Title:محاسبه مشارکت های توسعه دهنده

تاریخ پخش اینترنتی: ۴ اکتبر ۲۰۱۳ با حمایت: طراحی و حفاظت شهری توضیحات: اقدامات عمومی – مانند سرمایه گذاری در زیرساخت ها و ارائه خدمات عمومی – می تواند ارزش دلاری زمین خصوصی را به طور چشمگیری افزایش دهد. در حالی که دولت‌های محلی به دنبال جذب بخشی از این ارزش برای رفع نیازهای مختلف هستند، برنامه‌ریزان اغلب نمی‌دانند چگونه تعیین کنند که آیا یک درخواست معقول است یا خیر. این جلسه نشان می دهد که چگونه می توان افزایش ارزش زمین خصوصی به دلیل اقدامات عمومی را محاسبه کرد و یک رقم معقول برای مشارکت توسعه دهندگان ایجاد کرد. این دانش به ویژه برای کسانی که در طراحی و حفاظت شهری کار می‌کنند، مفید است، جایی که بسیاری از آنچه به دست می‌آید از طریق مذاکره مشارکت‌های توسعه‌دهنده است. این جلسه برای اولین بار در کنفرانس ملی APA در شیکاگو در سال ۲۰۱۳ ارائه شد. توجه: این پخش اینترنتی در حال حاضر فقط برای مشاهده در دسترس است و برای اعتبارات AICP CM قابل اجرا نیست.

قسمتي از متن فيلم: I hello everyone and welcome to the webcast my name is Christine Jersey I’m the executive director of AP Ohio and vice chair of the New Urbanism division I will be the moderator for today’s webcast today Friday October fourth we will hear the presentation calculating developer contributions for technical

Help during today’s webcast type your questions in the chat box found in the webinar tool bar to the right of your screen or call the 1-800 number shown for content questions related to the presentation type those in the questions box also located in the webinar tool bar

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For 1.5 CM credits of course like us on facebook planning webcast series to receive up-to-date information on the planning webcast series sponsored by our chapters and divisions we are recording today’s webcast and it will be available on our YouTube channel later today search planning webcast on YouTube

PDF of the PowerPoint is also available upon request I now like to turn it over to Margaret she is the webcast chair coordinator for the urban design and preservation division and she is going to talk a little bit about urban design and preservation division and she will introduce our speakers Margaret Thank

You Christine welcome everyone I’m Margaret Rifkin as Christine said with the urban design and preservation division in addition to today’s webinar our division is also sponsoring one on designing suburban futures with June Williamson on November first and one on making cities walkable with Jeff speck on november eighth we hope you will

Enjoy all our divisions webinars this is the second of four we’re offering this year and we also hope you will join the urban design and preservation division so you can be part of our national network of place makers from a variety of disciplines respond suring the webinar today on calculating developer

Contributions because all are great ideas about designing preservation and placemaking require implementation strategies that are fair and reasonable with that I’m delighted to present our two speakers today first my friend Carl Moritz who serves the city of Alexandria Virginia as the deputy director for long-range and strategic planning he has

Over 25 years of experience working in planning in the Washington DC area his current responsibilities in Alexandria include neighborhood planning community development demographics and forecasting and he is also great at explaining things very well in simple terms as you will see our next panelist is Sarah woodworth who is a managing member of

WCHA which is a highly regarded national real estate advisory firm ms woodworth specializes in urban redevelopment and transit oriented development her broad expertise includes market analysis feasibility innovative financing techniques and public-private deal structuring with that it’s my pleasure to welcome Carl and Sarah thank you very

Much I want to first thank christine and margaret for inviting us to speak to you today the focus of this session shirts the focus of the session is the value that’s created when a community agrees to allow additional development on a parcel or in a neighborhood so this

Might be when a development project is approved or a parcel is Ruiz owned or a new master plan is adopted really by a stroke of a pen then the government is acting on behalf increases the value of private land by saying it can be developed more intensively today than it

Was yesterday Sarah and I are going to argue that understanding the value that’s created this way is a very important tool for planners to have you might use this information when negotiating for developer funded improvements and we’ll show you how to do that but I think you’ll also see that

It can be helpful even if you have very limited ability to ask for developer contributions because it helps you determine if you are proposing the right densities to determine if the plans are implementable and also to achieve greater buy-in from the community so I’m going to provide an introduction and the

Planners perspective Sarah woodworth will walk you through the process and illustrate important concepts and then I’m going to touch base on a few legal perspectives and then how all this works with phase development which is a very important part of it excuse me there so a community is considering a rezoning or

Preparing a plan that will add some density and possibly create additional demand on transportation Public Safety and other services and maybe there are community members who want to know a couple of things is all that additional density necessary and why will improving that density benefit them to question

Certainly that that I hear a lot so a value capture is typically thought of as tools that capture some of the increase in value on private land that’s created by government action and in tysons corner virginia it’s being used to help pay for 5.2 billion dollar metro rail extension to Dulles Airport in

Montgomery county maryland it’s generating about 280 million dollars to pay for transportation and other improvements to support transit orient your the white flint metro station some of the methods that are used to capture the value are tools that capture increases to the tax base whether it’s a formal tax increment financing district

Or something less formal wear the city might anticipate increased tax revenues and make sure that that’s enough to cover the increased payments that they might need to make some other more structured methods are special assessment districts and impact fees and of course any contributions that a developer agrees to make as a condition

Of approval would count as well in Alexandria we’ve been a little obsessed with this issue of value because we have a comparatively high market demand for new development a fairly strong ability to get developer contributions and a community has that has very high expectations that we’re going to bargain

Hard on their behalf so what this has led us to do is include a financial plan as part of every small area plan that financial plan shows what infrastructure and amenities are needed what they cost and how we’re going to pay for them usually a combination and developer contributions an informal tax increment

Financing district and the general fund I think the most important outcome of it is that the community has a real sense that they’re going to get what is promised some of the questions that you can answer when you know the value that’s being created by the plan is one

