Transit Public-Private Partnerships: Legal Issues (2014)

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

64 APPENDIX A—ANALYSIS OF THE STRUCTURE AND FUNDING OF PENDING AND COMPLETED TRANSIT PPPS 1. California A. Grossmont Trolley Station ($100 million) The Grossmont Trolley Station is a $100 million PPP in which the City of La Mesa, the Metropolitan Transit System, SANDAG, and Fairfield Residential Development are participating to create a “pedestrian- friendly regional transit center” with residential and commercial properties.791 Construction began in De- cember 2012.792 Funding for the project includes a $2 million SANDAG Smart Growth grant and $2.7 million from the SANDAG Capital Improvement Project. Several other TODs have been completed in La Mesa, a city with a population of less than 60,000.793 B. Fruitvale Village ($66.5 million) An example of TIF for TOD is the PPP for Fruitvale Village in Oakland, California, for which $4.0 million of the funding is being provided by TIF. The PPP was funded as shown in Table 3:794 Table 3. Sources of Funding for the Fruitvale Village PPP.795 (A) Equity/Grants (Buildings/Plazas) $26.0 million FTA $5.7 million City of Oakland pre-paid leases $7.4 million City of Oakland Pass-Through-Grants $5.3 million Tax Increment Financing $4.0 million Foundations $2.3 million Unity Council/FDV Equity $1.3 million (B) Debt (Buildings/Plazas) $28.0 million 501(c)(3) Bonds $19.8 million City of Oakland, HUD 108/EDI $3.3 million Citibank $1.4 million City of Oakland Home $0.7 million Unity Council loan $1.8 million 791 Elevator/Bridge Structure under Construction at the Grossmont Trolley Station, available at http://www.cityoflamesa.com/DocumentCenter/Home/View/2361. 792 Suzanne Strassburger, La Mesa Cultivates Smart Growth, Affordable Housing, Pedestrians and Trolleys Blend, SAN DIEGO SOURCE (Feb. 15, 2013), available at http://www.sddt.com/reports/article.cfm?RID=472&SourceCode= 20070215crf. 793 Id. 794 Erkel, supra note 737, at 6. 795 Id.

65 (C) Equity/Debt (BART Parking Structure) $12.5 million FTA $7.6 million grant Alameda County (ACTIA) $4.1 million Unity Council loan to BART $0.8 million TOTAL $66.5 million C. Oakland Airport Connector See discussion of the Oakland Airport Connector, a FTA Penta-P project, in Section XIII.B of the digest. D. Transbay Transit Center and Caltrain Downtown Rail Extension Program ($4.185 billion) The Transbay Transit Center and Caltrain Downtown Rail Extension Program, a $4.185 billion project, with phase I costing $1.592 billion, “is a visionary transportation and housing project that transforms down- town San Francisco and the San Francisco Bay Area’s regional transportation system by creating a ‘Grand Central Station of the West’ in the heart of a new transit-friendly neighborhood.”796 The Transbay Transit Center replaces the former terminal at First and Mission streets in San Francisco.797 The project has been hailed as “an example of harnessing the power of public-private partnerships to build and improve infra- structure in the state.”798 The new regional transit hub will connect AC Transit, BART, Caltrain, Golden Gate Transit, Greyhound, Muni, SamTrans, WestCAT Lynx, Amtrak, Paratransit, and future high-speed rail from San Francisco to Los Angeles/Anaheim, thus linking eight California counties.799 Among other fea- tures, the Transbay Transit Center will have a 5.4-acre park on the roof.800 The project is being developed in two phases, with Phase 1 including the Transit Center building and the below-grade rail levels and Phase 2 including the Caltrain Downtown Extension Program. The Transbay Transit Center is headed by the Transbay Joint Powers Authority, whose purpose is to design, build, oper- ate, and maintain the new center and its associated facilities.801 796 Transbay Transit Center, Program Overview, available at http://transbaycenter.org/project/program-overview; Metropolitan Transportation Commission, Transbay Terminal, hereinafter referred to as “Transbay Transit Center, Pro- gram Overview,” available at http://www.mtc.ca.gov/projects/transbay/. 797 Id. 798 San Francisco Building & Construction Trades Council, Transbay Transit Center Breaks Ground, available at http://www.sfbuildingtradescouncil.org/content/view/292/111/. 799 Transbay Transit Center, Program Overview, supra note 796. 800 Id. 801 See Transbay Transit Center, available at http://transbaycenter.org/tjpa/about-the-tjpa.

