Mn/DOT and Economic Development

ACEC Annual Meeting

March 2, 2010

Outline of Discussion

• Mn/DOT’s Economic Development Objectives• Challenges• Solutions

– Innovative Finance– Public Private Partnerships– Transportation Economic Development initiative

Mn/DOT’s commitment to Economic and Community Development

• “Transportation is critical in supporting economic vitality and quality of life in Minnesota.”− 1st sentence in the Minnesota Statewide

Transportation Policy Plan 2009-2028

Mn/DOT’s commitment to Economic and Community Development

• Support local efforts to increase jobs, expand housing, and improve community livability through more coordinated planning, complementary design and timely communication among land use and transportation authorities.– Policy 8 of Minnesota Statewide Transportation Policy

Plan 2009-2028

Investments Needs 2009-2028~$65 Billion

Mobility$42.6 B

69%

Traveler Safety$3.1 B

5%

Infrastructure Preservation

$16.3 B26%

Regional & Community Improvement Priorities

= $3 to $5 B+

Investments to Meet Performance

Targets = $62 B($ in Billions, Year of Construction)

Projected Revenue : $15 B

0

200

400

600

800

1000

1200

2009 2019

State Fiscal Year

Co

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Ex

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(M

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State Funds

Federal Funds

Chapter 152 Bridge Bond Funds

Chapter 152 Other Bond Funds

2028

Buying Power of the SRC

Investment Plan for Projected2009-2028 Funding: $15 Billion

($ in Millions, Year of Construction)

Twin Cities Metro Area Mobility

$890 M6%

Interregional Corridor Mobility

$80 M1%

Capacity Improvement

$620 M4%

Roadway Enhancement

$780 M5%

Other Infrastructure Preservation

$640 M4%

Greater MN Trade Centers Mobility

$60 M0%

Regional & Community

Improvement Priorities$580 M

4%

Right of Way, Consultants,

Supplemental Agreements

$370 M2%

Pavement Preservation

$5,840 M40%

Other Bridge Preservation

$2,600 M17%

Chapter 152 Bridge Preservation

$2,520 M17%

“Traditional” Economic Development and Transportation Infrastructure Funding Sources

• Federal STP, Enhancements, CMAQ• Department of Commerce Economic Development Administration -

Public Works and Development Facilities Program• USDA Community Facilities programs• State DEED Programs• State and local funding from HUTDF• State bonding• Local Road Improvement Program• Transportation Revolving Loan Fund

One tool to narrow the gap: Innovative Finance • Innovative Transportation Finance is the practice of

exploring, developing and implementing the following to accelerate transportation improvements:– New and non-traditional revenue streams– New financing tools and techniques– New methods of utilizing existing revenue streams and

financing techniques– New types of financial partnerships between state,

regional, local and private entities

10

Innovative Finance Concepts • Revenue Generating Concepts

MnPASS HOT Lane/Shoulder Expansion

Toll Bridge Project

Concepts

Asset Revenue

Enhancement IdeasToward Zero

Death (TZD) Surcharge

Private Contribution

P3 Opportunities

Mileage Based User

Fees

Transportation Improvement

District Approaches

Addressing the Public Infrastructure Funding/Financing Gap

Mn/DOT Innovative Finance Initiative Activities

Innovative Finance Program Mission:

Mn/DOT will work with transportation partners and the public to explore, identify, develop, and implement financing approaches that enable access to non-traditional sources of revenue and new financial approaches that provide a maximum, sustainable level of transportation services to the citizens of Minnesota.

Benefits of Innovative Finance (Policy Rationale)

• Better Alignment of Transportation Use/Benefit and Financial Responsibility – Some IF strategies can better link the costs of a transportation improvement

with those who use or benefit from the improvement (e.g. toll projects, private contributions to specific projects, value capture strategies).

– When benefiting users and property owners are required to pay closer to the real cost of transportation improvements, revenue increases for some projects, demand decreases for other projects, and improvements can become more financially sustainable.

• Economic Development and Growth– Job Creation and Preservation– Tax Base Growth

Benefits of Innovative Finance (Cost/Operational Efficiency Rationale)• Project Acceleration Benefits

– Inflation Savings– Accelerated Public Benefits

• Safer Commutes• Improved Ride Quality• Less Congestion/Travel Time and Greater Reliability• Better Access and Greater Travel Mode Choice• Reduced Emissions and Environmental Improvement• Enhanced Livability and Quality of Life

Transportation Economic Development (TED) Initiative

Transportation Role in Economic Development

• Carefully targeted transportation infrastructure improvements will:– Stimulate new economic development and business

expansion– Create and retain jobs– Increase state and local tax base– Provide better/safer access to markets– Provide more opportunities for employers/employees– Improve livability and sustainability

Other State DOT Economic Development Programs

• Iowa - Revitalize Iowa’s Sound Economy (RISE) program

• Wisconsin – Transportation Economic Assistance (TEA) Program

• Illinois – Economic Development program (EDP)• Michigan – Transportation Economic Development

Fund (TEDF)• Massachusetts – Public Works Economic

Development (PWED) program.

Mn/DOT P3 Vision: Transportation Economic Development “initiative” Fundamentals

• Transportation / business development / jobs creation• Multi-agency collaborative effort (DEED, PFA, Mn/DOT)• Public Private partnerships/collaboration• Multi-modal, multi-jurisdictional• Project proposals to be evaluated on the basis of economic

development potential, level of private investment, safety, and mobility factors.

• Complimentary loan component (ROW Acquisition)

Potential “target” industries:• Manufacturing• Technology• Warehousing / Distribution• Research and Development• Agricultural processing• Bioscience• Tourism• Mixed use, high density multi-modal development

Strategies to Identify Transportation Economic Development Opportunities

• Public Outreach– Formal and informal meetings to discuss potential

project ideas• Project Screening

– Review of state and local plans/programs

Thanks very much!

• Brad Larsen

Director of Traditional and Innovative Finance(651) 366-4821

• Matt Shands

Transportation Economic Development Program Director (651) 366-4893