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.
Appendix I Agency Joint Development Documentation I-4 The intent of the research team was not to gather an exhaustive set of documents from every agency. Rather, it was to collect enough examples in each documentary category to help illuminate the structure of joint development policies and practices. That said, the document review helped identify, on an independent and objective basis, a range of practices that have been used in different circumstances and in pursuit of different agency goals. In addition to providing documents, the agencies responded, in the interview or written survey, to questions addressing the corresponding areas of policy and practiceâquestions about enabling act provisions pertinent to joint development; an agencyâs preferred developer solicitation format; its policy on unsolicited proposals; and its documentary practice with respect to the negotiation of developer agreements.137 The documents, by definition, provide greater detail than the survey responses; in some cases, they provide additional breadth and context as well. Between the survey and the document review, the research team has gained a foundation on which to formulate best practice recommendations in preparing the Joint Development Guidebook for Public Transit Agencies (the Guide). Acknowledgement. This comparative review would not have been possible without the efforts of the respondents at each agency, who not only provided detailed and insightful interview or survey responses in Task 3, but willingly provided the documents listed above, many requiring internal clearances of potential confidentiality concerns. In some cases, the interests of the agency or its partners in development required restriction on publication of the wording or facts of the documents, and these restrictions are strictly observed in this memorandum. 2.0 Enabling Acts or Equivalent Charter Documents An agencyâs enabling legislation (or, in some cases, an equivalent charter of fundamental legal authority) governs all agency activity and in some cases limits the agencyâs latitude with respect to JD practices. Table I-2 lists the enabling acts and equivalent charter documents that were collected for this study. 137 These questions, and the findings they elicited, are discussed in the Task 3 Technical Memorandum, Part A (Transit Agencies) and are referenced at the appropriate places in this memorandum.
Appendix I Agency Joint Development Documentation I-5 Table I-2: Transit Agency Enabling Acts or Equivalent Charter Documents Transit Agency Enabling Act or Equivalent Charter Document Atlanta: MARTA The MARTA Act of 1965, as amended through 2018: https://www.itsmarta.com/uploadedFiles/More/About_MARTA/Marta%20Act%2020 18%20.pdf Austin: Capital Metro Texas Transportation Code, Section 451: https://statutes.capitol.texas.gov/Docs/TN/htm/TN.451.htm Bay Area: BART CA Public Utilities Code, Division 10, Sections 28500 - 29757: https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=PUC&divis ion=10.&title=&part=2.&chapter=1.&article= [AB 2923, the 2018 Act conferring zoning powers, is included at 29010 et seq.] Bay Area: Caltrain Peninsula Joint Powers Agreement of 1996: http://www.caltrain.com/Assets/Public/JPA_Agreement_and_Amendment_10-03- 1996.pdf Boston: MBTA MA General Laws, Chapter 161A: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXII/Chapter161A Cleveland GCRTA Ohio Revised Code 306: http://codes.ohio.gov/orc/306 Dallas: DART Texas Transportation Code, Section 452: https://statutes.capitol.texas.gov/Docs/TN/htm/TN.452.htm Denver: RTD RTD Act, Colorado Statutes, Title 32, Article 9, Â§101ff: https://advance.lexis.com/container?config=0345494EJAA5ZjE0MDIyYy1kNzZkLTRkN zktYTkxMS04YmJhNjBlNWUwYzYKAFBvZENhdGFsb2e4CaPI4cak6laXLCWyLBO9&crid= 59852f37-bbaf-4b38-8255-c34907e46eac Kansas City: KCATA The 1965 Interstate Compact, as ratified by Congress in 1966. https://www.govinfo.gov/content/pkg/STATUTE-80/pdf/STATUTE-80-Pg826.pdf Los Angeles: LA Metro Los Angeles County Metropolitan Transportation Authority Reform Act of 1992, as explained in: http://media.metro.net/images/Introduction_to_LACMTA_Metro.pdf: Miami: Miami- Dade Transit Miami-Dade County Code, passim. The land use powers are at Chapter 33c: http://miamidade.fl.elaws.us/code/coor_ptiii_ch33c Minneapolis-St. Paul: Metro Transit Minn. Stat Ch 473 (Transit at 473-371 et seq.; general powers passim.) https://www.revisor.mn.gov/statutes/cite/473 New Jersey: NJ Transit 27 NJ Rev Stat C27:25-1 through C27:25-4.1: https://law.justia.com/codes/new-jersey/2018/title-27/chapter-25/ This following link is for the 2018 amendments: https://legiscan.com/NJ/text/S630/id/1850564. Salt Lake: UTA Utah Code, Chapter 2a, Part 8, Public Transit District Act (as amended through 2018): https://le.utah.gov/xcode/Title17B/Chapter2A/17B-2a-P8.html?v=C17B-2a- P8_1800010118000101 San Diego: MTS CA Public Utilities Code Division 11, Section 120050 - 120702): https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?division=11.&chapt er=2.&lawCode=PUC
Appendix I Agency Joint Development Documentation I-6 Transit Agency Enabling Act or Equivalent Charter Document Seattle: Sound Transit Original Enabling Act of 1992 (authorizing creation by referendum): RCW 81.112.010: https://app.leg.wa.gov/rcw/default.aspx?cite=81.112; The 2015 amendment adding Equitable TOD requirements: https://app.leg.wa.gov/rcw/default.aspx?cite=81.112.350 Seattle: King County Metro King County Code: Metropolitan Functions: https://aqua.kingcounty.gov/council/clerk/code/38_Title_28.pdf King County Code: Real Property, First-Tier Funds, etc.: https://aqua.kingcounty.gov/council/clerk/code/07_Title_4.pdf; https://aqua.kingcounty.gov/council/clerk/code/07_Title_4A.pdf Washington DC: WMATA The 1967 Interstate Compact as ratified by Congress, as amended: https://www.wmata.com/about/board/upload/Compact_Annotated_2009_final.pdf We refer to enabling acts âor equivalent charter documentsâ because only eight of the agencies have what might be called âtraditionalâ enabling actsâstate statutes creating a single, specific, quasi- independent authority. The remaining 10 are governed by other types of legal charter documents: â¢ Four are covered by state legislation enabling the creation of a class of transit authorities at the county or regional level: Austinâs Capital Metro, Dallas Area Rapid Transit (âDARTâ), the Greater Cleveland Regional Transit Authority (âGCRTAâ), and UTA. â¢ Three are enabled by a broader statute creating a county or regional government of which the transit agency is a part (Miami-Dade Transit, Metro Transit, King County Metro). â¢ TwoâKCATA and the Washington Metropolitan Area Transit Authority (âWMATAâ)âare interstate agencies, whose creation required, under the US Constitution, the enactment of identical enabling laws in each state (and in WMATAâs case, the District of Columbia as well), followed by Congressional ratification of an interstate compact.138 â¢ One (Caltrain) was created by a California Joint Powers Agreement, which serves as its enabling document. Table I-3 summarizes key characteristics of particular relevance to joint development. These comparisons are not meant to include all 18 of the enabling acts or equivalent charter documents in each topic, but to highlight provisions that are salient. 138 US Constitution, Article I, Section 10.
Appendix I Agency Joint Development Documentation I-7 Table I-3: Key Characteristics of Transit Agency Enabling Legislation Characteristic Examples A. Joint Development Authority. Is the enabling act silent or explicit on Joint Development, Transit Oriented Development (TOD), or real estate development as a public purpose or enabled activity? Most acts are silent, leaving the authority to engage in JD implicit. However, some enabling acts explicitly authorize JD. â Austinâs Capital Metro has explicit authority to acquire and develop land around a station (by creating, with municipal approval, a âStation or Terminal Complexâ which âmay include provision for residential, institutional, recreational, commercial, and industrial facilitiesâ), and to use eminent domain within 1,500 feet of the complexâs center. (Texas Transportation Code 451.151.) â DART has similar authority (Texas Transportation Code 452.) â Sound Transitâs enabling act allows JD and mandates the inclusion of affordable housing (see âCâ below). â Bay Area Rapid Transit District (âBARTâ) and Miami-Dade County are enabled to engage in TOD/JD on their land, and have extraordinary zoning powers to that end (see âEâ below). â The Massachusetts Bay Transportation Authority (âMBTAâ) enabling act is generally silent on JD, but recognizes it by placing conditions on the awarding of a Development Agreement (see âCâ below). â Many typical enabling statutes provide general authority to acquire real property for purposes within the agencyâs general scope, and are silent regarding TOD/JD, leaving the JD authority implicit; for example, the Ohio statute enabling the Cleveland GCRTA provides authority to: (1) Acquire in its name by gift, grant, purchase, or condemnation and hold and operate real estate and interests therein and personal property suitable for its purposes; (2) In its name purchase, acquire, construct, enlarge, improve, equip, repair, maintain, sell, exchange, lease as lessee or lessor, receive a right of use of, and manage, control, and operate, in or out of the county, a county transit system consisting of all real estate and interests therein, personal property, and a combination thereof, for or related to the movement of persons including but not limited to street railway, tramline, subways, rapid transits, monorails, and passenger bus systems but excluding therefrom trucks, the movement of property by truck, and facilities designed for use in the movement of property by truck for hire; ORC 306.04(C) (1), (2).