66 Table 4. Sources of Funding for the Transbay Transit Center802 (Phase 1). Local San Francisco Proposition K sales tax $97.8 million San Mateo County Measure A sales tax $7.3 million AC Transit capital contribution $38.5 million Other local $7.6 million Regional Regional Measure 1 (RM-1) Bay Area toll bridge revenue: $54.4 million Regional Measure 2 (RM-2) Bay Area toll bridge revenue $142 million AB 1171 (Bay Area toll bridge seismic retrofitting legislation) $150 million State State funding $28.3 million Land sales $429.5 million Federal TEA-21 earmark $8.8 million SAFETEA-LU earmarks $53.8 million TIFIA loan $171 million FRA rail relocation $3 million ARRA High Speed Intercity Passenger Rail $400 million TOTAL $1,592 million D. West Dublin/Pleasanton Station BART’s West Dublin/Pleasanton Station opened in February 2011, a “first of its kind endeavor by BART.” The PPP project is a beneficiary of the California Infrastructure Finance Act.803 The Act “stipulates that se- curing a private sector partner through competitive negotiations will enable the public sector to have fee- producing infrastructure designed and built without adhering to public contract code bidding processes.”804 2. Colorado A. Denver Southeast Corridor T-Rex Project ($879 million) Denver’s Southeast Corridor T-Rex project, built at a cost of $1.67 billion, of which $879 million was for transit, was a major reconstruction between 2001 and 2006 of Denver’s I-25/I-225 corridor and an expansion of Denver’s RTD light rail system using a “DB/Best Value” form of contracting. The contracting method saved an estimated 22 months of construction.805 The T-Rex project was the first “design-build contract to incorporate major highway and transit elements into the same project.” 806 802 Id. 803 CAL. GOV’T CODE § 5956, et seq. 804 BART TOD Memorandum, App. C, item 9, at 1. See also id., item 10. 805 AASHTO Center for Excellence in Project Finance, Transportation Expansion–T-Rex, hereinafter referred to as “AASHTO–Transportation Expansion–T-Rex,” available at http://www.transportation-finance.org/projects/t_rex.aspx. 806 Id.

67 Funding for the highways consisted of GARVEEs in the amount of $600 million (backed by future federal- aid receipts) and sales and use taxes amounting to $195 million.807 Table 5. Sources of Funding for the Denver Southeast Corridor T-Rex Project.808 FTA New Starts Full Funding Grant Agreement $525 million Sales and Use Tax Revenue bonds $324 million Local matching funds $30 million (passenger fares) Total $879 million B. Denver Eagle P3 East Rail and Gold Light Rail Lines See discussion in Section XIV.B of the digest. 3. Connecticut A. Stamford TOD ($40 million) The Connecticut DOT reported that the Stamford TOD project is being initiated.809 The date of the project and the identity of the private partner are to be determined, but there is a state commitment of $40 million for the project. Connecticut is seeking “private proposals to re-develop state-owned properties near the tran- sit hub, as well as demolish an existing…parking garage and provide 1,000 new spaces within 1/4 mile of the station.”810 The RFP states that the private partner would be committed to a 3-year contract with two 3-year renewable terms at the state’s discretion.811 In April 2012 Connecticut issued a combined RFQ and request for conceptual proposal, a copy of which is included in Appendix C, to private entities for the TOD.812 B. Westfield Shoppingtown, Inc. ($525,000) The Milford Transit District in Milford, Connecticut advised that the Westfield Shoppingtown, Inc., a $525,000 project, is “currently in design,” and a private partner will be responsible for maintenance, trash collection, snow removal, utilities, and security. 4. Florida—Miami Intermodal Center ($2 billion) The Miami Intermodal Center (MIC), a $2 billion project, is being constructed pursuant to a CMR con- tract, discussed in Section II.C.3 of the digest.813 The project includes a rental car center, the Miami Central 807 Id. 808 Id. 809 Conn. DOT Response. 810 Id.; see Steven Higashide, Stamford Project Must Prioritize TOD, Improvements for All Commuters, News and Opinion from the Tri-State Transportation Campaign (Oct. 4, 2012), available at http://blog.tstc.org/2012/10/04/stamford-project-must-prioritize-tod-improvements-for-all-commuters/. 811 Conn. DOT Response. 812 State of Connecticut, Connecticut Department of Transportation, “Request for Qualifications and Conceptual Pro- posals for the Transit-Oriented Development of the Stamford Parking Garage” (Apr. 30, 2012), available at http://www.ct.gov/dot/lib/dot/documents/dcommunications/press_release/Stamford_RFQCP_22812Final.pdf. 813 FHWA, Innovative Program Delivery, Miami Intermodal Project Profile, available at http://www.fhwa.dot.gov/

