Finding the Value, Capturing it, and Putting it to Work
12
Finding the Value, Capturing it, and Putting it to Work Stan Wall Partner HR&A Advisors, Inc. October 2015
-
Upload
hra-advisors -
Category
Real Estate
-
view
221 -
download
0
Transcript of Finding the Value, Capturing it, and Putting it to Work
Finding the Value, Capturing it,and Putting it to Work
Stan WallPartner
HR&A Advisors, Inc.October 2015
Value Capture: Stan Wall
Transit must create value in order to capture value.
Transit Improvem
ent
Increased Accessibilit
y, Lower Travel Time
Higher Land
Values
Value Capture
Value Capture: Stan Wall
Value Capture Strategy Development
Ownership
Joint Development New Transit AgencyNegotiated Exactions Existing/New PrivateSpecial Assessment Districts Existing/New PrivateDevelopment Bonus New PrivateAir Rights New Transit
Agency/PrivateTax Increment Financing Existing/New PrivateDevelopment Impact Fees New PrivateTransportation Utility Fees Existing PrivateLand Value Tax Existing/New Private
Value capture typically requires new development to succeed.
Value Capture: Stan Wall
Value capture works where new development is feasible, with positive land value.
FEASIBLEINFEASIBLE
COST REVENUE
LOSS
COST REVENUE
PROFIT
Value Capture: Stan Wall
Value capture requires real estate, capital markets and PPP capacity to craft and execute strategies.
Healthy Real Estate Markets Capital Markets Public-Private
Partnership Capacity
Value Capture: Stan Wall
Washington Metro 2004 NOMA Station Value Capture
• Finance/Value Capture:– DC Government Investment:
$53.7 Million– Federal Contribution: $25
Million– Special Taxing District: $25
Million– Total Investment: $103.7
Million
• Value Creation:– $3 Billion Private Investment– 8 Million sq ft of Mixed-Use
(6 Million sq ft Office, 200,000 sq ft Retail, 1,700 Housing Units, 400 Hotel Rooms)
Value Capture: Stan Wall
Washington Metro NOMA Station - Value Capture Today
New Pedestrian Tunnel & Plaza
Tax Increment Financing
Special Tax
Assessment
Direct Contributi
on
Infrastructure that enhances
value & development
Potential east of NOMA
Value Capture: Stan Wall
Washington DC Streetcar - Value Generation
No Build Build - Moderate
Build - High $-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
Net
Pre
sent
Val
ue (
$ m
illio
ns)
$2.6 billion
$3.2 billion
$3.9 billion
Value Capture: Stan Wall
Washington DC Streetcar - Value Capture
T – Transit policy goalsH – Affordable housing policy goals
Value Capture: Stan Wall
NJ Transit – Hudson-Bergen Light Rail West Side Extension
Bayfront Redevelopmen
t Area
West Side Ave Station
Potential Bayfront Station
• Cost (2011):– Capital cost: $214 million– Operating cost: $1.9
million/year• Value Creation (2011):
– $160 million in value– 6 million SF residential– 640,000 SF office
• Value Capture Proposed:– Negotiated Exaction
Value Capture: Stan Wall
First office towers under construction; subway opened
September 13, 2015
Aggressive rezoning for commercial and residential
sites, up to 33 FAR
Extension of #7 subway line and creation of new boulevard
through synthetic TIF
Uniform Tax Exemption Policy -
property tax abatements of up to 40% for “first-move”
office towers
10 Hudson Yards
New York City – Hudson Yards