Appendix I Agency Joint Development Documentation I-8 Characteristic Examples B. Real Property Transactions. Enabling acts define agency powers with respect to acquisition and disposition of real property, including availability of eminent domain and limitations on its use. â All enabling acts convey a general power to acquire and dispose of real property, by sale, lease as lessee or lessor, gift, exchange, etc. â Most, but not all, enabling statutes convey a power of eminent domain, at least for transit purposes, but as noted in the cases of Capital Metro and DART, the power may be limited by statutes or their application. â Many enabling acts, including some that allow the disposition of land for JD, do not allow its acquisition for JD. Land made available for joint development must, by law, have been acquired for traditional transit purposes; such purposes typically include (although generally by implication rather than explicit listing) construction staging, surface park & ride, and other transit activities that are legitimately convertible to JD. â With respect to land acquired by eminent domain, even for traditional transit purposes, many enabling acts require that the authority offer the prior owner first right of refusal/first right to purchase before making the property generally available. C. Requirements with Respect to Land Value. Enabling acts may prescribe basic conditions that must be attained in disposing of real property, including or especially for JD. â Many enabling acts require a return of fair market value (âFMVâ), often with latitude (or silence) as to what other goals the agency may seek to attain providing FMV is returned. â The MBTA enabling act requires high bid, other than in exceptional circumstances: âAny concession or lease of property for a term of more than one year or Development Agreement shall be awarded to the highest responsible and eligible bidder therefor unless the authority shall find that sound reasons in the public interest require otherwise.â (MA General Laws, Chapter 161A, section 5) â At the other end of the spectrum, Sound Transitâs enabling act, as amended in 2015, mandates that 80% of sites deemed suitable for residential development be offered, below market value if necessary, to public or non-profit entities that will develop housing in which 80% of the units will be affordable to households earning up to 80% of Area Median Income (the â80-80-80â mandate). (RCW 81.112.350) D. Public and Private Contracting. Breadth of ability to enter into agreements with public and private parties, including ability to receive grants, gifts, revenues, etc., from such parties. â All the statutes provide powers of contracting, which are generally subject to the overall restrictions on the agencyâs power to act for transit (as defined in the statute) or other purposes. These powers are typically broad, encompassing agreements with the federal government, other political subdivisions of the state, and private parties. These powers do not in and of themselves enable an agency to engage in JD transactions, but are essential to it. E. Land Use Regulation. In general, state laws provide that public authorities like transit agencies are exempt from zoning while executing their core purpose; but when they undertake real estate development on their property, such development is subject to local land use control. Thus far, only a handful of US transit agencies have superseding powers to exercise land use or zoning control. â BARTâs enabling legislation expressly allows TOD on BART land. As amended by AB 2023 in 2018, the Act confers contingent zoning powers on BART with respect to its land, particularly if the zoning jurisdiction does not act in compliance with standards established in the Act (CA Public Utilities Code, Division 10, Sections 29010 et seq.) â Miami-Dade Transit is a division of the unified government of Miami- Dade County, which has substantial land use regulatory authority. The unified government can exercise zoning powers to implement TOD within defined Rapid Transit Zones, including all County land at stations and, as of 2018, non-County land within a half-mile of future stations in unincorporated areas. (Miami-Dade County Code, Chapter 33c)
Appendix I Agency Joint Development Documentation I-9 3.0 Developer Solicitations Most transit agencies engage joint development partners through a competitive solicitation process. While some agencies, under some circumstances, may entertain unsolicited proposals, they often reserve the right to solicit competing bids, or their policy may require that they do so. Because the general policy is to require competitive contracting, this discussion begins with a review of documents used in competitive solicitations, and then turns, in section 4.0, to the unsolicited proposal process. For this analysis, the research team collected 23 competitive solicitation documents from 13 different transit agencies. These are listed in Table I-4. Table I-4: Transit Agency Solicitation Documents 139 Agency and Project Solicitation Document Link Atlanta: MARTA Kensington Request for Proposals (RFP): (2018) https://45tkhs2ch4042kf51f1akcju-wpengine.netdna-ssl.com/wp- content/uploads/2018/10/RFP-P40844-Joint-Development-of-Parcels-D1123-and- D1135-at-Kensington-Station.pdf Bay Area: BART Lake Merritt Request for Qualifications (RFQ): (2018) https://www.bart.gov/sites/default/files/docs/Lake%20Merritt%20TOD%20RFQ%2 0FINAL.pdf; RFQ Q&A (2018): https://www.bart.gov/sites/default/files/docs/LM%20RFQ%20Q%20and%20A%20 Final.pdf North Concord/MartÃnez RFQ (2019) https://www.bart.gov/sites/default/files/docs/North%20Concord%20RFQ%20Reiss uance%2004-7-2019.pdf Boston: MBTA Quincy Center Request for Information (with City of Quincy, 2017) * Quincy Center RFP (with City of Quincy, 2017) https://static1.squarespace.com/static/5acbedf0697a988659a1725e/t/5b046cb2f 950b75de24c3394/1527016627433/Quincy_Center_RFP_FINAL.pdf Cleveland GCRTA Columbus Road/West 25th Street RFQ (2019) http://www.riderta.com/sites/default/files/realestate/RFQ_- _Columbus_Road_Property_-_II.pdf Euclid Avenue RFP * Dallas: DART Trinity Mills RFP (with City of Carrollton, 2017) https://www.cityofcarrollton.com/home/showdocument?id=18424 Mockingbird Station East RFP (2016) * Denver: RTD Old Town Arvada RFQ (with City of Arvada, 2013) http://www.reconnectingamerica.org/assets/Uploads/20130301ArvadaTOD- RFQ.pdf Welton RFQ (2017) * 139 As of 2020, documents marked with an asterisk (*) were available in pdf form in the project file but no longer posted on the transit agencyâs website. Other documents may, in the normal course of agency website management, be removed in the future.
Appendix I Agency Joint Development Documentation I-10 Agency and Project Solicitation Document Link Kansas City: KCATA 18th & Troost RFP (2018) https://www.kcata.org/documents/procurement/KCATA_RFP_18-7036- 59B_18th__Troost_Development.pdf 39th & Troost RFP, Day Care Center (2018) https://www.kcata.org/documents/procurement/RFP_18-7044- 59B_39th__Troost_Lease_Agreement.pdf Rock Island Corridor, RFQ: https://www.kcata.org/documents/procurement/RFQ_17-7049- 39_Master_Developer_for_Rock_Island_9-22-17.pdf Los Angeles: LA Metro North Hollywood RFP, following RFQ and short-listing (2015) https://media.metro.net/projects_studies/joint_development/images/JDP_sfv_no ho-rfp.pdf (North Hollywood Guidelines, 2015 *) Mariachi Plaza RFP (2017) * Little Tokyo RFP (2018) * Memphis: MATA Central Station Redevelopment Phase 2 RFP (2012) * Miami: Miami-Dade Transit Okeechobee RFP (by and with County Department of Public Housing & Community Development, 2016) https://www.miamidade.gov/housing/library/guidelines/okeechobee-transit- site/okeechobee-transit-site-rfp.pdf New Jersey: NJ Transit Aberdeen-Matawan RFQ and Expression of Interest (RFQ/EOI; with the Borough of Matawan, 2019) https://www.njtransitdevelopment.com/bid-docs/ (Register to download) Bayonne 34th Street RFQ/EOI (2019) Ibid. Seattle: Sound Transit Northgate Equitable TOD RFQ (2018) * Washington, DC WMATA Huntington Joint Development Solicitation (RFP, 2019) https://www.wmata.com/business/real-estate/upload/Huntington-Metro-Station- Joint-Development-Solicitation.pdf 3.1 Types of Solicitation A threshold comparison among solicitation documents is the question of which type of solicitation process they represent. In the research teamâs experience, confirmed by the transit agency outreach conducted in Task 3, there are three basic types of solicitation document, which can be used in different ways.140 All are represented in the sample of 23 documents collected for this analysis and listed in Table I-4. 140 The term âsolicitationâ rather than âprocurementâ is used intentionally. âProcurementâ is generally used in reference to the acquisition of goods and services. For example, Circular 4220.1F is the Federal guideline for FTA funded procurements and explicitly excludes all real estate transactions (C4220.1F, Ch. II, Sec. 2. b. (1) (d)). To the extent that agencies use procurement terminology or practices in conducting real estate transactions, they are doing so by analogy. Moreover, in a joint development project, what is being solicited is not the acquisition of real property, but a partner to whom property will be sold or leased in exchange for some combination of money and other obligations. It would not be meaningful to suggest that a JD solicitation is compliant with Circular 4220.1F or FTA procurement requirements.