If we cut back on the density that the developer is requesting is that redevelopment still possible if we double the density will that be enough to encourage redevelopment is the additional density and effective incentive for asking developers to provide affordable housing can we ask for underground parking or will the

Dhoom the project and can we pay for a transit line with the value that’s created by up zoning the station areas I’m going to take you through a couple of examples in Alexandria that shows you what I mean and this is about the the braddock master plan and it involved

Redevelopment of a large public housing project as well as industrial uses that surround a metro rail station what we needed to do was provide enough density to add both market rate housing but also replace all of the public housing and what the community wanted was a new one

Acre park and we wanted development to pay for half of that park and we were able to show that this would work and the redevelopment of both the public housing and the park is underway the second one I want to talk to you about is north potomac yard where we’re

Planning for the replacement of a large very successful strip shopping center into a multimodal mixed-use community of approximately seven and a half million square feet this is a prime location just south of Reagan National Airport but to make all of that density work we needed to add a new inline metro station

And the question was whether the increase in value from the from the development would be enough to pay for the new metro station as well as some of the other important amenities such as parks and the site of a new elementary school and the analysis showed that the

Increased SAR allows about 240 million dollar in land value increase for the property owner which is something that we could tap into the next example that I have is a landmark plan which is focused on redeveloping a failing mall as well as a lot of older stripped commercial that is between the mall

Which is at the north end there and then the metro station which is the south of that of that map to make this happen we added about 12 million square feet in development potential and here the question was whether the economics would allow this project to happen at all let

Alone contribute to the bus rapid transit project we have planned so what we decided with Sarah’s help was that we would not expect developer contributions from the early redevelopment projects we call this the catalyst phase and we felt these early developers were taking the most risk you know later

After a critical mass of redevelopment takes place which we estimated about 2 million square feet we thought that second phase of development would have an increased ability to pay some developer contributions not a huge amount but something toward that transit project the last phase of this plan is

When the transit is in place which in and of itself will add value to the sites in the plan and make redevelopment less risky so in that phase we’d expect the highest level of contributions from new development the last one I want to mention is an area called the Beauregard

Corridor and Sarah was also very involved in this plan it contains a lot of older multifamily garden and high-rise apartments a few smaller single-family detached houses those gardens were built in the 60s and 70s originally for singles coming to the washington area but over time they became more and more attractive to

Low-income families so as a result a big objective of this plan was to maximize affordable housing at the same time we have a lot of transportation challenges here and so we needed some money for that we also wanted a in addition to a new transit line we wanted a fire

Station we went into parkland so there was quite a long shopping list of things that we were hoping to pay for with this with this plan an interesting element of the plan was that there were five main land owners and they decided all of which were developers so they had in

Mind something specific that they wanted to do but also they decided to negotiate with the city as a group so whatever developer contribution was was agreed to they were going to divide it up among them sort of pro rata we were able to make all of this work get get everything

On our on our list even getting 800 units of affordable housing in part by phasing the developer contributions over time and in injecting some public money at key key points phasing is important tool to making all this work and I’m going to talk about that at the end of

This presentation in part because early money is the most expensive money that there is when we’re working with developers and negotiating a contribution a big issue is what counts as a quote unquote contribution and what doesn’t we came up with a term which is we called the bucket which is describes

The list of things that count as a developer contribution the things quote unquote in the bucket are things over and above the basic things that any developer would be required to do like handling stormwater or providing the minimum amount of open space it’s an important issue because we that is the

Government want to make sure that the bucket list only contains things that are truly extra we figure if it’s something that we routinely asked for something that the ordinance requires things that any developer would have to do even if they don’t get an increase in density then the developer should have

Known we would ask for it and they sort of build it into their original pro forma but we recognize that there isn’t a bright line between what is in the bucket and what the standard requirement and a good example of that might be underground parking in Alexandria is

Something that we nearly always ask for but the developers nearly always want it counted as an extra cost that is put on this bucket list so I’m with that I’m going to turn it over to Sarah and she’s going to talk to us about calculating the developer contribution and thanks

Carl hi I’m Sarah woodworth and work for a consulting firm that basically deals with market economics and public private finance so we inform the planning process by addressing questions like does the policy make any make sense from a market standpoint would private investors implement the policy in the foreseeable future what benefits accrue

To the private sector as a result of the policy and can we translate any benefit into community investments and that’s what we do and we work with both the public in the private sector I’m getting to the next page job sorry so why engage the market and economic

Perspective in the planning process as you will see in the following examples one reason is to understand how much the private sector can potentially pay towards implementing the plan but even before this to inform the community during the planning process as to what the market and economic implications are

Under different policy initiatives for example I’m currently working with a jurisdiction in Connecticut where they spent a great deal of time adopting a village commercial district zone it’s a new zoning initiative in the zone allows for reduced setbacks relaxed parking requirements all to encourage good design and good development consistent

With a village character the zone however allows for only three story hikes and when we look at existing land values in these in these village commercial districts it will be very difficult for three story redevelopment to happen because it won’t be financially feasible if they had considered the economics as part of the

Planning process I wonder whether the community would have accepted a four story rather than three story limit knowing the economics of redevelopment so our basic concept as it relates to rezoning and really what I mean by that is up zoning is by in some cases by the stroke of a regulatory pen private

Property owners can obtain a lot of new value without doing a thing and our contention is that under these types of circumstances the community should participate in that benefit and here’s my example on the table is under existing zoning a given property owner has the ability to develop 15 dwelling

Units and the market is willing to pay for land to the tune of $25,000 dwelling unit that means that property owners land is worth with a 15 unit zoning 375 thousand dollars while under new zoning the community decides that they think that it’s okay to have up zone and they

Will allow 55 units on the same parcel well assuming that they can still get $25,000 a unit and land value that property owners value just went to one point 375 million dollars which means there was a one-million-dollar benefit as a result of that rezoning our contention is we should get a piece of