68 Station, roadway improvements, MIA Mover guideway foundations, and the MIC station.814 In addition, the TOD opportunities may include “up to 1.4 million square feet of mixed-use development…in conjunction with the Miami Central Station” parts of which FDOT may lease or sell to a private developer or a public agency.815 Although portions of the project have been completed, the MIC’s scheduled completion is for early 2014.816 In addition to two TIFIA loans, the MIC project is funded by various state and local sources of funding from Miami-Dade County/Miami-Dade Aviation Department (MDAD); the Miami-Dade Expressway Author- ity; three Florida SIB loans; and private sector fees and charges, as well as transportation funding priori- tized by the metropolitan planning organization.817 The private sector fees and charges consist of customer facility charges paid by rental car customers; contingent rent to be paid by rental car companies, if neces- sary; and lease revenues on MIC property already acquired. As of March 2013, FDOT had spent over $1 bil- lion on the project.818 5. Illinois—Chicago Region Environmental and Transportation Efficiency Program ($3.2 billion) The Chicago Region Environmental and Transportation Efficiency Program (CREATE) is “a first-of-its- kind public/private partnership between the State of Illinois, City of Chicago, American Association of Rail- roads (BNSF, CN, CP, CSX, Norfolk Southern, UP), National Railroad Passenger Corp (Amtrak), and the Commuter Rail Division of the RTA (Metra).”819 The total estimated cost for the CREATE partners is $3.2 billion.820 CREATE is “the first state-local-private partnership aimed at solving an infrastructure problem” on such a large scale.821 CREATE has 21 projects that will benefit Metra commuter service, for example, on five Metra routes by decreasing delays and making service more reliable by reducing “conflict points” with freight trains.822 Some funding has been committed, including $86 million provided by SAFETEA-LU and $100 million in 2010 from DOT as part of the Transportation Investment Generating Economy Recovery (TIGER) program, a dis- ipd/project_profiles/fl_miami_intermodal.htm. 814 MIC, Construction, available at http://www.micdot.com/construction.html. 815 MIC, Joint Development, available at http://www.micdot.com/joint_development.html. 816 MIC, Welcome to the MIC, available at http://www.micdot.com/. 817 MIC, Finance, available at http://www.micdot.com/financing.html. 818 Id. Of that, nearly $335 million was for Right of Way acquisition, utilities relocation, and environmental remediation of approxi- mately 141 acres. In addition, FDOT contributed over $100 million towards the MIA Mover, the balance of which was the county’s contribution to the MIC Program funded under the Miami-Dade Aviation Department’s (MDAD) Capital Improvement Program (CIP). 819 Chicago Region Environmental and Transportation Efficiency Program (CREATE), What is CREATE?, available at http://www.aurora-il.org/documents/cnrailway/docs_meeting/Call%20to%20Action%20CREATE%20Exhibit.pdf. 820 Jacki Murdock, University of California-Los Angeles, Evolution and Financing of the Chicago Region Environ- mental and Transportation Efficiency Program, at 16, hereinafter referred to as “Evolution and Financing of CREATE,” available at http://jackimurdock.files.wordpress.com/2013/03/create.pdf. 821 Public-Private Partnerships for Transportation Projects, supra note 42, at 4–5. 822 Chicago Region Environmental and Transportation Efficiency Program, Passenger Rail Benefits, available at http://www.createprogram.org/factsheets/pass_benefits.pdf.