Appendix I Agency Joint Development Documentation I-11 â¢ A Request for Qualifications (RFQ) is a solicitation of entities who wish to enter the competitive selection process. An RFQ does not request a complete offer, and, even if it includes preliminary proposal concepts, it will not include pricing information and cannot result directly in a contract, since at the very least financial terms would still need to be negotiated. There are two types of RFQ solicitations in common use. In the two-step process, the RFQ is to be followed by a full Request for Proposals (RFP; see below). In this case, the RFQ is intended to result in a âshort listâ of entities that are found qualified to submit proposals, and the selection is made on the basis of the RFP. There is also a one-step RFQ process, in which the RFQ solicitation asks not only for qualifications, but for preliminary proposal concepts as well. In this case, the agency intends to make a preliminary selection based on the RFQ (and any associated interview process) without issuing an RFP. The refinement of the preliminary concepts into a detailed proposal and pricing occurs during the exclusive negotiation period that follows selection.141 â¢ A Request for Proposals (RFP) requests more complete offers, so that selection of a developer could conceptually progress directly to a binding contract. As noted above, the issuance of an RFP can be the second stage of a two-step RFQ/RFP process. There is also a one-step RFP format in wide use, in which there is no prior RFQ. A one-step RFP may include a Statement of Qualifications (SOQ) as part of the submittal; this SOQ may be read first, so that if any bidder is deemed unqualified, its full proposal need not be evaluated. An RFP itself can be divided into more than one step, if initial unpriced proposals are desired before proceeding to complete offers with prices. For example, DART has used an RFP including first an âInformal Proposalâ without pricing, an optional short listing, and then a âFormal Proposalâ including price and other major commercial terms. A best and final offer presentation was called for based on the Formal Proposals. â¢ A Request for Information (RFI), Request for Expressions of Interest (RFEI), or similar document, is a general âpre-solicitationâ request in which the agency seeks voluntary participation from the development community to help inform a subsequent RFQ or RFP. An RFI or RFEI is used when a development opportunity is emerging but lacks clear definition. It does not limit responses and is usually not a condition for later participation in the competitive process. As an alternative to a stand-alone, pre-solicitation RFI or RFEI, an agency may build this feature into an RFQ, as part of a two-step RFQ/RFP solicitation. NJ Transit, for example, is currently using a hybrid âRFQ/EOIâ to launch its Aberdeen-Matawan and Bayonne 34th Street JD opportunities. The names and descriptions of the solicitation types vary in common usage; the terminology used here reflects the research teamâs experience. A real estate transaction (in contrast to a contract for a supply of replacements for a vehicle component) is unique. The nature of the partiesâ interests and the development culture result in a more gradual, iterative negotiation process than for goods and services. This broadens the definition and usage of each solicitation type. 141 Unlike most goods and services procurements, but like Brooks Act procurements (also known as the Selection of Architects and Engineers statute), it is not uncommon for real estate RFQs to result in further discussions with only the most qualified competitor. The Exclusive Negotiating Agreement used by BART and LA Metro under California procedures is an example.
Appendix I Agency Joint Development Documentation I-12 In Task 3 of this study, transit agencies were asked which type of solicitation format they prefer. For the 25 agencies that responded to the question and expressed a preference, the pattern of usage varied widely, as shown in Table I-5. Table I-5: Distribution of Solicitation Types in Transit Survey 142 Description of Solicitation Type Number of Agencies One-step Request for Proposals (RFP) 13 One-step Request for Qualifications (RFQ) or equivalent 6 Two-step RFQ ï RFP or equivalent 6 Request for Expressions of Interest (RFEI) to Initiate a solicitation 4 It was also clear from the individual responses that many agencies have experimented with different solicitation formats; that some are comfortable choosing the most appropriate format on a project-by- project basis; and that customized hybrid formats are commonâsuch as RFPs that include Statements of Qualification which are read first, or RFQs that include preliminary proposal concepts. 3.2 Description of Evaluation Criteria Although the emphasis and level of detail may differ, our review of documents shows that RFQs and RFPs use similar criteria in evaluating both the qualifications of competing bidders and the merits of their proposals. (This is true to the extent that RFQs include requests for preliminary proposal concepts, or that RFPs include Statements of Qualifications). Criteria for evaluating developer qualifications typically address: â¢ financial capacity (supported by audited financial statements, specific interest and eventually commitment on the part lenders and capital partners); â¢ technical capacity, in both scope and depth, on the part of the developer, designer, and builder; â¢ experience in developing projects of the type and scale in question. A recent NJ Transit RFQ required at minimum: âdesigned and completed construction and marketing of at least three mixed-use projects of at least 250 residential multi-family units that include at least 15,000 SF of retail space. One of the projects must have been designed, completed and marketed as part of a Transit Oriented Development focused on creating density and design that encourages convenient and safe walkable access to a mass transit station.â When it comes to the competitive evaluation of proposal content, RFQs and RFPs differ in one basic respectâas previously noted, an RFQ does not include pricing or other proposed financial terms; those emerge either in negotiations or in a subsequent RFP. More broadly, transit agencies pursuing JD projects have different goals, or different priorities among common goals, and the solicitation documents associated with those projects need to describe the evaluation and selection criteria in a way that is clear to potential bidders and enables the agency to make an informed comparison. The goals of 142 The table entries add to 29 because the four respondents that indicated use of an RFEI also chose one of the preceding categories as their principal solicitation method.
Appendix I Agency Joint Development Documentation I-13 an agency joint development program or a particular JD project are likely to include some combination of the following: â¢ monetizing the transit asset in question (unused land, air rights, subsurface rights, or a portion of the station premises); â¢ generating increased ridership and associated farebox revenue, from the JD itself and surrounding TOD for which it may be catalytic; â¢ improving, reconfiguring, or replacing transit operating assets, such as the station itself, station access, or parking; â¢ advancing a variety of other public policy goals, from affordable housing to economic development to placemaking. In constructing evaluation criteria, a threshold question is whether the selection will be based on âhigh bidâ or, as in the great majority of contemporary cases, a multi-criterion âbest valueâ determination. In âbest valueâ solicitations, agencies also differ in whether they are required, as a floor, to attain fair market value. Transit agencies were asked to characterize the structure of their selection criteria, and the distribution of responses was as follows: Table I-6: Joint Development Selection Criteria Structure of Selection Criteria Number of Agencies Multi-criteria best value, provided Fair Market Value is obtained 15 Multi-criteria best value, with no Fair Market Value requirement 7 Can or must discount for affordable housing; otherwise FMV 2 Sometimes or always required to select highest responsible bid 2 For those agencies that are required to obtain FMV and/or high bid, a corollary issue arises when an RFP calls for the developer to design and build replacement parking or other station improvements: is the cost of these improvementsâwhich go to the heart of project economicsâcounted within the definition of FMV or the bid price; is it deducted from FMV through the appraisal process; or is it stated to fall outside FMV or the bid price? When asked about this issue in Task 3, transit agencies varied widely in their responses. Our concern here is how this and other aspects of a particular projectâs evaluation criteria are expressed in the solicitation document. None of the documents we reviewed called for the traditional sealed bidding process of selecting among responsive offers on price alone. (As noted previously, the MBTA is required by law to obtain the highest responsive bid. Its RFP evaluation criteria called for the non-price factors, which were applicable to all bidders, to be applied on a responsiveness or pass-fail basis, followed by selection of the highest bid.) Rather, the criteria were generally based on a combination of land price and other factors. Table I-7 addresses three aspects of how selection criteria are stated in solicitation documents, with several examples of each:
Appendix I Agency Joint Development Documentation I-14 â¢ How does the document request pricing information? â¢ If the project involves developer-built station improvements, how are these treated relative to FMV and bid price? â¢ For selections based on broader, multi-criteria best value, how are these criteria articulated in the solicitation? Table I-7: Primary Evaluation Criteria Type of Criteria Examples A. Land Price/Financial Terms. As noted in the enabling act discussion, many agencies are required by law to obtain fair market value (FMV); others are required to do so by Board policy or by FTAâs JD circular, as applicable. Many of those that require FMV also pursue âbest valueâ. Others do not have an FMV requirement but still wish to make an âapples-to-applesâ comparison of financial terms. â DART has an FMV requirement. Its recent RFP requires simply âproposed terms for the transaction structure, including timing, certainty of funds and schedule of payments to DART.â â As noted previously, the MBTA is required to accept the highest bid unless it justifies otherwise. â BART is not required to obtain FMV, but its current RFP requires financial modeling using a prescribed format including all assumptions. â Denver Rapid Transit District (RTD) must obtain FMV, but when other requirements are taken into account, the proposal must be demonstrated to be net budget neutral (see also below). B. Treatment of Station Improvements. An RFP may require the developer to build replacement garages or other station improvements. The extent to which park & ride is to be replaced, and the extent to which the developer is required to fund garages or other improvements outside of the bid price, may create a major financial trade-off between project feasibility and the agencyâs expectations with respect to land value. â The MBTAâs recent Quincy Center RFP is an example of an agency requiring a set of specific station improvements to be funded, designed, and built by the developer, with an explicit statement that these costs will not be included in the bid price. â WMATAâs Huntington RFP, at a major park & ride station, reflects the agencyâs recent JD policy change of evaluating park & ride replacement on an all-in ridership and revenue basis. The developer is expected to conduct and fund the analysis. WMATA has historically expected developers to fund replacement and improvement facilities to the extent possible. â BARTâs recent North Concord-MartÃnez RFQ, for a 2000-car park & ride lot, invites proponents to make creative proposals for the extent and configuration of replacement parking and states BARTâs intent to work cooperatively to determine replacement and pursue third-party funding. BART has historically allowed the cost of replacement garages to âcount againstâ land value.
