On February 27, 2019 the National Association of Development Organizations (NADO) Research Foundation held a webinar on financing programs available through the U.S. Department of Transportation's Build America Bureau, as well as value capture techiques for recovering value that occurs as a result of infrastructure investment.

1. ONTHEROADTOPROSPERITY
Transportation Infrastructure Financing
and Value Capture

2. ONTHEROADTOPROSPERITY
About NADO
▪ National association for 540 regional development
organizations, including emerging network of Rural
Transportation Planning Organizations (RTPOs or RPOs)
▪ Promote public policies that strengthen local governments,
communities and economies through the regional strategies,
coordination efforts and program expertise of the nation’s
regional development organizations

3. ONTHEROADTOPROSPERITY
About NADO
▪ Through the NADO Research Foundation, develop training and
resources related to:
• Rural/small metro transportation planning, RPO America
• Small business finance
• Economic development planning
• Regional resiliency
• Developing quality of place

4. ONTHEROADTOPROSPERITY
Resources for Regional Planning

5. ONTHEROADTOPROSPERITY
Resources for Regional Planning

6. Today’s Topic: Transportation
Infrastructure Financing and Value
Capture
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7. On the Road to Prosperity: Fostering
Collaborative Transportation and Economic
Development Planning
ONTHEROADTOPROSPERITY

8. Housekeeping and Technology
• Two presenters with a brief pause for questions between
and a longer Q&A session at the end of the webinar
• We welcome questions and comments via “chat”—enter
them at any time!
• All attendee lines are muted by default
• We are recording this session
• Webinar slides and recording will be available on
RuralTransportation.org
ONTHEROADTOPROSPERITY

9. How to “Chat” Questions and Comments
If you have a question or comment, enter it
into the Chat box at any time!
• Below the Chat window, use the drop-down
menu to select the recipient of the message:
All - Entire Audience OR Organizers only
(Megan & Carrie)
• Type your message in the text field, then
click Send.
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10. Introducing Today’s Presenters
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• Scott Allen, Transportation
Specialist, FHWA Office of
Planning, Environment, and Realty

11. On the Road to Prosperity: Fostering
Collaborative Transportation and Economic
Development Planning
Webinar: Transportation Infrastructure Financing and
Value Capture
February 27, 2019

12. Introducing Today’s Presenters
ONTHEROADTOPROSPERITY
• Nefretiti Harrison, Project
Development Lead, U.S.
Department of Transportation
Build America Bureau

13. Overview of the
Department of Transportation’s
Innovative Financing Solutions

14. Session Objectives
❑ INFRA Grants
❑ Private Activity Bonds (PABs)
❑ Railroad Rehabilitation & Improvement Financing (RRIF)
❑ Transportation Infrastructure Finance and Innovation Act
(TIFIA)
❑ TIFIA Rural Projects Initiative (RPI)
14

15. Infrastructure for Rebuilding America (INFRA)
15
❑ Discretionary grant program authorized under the FAST Act through 2020 -
previously known as FASTLANE
❑ Approximately $855-900 million available for infrastructure grants for FY
2019.
❑ Minimum INFRA Award Size
• $25 million for large projects
• $5 million for small projects
❑ INFRA program preserves statutory requirements and utilizes updated criteria
to evaluate projects and align with national and regional economic vitality
goals.
▪ Leveraging increased investment by state, local, and private partners.
▪ Promoting improved project performance and accountability.
▪ Providing project sponsors maximum flexibility to propose innovative
solutions to address specific, local needs.
❑ APPLICATION DEADLINE: March 4, 2019 8PM EST
https://www.transportation.gov/buildamerica/Infragrants

16. Private Activity Bonds
16
▪ U.S. DOT Secretary of Transportation is authorized to allocate $15 billion of
PABs for qualified highway or surface freight transfer facilities
▪ State or local governments issue tax-exempt bonds on behalf of a private
entity
▪ Private entity/developer responsible for all PABs debt service
(PABs are not a moral or legal obligation of a governmental issuer)
▪ Can be used in combination with TIFIA credit assistance
▪ To date, nearly $8.99 billion in PABs have been issued for 22 projects
▪ Currently, $1.3 billion in allocated volume cap is outstanding for three projects
▪ About $4.7 billion remains to be allocated
▪ Currently processing seven requests totaling $3.55 billion
▪ If all requests are approved , about $1.2 billion would remain available