That now there’s a couple of things to take into consideration and while this may seem obvious what’s amazing is how often it happens in the real world is that zoning does not necessarily create market just because you rezone and up zone does not necessarily mean that that

Level of development will happen you you have to consider whether there is market support for that level of up zoning so in this example while we may have observed it to 55 units the market is only able to absorb 15 units in the foreseeable future so in fact the

Episode increate near to near term value to that landowner they’re basically in the same place now maybe over the long term when market conditions change but when we’re working on these things we’re trying to think of how we’re going to pay for near-term or mid term infrastructure so you have to always

Really consider the true market realities facing redevelopment in your area when you try to value the benefit of your zoning initiatives another important consideration is that often with intensification of land use comes additional costs so and that will then reduce sometimes the economic benefit of increased density so in this case to get

The 55 units on this particular site the developer or the owner would have to provide structured parking and structured parking costs twenty thousand dollars of space let’s say and if the rents are the same between the 15 15 units and the 55 units that $20,000 comes right out of their land value

So in fact the highest and best use for this piece of property isn’t the 55 units where the land value would be 275,000 but in fact the 15 units with surface parking which would have a land value of 375,000 we need to be considering costs and I can say that

This happens a lot in real life with strip centers people think that you could just structure parking and identity and that necessarily makes a better project and that is not always the case so in terms of examples I just thought we thought it would be helpful to run through Sarah can I just

Interrupt you apples in terms of I can I just in a rush I’m sorry when you get that funky pop up if you select the bottom option it’ll go away permanently okay okay I thought I was just saying that don’t worry about it okay bingham as you know the Beauregard planning

Process was in Alexandria Virginia there was near term market for higher density land uses and there were a select group five of large landowners in the planning area to accommodate the density however required investments in road utilities transit and other public amenities and as Carl mentioned the city of Fairfax is

Policy is that each approved plan must have a financing plan to show that it is feasible so the question at hand was what benefits accrue to the property owners if the city allows for more density and how much can we expect the private sector to contribute towards the

Implementation of the plan and then ultimately with that knowledge can this plan be financed so the first thing we do in every case is pretty basic we understand what current land values are and we do this by working closely with the city appraiser they often are really

On top of what developers are paying for land for different kinds of land uses in this case this example is just one property owner in the Beauregard planning area and they really had zoning for 878 units and we identified the developers were willing to pay 45 to 55 thousand dollars for

Land per unit in Beauregard at the time so that means that the current value of the project of the land was between 39.5 and forty eight point two nine million and that’s their current value so we then look the second step is to calculate the value with a new zoning

This is pretty basic our new zoning suggested the same piece of property we would allow it to accommodate 1472 units notice that our values are not 45 to 55 thousand but we assumed that we would get a five percent bump because what is being planned in Beauregard includes

Transit and a high degree of public amenities so we bumped the land values to reflect the benefits of a good plan and more of a transit orientation so with that that property owner under the new plan would ultimately have a value between sixty nine point six million and

۸۵ million dollars for their land then we calculate the difference and so what their existing land from the Razon land value and we get a range for between 30 and 35 point seven million dollars we do this for each of the landowners in Beauregard is what we did and we

Basically gave the city a great big range of potential benefits to the private sector what the city then does is negotiate we and it’s a very transparent process we show them our log attract logic it’s quite intuitive this isn’t detailed pro forma and a lot of nitty gritty details this is intuitively

This is what we think the benefit is to you now let’s negotiate what is an equitable financing arrangement between the public and private sector to make this plan workable and feasible and as a result of negotiation the developers and this coral mentioned they actually negotiated at

A group um we came to an agreement that they would pay a certain amount of money for every foot developed square foot developed that would be that money would be contributed towards fire stations transit parks and they pay that money at the time of their approval so that’s Beauregard Carl also mentioned north

Potomac yard which is also in alexandria the issue with north potomac yard if you look at the aerial you can see the rail line on the right side which is the east and then you also can see that there’s a river over there which is the potomac

River this is a super valuable site that everyone would love to have a metro station and for those of you who are not from the Washington DC area Metro is our regional transit operator and basically land around those metro stations is very valuable so the question there in the

Case of Potomac was how do you help to get the developer to pay for the metro station when it is likely it will probably be at least a decade before that metro station happens and we also have a very valuable power center sitting on top six hundred thousand

Square foot retail power sign so what we did is we did the same kind of process and we looked at what is the existing power centers land value and we came up once again working closely with the city’s appraiser with 90 million dollars a footnote here is we rarely when we’re

Doing these kinds of calculations underestimate current land value it’s a very bad way to start a negotiation is to undervalue a property owners existing property so we tend to be you know fairly lenient on land value and in this case we came up with a base value of 90

Million we then as we did in Beauregard calculated new value with new zoning now in the case of Potomac Yard it was fairly complex simply because the city was not going to allow super high density of use without transit and land values were going to be very different with and without transit

So we looked at a variety of development scenarios one with lower density and without metro another with higher density with metro and we understood the economic implications of those on land values and as you can see land value clearly improves with office and residential with metro and with density

Because you start getting views and you get the the transit premium so we then as we did any others we calculated the difference on the left side where we have 1.5 floor area ratio with no metro station the developer would be able to get 72 about 70 2.5 million dollars of

Net new land value by just increasing his density from a point to 20 1.5 in the case of with metro and a higher density that developer would get almost 241 million dollars of net new land value as a result of that policy so that’s a wide range of land value

Enhancement so the city took that and we they negotiated a deal wherein it was resolved that the developer who is very interested obviously in getting that metro station helping to pay for it because there will be great benefit to their bottom line they agreed to a special assessment in the near term and

A lower 1.5 floor area ratio intensity of use zoning and they would pay on a per-square-foot basis each time something was redeveloped under this lower zoning envelope while we waited for the metro station then when a metro station came the zoning envelope would go up it would step up to 2.5 fa are