Appendix I Agency Joint Development Documentation I-15 C. Multi-Criterion Best Value. The solicitations cited on the right are examples from agencies who conduct multi-criterion/best value solicitations. Whether they require FMV or not, these solicitations expressly state that price is only one of several factors to be considered, and project-specific criteria are often placed in a framework of broader JD goals. â¢ Affordable housing: the MARTA, BART, MBTA, LA Metro, and Sound Transit solicitations listed in Table I-5 include agency- imposed affordable housing requirements. These and other agencies take differing approaches to the discounting of land value (or the reduction of FMV to reflect the affordability requirement), depending on Board policy, the availability of other subsidies or incentives, and other factors. â¢ Denver RTD has a unique policy document entitled âEvaluation Guidelinesâ (http://www.rtd-denver.com/documents/tod- evaluation-guidelines-2018.pdf), which presents a structured hierarchy of JD project principles (or âmust-havesâ, including net budget neutrality) and two tiers of additional âfactorsâ, including ridership, affordable housing, station improvements, etc. This document is reflected in all solicitations. â MARTAâs RFPs (including the Kensington example in Table I-4) routinely state the three overarching goals of their official TOD/JD policy: to generate greater transit ridership, which is a natural consequence of clustering mixed-use development around stations and along corridors; to promote a sustainable, affordable and growing future for the people of Metro Atlanta; and to generate a return on MARTAâs transit investment. These are reflected in Individual project goals. â NJ Transitâs Aberdeen-Matawan Station RFQ/EI states four specific goals: maximize the value of the NJ Transit real estate asset; enhance the overall economic development of Matawan and the region with mixed-use commercial development; maximize the utilization of the station (a reference to ridership); enhance commuter access/public parking. â LA Metroâs RFP for North Hollywood included community goals, such as: âgenerate economic development benefits such as jobs and fiscal revenues to the local area and the municipalities served; respond and contribute to the social and urban fabric of the local community and contribute to a neighborhoodâs long- term sustainability.â 3.3 Technical Specifications: Prescriptiveness versus Flexibility A basic role of the solicitation is to explain the agencyâs understanding of the opportunity to potential developers. This is particularly important for any transit improvements associated with the project; the agency typically has some threshold expectations or requirements, particularly if the opportunity includes the design and construction of transit facilities by the developer. Moreover, the transit agency may have a concept in mind for the development program itselfâthe mix of uses, the scale, the placement on the site, the TOD urban form. If the agency has already engaged the local jurisdiction and the affected neighborhood, there may be mutual understandings that those stakeholders expect to see reflected in the solicitation. For all of these reasons, a key question in drafting any solicitation (especially an RFP) is this: how detailed and prescriptive, versus broad and flexible, should the technical description be? Other than
Appendix I Agency Joint Development Documentation I-16 engineering and construction standards that are essential to safety and operations, which project specifications should be presented as required and which as illustrative? From the agencyâs standpoint, too prescriptive an approach may stifle creativity and limit the quality of proposals; too flexible an approach may complicate the ability to make an âapples-to-applesâ evaluation. From the bidderâs standpoint, flexibility is generally welcome, but only if the parameters are clear. An effective solicitation finds the âsweet spotâ between specificity and flexibility that is appropriate for the project in question. In some cases, the nature of the opportunity dictates the result. When KCATA requested proposals for a master developer to review all the opportunities in the future Rock Island transit corridor and then to proceed in phases to plan and facilitate the developments, it was easily able to grant the respondents broad discretion and creativity in developing their proposals. At a more finite opportunityâthe two-acre site in Kansas City at the corner of 18th & TroostâKCATA was also able to offer broad flexibility. The principal guidance in the RFP is to propose vertical mixed-use development, consistent with zoning, that will generate transit ridership. The RFP also stated that while the formal offering was the two-acre parcel, KCATA was willing to entertain proposals to develop other portions of its 20-acre operations campus, of which the corner parcel is part. By contrast, WMATAâs Huntington Metro RFP addresses an end-of-line heavy rail station, with large, complex facilities, a developed environment, and important intermodal functions. The RFP presents a set of âtest fitâ suggestions, working assumptions, and performance standards, reflecting WMATAâs in- depth analysis of the site. While there are some specific, engineering-driven parameters, most of the technical points are described as assumptions âbut not requirementsâ, and bidders are invited to propose a variety of site planning, replacement parking, busway, and drop-off solutions. The RFP thus provides appropriate flexibility in a more constrained environment than the other examples. 4.0 Unsolicited Proposal Policies There is a general preference among the transit agencies surveyed for proactive identification of JD opportunities and solicitation of competitive JD proposals. Many agencies are required to seek competitive bids or are allowed to consider sole-source negotiations only in narrowly defined circumstances. Nonetheless, developer-initiated proposals for the acquisition and use of agency land are common. Moreover, proposals by adjoining land owners to build new station entrances, station improvements, or entire new stations are, by definition, almost always unsolicited. Agency policies vary as to the potential advantages of developer-initiated or unsolicited proposals, and not all agencies have documented explicit policies. The seven unsolicited proposal policies collected from transit agencies for this review are listed in Table I-8. (These are generally agency policy documents or manuals, but some are state statutes or executive guidelines developed under broader policy authority.) Several key policy characteristics are outlined in Table I-9.
Appendix I Agency Joint Development Documentation I-17 Table I-8: Unsolicited Proposal Policies Transit Agency Unsolicited Proposal Policy Atlanta: MARTA https://itsmarta.com/uploadedFiles/More/Procurement/MARTACPMProcedure- Final4-09-2018-REV6.pdf (pp. 66 ff; 2018) https://www.itsmarta.com/uploadedFiles/More/Transit_Oriented_Development/M ARTA-TOD-Implementation-Policies-Adopted-Text-November-2010.pdf Bay Area: BART https://www.bart.gov/sites/default/files/docs/unsolicited_proposal_review_proce dure_20190822_0.pdf Boston: MBTA Provision of Joint Development Policy (2017): https://www.mass.gov/files/documents/2017/10/17/TOD_Policy.pdf (p. 26) Overall Innovation Proposals Policy (2016): https://cdn.mbta.com/sites/default/files/2017-12/mbta-innovation-proposal- policy.pdf Denver: RTD http://www.rtd- denver.com/documents/businesscenter/Resolution16_Series2015_UnsolicitedProp osal.pdf (2015) Kansas City: KCATA http://www.kcata.org/documents/uploads/2017UnsolicitedProposalPolicy.pdf (2017) Los Angeles: LA Metro http://media.metro.net/projects_studies/joint_development/images/jdprocess_20 1701_finalattachment_a.pdf (Appendix; 2017) Salt Lake City: UTA https://le.utah.gov/xcode/Title63G/Chapter6A/C63G-6a- S712_2018050820180508.pdf (2018) Washington, DC: WMATA https://www.wmata.com/about/board/meetings/board-pdfs/upload/3A-Joint- Development-Policies.pdf (p. 23, 2018)
Appendix I Agency Joint Development Documentation I-18 Table I-9: Key Characteristics of Unsolicited Proposal Policies Characteristic Examples A. Explicit Policy for Unsolicited Proposals Policies that address unsolicited JD proposals were collected from seven transit agencies. â LA Metro provides a particularly detailed Unsolicited Proposal Appendix as part of its JD Policy (Process). The Policy states that Metro does not encourage unsolicited proposals. â BART, Denver RTD, and KCATA have detailed, stand-alone Unsolicited Proposal Policies accessible on their JD-related web pages. KCATAâs policy explicitly encourages such proposals. B. Scope of Policy The transit agency may apply a single guideline for unsolicited proposals to provide goods or services as well as real estate and joint development or may document a separate procedure addressing only unsolicited JD proposals. â LA Metro and Denver RTD have separate joint development guidelines for unsolicited proposals as companions to their guides for unsolicited goods and services proposals. â WMATA has a separate set of guidelines for joint development with its own unsolicited proposal policy. â KCATA addresses unsolicited proposals for joint development in the context of a unified unsolicited proposal policy for procurement and real estate contracting. â The MBTA has a specific statement on unsolicited proposals in its official JD policy. It also addresses unsolicited JD proposals as part of a recent Innovation Policy covering goods and services. C. Documented Preference for Bilateral Negotiation or for Seeking Competitive Offers Most (but not all) respondents documented a preference in principle for assessing competitive interest, but the range varied from complete confidentiality of bilateral negotiations, to a pro forma publication serving only the general purposes of a public notice, to a generic and selective inquiry as to development interest, to a full and open competition with the original proposal. Several of the policies: (a) allow an award to be made to the unsolicited proponent if the competitive solicitation is published (or in some cases, a notice seeking competing expressions of interest is published) without response, and (b) make clear that if the unsolicited proposal results in a competitive solicitation, the original proponent has no special standing. â MBTA prohibits an award resulting from an unsolicited proposal without âadequate opportunity to competeâ (at least 14 days). An award is permitted if a sole-source determination is made, and the absence of responses to the notice of 14 days or more would be a factor. â UTA, operating under Utah statutes, similarly prohibits awards without an opportunity for competition; state law creates the possibility of regulations that might specify exceptions. â WMATA permits an award without competition only in three specific circumstances: (1) the proponent has an existing ground lease, (2) the proponent is a member jurisdiction, or (3) the proposal permits the advantageous assembly of real property adjoining WMATA property. â MARTAâs TOD Implementing Policies (part of its official policy) state that MARTA can respond to an unsolicited JD proposal by rejecting it as untimely or not advantageous, or by initiating a normal competitive solicitation. The two exceptional cases in which the policy explicitly contemplates sole-source awards (at MARTAâs discretion) are (1) proposals from adjacent land owners and (2) proposals from other public jurisdictions. â KCATA and LA Metro permit an award based on a determination regarding the proprietary interest in the unsolicited proposal. â RTD permits the designation of a project to follow the non- competitive track and permits award after completion of the unsolicited proposal process.