17. About RRIF
17
The Railroad Rehabilitation & Improvement Financing Program which provides direct loans
and loan guarantees to finance railroad infrastructure underwent substantive and
procedural changes as a result of the FAST Act.
FAST Act changes to the RRIF Program included:
▪ Expanded applicant and project eligibilities, to include Transit-Oriented Development
projects
▪ Extended maximum loan maturity to 35 years after substantial completion
▪ Revamped and more transparent application process
▪ Clarified ability for applicants to pledge dedicated revenues as collateral
▪ Master Credit Agreement capability
▪ Required all applicants and borrowers to be responsible for all transaction costs and fees
associated with application evaluation, independent financial and legal advisors, post-
closing costs, among other fees
▪ Removed cohort requirement as well as the requirement of RRIF to repay Credit Risk
Premiums (CRPs)

18. RRIF Program Benefits
▪ Long term, fixed interest, permanent, up-front
financing
▪ Funds are drawn as needed
▪ Flexible amortization
▪ No pre-payment penalty
▪ Uses Treasury Rate
▪ Current interest rate would depend
on the term of the loan
▪ Rates available at treasury.gov website
18

19. Railroads
State and Local Govs
Government sponsored authorities
and corporations
Interstate compacts (410(a))
Amtrak Reform and Acc. Act of
1997
Limited option freight shippers
Joint Ventures
Design/planning
Freight Rail Facilities
Freight Transfer Facilities
FRA-Regulated Commuter Rail Facilities
Passenger Rail Vehicles and Equipment
Transit-Oriented Development
“Intermodal” or Rail Equipment or
Facilities
Refinance of above
NO OPERATIONS!
BORROWERS PROJECTS
RRIF Eligible Borrowers and Projects
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20. 20
RRIF Portfolio Statistics
Since program inception, RRIF has approved
39 loans to finance $6.3 billion towards
infrastructure investments in 27 states.

21. 21
About TIFIA
The Transportation Infrastructure
Finance and Innovation Act of 1998
(TIFIA) established a Federal credit
program under the U.S. Department of
Transportation (DOT) for eligible
transportation projects.

22. TIFIA Credit Assistance
22
▪ Secured (Direct) Loan
▪ Maximum term of 35 years from substantial completion
▪ Repayments must start within 5 years after substantial
completion
▪ Loan Guarantee
▪ Guarantees a project sponsor’s repayments to non-Federal
lender
▪ Loan repayments to lender must commence within 5 years
after substantial completion
▪ Line of Credit
▪ Contingent loan available for draws as needed up to 10
years after substantial completion of project

23. TIFIA Changes Under the FAST Act
▪ The FAST Act enacted several changes to the TIFIA Program including:
▪ Expanded Eligibilities
▪ Transit-Oriented Development Projects
▪ Rural Projects Fund within a State Infrastructure Bank
▪ Modified Rural Project Eligibility
▪ Streamlined Application Process for Secured Loans
▪ Fee Relief for Small Projects (under $75 million)
▪ Master Credit Agreement Authority Clarifications
23
The FAST Act continues the Transportation Infrastructure Finance and Innovation Act (TIFIA)
program which leverages Federal funds by attracting substantial private and other non-
Federal co-investment to improve the nation's surface transportation system.