Because now we’ve got some mode shift and they would pay a higher premium per square foot to help to pay for implementing the plan so Potomac is a fairly complex solution but it was a way for the city to continue to capture value as conditions changed over time

Sorry white flint which coral mentioned in his introduction is in actually Montgomery County Maryland it is an area that is right off of the Washington DC Beltway it’s varying through typical commercial strip but very very productive from an economic perspective in other words land is very valuable

Here even though it’s very low density and it doesn’t look great it’s very valuable land Montgomery County began a planning process for this part of the county white flint and it was recognized that the residents of the community were super suspect of density because in the past as redevelopment happens and land

Uses were intensified the infrastructure did not keep up with it and their whole quality of life was compromised due to traffic and congestion the landowners in white flint recognize this issue that the community may be very interested in trying to create a mixed-use walkable environment but may want to limit

Density because of their fear of more congestion and more traffic so the landowners in white flint created a basically a consortium they retained our firm to try and educate the community about land use economics and redevelopment economics and try to find a public-private solution that would allow infrastructure to be built in

Front of density to address the community’s concerns with regard to that issue so what we did is we just as we did in the other process but this time working for the private landowners and not the city or the commune is the private property owners illustrated to the community what

Existing property values are in white flint at the time that this planning process was being undertaken and the idea was the property values were very very high and for those of you who aren’t super familiar with floor area ratio I created this little up exhibit

On the left hand side of the slide just let’s just go over it really quickly it’s a fairly basic concept but if you don’t get it it’s going to be hard to understand this on this example let’s just say we had a 40,000 square foot

Piece of dirt and that piece of dirt was worth 6.8 million dollars in the marketplace and let’s say we had a zoning code that allowed for a quote to point OFA are what that means is the zoning allows us to do 2 times the amount of the land area or 80,000 square

Feet of development the value then of the parcel where the 2 point 0 f AR is 6.8 million divided by 80,000 square feet and that is an $85 f AR foot and the same thing goes if or three FA are you divide these 6.8 million dollars by

۱۲۰,۰۰۰ and that gives you a $57 / f AR foot land value so that’s what that all means so in the case of white flint we the private sector demonstrated the community this is what’s happening out there here are our land values it’s on the ground a developer would not sell or

Redevelop their property without getting at least that kind of money / f AR foot because it would not be in their economic best interest we then understood the the land values of existing you of uses in the marketplace under these different floor area ratio scenarios and you can see this was

Actually this project was done during the go-go years right before the great recession when condos were very hot and multifamily rental wasn’t but you can see that we Illustrated to them was pure our market realities note by the way that the rental residential retail mix has a negative one dollar ninety seven

Cents per fa our foot that’s because the costs of going up and structured parking where such that it didn’t make any sense to actually develop that kind of a land use in the land that would be no there would be no land value in that scenario but we presented this to the community

And then we Illustrated if we have to get on the top line at a to fa fa are we have to get $85 for developers sell or redevelop the land and a three-fer we have to get fifty seven dollars and at a four fa are we have to get $43 to sell

Or redevelop the land only with the higher density would there be in the case of a condominium or an office retail mix the economic justification for redevelopment if they didn’t get enough density in other words the land uses would stay as they are today and they certainly wouldn’t be a walkable

Mixed-use environment that the community wanted what ended up happening in the case of white flint is the community unya grasped this they want the mixed-use walkable environment but they were concerned still about you’re going to build it and then the infrastructure is not going to get here and we’re going

To be in a terrible environment and that’s not what we want the property owners agreed as part of this planning process and as part of the financing plan of the whites Flint sector plan that they would create a special vote a special assessment district in and they

Would pay extra taxes that would go towards infrastructure improvements in the White Flint planning area and that is being implemented today so lessons learned I know many of you already do this in your communities but there still are many communities that do not on the market and economic perspective should

Be shared as part of the planning process to understand prey and to allow communities to make informed decisions we are seeing this more and more as resources remain limited in the public sector is that plan should be developed with a true understanding of how they will be paid

For it manages expectations and it generally creates a win-win because plans actually get implemented because they can and it seems unfortunate in our mind I that communities up zone well before the market is ripe for that kind of up zone and in our opinion the opportunities for public private

Financing are limited in the situation where you’re way ahead of the market and you create too much zoning envelope and you basically lose your opportunity to leverage private money and finally we always recommend to our clients that they really think through and calculate the implications of the various

Regulations that they impose on the private development community and how that really does impact development costs sometimes it can be a real eye-opener and what it forces communities to do is really prioritize what they want and to reduce the burden on the private sector to allow private

Investment to occur and growth growth to happen so with that I will turn this over back over to Carl alright thank you very much Sarah what I’m going to do is talk a little bit about the legal parameters and and some of the issues from the developers perspective of course there the other

Partner in this and so we wanted to give you a sense first of how we’re able to accomplish this from a legal perspective and then also some of the points that developers routinely raised with us when we’re working with them on this in Virginia we have enabling legislation

That that allows us to engage in proffered rezonings and conditional use permits and in Alexander specifically most of our rezonings occurs through the smaller area planning process but we do have some standalone rezonings from time to time almost every development project in Alexandria that is not by right and

Most or not requires some special use permit of some kind even if there isn’t a rezoning so that means that there the opportunity is almost always there to negotiate for some some kind of contribution they are of course considered voluntary in the sense that developer is asking for something about

What he can do by right and so and I’m sure you’re familiar with the concept of rational Nexus and the three points here under the voluntary heading says that the city what the city is asking for must be related to the development and its impact proffers are oriented toward

Facilities and amenities that benefit the development itself or the nearby community and they do provide the opportunity for a number of different developers to contribute to a project that no single developer could afford these are the typical categories of projects that could be funded with proffers and this list was from the

Perspective of the of a developer this might be he might consider all of these things to be quote unquote in the bucket or things that are extraordinary contributions but as a city planner i would say that almost all of these are ones where if there’s sort of a