Appendix I Agency Joint Development Documentation I-19 Characteristic Examples D. Confidentiality In addition to complying with any state requirements for disclosure and exceptions for proprietary data, to what degree do the procedures protect or require waiver of claims of originality or intellectual property in unsolicited proposals? â Most of the submitted documents rely primarily on state open records laws. A DART RFP is representative: âProposers are hereby notified that DART is subject to Chapter 552 of the Texas Government Code, commonly referred to as the Public Information Act. Proposers should understand that DART will treat proposals as confidential and does not intend to disclose proposal information to other proposers or the public. Proposers should understand that a request may be received by DART for a proposal. In such event, the Texas Attorney General will make the determination as to whether DART may withhold the entirety of a proposal, part of the proposal or must release the proposal in its entirety. In light of the Public Information Act requirements, DART does not execute confidentiality agreements or include confidentiality provisions in agreements.â E. Other Unsolicited Proposal Policies Are proposer fees required, or other agency policies applied, to agreements resulting from unsolicited proposals? â MARTA provides for fees in proportion to contract value, subject to CEO modification. â UTA, operating under state law, provides for fees related to actual processing costs. â RTD requires that unsolicited proposals comply with its fair labor policies. 5.0 Development Agreements The remaining category of primary joint development documentation consists of development agreements. The research team collected 10 such agreements from six different transit agencies. Unlike enabling acts, JD policies, and solicitation documents, which are largely in the public domain, development agreements are by nature less likely to be available on-line and more likely to be held closely by the parties. The research team looked for agreements representing the variety of joint development transactions, particularly: â¢ JD projects involving FTA jurisdiction as well as those that do not;143 â¢ JD projects on transit agency property, as well as off-site joint development (such as adjacent land owners building or improving stations). All of these categories are represented in Table I-10. It was also important to capture the two principal types of development agreements, interim and final, which was also accomplished. Interim agreements (which may also be called, among other things, Exclusive Negotiating Agreements or ENAs) typically govern the period between the preliminary developer selection and the conclusion of a final agreement. 143 A companion project, TCRP J-05 18-04, is entitled âJoint Development Agreements Using FTA Funds or FTA- Funded Assets.â That research is limited to FTA-assisted projects. For this study and for the Guide, the research team.
Appendix I Agency Joint Development Documentation I-20 An interim agreement establishes a framework for the transaction, with deadlines and contingencies if a final agreement is not achieved.144 Final agreements (which may be called, among other things, Joint Development Agreements or Development Agreements) constitute a meeting of the minds on the major obligations of all parties. A final JD agreement typically governs the completion of the predevelopment process, up to or beyond the actual conveyance of the development rights, providing the prerequisites and triggers for that event to occur. A final JD agreement may include, be accompanied by, or be superseded by the deed of sale or ground lease. Portions of a final JD agreement may lie outside the ground lease or deed of sale and survive it for the life of the project.145 Our review of the agreements listed in Table I-10 helped illuminate a number of salient issues, including several which, in the research teamâs experience, are key to successful implementation: â¢ An Exclusive Negotiating Agreement arising from an RFQ-based selection (as in the example of BARTâs Lake Merritt project) requires a lengthy term, sufficient to plan and negotiate the details of the project (in that case, 24 months). â¢ A crucial question during the interim period is how to keep the parties bound to each other and negotiating urgently and in good faith. A typical incentive is to require a substantial, non- refundable deposit by the developer; in BARTâs ENAs, this âexclusivity feeâ is applicable to BARTâs costs (which the developer is obligated to fund). Another incentive that appears in at least one of these agreements is Board authorization, stated in the interim agreement, to commence negotiations with the second-place competitor if deadlines are not met and the staff is convinced that the original exclusive negotiations will be fruitless. â¢ Some agencies break the exclusive negotiating or interim agreement period into two steps: reaching agreement on a Term Sheet (a draft of which, or at least the form of which, may be included in the solicitation or attached to the ENA as a point of departure), followed by the full final agreement. â¢ For JD projects on transit agency land, three core transactional issues are commonly addressed in interim agreements and resolved in final agreements. The first is the structure and net present value of the transit agencyâs compensation for the property. This involves not only the method of conveyance (sale, ground or air rights lease, or a joint venture or partnership in which the agency has an equity stake, as is proposed in one of the projects in Table I-10) and the sale price or rent structure; but also, as noted earlier, the way in which in-kind contributions by the developer are recognized in relation to the sale price or rent stream. 144 This is not to imply that all transit agencies use a formal interim agreement; as indicated in the Task 3 interviews, some enter exclusive negotiations without a documentary agreement, relying on mutual interest, a developer deposit, and a preliminary designation stating a deadline to conclude a term sheet. 145 An example of a different type of final joint development agreement is the Memorandum of Agreement used by the MBTA and its off-site development partners to document the four station construction or improvement projects included in Table 10.
Appendix I Agency Joint Development Documentation I-21 â¢ A second core transactional issue is the list of âclosing conditionsâ that are satisfied prior to executing the deed of sale or ground lease, as the case may be. A strong agreement from the agencyâs standpoint includes all of the key entitlements and well-defined evidence of financing. Table I-10: Development Agreements Transit Agency and Project/Station Type of JD Agreement Description FTA* Bay Area: BART Lake Merritt Exclusive Negotiating Agreement (2019) Preliminary designated developer to build a mixed-use project on BART land. ENA provides 24-month structured negotiation. no Boston: MBTA Boston Landing Memorandum of Agreement Adjacent developer (Boston Landing LLC, an affiliate of New Balance) to fund, design, and build a commuter rail station for the MBTA. no Boston: MBTA Yawkey Station (now Lansdowne Station) Memorandum of Agreement Adjacent land and air rights developer (MK Parcel 7 LLC) to substantially improve the commuter rail station; to manage design and construction; and fund all costs over $12 million. no Boston: MBTA North Station Agreement (2015) Adjacent land and air rights developer (Delaware North, owner of TD Garden) to fund, design, and build a pedestrian tunnel connecting the MBTAâs commuter rail and rapid transit areas. no Boston: MBTA Ruggles Station Memorandum of Agreement (2014) Northeast University, as adjacent land owner, to build a pedestrian overpass above MBTA track and platform; land swap and other considerations. no Cleveland: GCRTA Columbus Avenue Site near Ohio City/W. 25th St. Station Letter of Intent (2019) Developer (Carnegie) designated to build mixed-use JD on GCRTA land and station access improvement at Ohio City/W. 25th St. Station. (Preliminary step to Development & Use Agreement.) yes Los Angeles: LA Metro Vermont/Santa Monica Station Exclusive Negotiating Agreement (2018); Memo to Board Developer designated as a result of an unsolicited proposal, following the Unsolicited Proposal Policy. yes Los Angeles: LA Metro Soto Station Joint Development Agreement (2018) Affordable housing development on LA Metro property. Conveyance by ground lease. Preceded by ENA and Term Sheet. yes Memphis: MATA Central Station Development Agreement (2015) Existing station and mixed-use complex; new master developer (Henry Turley and affiliates) to be substituted under new Ground Lease. To upgrade transportation and joint development components. no San JosÃ©: VTA Sample Sample Exclusive Negotiating Agreement Sample ENA. N/A
Appendix I Agency Joint Development Documentation I-22 * Indicates whether the agreement involves an FTA-assisted joint development project. â¢ The third issue is the structure of defaults and remedies, both prior and subsequent to closing. While de-designating a developer and starting over is generally a last resort, the leverage that the transit agency has over the developerâs timely performance depends on this language. With respect to âshow-stoppingâ events like developer bankruptcy or breach of specific terms in the agreement, the remedies available to the agency are key. â¢ In projects with an FTA interest, development agreements explicitly note that FTA approval is required. It is also common for such agreements to state that the transit agency will reserve certain physical and/or access and use easements in order to fulfill the FTA requirement of âsatisfactory continuing controlâ. â¢ In projects in which a developer is building on or adjacent to transit agency property, and especially if the developer is building facilities on the transit agencyâs behalf, the requirements for design review and construction coordination are likely to be at their strongest, in both content and procedure. This is well illustrated by the MBTA projects represented here. When buildings are contiguous to the transit facilitiesâespecially heavy or commuter rail, or any mode operating in a subwayâthe requirements for noise and vibration abatement, fire code, ventilation, and tunnel integrity are typically addressed. â¢ There are other issues, of a legal and procedural nature rather than engineering, that may arise in JD agreements when developers will be building on or next to transit property. Among the agreements reviewed here, these issues included a requirement for the developer to fund a force account for oversight, flagging, and other transit agency expenses; a work-in-harmony provision to ensure labor peace between the agency and developer work forces; and the potential for construction done on behalf of the transit agency to require public bidding, with the developer standing in the agencyâs shoes. 6.0 Summary of Findings With dozens of US transit agencies undertaking joint development programs and projects, each resting on an enabling act and almost all requiring a solicitation, negotiation, and final agreement, there is a sea of documentation. In collecting and reviewing a range of examples, the analysis reported here helped the research team address a number of substantive and procedural issues in the development of the Guide, including the identification of best practices. To briefly summarize some highlights of this review: Enabling acts vary widely in form. Many are not traditional, single-agency enabling statutes at all, but rather county charters, categorical enabling acts for multiple transit districts across a state, interstate compacts, or joint powers agreements. In terms of content relating to joint development, enabling acts and these other forms of agency charters have much in common, including, in most cases, broad powers to acquire and dispose of real property and enter into complex agreements, but only implicit authority to engage in JD. Several agencies, however, have explicit charter authority to undertake joint development, and at least two (BART and Miami-Dade Transit, through its parent county government) have land use regulatory power that can be used to promote JD.