24. TIFIA Major Benefits
24
▪ Long term, fixed cost, permanent
financing
▪ Longer repayment periods - Up to 35 years
▪ Deferred for 5 years following substantial
completion
▪ No prepayment penalty
▪ Can be highly customized to meet
borrower needs
▪ Low interest rates

25. TIFIA Major Requirements
▪ Minimum Anticipated Project Costs
▪ $10 million for Local and Rural Projects
▪ $15 million for Intelligent Transportation Projects
▪ $50 million for all other eligible Surface Transportation Projects
▪ Limited to 33% of reasonably anticipated eligible project costs (unless the sponsor
provides a compelling justification for up to 49%)
▪ Investment Grade Rating
▪ Senior debt must receive two investment grade ratings
(BBB-/Baa3) from nationally recognized credit rating agencies
▪ Only one investment grade rating is required from projects totaling $75 million or less
▪ Dedicated Repayment Source
▪ Pledged to secure both the TIFIA and senior debt financing
▪ Comply with Federal requirements
▪ Including but not limited to NEPA, Buy America, Titles 23 and 49
25

26. ELIGIBLE PROJECTS
Highways and Bridges
Intelligent Transportation Systems
Intermodal Connectors
Transit Vehicles and Facilities
Intercity Buses and Facilities
Freight Transfer Facilities
Pedestrian and Bicycle Infrastructure Networks
Transit-Oriented Development
Rural Infrastructure Projects
Passenger Rail Vehicles and Facilities
Surface Transportation Elements of Port
Projects NO OPERATIONS!
Eligible TIFIA Borrowers and Projects
26
ELIGIBLE BORROWERS
• State Governments
• Local Governments
• State Infrastructure
Banks
• Private Firms
• Special Authorities
• Transportation
Improvement Districts

27. TIFIA Portfolio Statistics
Since program inception, TIFIA has approved 82 loans
totaling over $31.4 billion to stimulate over $113.2 billion
of transportation infrastructure investments in 22 states
(plus the District of Columbia and Puerto Rico).

28. 28
TIFIA Rural Projects Initiative (RPI)
❑ Rural project definition: Project located in an area that is
outside of an urbanized area with a population greater than
150,000 individuals
❑ Project size: Total eligible project cost of $10-75 million
❑ Loan size: Up to 49% of eligible project costs
❑ Loan term: Up to 35 years with potential for deferred repayment
(up to five years after substantial completion
❑ Interest rate: Fixed rate of ½ Treasury rate
❑ DOT’s advisory fees: Borrower fees may be covered by DOT

29. Quick Questions for Nefretiti
How to enter them into the Chat box:
• Below the Chat window, use the drop-down
menu to select the recipient of the message:
All - Entire Audience OR Organizers only
(Megan & Carrie)
• Type your message in the text field, then
click Send.
ONTHEROADTOPROSPERITY

30. Introducing Today’s Presenters
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• Thay Bishop, Senior Program
Advisor, Federal Highway
Administration Center for
Innovative Finance Support

31. EDC-5 Value Capture Implementation Team
31
Value Capture:
Capitalizing on the Value Created by Transportation

32. Value Capture Implementation Team
32
Introduction to Value Capture
▪ Value capture overview
▪ The EDC-5 Value Capture initiative
▪ Value capture mechanisms & examples
▪ Ingredients of a successful implement value capture
▪ Funding opportunities

33. Value Capture Implementation Team
33
What is a Value Capture?
“Value capture” refers to a toolbox of strategies used by public
agencies to recover a portion of the increased property value
created as a result of public infrastructure investment.

34. Value Capture Implementation Team
34
EDC 5 Value Capture Initiative
Promotes the use of value capture mechanisms as part of a
mixed funding and innovative finance strategy to accelerate
project delivery and provide equitable funding for
sustainable transportation investments
Clearinghouse for best practices/lessons learned:
▪ EDC-5 Value Capture Sessions:
https://www.fhwa.dot.gov/ipd/value_capture/resources/value_
capture_resources/edc-5_resources.aspx.
▪ Project Profiles:
https://www.fhwa.dot.gov/ipd/value_capture/project_profiles/
▪ Factsheets:
https://www.fhwa.dot.gov/ipd/fact_sheets/
▪ Value Capture Resources:
https://www.fhwa.dot.gov/ipd/value_capture/resources/value_
capture_resources/default.aspx