69 cretionary program under the American Recovery and Reinvestment Act of 2009 (ARRA).823 As of 2010, con- tributions toward the funding of the project also included $100 million from the railroads, $30 million from the City of Chicago, and $100 million from the State of Illinois.824 6. Massachusetts A. Greenbush Commuter Rail PPP legislation in Massachusetts authorizes the use of PPPs to leverage non-core assets.825 One example of a PPP in Massachusetts is the DB contract for the Greenbush Commuter Rail project that was completed in October 2007.826 B. MBTA Orange Line Station ($29,229,184) In October 2011, the MBTA awarded a contract for $29,229,184 for the construction of the new MBTA Orange Line Station in connection with the Assembly Square redevelopment site. The PPP’s funding is pro- vided by state and federal agencies and the developer Federal Realty Investment Trust. Construction began in August 2012.827 C. Holyoke Multimodal Center ($10.467 million) The Pioneer Valley Transit Authority (PVTA) in Springfield, Massachusetts, reported that its Holyoke Multimodal Transportation Center (HMTC) Project was a joint development project with educational office, classroom space, and a café that was undertaken with a private partner that will have continued responsi- bility for operating the facility and leasing it to tenants, including the PVTA.828 The HMTC site was formerly a vacant firehouse (constructed in 1913) and a parking lot. The PPP con- sisted of the PVTA, the city of Holyoke, Holyoke Community College, and the private developer. The HMTC opened in September 2010.829 823 Evolution and Financing of CREATE, supra note 820, at 18–19. 824 Id. at 19. 825 Implementation of PPPs for Transit, supra note 24, at 2. 826 Massachusetts Bay Transportation Authority, Greenbush Commuter Rail Before-and-After Study, available at http://www.ctps.org/drupal/greenbush_before_after. 827 Massachusetts Bay Transportation Authority, T Projects, Assembly Station, available at http://www.mbta.com/about_the_mbta/t_projects/default.asp?id=22873. 828 PVTA Response. 829 Land & Community Revitalization, Brownfields Success in New England–Holyoke Transportation Center (Aug. 2011), available at http://www.epa.gov/region1/brownfields/success/11/Holyoke.pdf.

70 Table 6. Sources of Funding for Holyoke Multimodal Center.830 Federal Transit Administration Grant $4,500,000 Massachusetts Transportation Funds $2,900,000 Holyoke Intermodal Facility, LLC $1,500,000 Department of Housing and Urban Development (HUD) Grant $550,000 MassDEP Leaking Underground Storage Tank (LUST) Grant $315,000 HUD Economic Development Initiative (EDI) Grant $277,220 City of Holyoke (donation of building) $230,000 EPA Brownfields Assessment Grants $195,182 TOTAL $10,467,402 7. Minnesota—Hiawatha Light Rail Transit Project ($715.3 million) The Minneapolis Hiawatha Light Rail Transit Project, costing $715.3 million, which opened in December 2004, involved “an innovative mix of design-build and design-bid-build procurements.”831 The project was built with two DB contracts: one for light rail vehicles and the other for rail, signal, and communication equipment, except that a design-bid-build procurement was used for two 7,400-ft airport tunnels. Table 7. Sources of Funding for the Hiawatha Light Rail Transit Project.832 Federal Grants FTA Section 5309 New Starts $334.3 million Federal Transit Capital Grant $39.9 million Federal Surface Transportation Program and Congestion Mitigation Air Quality $49.8 million State Grants State of Minnesota $100.0 million Minnesota Department of Transportation $20.1 million Local Grants Hennepin County $84.2 million Metropolitan Airports Commission Federal, State, and Local grants $87.0 million TOTAL $715.3 million 830 Id. 831 FHWA, Project Profiles, Hiawatha Light Rail Transit, available at http://www.fhwa.dot.gov/ipd/project_profiles/mn_hiawatha.htm. 832 Id.