Appendix I Agency Joint Development Documentation I-23 JD solicitation documents vary widely in format and content, but several trends may be emerging in current practice. First, the use of one-step RFQs (followed by exclusive negotiations to define the project) and one-step RFPs may be growing, in contrast to the two-step RFQ-RFP process. Second, while evaluation and selection criteria vary widely as well, multi-criteria/best value selections are increasingly typical, as reflected in the criteria sections of individual solicitation documents. Third, in setting forth the project concept and guidelines, agencies are seeking the âsweet spotâ between too prescriptive and too unconstrained an approach, an answer likely to depend on the projectâs scope and setting. Some agencies always discourage unsolicited proposals or, if they entertain them at all, do so by opening the proposed opportunity to competition. Some are willing, or legally able, to consider negotiating a sole-source agreement arising from an unsolicited proposal only in a narrow set of circumstances, particularly if the proponent is an adjacent land owner or a sister jurisdiction. Some agencies expect unsolicited proposals in a range of circumstances, while others have documented only a case-by-case assessment of whether to pursue bilateral negotiations or a competitive process. While discussions of unsolicited proposals usually have development of transit agency property in mind, the emerging model of adjacent developers funding and building station improvements or whole stations rests on a form of unsolicited proposal as well. Our review of sample development agreements revealed the obvious differences between interim and final agreements, especially when a developer selection based only on an RFQ transitions into a lengthy ENA in which the proposal will, in effect, be written. The review illustrated how development agreements address the core transactional issues of net compensation, closing conditions, and the structure of defaults and remedies. And several agreements helped illustrate the types of advanced engineering, legal, and procedural issues that must be carefully documented when developers will be building, either on their own behalf or the transit agency, in the tight physical and institutional space of an operating transit facility.
Â AppendixÂ IÂ AgencyÂ JointÂ DevelopmentÂ DocumentationÂ Iâ20Â AnÂ interimÂ agreementÂ establishesÂ aÂ frameworkÂ forÂ theÂ transaction,Â withÂ deadlinesÂ andÂ contingenciesÂ ifÂ aÂ finalÂ agreementÂ isÂ notÂ achieved.144Â Â FinalÂ agreementsÂ (whichÂ mayÂ beÂ called,Â amongÂ otherÂ things,Â JointÂ DevelopmentÂ AgreementsÂ orÂ DevelopmentÂ Agreements)Â constituteÂ aÂ meetingÂ ofÂ theÂ mindsÂ onÂ theÂ majorÂ obligationsÂ ofÂ allÂ parties.Â AÂ finalÂ JDÂ agreementÂ typicallyÂ governsÂ theÂ completionÂ ofÂ theÂ predevelopmentÂ process,Â upÂ toÂ orÂ beyondÂ theÂ actualÂ conveyanceÂ ofÂ theÂ developmentÂ rights,Â providingÂ theÂ prerequisitesÂ andÂ triggersÂ forÂ thatÂ eventÂ toÂ occur.Â AÂ finalÂ JDÂ agreementÂ mayÂ include,Â beÂ accompaniedÂ by,Â orÂ beÂ supersededÂ byÂ theÂ deedÂ ofÂ saleÂ orÂ groundÂ lease.Â PortionsÂ ofÂ aÂ finalÂ JDÂ agreementÂ mayÂ lieÂ outsideÂ theÂ groundÂ leaseÂ orÂ deedÂ ofÂ saleÂ andÂ surviveÂ itÂ forÂ theÂ lifeÂ ofÂ theÂ project.145Â Â OurÂ reviewÂ ofÂ theÂ agreementsÂ listedÂ inÂ TableÂ Iâ10Â helpedÂ illuminateÂ aÂ numberÂ ofÂ salientÂ issues,Â includingÂ severalÂ which,Â inÂ theÂ researchÂ teamâsÂ experience,Â areÂ keyÂ toÂ successfulÂ implementation:Â Â Â ï· AnÂ ExclusiveÂ NegotiatingÂ AgreementÂ arisingÂ fromÂ anÂ RFQâbasedÂ selectionÂ (asÂ inÂ theÂ exampleÂ ofÂ BARTâsÂ LakeÂ MerrittÂ project)Â requiresÂ aÂ lengthyÂ term,Â sufficientÂ toÂ planÂ andÂ negotiateÂ theÂ detailsÂ ofÂ theÂ projectÂ (inÂ thatÂ case,Â 24Â months).Â Â ï· AÂ crucialÂ questionÂ duringÂ theÂ interimÂ periodÂ isÂ howÂ toÂ keepÂ theÂ partiesÂ boundÂ toÂ eachÂ otherÂ andÂ negotiatingÂ urgentlyÂ andÂ inÂ goodÂ faith.Â AÂ typicalÂ incentiveÂ isÂ toÂ requireÂ aÂ substantial,Â nonâ refundableÂ depositÂ byÂ theÂ developer;Â inÂ BARTâsÂ ENAs,Â thisÂ âexclusivityÂ feeâÂ isÂ applicableÂ toÂ BARTâsÂ costsÂ (whichÂ theÂ developerÂ isÂ obligatedÂ toÂ fund).Â AnotherÂ incentiveÂ thatÂ appearsÂ inÂ atÂ leastÂ oneÂ ofÂ theseÂ agreementsÂ isÂ BoardÂ authorization,Â statedÂ inÂ theÂ interimÂ agreement,Â toÂ commenceÂ negotiationsÂ withÂ theÂ secondâplaceÂ competitorÂ ifÂ deadlinesÂ areÂ notÂ metÂ andÂ theÂ staffÂ isÂ convincedÂ thatÂ theÂ originalÂ exclusiveÂ negotiationsÂ willÂ beÂ fruitless.Â ï· SomeÂ agenciesÂ breakÂ theÂ exclusiveÂ negotiatingÂ orÂ interimÂ agreementÂ periodÂ intoÂ twoÂ steps:Â reachingÂ agreementÂ onÂ aÂ TermÂ SheetÂ (aÂ draftÂ ofÂ which,Â orÂ atÂ leastÂ theÂ formÂ ofÂ which,Â mayÂ beÂ includedÂ inÂ theÂ solicitationÂ orÂ attachedÂ toÂ theÂ ENAÂ asÂ aÂ pointÂ ofÂ departure),Â followedÂ byÂ theÂ fullÂ finalÂ agreement.Â ï· ForÂ JDÂ projectsÂ onÂ transitÂ agencyÂ land,Â threeÂ coreÂ transactionalÂ issuesÂ areÂ commonlyÂ addressedÂ inÂ interimÂ agreementsÂ andÂ resolvedÂ inÂ finalÂ agreements.Â TheÂ firstÂ isÂ theÂ structureÂ andÂ netÂ presentÂ valueÂ ofÂ theÂ transitÂ agencyâsÂ compensationÂ forÂ theÂ property.