Great line that there’s some element of these that are things we routinely require and some element of these that might be considered extra and so for example under the green building standards we do have a green building policy and that it has the expectation of LEED Silver but if a developer were

To do LEED Platinum then that would be then that extra cost would be something that the developer would proffer these are a few points that we routinely hear from the developers that are important to them and as a city planner I completely agree with those we have found it better for everyone concerned

If we work out these expectations early that that we take that opportunity to make choices to set priorities is Sarah just mentioned and that our expectations are rational doesn’t doesn’t hurt and then finally to stick to these if we are negotiating in good faith with the development community and and the

Community is joined in with us in those negotiations we need to stick to what we agree to a a key point here from the developers perspective is the same one that Sarah also raised and I left the slide in even though Sarah made made the point very well is because how often

This point is misunderstood and so many times in my career public officials in the community routinely assumed that just by adding development potential 20 sites they’re automatically increasing the value and also that they’re that necessarily we’re going to get the maximum amount of development that the

Zone allows so if we allow somebody to build to a 30 f AR than they will and and that is a false assumption to make from a variety of perspectives and you can just look at all the lands owned one thing that’s built to less than that development potential all around the country

To see that that’s the case the last thing that I want to talk about is development phasing and I touched on this at the beginning just how important it is to use the fab development is faced over time to recognize first the development is faced over time and then

Perhaps to use that as part of your financing strategy so sometimes we have to get a little creative when we’re figuring out how to make sure that the funding resources are going to be enough to pay for everything we need to support a plan and I mentioned earlier that

Early money is expensive it’s hard for developers to come up with upfront cash and easier for them if we wait till some part of the development is built and they’re getting some revenue we also know that over time the increased tax revenues from new development can be

Substantial but it takes a while for those increased tax revenues to add up to something that’s useful the city can use its bonding authority to pay for some things earlier but there’s also a limit on how much we can bond illustrated on this slide are three categories of things that we typically

Finance this way and then the first one is a fire station and it represents things that need to be provided early either before or very soon after the development project is open other examples in this category could could include transportation and water and sewer facilities and sometimes schools

Are also included in this category the center picture represents parks and other facilities that are not as urgent we might be able to wait a little bit for the new park particularly if it’s going to be used primarily by the residents of the new development and then the third picture is supposed to

Represent affordable housing and it’s in a category all its own because we have needed a lot of flexibility to make our affordable housing goals happen it’s so expensive to provide it and it’s so needed that we have found ways to that we need to add it in gradually over time

From the cash flow as the cash flow from new development increases so I have two examples of how this works and the first one is from our Beauregard plan that sir also talked about the red line on the chart supposed to show or what it does show

You is what the increased tax revenue to the city is expected to be if the development proceeds as expected as the phasing expected and you can see that it gets to be quite significant over the course of the 30 or so your build out of the plan what the red dots are

Symbolizing is the desired time frames for the delivery of some of the most key elements of the public amenities benefits and infrastructure so those included a fire station the affordable housing a new transit way some in athletic field and Recreation enhancements and the ellipse is it is a

Roadway improvement so the red dots are when we wanted those things to take place if if money were no object but but the blue dots are or what we had to delay in order to make them line up with the revenue potential both on the public and the private sector that we could

Reasonably expect so the fire station had to be delayed a couple of years the affordable housing approximately five years in the same of the athletic fields and recreation facilities if you look closely at that red line that’s the tax revenues you’ll see that it dips negative very early on and that’s

Because we found it in this case we needed to actually provide some public money up front to make particulars actually for the affordable housing contribution so we’re actually making an investment in the very early years up front in order to make the whole thing worked the second example is with our

Potomac yard metro station and you this is approximately 250 million to 300 million dollars which is a huge amount of money for a city of 150,000 population to absorb so it’s a big question if the city were to go ahead pull the trigger on this project and

Borrow the amount of money for this how are we going to pay for the debt service which here is estimated to be about 15 million dollars a year so our funding sources potential funding sources for the included the upfront developer contributions a special taxing district over the new development and then the

Net increases of tax revenues to the city from the new development and what this graph illustrates is that if the development occurs according to schedule it isn’t about until about seven years in that the revenues are sufficient to cover the debt service and then after that we’re going to be okay and that’s

Of course assuming that development of perceived on schedule and that’s a big assumption so it’s likely that we’re not going to pull the trigger on starting the metro station until we know that at least a critical amount of that development is going to be underway the last slide before we open to questions

Is I want to mention the importance of involving the community and how we involve the community along the way of course with a small area plan we start involving the community very early in their vision and goals for an area and we don’t bring up economics right away

Because in part we don’t want to give the impression that we’re the planning effort is being driven by economics it’s not that it’s just a bit because there are a lot of other issues that are important to the community transportation the environment recreation schools community character

All of that but just as we do traffic studies to test whether various development scenarios are feasible from a transportation point of view we also test these development scenarios from an economic and financial point of view and to make sure that it works and then if

It does how much value is created so I think you Sarah alluded to once we and the developers agree on an amount we are very much involving the community in determining what improvements that money is going to be spent on and we routinely hear from the developers that within

Reason they’re not as concerned about what the money gets spent on of course it has to be an actual benefit and not something that’s arbitrary it has to be something that benefits the community that surrounds the development and the development itself but within that framework they’re very

Willing to let the community have a very strong voice in determining what’s on that list of things that gets improved or it gets paid for and the order so that’s a really positive conversation to have with the community to say you know we have X millions of dollars what do

You want to see that spent on and part of the reason why it’s a positive conversation is that they see in a very tangible way that their neighborhood is going to be benefiting from the new development and that there’s some commitment to make that happen so although the title of this session is

Calculating developer contributions I think the message we’ve been trying to convey is that there’s true value in conducting these financial analyses as part of your long-range planning even if you are going to use that information to estimate developer contributions when the community and the developer agree on the general financial parameters of a