71 8. Nevada A. Las Vegas Monorail Project ($650 million) The Las Vegas Monorail, a 4-mi fixed-guideway system, was made possible because of a 1997 Nevada law authorizing a private company to own, operate, and charge a fare as a public monorail system.833 The mono- rail, a $650 million PPP, is “the only urban rail transit project since the 1920s with a significant portion of the financing based on projected fare box revenues.”834 In addition to contributions from area resorts and hotels served by the monorail, the PPP was financed with tax-exempt revenue bonds issued through the State of Nevada and with tax-exempt revenue bonds, backed by fares and advertising, issued by Salomon Smith Barney and the Nevada Department of Business and Industry.835 Las Vegas Monorail Company now owns and operates the monorail. The company receives no public subsidies and is the only privately owned public transportation system in the United States.836 B. Reno Transportation Rail Access Corridor ($279.9 million) ReTRAC, a $279.9 million DB project completed in 2006, was sponsored by the city of Reno and the Union Pacific Railroad to “depress[] a 2.25-mile downtown stretch of the rail corridor into a 1.75-mile-long, 54-foot- wide by 33-foot-deep trench….”837 By eliminating 10 at-grade crossings, the “project resolved numerous envi- ronmental, public health, and safety issues” while creating 120 acres of developable real estate.838 Table 8. Sources of Funding for the Reno Transportation Rail Access Corridor.839 City of Reno bond issues $111.5 million (backed by hotel room and sales taxes) TIFIA loan $50.5 million (backed by hotel room and sales taxes) Union Pacific Railroad $17 million Federal grants $21.3 million Cash, interest earnings, and other income $79.6 million TOTAL $279.9 million 833 FHWA, Office of Innovative Program Delivery, Project Profiles, Las Vegas Monorail Profile, hereinafter referred to as “Las Vegas Monorail Profile,” available at http://www.fhwa.dot.gov/ipd/project_profiles/nv_lasvegas_monorail.htm. 834 FTA Public-Private 3P Program, supra note 56, at 2. 835 Las Vegas Monorail Profile, supra note 833; Public Transportation: Federal Project Approval Process Remains a Barrier, supra note 170, at 11. 836 Las Vegas Monorail Profile, supra note 820. See also Cam C. Walker, The Las Vegas Monorail, an Innovative So- lution for Public Transportation Problems Within the Resort Corridor (University of Nevada, Las Vegas, 1999), available at http://digitalscholarship.unlv.edu/cgi/viewcontent.cgi?article=1212&context=thesesdissertations. 837 FHWA, Office of Innovative Program Delivery, Project Profiles, Reno Transportation Rail Access Corridor, avail- able at http://www.fhwa.dot.gov/ipd/project_profiles/nv_retrac.htm. 838 Id. 839 Id.

