the transit facility itself is providing a direct connection and it would be part of the linkage demonstrating the direct relationship between the transit and the nontransit development.

>> I have a question, it says how is the circular addressing unsolicited proposals from developers? Referring to page 5-4 in the circular, under Number 4, procurement, procurements that are assisted with FTA funds must adhere to certain standards and among these is an open requirement for full competition, in essence it applies to joint development. The next question I have is who does the final review, FTA regional offices or headquarters? Again I'm referring to the circular, 6-8 where it talks about joint development project approval, it will be the regional office that does final review and approval. Any other questions?

>> CHRIS: I have a couple of parking-related questions here. The first one is if the grantee provides documentation showing that the two both generate more ridership than the existing parking lot is that sufficient documentation to allow the development to occur? I want to separate two issues. The reason why I brought up ridership issues earlier is because in some of our agreements, particularly new starts, there is — ridership level is a term of the agreement. So if the grantee is affirmatively doing something like removing parking that will prevent achieving that ridership level that would be a breach of the agreement in most cases. Put that to one side. A separate issue is one that when FTA has paid for and asked for parking in this, the destruction of that asset before it has achieved it's useful life and exhausted that useful life will have to be accounted for so in this case county development go ahead? Yes, it can. It can go ahead if ridership is going to increase or remain the same. The question is if that parking lot still has value that value will have to be accounted for.

Second question, what is the process to reduce the number of parking stalls originally built that are no longer needed for a facility. Parking in this case would be treated the same as any other excess property, excess equipment, buses, real property. If it really is no longer needed then I think the grantee would be obligated to dispose of that through the disposition process.

>> SHARON: There is a question we get frequently and there is a misperception that FTA requires one-to-one replacement of parking, forget useful life of the facilities and the improvement regarding the actual number of parking spaces. We do not require a 1-to-1 replacement. The issue, again, regarding new starts is the ridership forecast that is used in the evaluation of the new start's project. However, we assume in many cases that the joint development, some of the benefits of that joint development project will be increased ridership and therefore, that increased ridership may off-set the law of the parking spaces that result in the development of that joint development. So there are different perspectives on this with different elements of this, if you consider one is the useful life and the cost of that and the 1-to-1 replacement requirement, there is no 1-to-1 replacement requirement, in many cases it comes long after the transit project has been constructed and is in operation and many can exceed the forecast at the beginning than in the horizon period. So in that case we're looking at are you providing — is the transit — we're looking at is the cost effectiveness of that transit facility being realized and that's the bottom line and the analysis being used. So if there is additional ridership or if it's off set or if the ridership forecast has been exceeded then the parking replacement is not necessary but you should discuss it with the regional office to make sure that whenever you would have to justify it and that your justification is acceptable.

>> We have a question on baseline market analysis, will specific criteria be prepared and can we use the local government department to prepare this review? There is no specific criteria prescribed for any of the baseline market analyses, yes, a local economic development department may prepare the analyses and as you will see on the project request form the essence of what we want to know on the project request form is who did the study and the general results of the study. Essentially we want to see the type of data that you relied on in your decision-making process.

>> We have a question on ground leases of land on private properties and can market or above-market ground leases satisfy the minimum fair share of revenue? The minimum fair share of revenue — and I'm going to rely on Awan to help me out with this one, that's his section, is a specific-defined, calculated number and you're either meet it go or you aren't. Would you —

>> The fair share revenue threshold that we set is a floor. It would be — you would have to support any — when we are looking at the fair share of revenue we're look to go make sure that the federal interest is repaid over the term of the project. You may negotiate a rate that is higher and, in fact, in most instances that would probably occur, because this is a floor, a minimum threshold, and as we mentioned during the presentation, the exceptions would be for community service projects. Before we move on to the next question I will add that the project request form — we request data points in the project request form to calculate those numbers.

>> SHARON: Kind of a follow-up question to the functional relationship and bicycle and pedestrians walkways, the clause infers that a project sponsor could be involved in the development within a half mile area, for example, a local municipal or nonprofit could offer land within half a mile of a proposed station and obtain project sponsorship participation and FTA capital funding shared via new start and are these assumptions correct? Um, yes and no. It could be assessed as a joint development, depends really on what function — what's going to be done — what function or how that land is going to be used, I should put it that way. And keep in mind the half mile is really — that's a target radius that we use for a pedestrians for walking and it's three miles for bicycling. Keep in mind for general purposes, bicycle and pedestrians walkways generally are on a public right of way. They're generally on the highway street right of way or the roadway right of way in the public area and they're for anyone's use to get to that transit facility. If there is a particular station, a particular development and it's out of the way, saying, and then there is going to be a pathway that's constructed to link that development directly and only that development as part of that development, these pathways are being constructed to link to the transit facility then that would be joint development and it should be considered in the EIS because that is going to have impact on the neighborhood traffic assessment in general.

>> We have a question that says can a grantee enter into noncompetitive joint development agreements involving federally-assisted real estate if there is only one entity that can reasonably use the property. Maybe. Bring us the details and we would analyze that like any other noncompetitive acquisition or benefit to the public. We would need to analyze that on a case-by-case basis, I think.

>> SHARON: We have a fair share of revenue question. Can you count the anticipation fair revenue generated by development toward fair share of revenue return. No. We are looking at the project revenue, revenue generated by the joint development project. It's usually a commercial or whatever — retail establishment but most of these — it could be industrial. Most of these are money making ventures and therefore the developer — one of the things it gets into the baseline market analysis. We're not just looking at what you're doing or — we're looking for one of the things that we have said is that you can negotiate a higher return than the threshold. One of the things in the baseline market analysis that should be considered is how much revenue is this project going to generate? If the project itself is going to generate $10 million over the term of the joint development agreement and the federal investment is $500,000 in that, in the original cost because we are not accounting for inflation or anything, we're basing it on the original cost itself. If you bought land 20 years ago and now it's made available for joint development purpose, your minimum threshold is whatever that cost was, the original cost of that land. The land itself may be well worth $8 million now, but we're not expecting you to do that. But the point being we're trying to leverage. We have fair bucks revenue counts toward revenue criterion No. 2 but not as the fair sheriff revenue. We are explicit on the fair share of revenue that it is generated from the joint development project itself and not users per se of the joint development. This is coming from your partner, it's coming from the development partner that the transit agency is working with.

>> What we will do is provide a list of all the questions that we received and the answers and post them on the web site as I said earlier and at this time, we will plan to conclude our webinar. I would like to thank our speakers again. Sharon Pugh, Liz Patel, Mazhar and Chris, today's topics, please complete the he'll valuation there on your screen. We would like and appreciate your feedback. I'm Kimberly Gayle and thank you for your participation today.

(End of webinar. )