Plan is immediately moves the conversation toward more productive topics and in the end my experience is that it helps get the plan approved and even more important helps ensure that the plan will ultimately be implemented and with that I’d be happy to turn it over and have questions

There oh good there we go okay I was having trouble unmuting myself okay great they oh that scared me Thank You Carl and thank you Sarah this is wonderful this is a really great break down on something that’s somewhat complicated and okay so we do have some questions coming in which is really

Great so we can just go ahead and jump right into those I am going to put up my finished slide for those folks um who jumped in towards the end um there we go and also just as a quick note before we begin the QA and this is approved well

It’s pending approved for 1.5 CM credits and it should be listed within the next week or so so don’t worry if you can’t seem to find it now it’s not you it’s just that it has not been posted yet so please be sure to check back in a week

So that you can log those CMS okay let’s jump into these q and A’s alright the first question in Seattle we have a park located over a water reservoir by permit not easement how can you assign a value to the permit try it again you have a

Park who owned who has a permit I can’t tell you i don’t i’m not quite sure um whoever whoever asked that question i guess if they can maybe clarify a little bit more within the question box i assume it’s the city to be at all okay well if it’s a publicly owned reservoir

And it’s a public park there isn’t a value being generated by the park itself on the reservoir I wouldn’t think so you can jump in what where there might be a potential for this kind of thing is if the park itself is creating value to adjacent private property that isn’t

There without the park and that we might be able to calculate what might be able to use this to to calculate the benefits to the surrounding private land of having a park adjacent to it rather than a reservoir search can you think of something else I think that that’s

Exactly right i think the park itself doesn’t have private development value because it’s a park but we do know that the park does and your benefit to its adjacent properties i mean there have been studies on that and so we could we could calculate that great ok the next

Question what do you do to counteract the feeling of entitlement by the developers when property is down zoned hmm that’s a tough one yes I you know I actually don’t have a whole lot of experience and downzoning I do know that it is very difficult and there you could

Use this particular methodology the developer could use it to say you’ve just taken away a lot of value that’s just assuming that there is market to fill up his existing zoning envelope and we could always if that isn’t the case then you would calculate whether indeed there really is any difference between

The current zoning and the downzoning yeah as a planner I guess one thing I would do if I were doing the downzoning his first do it as part of a comprehensive planning effort so that I could go back to the public policy objectives that we were trying to

Achieve so that no individual developer could make the claim that we were doing this arbitrarily the second thing I might do it is if I were to hire Sarah to help me with this is to ask her to help me demonstrate that there wasn’t a market demand for the down zone for the

Current zoning so that the downzoning didn’t represent a loss in value an actual loss in value only a theoretical loss in value yes if that were the case you would have to be true of course and of course if there is a situation where in this would be kind of innovative but

You could down zone but allow the developer to sell the development rights of the rights he lost to some other part of town that had market I mean that would be another interesting way of dealing with it so if it were in the market yeah and this would be a way to

Help figure out what just how much should he be compensated the developer be compensated through the whether or not you use that information ottoman you’re transferred development rights program or not it might be helpful to know okay um for parklands was that a transfer of development rights or

Payment in lieu I think oh I think Carl I think that’s for you okay in the braddock plan the it was actually developer contributions it was the main tool that we used most of the development in the neighborhood was assigned an amount of money a per-square-foot contribution toward the

Parks that they needed to provide so their pro rata share of the parts cost the difference was on the block itself we are actually hoping or planning to have the half of that block be privately redeveloped in half the blocks be a park and in that case we’re going to be

Contributing the development potential on the park to the developer of the remaining half of the block so development potential will be used as a part of the financing of that put that part yes okay our actual tax land values used as existing land values that’s a great question down and it and the

Answer is it depends but generally no oftentimes been my experience that the tax assessor’s database doesn’t really have what developers are willing to pay for land it often is below that so it’s really a market-driven number it’s the question to ask is what our developers paying per

Unit per residential unit for land right now in this market or / fa our foot for office space now it’s this is easier to do in places where there’s a robust market so there’s been a lot of sales so you have a there’s a track record it

Gets much more challenging in a slower growth market where there just aren’t that many sales and sometimes you actually have to try to calculate the land value yourself by figuring out you know how much can i afford to pay for land given the rents that i think i can

Get and my operating costs and my investment Neil but that’s that’s a little bit more difficult to do but it is it isn’t just looking at the property tax assessor’s database okay um in the White Flint example did the public sector hire a counterpart to the developers economic consultant to

Negotiate over all the numbers yes they actually had their own they always are doing their own due diligence because ultimately this was a financing arrangement for our infrastructure costs so as I recall the yes we were we had they had their own private private consultant looking at at financing

Alternatives so it was a it was a very interesting process because it was really an integrated process with the community the public sector ie montgomery county and the major landowners so it was it was very dynamic but yeah everybody had their everybody knew what was happening and no one was

Able to pull the wool over anybody’s eyes hey ok um have any projects gone from start to completion in terms of actual tag revenue verse negotiated benefits from the developer in actual market demand rates well in Alexandria the braddock plan is it’s not a hundred percent build

Out but it’s more than fifty percent build out in the park is about fifty percent we’ve acquired four percent of the park and it’s being improved right now so I would say it’s fifty percent of the way there the other plans we’re in we’re still in the stages of early

Stages in potomac yard a lot of development has started in the southern end but not at the northern end yet we’re still doing the environmental impact statement for the metro station the plan was approved in 2010 so it wasn’t that long ago we really expect the Beauregard plan to be moving ahead

The developers they just got their approvals last year so they’re still getting their final site plans and so forth the landmark plan is still very early on them but the de mall has submitted its plan for redevelopment and had it approved so that one’s day I guess still in the earliest of the

Stages of the four examples that I have I’m Sarah maybe you know about wife sling yeah I mean white Flint’s moving for but I would like to say that Alexandria every jurisdiction is a little bit different and um it’s been my experience with alexandria Karl that they often work with you know developer