35. Value Capture Implementation Team
35
Background
▪ U.S. transportation infrastructure is deteriorating
- End of useful lifecycle
- Deferred maintenance
- Maintenance backlog
▪ Federal funding unsustainable
- The Federal gas tax has lost its purchasing power by nearly
40% since 1993
- Increased fuel efficiency and reduced growth in VMT has
further eroded the growth in fuel tax revenues
▪ “Smart” Infrastructure Investment needs

36. Value Capture Implementation Team
36
Supplemental Funding Sources
▪ General Fund transfers have kept the Highway Trust Fund
solvent
▪ Exploring new funding sources, such as the mileage based
user fee
▪ Innovative financing is used to deliver large capital projects,
leveraging private capital or borrowing from government
backed loan programs, such as:
- Transportation Infrastructure Finance and Innovation Act (TIFIA)
- Railroad Rehabilitation and Improvement Financing (RRIF)
- Private Activity Bonds
- State Infrastructure Banks
- Section 129 Loans
- Lease

37. Value Capture Implementation Team
37
Value Capture Techniques
Category Technique Purpose Fund or
Finance
Developer
Contributions
Impact Fees Capital Expenses Fund
Negotiated Exactions Capital Expenses Fund
Special
Assessments
Special assessment Districts Capital Expenses Fund or Finance
Business Improvement Districts Capital or Maintenance Fund or Finance
Sales tax Districts Capital or Maintenance Fund or Finance
Land Value Taxes Capital or Maintenance Fund or Finance
Fees Transportation Utility Fees Operation & Maintenance Fund
Incremental
Growth
Tax Incremental Finance Capital Expenses Fund or Finance
Transportation Reinvestment Zones Capital Expenses Fund or Finance
Tax Allocation District Capital Expenses Fund or Finance
Joint
Development
At Grade Capital Expenses Fund or Finance
Below grade Capital Expenses Fund or Finance
Above grade (Air Rights) Capital Expenses Fund or Finance
Concession Asset Recycling Capital Expenses Fund or Finance
Advertising
Advertising Capital or Maintenance Fund
Naming Rights Capital or Maintenance Fund

38. Value Capture Implementation Team
38
Developer Contributions/Impact Fees
Osceola County Florida
▪ A one-time fee assessed on new development
- Intended to pay the cost of expanding & extending public
services resulted from new development
- Assessed at the time a building permit is issued and are paid
prior to the issuance of a Certificate of Occupancy
▪ Used for roadways, less frequently
used in transit
▪ Example: Osceola County, Florida
- Used impact fees to pay for the $1B
County Road & Bridge Program
- Boosted the County economy
- Sped up delivery & save money

39. Value Capture Implementation Team
39
Special Assessments/Special Assessment District
▪ A special fee levied on property owners to pay for
infrastructure development
▪ Specific geographic area
▪ Assessed against those properties receiving benefit
from the improvement
▪ Example: Route 28 Corridor Improvements in Virginia
- Covers 10,204 acres of land, in an appx.
14-mile-long corridor
- Maximum tax rate of $0.20 per $100 of
assessed value
- Special assessment district funded 75% of the
$139 M project cost

40. Value Capture Implementation Team
40
Fees/Transportation Utility Fees
▪ Applies to all residents and businesses
▪ Pays by property occupants rather than property
owners
▪ Bases on the estimated number of roadway trips
generated by a property
▪ Fees are typically added to city utility bills
▪ Example: City of Hillsboro, Oregon
- Used Transportation Utility Fee to pay
for street repairs, routine maintenance,
and pavement preservation
- Saved money and extended the life of
pavement by almost 50%
Photo Credit to City of Hillsboro

41. Value Capture Implementation Team
41
$
Incremental Growth: Tax Incremental Finance
Property tax base is frozen when TIF is created
Local government jurisdictions continue to collect
tax revenue on that tax base
PostTIFpropertytax
revenueavailablefor
localgovernment
jurisdictions
Property
Tax
Revenue
25 years TIF TIF Terminated
Redevelopment
stimulates increase
in property value
N
e
w
T
a
x
B
a
s
e
As properties redevelop and
develop, tax revenue
increases
used to pay for eligible costs
▪ Within a defined geographic area or zone
▪ Authorized by state statutes in 49 states and the District of Columbia