72 9. New Jersey A. Hudson-Bergen Light Rail Line The first Minimal Operable Segment (MOS-1) of the HBLR, a PPP and DBOM-type of procurement, was delivered to the New Jersey Transit Corporation by Washington Group International.840 The HBLR (MOS-1) was the first public transit project in the United States to use a DBOM contract for project delivery.841 It is estimated that the alternative method of procurement “saved 30% over the more traditional design-bid-build procurement method, a saving of about $345 million.”842 The DBOM method was selected also because it would save an estimated 8 years compared to traditional public procurement.843 The MOS-1 cost $992 million, funded 61 percent by an FFGA with FTA; MOS-2 cost $1.2 billion, funded 41 percent by FTA. The project was funded also by GANs (backed by passenger fares) and by the State Transportation Trust Fund (motor fuel tax receipts).844 At a cost of approximately $2 billion, the HBLR, one of the largest public works projects in New Jersey, has been a “catalyst for both residential and commercial development.”845 B. Weehawken Ferry Terminal ($44 million) The Weehawken Ferry Terminal, which opened May 2006, was a $44 million project for which the private partner, New York Waterway, is responsible for leasing and maintaining the terminal. 10. New York—JFK Air Train The JFK Air Train is an 8.1-mi people mover in New York City connecting the city with JFK Interna- tional Airport. The project was delivered pursuant to a DBOM contract that was financed by a Passenger Facility Charge approved by the Federal Aviation Administration.846 11. Ohio—Compressed Natural Gas Facility Project ($1.6 million) In May 2012, SARTA unveiled Northern Ohio’s first public compressed natural gas fueling facility,847 a $1.6 million project for which the private partner has continued responsibility for its maintenance.848 840 H.R. REP. NO. 110-24, Hearings on PPPs, supra note 9, at 83. 841 New Jersey Transit, System Expansion Projects, Hudson-Bergen Light Rail, available at http://www.njtransit.com/ tm/tm_servlet.srv?hdnPageAction=Project001To. 842 MALLETT, supra note 25, at 21. 843 AASHTO Center for Excellence in Project Finance, Hudson-Bergen Light Rail, available at http://www.transportation-finance.org/projects/hudson_bergen_lrt.aspx. 844 Id. 845 Dwayne C. Sampson, Developing Sustainable Transportation Systems (2009), Conference of Minority Transporta- tion Officials, New York Chapter, Arusha, Tanzia, Aug. 2009. 846 H.R. REP. NO. 110-24, Hearings on PPPs, supra note 9, at 84. See Developing Sustainable Transportation Systems, supra note 832. 847 SARTA Unveils NEO’s First Public CNG Station (May 14, 2012), available at http://www.sartaonline.com/sarta- unveils-northern-ohio-s-first-public-cng-sta. 848 SARTA Response.

73 12. Oregon A. TriMet’s MAX Red Line ($125.8 million) TriMet’s MAX Red Line to Portland International Airport, a $125.8 million project, was a unique PPP that began in 1997 when Bechtel Enterprises submitted a “proposal to design and build a MAX extension to the airport under an innovative public/private partnership….”849 Bechtel agreed to contribute about a quar- ter of the project’s funding in return for development rights to a 120-acre, mixed-use, commercial site owned by the Port of Portland near the entrance to the airport.850 In furtherance of the PPP, three public agencies and Bechtel entered into 85 agreements.851 Bechtel later sold its interest to Trammel Crow.852 According to TriMet, because there were no federal or state funds for the project, what made the MAX Red Line project possible and successful was the connection between transit and land use.853 The MAX Red Line opened in September 2011. Table 9. Sources of Funding for TriMet MAX Red Line.854 TriMet $45.5 million Port of Portland $28.3 million Bechtel $28.2 million City of Portland $23.8 million TOTAL $125.8 million B. Patten Park TOD ($15.45 million) TriMet’s $15.5 million PPP in 2008 for Patten Park was a mixed-use commercial and residential TOD. REACH Community Development, the private partner, owns and operates the project. The TOD project re- quired permanently affordable housing units as part of the redevelopment of a motel in proximity to TriMet’s Interstate Max (Yellow Line) light rail project. The funding for the project included LIHTCs (dis- cussed in Section XII.F.1), a grant of $4 million from the Portland Development Commission (PDC), a grant from Metro, and an FTA-approved discounting of the sales price of the land, along with HUD Section 8 fi- nancing for housing units.855 There are several interesting aspects of TriMet’s ability to initiate TODs. First, TriMet is a beneficiary of legislation enacted in 1995 by the Oregon State Legislature that authorized local jurisdictions to adopt a property tax abatement program for TOD that “reduc[ed] operating costs through a 10-year tax exemption 849 TriMet Report on Transportation Initiatives, supra note 162, at 88. 850 Id. 851 Id. 852 Id. at 6. 853 H.R. REP. NO. 110-24, Hearings on PPPs, supra note 9, at 71. 854 TriMet Report on Transportation Initiatives, supra note 162, at 88. 855 Id. at 93.