Contributions if you go to Fairfax County which is right next door in in Virginia very nearby they don’t like the idea of developer contributions because it’s very it’s a very bumpy way to get money they would much prefer more of the special assessment district concept

Where they can get a stream of money up front and that allows them to be making public improvements from the very beginning and i would say that in those cases where you can get the specialist estimate district like a white flint like a tysons corner on that the public

Sector has on your ability to move is enhanced a lot in the near term yeah that’s a good but it just depends upon it they’re all different about what what different communities feel comfortable with but I will say that the special assessment concept it seems to me if you

Can get it to happen and and the landowners agree that there’s real benefit to infrastructure and public improvement investment is a is a very clean way of getting near term investment early okay um let’s see do you have any advice regarding a code requirement to demonstrate need for a rezoning

That’s interesting flashing back to I don’t have that condition and I was trying to flash back to a previous period in my career when we routinely had that requirement and we had trouble with it every time so and I know that I’ve dealt with this where you know restaurants are like conditional uses

And you have to show and demonstrate that there’s net new market to support restaurants and or you know liquor licenses and all of that and it ends up you know we end up doing the study and they end up getting approved because they’re all kinds of you know gymnastics

One can do to make it happen i think that the jurisdiction we to do a lot of those kind of studies for the i think they stopped it by a kiss right i agree with you we ended up equating market demand with need and you can do that but

It’s a it’s not necessarily what someone might mean by need and we used to have a lot of debate about that with the community because it would be you know it much more convenient if the zoning ordinance which define what need meant but typically it doesn’t so you end up

Having to come up with something and usually it ended up being market demands and so this would help at least bound the conversation on how much mark well it’s not really a market study so i still think it’s problematic i try to get it out of your ordinance easy for me

To say okay um no other state then Virginia has a proper system in exchange for rezoning how can the techniques in alexandria be transferable to other states well there’s a couple things one is through the special use permit avenue which isn’t strictly speaking through the rezoning mechanism

And I think a lot of jurisdictions do have a set of land uses which require special use permits of one kind or another that turned the decision from being sort of an administrative to a quazy legislative decision which gives you broader latitude to open that conversation too well what is the

Community getting out of it what are the community impacts and what then what are their compensating community benefits I mean even in Virginia we are still talking about voluntary a voluntary contribution however in air quotes that word voluntary maybe the other thing that I would say is that even when

Developer contributions are not on the are not part of the conversation you may well be saying to a developer about using this information you don’t need that 30 f AR that you’ve been asking for you’re never going to use it and you early only need one point five FA are in

Order to make your project work so in that sense you’re benefiting the community by making your rezonings more rational and perhaps more limited than than they would otherwise be and and I would say that you know we basically have a whole practice based on this stuff so it happens all over the country

And and sometimes what triggers it isn’t necessarily zoning but a redevelopment wants to have in particularly in urban environments and it needs public money and to you know it becomes a question of does it really need public money how much public money what is a fair and equitable public private arrangement we

Use tax increment all over the country which is really you know what is the value with the pacing of new development what can the market support so how can we then generate sufficient revenues to then pay for the infrastructure necessary to support growth so I do

Agree that Virginia is so unique in the sense that you literally do almost negotiate development contributions but all over the country the public and the private sectors are working together to try to accomplish you know the visions of the communities and often it requires them cooperating from a financing standpoint and that

Means you have to understand the economics of the deal okay our developers limited from seeking valuation reductions with the county assessor we have had projects where large retailers seek reductions thereby reducing available dollars for infrastructure debt payments do prohibit developers or owners from seeking such property value reductions good good well

I’ve had an experience where we literally agree on what we think the TIF payment is and and the the the developer is obligated to pay that level of what would be the equal to what we thought the property tax would be in to the extent that the property taxes are

Indeed that will reboot will bri bait them back but if in fact the property taxes aren’t that the developer is on the hook to pay that each year and it’s a way of sort of protecting us from the downfall of tax increment which is what happens if we projected it wrong and so

That’s how we protect ourselves is to require the developer to pay the amount and then use the increment to pay them back and if the increment is insufficient that’s their problem not ours yeah and I don’t think we’ve done anything specifically to prohibit them from pursuing a rid of a lower value but

I actually had an experience I wasn’t directly involved but I was working in the city when a developer did tried to get his their property taxes reduced and there was a big court case and in fact it came down on the side of the property owner the developer because they said

You can’t force someone to pay property taxes that are more than and what the property is worth but the example I use beforehand which is there’s an agreement that they’re going to pay a certain amount in lieu of property taxes and you you know you’ll have that problem and they have our

Greatest amount and if the property taxes are there they are if they’re not they’re not that’s very good good idea okay um is that if the primary special assessment vehicle used or are there others well in Alexandria we have we have liked them so i would say that

Answers yes for us in the most recent past and it’s not a formal test it’s a more in agreement by the city council to that we are going to divert some fraction of the additional increment toward the infrastructure and amenities that are called for in the plan and so

Far we have done that but we have stopped short of setting up a specific text increment financing district we have created though a special assessment district in the one case and that is the potomac yard for the metro station where the stakes are considerably higher that

We make sure we get all the contribution we are expecting in order to make that station work no era so to me a special assessment is different than tax increment tax increment is taking what is the city’s money which is the property taxes and driving those incremental increase in property taxes

Back into the the project to fund amenities infrastructure etc it’s essentially the city’s money a special assessment is an extra tax that the property owners pay so it’s their money so when I use the example of white flint I mean I think it was like they paid ten

Percent of their property tax bill as and they increase their property tax bill by ten percent and use that additional ten percent as a special assessment that they charge all property owners pay it and that goes into a bucket that is paid that then goes to pay for infrastructure so it is

