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Expanding the Use of Value Capture for Transportation and TOD in Massachusetts

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Expanding the Use of Value Capture for Transportation and TOD in Massachusetts Expanding the Use of Value Capture for Transportation and TOD in Massachusetts January 20, 2017 Prepared for: Metropolitan Planning Area Council (MAPC) City of Somerville Barr Foundation A Better City TABLE OF CONTENTS EXECUTIVE SUMMARY ........................................................................................................... 4 I. INTRODUCTION ......................................................................................................14 How to Use This Report .............................................................................................................................. 14 II. VALUE CAPTURE OVERVIEW ...............................................................................17 Value Capture Tools ................................................................................................................................... 17 Considerations for Implementing Value Capture Strategies ....................................................................... 23 Use of Value Capture in the U.S. ................................................................................................................ 26 III. CONTEXT FOR VALUE CAPTURE IN MASSACHUSETTS ....................................34 IV. EVALUATION OF MASSACHUSETTS VALUE CAPTURE TOOLS ........................37 Tax Increment Financing Tools ................................................................................................................... 38 Special Assessment and Taxing Districts ................................................................................................... 46 Developer Contributions .............................................................................................................................. 51 Public Sector Real Estate Transactions ...................................................................................................... 57 Summary: Strengths and Weaknesses of the Tools ................................................................................... 59 V. VALUE CAPTURE CASE STUDIES ........................................................................64 Case Study Approach ................................................................................................................................. 64 Allston Interchange ..................................................................................................................................... 68 South Boston Waterfront ............................................................................................................................. 76 South Coast Rail ......................................................................................................................................... 85 MBTA Red Line ........................................................................................................................................... 90 Conclusions ................................................................................................................................................. 98 VI. RECOMMENDATIONS .......................................................................................... 100 APPENDIX A: GREEN LINE EXTENSION CASE STUDY ..................................................... 109 Summary of Key Findings ......................................................................................................................... 109 Value Capture Overview ........................................................................................................................... 114 Economic and Property Value Benefits of Transit .................................................................................... 115 Property Value and Fiscal Benefits of the Green Line Extension ............................................................. 120 Capturing the Value from the Green Line Extension ................................................................................ 132 Detailed Assumptions ............................................................................................................................... 140 APPENDIX B: LIST OF INTERVIEWEES ............................................................................... 148 APPENDIX C: MATRIX OF VALUE CAPTURE CASE STUDIES IN REPORT ...................... 149 Expanding the Use of Value Capture for Transportation and TOD in Massachusetts 1 TABLE OF FIGURES Figure 1: Types of Value Capture Tools ....................................................................................................... 6 Figure 2: Indicators for the Successful Use of Value Capture .................................................................... 10 Figure II-1: Common Uses of Value Capture Tools in the U.S. .................................................................. 27 Figure II-2: Total Transit Capital Funds in the U.S. by Source, 2014 ......................................................... 28 Figure II-3: Proposed New BRT Lines in the Boston Region ...................................................................... 31 Figure II-4: Jurisdictions, Corridor Length, and Travel Time Savings for Proposed BRT Lines ................. 31 Figure IV-1: Existing and Proposed Value Capture Tools in Massachusetts ............................................. 37 Figure IV-2: Strengths and Weaknesses of Massachusetts Value Capture Tools ..................................... 60 Figure V-1: Case Study Summary .............................................................................................................. 66 Figure V-2: Study Area Context Map .......................................................................................................... 70 Figure V-3: Proposed Interchange Redesign.............................................................................................. 71 Figure V-4: Study Area Context Map .......................................................................................................... 77 Figure V-5: Recent and Projected Development in the South Boston Waterfront ...................................... 80 Figure V-6: Proposed South Coast Rail Project.......................................................................................... 86 Figure V-7: Red Line Stations and Key Connections ................................................................................. 91 Figure V-8: Red Line Planned v. Actual Capacity ....................................................................................... 92 Figure V-9: Red Line Segments: Station Areas, Municipalities, and Major Land Uses .............................. 94 Figure V-10: Red Line Segments: Existing Property Characteristics ......................................................... 94 Figure V-11: Red Line Segments: Development ........................................................................................ 95 Figure A-1: Development Impacts of the Green Line Extension, 2017-2047 ........................................... 111 Figure A-2: Total Potential Value Capture Revenues, 2017-2047 (In 2017 Dollars, Millions) .................. 114 Figure A-3: Broad Categories of Value Capture Tools ............................................................................. 115 Figure A-4: Benefits of Transit .................................................................................................................. 118 Figure A-5: New Development Currently Planned for the Green Line Extension Station Areas and Associated Increase in Assessed Property Values, 2017-2047 ............................................................... 123 Figure A-6: Development Directly Related to the Extension of the Green Line, 2017-2047 .................... 124 Figure A-7: Assessed Property Value Directly Related to the Extension of the Green Line, 2017-2047 (in 2047 Dollars, Millions) ............................................................................................................................... 125 Figure A-8: Transit Benefit Assumptions .................................................................................................. 126 Figure A-9: Cumulative Property Tax Revenues Associated with New Development Currently Planned for the Green Line Extension Station Areas, 2017-2047 (in 2017 Dollars, Millions) ...................................... 128 Figure A-10: Cumulative Property Tax Revenues Directly Related to the Extension of the Green Line, 2017-2047 (in 2017 Dollars, Millions) ....................................................................................................... 129 Expanding the Use of Value Capture for Transportation and TOD in Massachusetts 2 Figure A-11: Local Hotel and Meal Tax Revenues, 2017-2047 (in 2017 Dollars, Millions) ...................... 129 Figure A-12: Total Permanent Jobs and State Tax Revenues Associated with New Development, 2017- 2047 .......................................................................................................................................................... 131 Figure A-13: Summary of Massachusetts’ Value Capture Tools (Existing and Proposed) ...................... 135 Figure A-14: Total Potential Revenues from Capturing a Share of the Local Property Tax Increment, 2017-2047 (In 2017 Dollars, Millions) ....................................................................................................... 138 Figure A-15: Total Potential Value of Development Contributions, 2017-2047 (In 2017 Dollars, Millions)
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