Â ThisÂ involvesÂ notÂ onlyÂ theÂ methodÂ ofÂ conveyanceÂ (sale,Â groundÂ orÂ airÂ rightsÂ lease,Â orÂ aÂ jointÂ ventureÂ orÂ partnershipÂ inÂ whichÂ theÂ agencyÂ hasÂ anÂ equityÂ stake,Â asÂ isÂ proposedÂ inÂ oneÂ ofÂ theÂ projectsÂ inÂ TableÂ Iâ10)Â andÂ theÂ saleÂ priceÂ orÂ rentÂ structure;Â butÂ also,Â asÂ notedÂ earlier,Â theÂ wayÂ inÂ whichÂ inâkindÂ contributionsÂ byÂ theÂ developerÂ areÂ recognizedÂ inÂ relationÂ toÂ theÂ saleÂ priceÂ orÂ rentÂ stream.Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 144Â ThisÂ isÂ notÂ toÂ implyÂ thatÂ allÂ transitÂ agenciesÂ useÂ aÂ formalÂ interimÂ agreement;Â asÂ indicatedÂ inÂ theÂ TaskÂ 3Â interviews,Â someÂ enterÂ exclusiveÂ negotiationsÂ withoutÂ aÂ documentaryÂ agreement,Â relyingÂ onÂ mutualÂ interest,Â aÂ developerÂ deposit,Â andÂ aÂ preliminaryÂ designationÂ statingÂ aÂ deadlineÂ toÂ concludeÂ aÂ termÂ sheet.Â Â 145Â AnÂ exampleÂ ofÂ aÂ differentÂ typeÂ ofÂ finalÂ jointÂ developmentÂ agreementÂ isÂ theÂ MemorandumÂ ofÂ AgreementÂ usedÂ byÂ theÂ MBTAÂ andÂ itsÂ offâsiteÂ developmentÂ partnersÂ toÂ documentÂ theÂ fourÂ stationÂ constructionÂ orÂ improvementÂ projectsÂ includedÂ inÂ TableÂ 10.Â Â
Â AppendixÂ IÂ AgencyÂ JointÂ DevelopmentÂ DocumentationÂ Iâ21Â ï· AÂ secondÂ coreÂ transactionalÂ issueÂ isÂ theÂ listÂ ofÂ âclosingÂ conditionsâÂ thatÂ areÂ satisfiedÂ priorÂ toÂ executingÂ theÂ deedÂ ofÂ saleÂ orÂ groundÂ lease,Â asÂ theÂ caseÂ mayÂ be.Â AÂ strongÂ agreementÂ fromÂ theÂ agencyâsÂ standpointÂ includesÂ allÂ ofÂ theÂ keyÂ entitlementsÂ andÂ wellâdefinedÂ evidenceÂ ofÂ financing.Â TableÂ Iâ10:Â DevelopmentÂ AgreementsÂ Â TransitÂ AgencyÂ andÂ Project/StationÂ TypeÂ ofÂ JDÂ AgreementÂ DescriptionÂ Â FTA*Â BayÂ Area:Â BARTÂ LakeÂ MerrittÂ ExclusiveÂ NegotiatingÂ AgreementÂ (2019)Â PreliminaryÂ designatedÂ developerÂ toÂ buildÂ aÂ mixedâuseÂ projectÂ onÂ BARTÂ land.Â ENAÂ providesÂ 24âmonthÂ structuredÂ negotiation.Â Â noÂ Boston:Â MBTAÂ Â BostonÂ LandingÂ MemorandumÂ ofÂ AgreementÂ Â AdjacentÂ developerÂ (BostonÂ LandingÂ LLC,Â anÂ affiliateÂ ofÂ NewÂ Balance)Â toÂ fund,Â design,Â andÂ buildÂ aÂ commuterÂ railÂ stationÂ forÂ theÂ MBTA.Â noÂ Boston:Â MBTAÂ YawkeyÂ StationÂ (nowÂ LansdowneÂ Station)Â MemorandumÂ ofÂ AgreementÂ Â AdjacentÂ landÂ andÂ airÂ rightsÂ developerÂ (MKÂ ParcelÂ 7Â LLC)Â toÂ substantiallyÂ improveÂ theÂ commuterÂ railÂ station;Â toÂ manageÂ designÂ andÂ construction;Â andÂ fundÂ allÂ costsÂ overÂ $12Â million.Â noÂ Boston:Â MBTAÂ NorthÂ StationÂ AgreementÂ (2015)Â AdjacentÂ landÂ andÂ airÂ rightsÂ developerÂ (DelawareÂ North,Â ownerÂ ofÂ TDÂ Garden)Â toÂ fund,Â design,Â andÂ buildÂ aÂ pedestrianÂ tunnelÂ connectingÂ theÂ MBTAâsÂ commuterÂ railÂ andÂ rapidÂ transitÂ areas.Â noÂ Boston:Â MBTAÂ RugglesÂ StationÂ MemorandumÂ ofÂ AgreementÂ (2014)Â NortheastÂ University,Â asÂ adjacentÂ landÂ owner,Â toÂ buildÂ aÂ pedestrianÂ overpassÂ aboveÂ MBTAÂ trackÂ andÂ platform;Â landÂ swapÂ andÂ otherÂ considerations.Â noÂ Cleveland:Â GCRTAÂ ColumbusÂ AvenueÂ SiteÂ nearÂ OhioÂ City/W.Â 25thÂ St.Â StationÂ LetterÂ ofÂ IntentÂ (2019)Â Â DeveloperÂ (Carnegie)Â designatedÂ toÂ buildÂ mixedâuseÂ JDÂ onÂ GCRTAÂ landÂ andÂ stationÂ accessÂ improvementÂ atÂ OhioÂ City/W.Â 25thÂ St.Â Station.Â (PreliminaryÂ stepÂ toÂ DevelopmentÂ &Â UseÂ Agreement.)Â yesÂ LosÂ Angeles:Â LAÂ MetroÂ Vermont/SantaÂ MonicaÂ StationÂ ExclusiveÂ NegotiatingÂ AgreementÂ (2018);Â MemoÂ toÂ BoardÂ DeveloperÂ designatedÂ asÂ aÂ resultÂ ofÂ anÂ unsolicitedÂ proposal,Â followingÂ theÂ UnsolicitedÂ ProposalÂ Policy.Â yesÂ LosÂ Angeles:Â LAÂ MetroÂ SotoÂ StationÂ JointÂ DevelopmentÂ AgreementÂ (2018)Â AffordableÂ housingÂ developmentÂ onÂ LAÂ MetroÂ property.Â ConveyanceÂ byÂ groundÂ lease.Â PrecededÂ byÂ ENAÂ andÂ TermÂ Sheet.Â yesÂ Memphis:Â MATAÂ CentralÂ StationÂ DevelopmentÂ AgreementÂ (2015)Â ExistingÂ stationÂ andÂ mixedâuseÂ complex;Â newÂ masterÂ developerÂ (HenryÂ TurleyÂ andÂ affiliates)Â toÂ beÂ substitutedÂ underÂ newÂ GroundÂ Lease.Â ToÂ upgradeÂ transportationÂ andÂ jointÂ developmentÂ components.Â noÂ SanÂ JosÃ©:Â VTAÂ SampleÂ SampleÂ ExclusiveÂ NegotiatingÂ AgreementÂ SampleÂ ENA.Â N/AÂ
Â AppendixÂ IÂ AgencyÂ JointÂ DevelopmentÂ DocumentationÂ Iâ22Â *Â IndicatesÂ whetherÂ theÂ agreementÂ involvesÂ anÂ FTAâassistedÂ jointÂ developmentÂ project.Â Â ï· TheÂ thirdÂ issueÂ isÂ theÂ structureÂ ofÂ defaultsÂ andÂ remedies,Â bothÂ priorÂ andÂ subsequentÂ toÂ closing.Â WhileÂ deâdesignatingÂ aÂ developerÂ andÂ startingÂ overÂ isÂ generallyÂ aÂ lastÂ resort,Â theÂ leverageÂ thatÂ theÂ transitÂ agencyÂ hasÂ overÂ theÂ developerâsÂ timelyÂ performanceÂ dependsÂ onÂ thisÂ language.Â WithÂ respectÂ toÂ âshowâstoppingâÂ eventsÂ likeÂ developerÂ bankruptcyÂ orÂ breachÂ ofÂ specificÂ termsÂ inÂ theÂ agreement,Â theÂ remediesÂ availableÂ toÂ theÂ agencyÂ areÂ key.Â ï· InÂ projectsÂ withÂ anÂ FTAÂ interest,Â developmentÂ agreementsÂ explicitlyÂ noteÂ thatÂ FTAÂ approvalÂ isÂ required.Â ItÂ isÂ alsoÂ commonÂ forÂ suchÂ agreementsÂ toÂ stateÂ thatÂ theÂ transitÂ agencyÂ willÂ reserveÂ certainÂ physicalÂ and/orÂ accessÂ andÂ useÂ easementsÂ inÂ orderÂ toÂ fulfillÂ theÂ FTAÂ requirementÂ ofÂ âsatisfactoryÂ continuingÂ controlâ.Â Â Â ï· InÂ projectsÂ inÂ whichÂ aÂ developerÂ isÂ buildingÂ onÂ orÂ adjacentÂ toÂ transitÂ agencyÂ property,Â andÂ especiallyÂ ifÂ theÂ developerÂ isÂ buildingÂ facilitiesÂ onÂ theÂ transitÂ agencyâsÂ behalf,Â theÂ requirementsÂ forÂ designÂ reviewÂ andÂ constructionÂ coordinationÂ areÂ likelyÂ toÂ beÂ atÂ theirÂ strongest,Â inÂ bothÂ contentÂ andÂ procedure.