42. Value Capture Implementation Team
42
Incremental Growth: Tax Incremental Finance
▪ Example: $4.8 B Atlanta Beltline project, George
− Adopted in 2005; Sunset in 2032 (25 years)
− Utilized 22-miles unused freight ROW
− Social: 5,600 Affordable Housing Units of
28,000 residential units
− Economic: $20 B in annual new economic
development tax revenue including 30,000
permanent jobs
− Environmental: Reduce Carbon foot print
by 665,000 metric tons annually
▪ Offers a source of long-term revenues and generates significant
“gap financing”
▪ Flexible, powerful tool to foster high quality development and
redevelopment

43. Value Capture Implementation Team
43
Joint Development: Air Rights
▪ Involves a partnership between a public entity and a private
developer to develop certain infrastructure assets
▪ Sale/lease of development right over a transit station or the
highway
▪ Plays key role in some urban projects
▪ Example: Capitol Crossing Project, Washington, D.C.
− Sold the right to develop above the I-395 to the developer in 2012
− Captured:
o $120 M at the time financial closed
o $270 M improvements
o $40 M in new property taxes
o Creates 8,000 permanent jobs, 51%
fills by the district residents
o Reconnects the two long divided
neighborhoods https://www.fhwa.dot.gov/ipd/project_profiles/

44. Value Capture Implementation Team
44
Concession: Asset Recycling
▪ A long-term lease of existing highway facility (i.e. toll facility)
and use of the lease revenues to pay for other highway
improvement needs
▪ U.S. experience with infrastructure asset recycling is limited
▪ Example: $3.8 B Indiana Toll Road, Indiana
− 75-year agreement, the right to
operate the toll road
− Received $3.8 B upfront money
− Funded 10 transportation plan
− Retained all public employees
▪ Other examples:
https://www.fhwa.dot.gov/ipd/value_capture/project_profiles/
Source: Atkins Acuity

45. Value Capture Implementation Team
Value Capture is ……
▪ A set of powerful funding tools that can help address
funding gaps (USDOT supports Value Capture)
▪ Can be part of the mix of funding sources for
transportation improvement solutions
▪ Can accelerate project delivery, enhance safety,
and save time and money when done properly
45
Value Capture Summary

46. 46
Ingredients of a Successful Value
Capture Project
Identify
Needs
Long-Range
CIP Strategic
Plan
Identify
Funding &
Financing
Implement
Projects &
Programs
Annual
Capital
Budget
Five-Year
CIP Plan
Capital
Improvement
Plan

47. Value Capture Implementation Team
State Transportation Innovation Council (STIC)
Incentive
▪ Up to $100,000 per STIC per year to
standardize an innovation
https://www.fhwa.dot.gov/innovation/stic/
Accelerated Innovation Deployment (AID)
Demonstration
▪ Up to $1million available per year to deploy
an innovation not routinely used
https://www.fhwa.dot.gov/innovation/grants
47
EDC-5 Funding Opportunities

48. EDC-5 Value Capture Implementation Team
48
Questions & Answers
Thay Bishop, Senior Program Advisor
Center for Innovative Finance Support
E-mail: Thay.Bishop@dot.gov
Tel: 404-562-3695

49. Time for Your Questions and Comments!
How to enter them into the Chat box:
• Below the Chat window, use the drop-down
menu to select the recipient of the message:
All - Entire Audience OR Organizers only
(Megan & Carrie)
• Type your message in the text field, then
click Send.
ONTHEROADTOPROSPERITY

50. Thank you!
ONTHEROADTOPROSPERITY
• Webinar slides and recording will be available on
RuralTransportation.org
• Final Virtual Peer Exchange: How transportation
technologies are meeting mobility and economic
development needs in rural and small urban
communities
• Coming this spring—watch for info!
• Questions or suggestions? Contact
megan.e.mcconville@gmail.com or ckissel@nado.org