A net new tax on top of them that’s how Delos rail was funded in tysons the property owners are paying an additional tax up and above the property taxes to help fund those infrastructure improvements so in my mind when I think special assessment i think it’s the

Private sectors money when I think tax increment even though it’s driven by the new project we’re using what the city would have gotten from the project to drive it back into the infrastructure in that I’m going along with this there’s a question here would it be legal to assess impact fees developer

Contributions for only a specific area of the city and then the question goes on would this be done with a special assessment district or some other mechanism well a impact tax is a way of getting up front developer contributions typically the impact taxes page upfront or before the certificate of occupancy

Issued and the difference really is the impact taxes are typically a formula that you come up with the anticipated cost for an area it can be a sub area of a city or jurisdiction or but or the entire jurisdiction but you calculate the what you need to collect in order to

Make the necessary improvements or infrastructure expenditures and divide it more usually on a pro rata share among the anticipated development and then each development project that comes in pays that impact see or impact tax depending on the jurisdiction and so I would say that sort of the difference

Here is that where we’re doing it on a more customized basis but the same analysis could have been used we could have come up with an impact tag safe for Beauregard as the means of collecting the developer contribution that we calculated using this approach okay we have another proper question have either

Of you worked with developers that are seeking cash proper credits for high-quality building materials in lieu of a cash proper payment if so how do you evaluate the value of high-quality building materials architectural proffers I would say we we do have a discussion of the adage value of high-quality architecture it is

Something that Alexandria it’s been enormous surprise is very highly and so it is definitely part of almost every conversation that we have as a developer and it is an element of most development projects in general it would be to the extent we can value it and that we agree

That it’s an extra cost because in part we think that developers should know by now that alexandria has a certain expectation for architectural quality in part because we have a number of historic districts and that as its own that drives its own expenditures in terms of architecture but but also

Because it’s been part of our practice for so long if we can come to an agreement on the additional cost of the materials that are being used and we can come to an agreement on which of those are quote unquote extra things that alexandria wanted did they could have

Been just as successful without providing then we could work that into the bucket list and that’s I think how we would do it we are pretty aware here of on staff of just how much architectural materials cost and how much an extra costs certain elements are

So so we would be able to to work that through if we needed to and to the extent that we have a specific project and we’re trying to calculate the equitable arrangement between the public and the private we would actually you know understand those development costs and we’d solve in

Light of those development costs with the enhanced materials right but i can’t say i’ve had much experience with the issue coming in that I won’t pay the normal $10 a square foot I only want to play eight because i’m doing a gold-plated building i haven’t we haven’t had that much in our experience

Okay um just a few more questions are you guys okay with doing this market um how does Alexandria determine whether it needs a new fire station are the standards based on proximity or intensity of land use how do you show the connection between the new development and the need for new

Development well that’s a good question yeah we we do a response times we have using GIS the forecast of new development we include the forecasted development at five stories or less and five stories and above I think that’s the right break for different kinds of

Trucks in the case and we do that we have done that calculation and in fact we’re in the middle of redoing it because of the additional fire station beyond the one I mentioned in Beauregard in the case of Beauregard it was a little easier for us to do that because

Something like seventy five to ninety percent of the calls insert in that part of town were being answered by Fairfax County because Alexandria routinely was unable to get to the call first so we had that was the the data that what I think was most convincing to the

Community and to the City Council to justify the need for the additional fire station but response times would be another one that we would do we are using okay let’s see are any of these projects addressing impacts in adjacent communities the Alexandria examples are not not if not through this

Mechanism at least now in the case of Beauregard there was considerable discussion during the planning process about the impacts on neighboring jurisdictions and the citizens that live outside Alexandria but in Fairfax County were fairly vocal participants in the planning process the main way that came out in sort of a practical purpose was

That we included impacts on intersections in neighboring jurisdictions in the traffic analysis and so the solutions were ones that would bring the intersection standards to acceptable kept it acceptable in the neighboring jurisdictions so to to a limited extent the transportation improvements that we approved benefited the neighboring jurisdictions from that

Perspective so it’s sort of in a backwards way they it is reflected in the developer contribution because part of that developer contribution goes toward that transportation improvement that does help benefit the neighboring jurisdiction in that time ok great um for mixed uses are the fees different per square foot

I’ll let their jump in after i finish i believe we have not been assessing the payments on a per-square-foot basis different by use the different uses go into the equation at a different time they go in at the at the beginning when Sarah’s calculating the value that’s created that the value that’s created

Differs depending on the mix of uses but then we don’t go back and say for every retail square footage you need to contribute ten dollars and for every office square footage you need to contribute 12 or or something like that we haven’t done it that way detect but

When we’re doing the calculations we do as you recall when you saw if you saw the slide on north potomac yard we had you know retail residential and office on and we had different land values for each one of those so that kind of goes into the equation but then we generally

Come out with just sort of a range of what are likely benefits to the private sector and then everything gets pretty generalized in policy as Karl just explained but if you know it also really depends upon the location because sometimes municipalities force mixed-use and it really works in certain locations

And in other locations you know the the ground floor that’s forced to be retail the upper floors are subsidizing the retail so the retail value may actually even be negative so we do take it into consideration in in our analytic process mm-hmm okay well that wraps up the QA do you

Guys have any other final thoughts or final comments before I close up shop here no but but thank you very much for having sure thank you yeah and for those still in attendance just to remind you again you can log your CM credits probably in about a week or so it’s

Still see impending and again we are recording the webcasts and it’ll be available on our YouTube channel by searching planning webcasts so this concludes today’s session thank you everybody for attending and thank you Margaret if you’re still hanging on there she’s on the executive committee for the urban design and preservation

Vision thanks for coordinating our speakers and getting this going today and thanks to our speakers Carl and Sarah this was great it’s a heavy topic and you feel did it well so thanks everybody and have a great weekend bye-bye you two bye hey

ID: P8O9RNYZj5M
Time: 1383152280
Date: 2013-10-30 20:28:00
Duration: 01:22:25

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