74 on the improvement value of a property. Property owners continue to pay taxes on the land value during the exemption period.”856 Second, “Federal Metropolitan Transportation Improvement Program (MTIP) funds are allocated to TriMet, which in turn provides its general funds to Metro. This relieves the TOD Implementation Program from the responsibility of meeting federal requirements.”857 Third, “Metro offers financial incentives to offset the higher costs of compact development by purchasing TOD easements from developers and, in some cases, acquiring and selling land near transit at a reduced cost.”858 Table 10. Sources of Funding for the Patten Park PPP.859 PDC—Interstate Urban Renewal District (TIF) $4,467,500 Tax-exempt bonds—residential $2,796,000 Tax-exempt bonds—Non-Oregon Affordable Housing Tax Credit (OAHTC) $495,546 Enterprise LIHTC equity $3,215,000 System development waivers $322,661 Metro TOD $3,650,000 Weatherization $116,400 TriMet $192,500 Business energy tax credits $25,000 Deferred developer fee $170,000 TOTAL $15,450,607 13. Pennsylvania A. Wayside Energy Storage System ($2,200,000) SEPTA reported on two PPPs. One PPP was for SEPTA’s Wayside Energy Storage System, a $2,200,000 project that included a unique combination of advanced energy storage and software technologies to recover excess train braking energy at a substation and store the energy for later use. SEPTA reports that any ex- cess energy may be sold through the wholesale and regulatory markets. The private partner serves as an intermediary between the local electric utility company and SEPTA.860 B. Combined Heat and Power Plant A second PPP project is still in the proposal stage, but a private partner will be selected to design, build, own, operate, finance, and maintain a combined heat and power plant on SEPTA’s property. The private en- 856 Id. at 6. 857 Id. at 13. 858 Id. Also, “Metro’s role as a financial partner in TOD projects can leverage other public support; local and state agencies have helped to spur development by reducing entitlement risk, expediting permitting, authorizing tax abate- ments, making related public improvements and providing project financing.” Id. 859 TriMet Response. 860 SEPTA Response.

75 tity will finance the plant and sell electric power and heat to SEPTA under a long-term energy service agreement.861 14. Texas A. Cotton Belt Corridor In May 2009 the Dallas Area Rapid Transit (DART) and the Fort Worth Transportation Authority began a search for qualified partners for a DBFOM project for “a cross regional passenger rail service utilizing the Cotton Belt Corridor, with the aim of starting on or about 2013.”862 In 2010, the Regional Transportation Council/North Central Texas Council of Governments issued an RFP for an innovative financing initiative for the corridor.863 Phase 1 of the financing initiative is for the purpose of recommending a funding strategy. Phase 2 is for a financing plan for the project.864 However, the response to DART’s request was that potential private partners needed a “more detailed project defini- tion.”865 Also, an “environmental clearance” was needed to advance the project.866 B. Houston North and Southeast Corridor High Capacity Transit Extension Projects See the discussion of the Houston Projects, also chosen for FTA’s pilot program, in Section XIII.D of the report. C. Mockingbird Pedestrian Bridge Construction began in June 2013 on DART’s $7.5 million Mockingbird Pedestrian Bridge.867 According to one source, the majority of the funding was provided under “an old air quality program for projects that would reduce the region’s air quality problems.”868 15. Utah—Utah Transit Authority—2013 TOD Program In 2013, the Utah Transit Authority solicited qualified developers capable of comprehensive development of TOD sites along UTA’s public transit system. Developer-candidates were expected to “have the capacity and demonstrated experience to handle all aspects of the development process including, planning, design, structuring of financings, permitting, construction, sales and leasing, and ongoing management.”869 861 Id. 862 Dallas Area Rapid Transit (DART), Request for Information Dallas Area Rapid Transit/Fort Worth Transportation Authority Cotton Belt Rail Line Public Private Partnership, available at http://www.dart.org/CottonBeltPPP/. 863 Id. 864 DART, Cotton Belt Regional Rail Corridor, available at http://www.dart.org/about/expansion/cottonbelt.asp. 865 Id. 866 Id. 867 Joe Simnacher, Groundbreaking Tuesday on Mockingbird Pedestrian Bridge at Katy Trail, DALLAS NEWS, June 17, 2013, available at http://www.dallasnews.com/news/metro/20130617-groundbreaking-tuesday-on-mockingbird- pedestrian-bridge-at-katy-trail.ece. 868 Id. 869 Utah Transit Authority, Request for Qualifications and Site Proposals (“RFQ&P”) for Pursuit of Joint Development on Transit Oriented Development (“TOD”) Sites (2013), available at http://www.rideuta.com/uploads/RFQP_UT13- 016GL_ad_(2).pdf.

