A 10-Part TOD Finance Plan

Part 9: Tri-Party and Public-Public Partnerships
Another source of funding or cost sharing is “Public-Public” Partnership(s), or Intergovernmental Agreements between a transit agency and other governmental entities, such as a city, county or state governments. If public-public partnerships were structured a transit agency could share the cost, risks and responsibilities for financing, designing, developing and constructing a TOD. Before transit agencies approach a potential public partner, they should document how the TOD will generate economic benefits and improve the quality of life for local residents.

For situations where a transit agency does not own any, or adequate land around a transit station, the agency may have to structure a Tri-Party Agreement between the agency, private landowner(s) and a private developer. If the transit agency does not have sufficient funds to acquire the land, they will need to demonstrate the financial return for the landowner(s) to provide the land in exchange for an equity position in the TOD.

Part 10: Infrastructure Funds
Over the last few years Infrastructure Funds have been formed in the capital market. Infrastructure funds allow investors to own part of a professionally managed portfolio of infrastructure assets, such as:

• Rail facilities and other transport assets
• Toll roads
• Utilities
• Airports
• Communications assets, such as broadcasting towers
• Materials handling facilities

• Goldman Sachs: $6.5 billion
• Macquarie: $4.0 billion
• Deutsche Bank/RREEF: $3.0 billion
• JP Morgan: $3.0 billion
• CIT Group: $2.5 billion

Summary
The proposed 10-part approach to structuring the financing of TODs and transit-related developments provides a multitude of funding sources, ways to generate additional income and enormous flexibility, all of which should lead to creative public/private finance plans for TODs, transit systems and transit-related facilities.

John Stainback is president/CEO of Stainback Public/Private Real Estate, LLC (SPPRE). Will Reed is vice president for finance with SPPRE.