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Creating Quality of Life by Making Markets Work
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The Cotton Belt
The New EconomyNew Partnerships
The Cotton Belt13 Cities, 3 Counties, DFW Airport
DART Availability Payments Trending Down
• Shifting to development patterns driving transportation, rather than the opposite
$50 Billion in highways removed from 2030 Plan in updating 2035 Long Range Plan
Value Capture Opportunity (Lost)
Arlington, Virginia
31% of taxbase
In 7% land area
• Phase 1 (completed)– Analyze the ability to narrow the gap through value
capture to repay a private investment group
• Phase 2 – Unsolicited Proposal/RFP (SB 1048)
• Phase 3 – 18-month exclusive period– Construct and commit revenue streams to maximize
tax exempt debt and to repay investors for financing balance made up by private equity/debt
– Go/No-Go
• Final Phase – Finance/Design/Build/Maintain/Operate
Courtesy Russ Preston
Courtesy Russ Preston
We examined almost 9,008 acres, parcel by parcel, not relying on arbitrary walking radii
Bush/Central TOD
Conventional zoning was stunting development
New zoningForm-Based Code
TOD StreetType ‘A’
Tying together zoning and complete streets
5+ Million Square Feetof walkable urbanism
Share the growing pie – Tax Increment Finance
Baseline Property Value
Ap
pra
ised
Valu
e
Time
Captured Appraised
Value
Creation Termination
Tax Increment
Value After Terminatio
n
Fiscal impact of build out• Value capture potential for IFI just from 57
acres
Creating 13 City, 3 Transit Agency Special District
Share the growing pie – Special Assessment Subdistricts
7% Discount; 2.39% Inflation; 35% Local Tax SharePresent Value ($Millions)
Cash/Current Commitments $342.0New Starts (The T) $305.0
Sales TaxGrapevine (@ 3/8 cent sales tax) $123.84B (@ 10% of collections) $40.1DART Contribution (PV of sales tax starting yr 2036) $214.3
Fare box (@ $0.14 / mile) $191.8
Non-GeographicNaming Rights $28.8Advertising $30.8Fiber Right-of-Way $89.3
Tax Base Value CaptureCity Property Tax $224.2County Property $80.4Sales Tax $22.3Hotel Tax $28.5Special District $55.3
Land Value Appreciation $262.3Total Revenue $2,039.0
Capital Costs (orig. DART cost + 2% financing cost) $1,573.4Operating Cost (20% savings – alt. delivery) $617.1Total Costs $2,190.5
Difference ($Millions) -$151.6
Capital Funding Gap Analysis
Gap reduced down to $151- $500 Millionon a $2+ Billion Project
(Analysis does not include non-tax exempt cost of money)
Cotton Belt Summary Schedule
Pre-Proposal Phase
Unsolicited Proposal Submittal
RFP Phase
Dec 2012 – Jan 2013
Preliminary Agreement
Pre-CDA Phase
Apr-May 2013
May-Aug 2014
Comp DevAgreement
Project Delivery
Operation
2016-2017
• Define business approach• Stakeholder communication• Consensus building• Define procurement strategy• Execute inter-local agreements • Develop procurement processes, policies & procedures• Confirm legislative authority to receive proposal• Define governance structure• Develop governance framework• Define legislative requirements• Initiate legislative processes• Develop and finalize proposal
• Receive unsolicited proposal• Validate proposal assumptions• Prepare RFP• Issue RFP• Receive competing proposals• Issue Preliminary Development Agreement/Interim Award
• Validate proposal assumptions•Land use planning/TIF• Negotiate local agreements• Environmental approvals• Financial agreements• Establish governance structure• Preliminary engineering & design• Negotiate and execute final CDA
• Finalize overall work program• Validate proposal assumptions• Final engineering & design• Execute D/B contract• Execute O&M contract• Execute EPC• Deliver project• Begin Service
Special District
Established Procurement
responsibilities transferred to
District
Jul-Sep 2013
Key Consideration Benchmarks
• Preparation Regional Planning and Initial Framing Local Planning and Reviews Innovative Financing Analysis
• Enablement Initiate NCTCOG as Responsible Governmental Entity
(RGE) to support assessment of private sector proposals
– Initiate local support to seek state legislation that enables future establishment of a regional Municipal Management District (MMD) to organize revenue and contractual obligations
• Actions– Consider and act on local funding support
considerations:• TIF Support• Special District Support
– Final Agreement with Private Team