76 16. Virginia/Washington, DC—Metropolitan Area Transit Authority—Dulles Metrorail Silver Line ($5,998,819,000) The Metropolitan Washington Airports Authority (MWAA) is constructing the Dulles Metrorail Silver Line that will connect Washington, DC, to points in Virginia, including Tysons Corner, the Washington- Dulles International Airport, and Reston. As each of two phases of the project is completed, WMATA will own and operate the line.870 Phase 1 is being constructed pursuant to a DB contract with substantial comple- tion expected in 2014. In May 2009, MWAA approved a plan for Phase 2 for which the authority will use a competitively bid DB contract.871 The MWAA received a $900 million grant under FTA’s New Starts program that included $77.3 million in ARRA funds. The cost of Phase 1 is $3.1 billion.872 To finance the major portion of both phases, MWAA has taken over the responsibility for the operation of and the revenue from the Dulles Toll Road.873 Table 11. Sources of Funding for the Dulles Metrorail Silver Line ($5,998,819,000).874 FUNDING PARTNER % SHARE TOTAL PROJECT ESTIMATE (TPE)– BASELINE $ SHARE TPE–BASELINE OTHER– GARAGES FUNDING PARTNER TOTAL (TPE– BASELINE + GARAGES) Dulles Toll Road (includes $900 million from FTA New Starts (16.1%), $275 million from Commonwealth of Virginia) 75% $4,262,763,750 $4,262,763,750 Fairfax County 16.1% $915,073,285 146,721,000 1,061,794,285 Loudoun County 4.8% 272,816,880 168,413,000 441,229,880 Aviation Funds 4.1% 233,031,085 233,031,085 TOTAL 100.0% $5,683,685,000 $315,134,000 $5,998,819,000 870 FTA, ANNUAL REPORT ON FUNDING RECOMMENDATIONS, FISCAL YEAR 2013, at 13 (2012), available at http://www.fta.dot.gov/documents/FY13_Annual_Report_main_text_1_30_12.pdf. 871 Airports Authority Board Selects Design-Build Delivery System for Phase 2 of Dulles Corridor Metrorail Project, available at http://www.dullesmetro.com/pdfs/Phase2FactSheetDesignBuild1May2009.pdf. 872 FTA, Office of Inspector General, Audit Report, Actions Needed to Improve FTA’s Oversight of the Dulles Corridor Metrorail Project’s Phase 1 (July 26, 2012), available at http://www.oig.dot.gov/sites/dot/files/FTA’s%20Oversight%20Dulles%20Metrorail%20Phase%201%5EJuly%2026,%20201 2.pdf. 873 Id. at 5. 874 Transportation Committee, Fairfax County Board of Supervisors, Dulles Metrorail Silver Line: Status Report and Transportation Infrastructure Finance and Innovation Act (TIFIA) Funding Update (May 7, 2013) available at

77 17. Wisconsin—Grand River Station ($30 million) The City of La Crosse Municipal Transit Utility reported that in 2010 it had used a PPP for the Grand River Station, a $30-million joint development project that included transit, housing, parking, and commer- cial space. The private partner was Gorman & Company, which has continued responsibility for the leasing, operation, and maintenance of the station.875 http://www.slideshare.net/fairfaxcounty/1-dulles-metrorail-silver-line-project-and-funding-update-bo-s-trans-comm-5-7- 13-final-dmb. 875 La Crosse Municipal Transit Utility Response.