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Suggested Citation:"III. CONCLUSIONS." National Academies of Sciences, Engineering, and Medicine. 2021. Joint Development Agreements Using FTA Funds or FTA-Funded Assets. Washington, DC: The National Academies Press. doi: 10.17226/26268.
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Page 14
Suggested Citation:"III. CONCLUSIONS." National Academies of Sciences, Engineering, and Medicine. 2021. Joint Development Agreements Using FTA Funds or FTA-Funded Assets. Washington, DC: The National Academies Press. doi: 10.17226/26268.
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TCRP LRD 56 13 met FTA requirements and avoided pitfalls that would other- wise delay the concurrence process. At least one agency interviewed worked closely with their re- gional FTA staff to draft a JD agreement template to use for all FTA-assisted JD projects that met FTA requirements and held the developer to the standards detailed by FTA guidance, which reduced uncertainty in their JD process going forward, and has made their development process more efficient overall. Nearly all of the agencies interviewed approved of the chang- es and clarifications made to FTA C 7050.1B, and felt that the circular would clarify many of the aspects of the previous itera- tion that they found confusing and/or unhelpful, particularly in terms of FTA-assisted property valuation and the definition of fair market value. III. CONCLUSIONS While FTA guidance on JD can appear intimidating to agen- cies unfamiliar with the process, the FTA’s engagement and over- sight appears to be relatively straightforward, and not as “heavy handed” as some agencies fear, particularly if transit agencies and potential JD partners engage their regional FTA office early and often in the conceptualization of their JD initiatives. A significant concern for many transit agencies is the high turnover of regional FTA staff. Some jurisdictions and transit agencies have successfully maneuvered through this challenge. It was discovered during the research process that most of the issues faced by transit agencies engaged in FTA-assisted JD were more administrative than legal. No agencies interviewed reported legal challenges specifically relating to JD projects that they had undertaken in the past, or that they were currently in the midst of developing. The majority of the challenges faced came down to the following: • Lack of knowledge by the agency/authority on the FTA assisted JD process. • General misperception by the development community (and sometimes by transit agencies/authorities themselves) about the complexities (or lack thereof) of the FTA-assisted JD process, the length of time the process would take, and the level of additional risk to the developer in involving the FTA. • Issues relating to public relations and engagement for cer- tain JD projects; getting community buy-in is essential to a smooth JD process. • Project complexity relating to the involvement of multiple partners and/or community stakeholders. This did not always result in barriers to project implementation, but needed to be managed carefully to ensure project success. Key takeaways for transit agencies looking to undertake a JD can be summarized by the following: • Engaging with the regional FTA office during the planning stages of a JD, prior to issuance of an RFP/RFQ, is highly ing control would have any significant impact to the developer’s ability to receive a return on investment from the property. Sev- eral agencies interviewed did not participate in FTA-assisted JD due to their concerns about restrictions imposed by the state they operated in, and/or local regulations prohibiting the use of public funds for private benefit. The most commonly noted challenge by the agencies inter- viewed was staff turnover at their regional FTA office, and, as a result, inconsistency in experience by some regional FTA offi- cials regarding the requirements for FTA-assisted JD. Several agencies mentioned that there was a “steep learning curve” for new staff not as familiar with the JD process. This sometimes caused the FTA concurrence process to take longer, and re- quired the agency to follow up with the regional FTA office multiple times. Similarly, some transit agencies reported issues with connecting with the “right” FTA regional office staff mem- bers for concurrence on JD projects. Overall, agencies reported that, if local FTA office staff lacked experience with the FTA- assisted JD process, they often struggled to get answers to their questions. A few agencies had significant difficulty with the process of receiving concurrence on projects from their local FTA office and were frustrated by limited communication with FTA staff. These agencies noted that the uncertainty of the timing of FTA concurrence was a deterrent to JD, and in turn made the private development community reticent to become involved. Most other challenges to the joint development process men- tioned by the agencies interviewed were related to inconsistent land use regulations and community pushback against the pro- posed development. Generally, the developer was responsible for obtaining the necessary approvals from the locality for the project, including rezoning approvals, special use permits, etc., which often delayed the development process. Several agencies had member localities that approved specific TOD plans and had already applied special zoning (such as planned unit devel- opment zones, TOD zones, etc.) to the station area in prepa- ration for future TOD, so the process moved more swiftly for those sites. D. Key Takeaways and Lessons Learned The majority of the transit agencies interviewed for this digest were in agreement that the FTA and its regional of- fices were supportive of the JD process, and that FTA staff endeavored to be transparent, helpful, and communicative throughout the process. The most commonly mentioned les- son learned by the agencies interviewed about the FTA-assisted JD process was the importance of engaging their regional FTA office in the JD process as early as possible. Open lines of regu- lar communication between the agency and their regional FTA staff throughout the JD process helped ensure a smoother and more efficient development process, and reduced uncertainty surrounding eventual FTA concurrence. Although the FTA does not currently have a process for provisional or conditional approval/concurrence, regular communication with FTA staff allowed agencies to draft JD agreements, ground leases, etc. that

14 TCRP LRD 56 advisable. Ensuring that relationships between local tran- sit agencies/authorities are strong before undergoing the process will almost assuredly allow the process to proceed more smoothly. • Ensuring that the transit agency/authority has the capacity and staff knowledge to manage the JD process is also criti- cal, particularly when multiple stakeholders and partners are involved. • Community engagement and community buy-in is critical to JD success; the broader community surrounding the sta- tion area where a JD is planned should be engaged early and often in the process. • JD is a highly useful tool for meeting local jurisdiction afford able housing targets and goals. Communities should use the policy and regulatory tools at their disposal to en- courage including affordable housing in JD projects when- ever feasible. • Ensuring that the broader development community is edu- cated about what is actually involved in the FTA-assisted JD process will reduce public misperceptions about the complexities and pitfalls of the process; it is recommended that transit agencies looking to undertake FTA-assisted JD projects offer educational opportunities for the develop- ment community on the FTA process and requirements. With the promulgation of FTA Guidance 7050.1B, it may be possible, at least based on the comments provided by transit agencies and others to the recent notice and comment process, to further lower the anxiety transit agencies and their governing authorities may have toward pursuing JD projects. At the same time, there appear to be many transit agencies that currently see few barriers to JD projects and intend to pursue JDs to their fullest capacity. As noted previously, the current coronavirus pandemic poses significant challenges to public transit, and the potential for JD going forward. However, it does not appear that the interest in sustainable, higher-density, walkable urban devel- opment by many cities and metro areas has been significantly dampened by the pandemic, so it seems reasonable to conclude that these types of projects will continue to move forward, once it is considered safe for the general public to congregate in close quarters once again, and sustainability/resilience to future shocks and stresses.

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In the United States, transit oriented development (TOD) is now recognized as a critical element in the planning, development, and execution of transit projects. Recent legislation has been designed to streamline the approval processes for new transportation projects, focus more on safety, and establish new programs to advance critical freight projects.

The TRB Transit Cooperative Research Program's TCRP Legal Research Digest 56: Joint Development Agreements Using FTA Funds or FTA-Funded Assets aims to clarify the Federal Transit Administration (FTA) assisted joint development process and attempts to separate public perceptions (and misperceptions) about TOD from reality. It is an update to TCRP Legal Research Digest 12:The Zoning and Real Estate Implications of Transit-Oriented Development.

Appendix C incudes sample model agreement forms, developed from Washington Area Transit Authority’s Office of Real Estate and Station Planning Templates.

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