Â ThisÂ isÂ wellÂ illustratedÂ byÂ theÂ MBTAÂ projectsÂ representedÂ here.Â WhenÂ buildingsÂ areÂ contiguousÂ toÂ theÂ transitÂ facilitiesâespeciallyÂ heavyÂ orÂ commuterÂ rail,Â orÂ anyÂ modeÂ operatingÂ inÂ aÂ subwayâtheÂ requirementsÂ forÂ noiseÂ andÂ vibrationÂ abatement,Â fireÂ code,Â ventilation,Â andÂ tunnelÂ integrityÂ areÂ typicallyÂ addressed.Â ï· ThereÂ areÂ otherÂ issues,Â ofÂ aÂ legalÂ andÂ proceduralÂ natureÂ ratherÂ thanÂ engineering,Â thatÂ mayÂ ariseÂ inÂ JDÂ agreementsÂ whenÂ developersÂ willÂ beÂ buildingÂ onÂ orÂ nextÂ toÂ transitÂ property.Â AmongÂ theÂ agreementsÂ reviewedÂ here,Â theseÂ issuesÂ includedÂ aÂ requirementÂ forÂ theÂ developerÂ toÂ fundÂ aÂ forceÂ accountÂ forÂ oversight,Â flagging,Â andÂ otherÂ transitÂ agencyÂ expenses;Â aÂ workâinâharmonyÂ provisionÂ toÂ ensureÂ laborÂ peaceÂ betweenÂ theÂ agencyÂ andÂ developerÂ workÂ forces;Â andÂ theÂ potentialÂ forÂ constructionÂ doneÂ onÂ behalfÂ ofÂ theÂ transitÂ agencyÂ toÂ requireÂ publicÂ bidding,Â withÂ theÂ developerÂ standingÂ inÂ theÂ agencyâsÂ shoes.Â Â 6.0Â Â Â SummaryÂ ofÂ FindingsÂ WithÂ dozensÂ ofÂ USÂ transitÂ agenciesÂ undertakingÂ jointÂ developmentÂ programsÂ andÂ projects,Â eachÂ restingÂ onÂ anÂ enablingÂ actÂ andÂ almostÂ allÂ requiringÂ aÂ solicitation,Â negotiation,Â andÂ finalÂ agreement,Â thereÂ isÂ aÂ seaÂ ofÂ documentation.Â InÂ collectingÂ andÂ reviewingÂ aÂ rangeÂ ofÂ examples,Â theÂ analysisÂ reportedÂ hereÂ helpedÂ theÂ researchÂ teamÂ addressÂ aÂ numberÂ ofÂ substantiveÂ andÂ proceduralÂ issuesÂ inÂ theÂ developmentÂ ofÂ theÂ Guide,Â includingÂ theÂ identificationÂ ofÂ bestÂ practices.Â ToÂ brieflyÂ summarizeÂ someÂ highlightsÂ ofÂ thisÂ review:Â Â EnablingÂ actsÂ varyÂ widelyÂ inÂ form.Â ManyÂ areÂ notÂ traditional,Â singleâagencyÂ enablingÂ statutesÂ atÂ all,Â butÂ ratherÂ countyÂ charters,Â categoricalÂ enablingÂ actsÂ forÂ multipleÂ transitÂ districtsÂ acrossÂ aÂ state,Â interstateÂ compacts,Â orÂ jointÂ powersÂ agreements.Â InÂ termsÂ ofÂ contentÂ relatingÂ toÂ jointÂ development,Â enablingÂ actsÂ andÂ theseÂ otherÂ formsÂ ofÂ agencyÂ chartersÂ haveÂ muchÂ inÂ common,Â including,Â inÂ mostÂ cases,Â broadÂ powersÂ toÂ acquireÂ andÂ disposeÂ ofÂ realÂ propertyÂ andÂ enterÂ intoÂ complexÂ agreements,Â butÂ onlyÂ implicitÂ authorityÂ toÂ engageÂ inÂ JD.Â SeveralÂ agencies,Â however,Â haveÂ explicitÂ charterÂ authorityÂ toÂ undertakeÂ jointÂ development,Â andÂ atÂ leastÂ twoÂ (BARTÂ andÂ MiamiâDadeÂ Transit,Â throughÂ itsÂ parentÂ countyÂ government)Â haveÂ landÂ useÂ regulatoryÂ powerÂ thatÂ canÂ beÂ usedÂ toÂ promoteÂ JD.Â Â Â
Â AppendixÂ IÂ AgencyÂ JointÂ DevelopmentÂ DocumentationÂ Iâ23Â JDÂ solicitationÂ documentsÂ varyÂ widelyÂ inÂ formatÂ andÂ content,Â butÂ severalÂ trendsÂ mayÂ beÂ emergingÂ inÂ currentÂ practice.Â First,Â theÂ useÂ ofÂ oneâstepÂ RFQsÂ (followedÂ byÂ exclusiveÂ negotiationsÂ toÂ defineÂ theÂ project)Â andÂ oneâstepÂ RFPsÂ mayÂ beÂ growing,Â inÂ contrastÂ toÂ theÂ twoâstepÂ RFQâRFPÂ process.Â Second,Â whileÂ evaluationÂ andÂ selectionÂ criteriaÂ varyÂ widelyÂ asÂ well,Â multiâcriteria/bestÂ valueÂ selectionsÂ areÂ increasinglyÂ typical,Â asÂ reflectedÂ inÂ theÂ criteriaÂ sectionsÂ ofÂ individualÂ solicitationÂ documents.Â Third,Â inÂ settingÂ forthÂ theÂ projectÂ conceptÂ andÂ guidelines,Â agenciesÂ areÂ seekingÂ theÂ âsweetÂ spotâÂ betweenÂ tooÂ prescriptiveÂ andÂ tooÂ unconstrainedÂ anÂ approach,Â anÂ answerÂ likelyÂ toÂ dependÂ onÂ theÂ projectâsÂ scopeÂ andÂ setting.Â Â SomeÂ agenciesÂ alwaysÂ discourageÂ unsolicitedÂ proposalsÂ or,Â ifÂ theyÂ entertainÂ themÂ atÂ all,Â doÂ soÂ byÂ openingÂ theÂ proposedÂ opportunityÂ toÂ competition.Â SomeÂ areÂ willing,Â orÂ legallyÂ able,Â toÂ considerÂ negotiatingÂ aÂ soleâsourceÂ agreementÂ arisingÂ fromÂ anÂ unsolicitedÂ proposalÂ onlyÂ inÂ aÂ narrowÂ setÂ ofÂ circumstances,Â particularlyÂ ifÂ theÂ proponentÂ isÂ anÂ adjacentÂ landÂ ownerÂ orÂ aÂ sisterÂ jurisdiction.Â SomeÂ agenciesÂ expectÂ unsolicitedÂ proposalsÂ inÂ aÂ rangeÂ ofÂ circumstances,Â whileÂ othersÂ haveÂ documentedÂ onlyÂ aÂ caseâbyâcaseÂ assessmentÂ ofÂ whetherÂ toÂ pursueÂ bilateralÂ negotiationsÂ orÂ aÂ competitiveÂ process.Â WhileÂ discussionsÂ ofÂ unsolicitedÂ proposalsÂ usuallyÂ haveÂ developmentÂ ofÂ transitÂ agencyÂ propertyÂ inÂ mind,Â theÂ emergingÂ modelÂ ofÂ adjacentÂ developersÂ fundingÂ andÂ buildingÂ stationÂ improvementsÂ orÂ wholeÂ stationsÂ restsÂ onÂ aÂ formÂ ofÂ unsolicitedÂ proposalÂ asÂ well.Â Â OurÂ reviewÂ ofÂ sampleÂ developmentÂ agreementsÂ revealedÂ theÂ obviousÂ differencesÂ betweenÂ interimÂ andÂ finalÂ agreements,Â especiallyÂ whenÂ aÂ developerÂ selectionÂ basedÂ onlyÂ onÂ anÂ RFQÂ transitionsÂ intoÂ aÂ lengthyÂ ENAÂ inÂ whichÂ theÂ proposalÂ will,Â inÂ effect,Â beÂ written.Â TheÂ reviewÂ illustratedÂ howÂ developmentÂ agreementsÂ addressÂ theÂ coreÂ transactionalÂ issuesÂ ofÂ netÂ compensation,Â closingÂ conditions,Â andÂ theÂ structureÂ ofÂ defaultsÂ andÂ remedies.Â AndÂ severalÂ agreementsÂ helpedÂ illustrateÂ theÂ typesÂ ofÂ advancedÂ engineering,Â legal,Â andÂ proceduralÂ issuesÂ thatÂ mustÂ beÂ carefullyÂ documentedÂ whenÂ developersÂ willÂ beÂ building,Â eitherÂ onÂ theirÂ ownÂ behalfÂ orÂ theÂ transitÂ agency,Â inÂ theÂ tightÂ physicalÂ andÂ institutionalÂ spaceÂ ofÂ anÂ operatingÂ transitÂ facility.Â Â Â Â