FIRST COAST COMMUTER RAIL TOD STUDY | TOD IMPLEMENTATION
FIRST COAST COMMUTER RAIL TOD STUDY | TOD IMPLEMENTATION
476
477
VALUE CAPTURE MECHANISMS
CONTRIBUTING ENTITY
ADMINISTERING ENTITY
TIMING OF FUNDS
MECHANISM
DEFINITION
Value capture, as depicted in Figure 6-2, refers to a variety of financing tools and strategies that allow the public sector to capture a portion of the increase in land value that directly results from public investments, including transit. There are a variety of public-private financing tools and mechanisms that allow the public sector to capture a portion of the increase in private development and land value, which results directly from public investments in transit, streetscape, and public realm improvements. A justification for using these tools is that private investment may not occur in the absence of public investment. Value capture mechanisms typically used across the country, as well as strategies commonly used in Jacksonville, St. Johns County, and elsewhere in Florida, that could be used to fund public realm improvements and development were identified as part of the study process.. These include a mix of one-time and recurring revenue sources that would 1) defray both upfront construction costs and future expenses related to operations and maintenance or 2) subsidize otherwise infeasible development. However, if projects are financially infeasible, new fees and assessments can make it harder for developments to pencil; therefore, the mechanisms listed in Table 6-1 will require selective deployment and application. For example, Tax Increment Financing (TIF) is a powerful tool available to CRAs in Florida to reserve future incremental tax income for current horizontal and/ or vertical development investments that spur growth and redevelopment of a neighborhoods, which makes
them particularly useful to meeting goals of advancing TOD. By capturing the incremental property tax revenue within a specific redevelopment district, a CRA can pledge those funds to finance upfront capital projects or subsidize otherwise infeasible redevelopment projects, among other uses designated the district’s Community Redevelopment Plan. In 2018, Miami-Dade County adopted an ordinance for the creation of a TIF district, the Miami Dade County Transportation Infrastructure Improvement District, that extends along specific transit corridors (the “SMART” Plan corridors) and earmarks the generated tax increment revenue for the development, construction, maintenance, and operation of the Plan’s project, which includes TOD, specifically housing, retail, and office development, along the rapid transit lines. Some projects and project areas might not be suitable to maximize the use of value capture instruments, due to capacity of new development to generate taxable property value increases or if the administrative or political conditions make the instrument unsustainable. Table 6-2 provides a framework to assess the suitability of value capture instruments to fund certain projects and improvements in areas along the corridor. If deemed suitable for value capture, there are additional factors that determine the specific type of value capture instrument given the variations in revenue generation capacity, risk tolerance, timing, and potential revenue uses. These factors are outlined in Table 6-3.
Additional density permitted to developers by local governments in exchange for developers building more housing or provide community benefits beyond normal zoning A leasing arrangement where a developer rents land from a property owner. The developer pays rent and may have the right to develop or improve the leased property during the lease period. Charges imposed on developers by local governments to help cover the costs of increased public services and infrastructure needed due to new development Additional taxes or fees imposed on properties in a specific area to fund improvements or services that directly benefit those properties. Taxing districts have separate tax rates for specific projects or services A financing tool where local governments use the increased property tax revenue generated by a development project to fund public infrastructure or other community benefits in the designated district
City of Jacksonville, City of St. Augustine, St. Johns County
Density Bonus Programs 1
One-Time
Developers
City of Jacksonville, City of St. Augustine, St. Johns County
Ground Lease Developer Agreements
Recurring
Developers
City of Jacksonville, City of St. Augustine, St. Johns County
Development Impact Fees/ Mobility Feeds
One-Time
Developers
City of Jacksonville, City of St. Augustine, St. Johns County
Special Assessments and Taxing Districts 2
Property owners
Recurring
Value capture aims to allocate some of the net new tax revenue generated by this growth to fund capital and operating costs that would otherwise be borne by the public
Property owners and developers benefit from zoning actions and other public investments that improve the public realm
PUBLIC INVESTMENT
Community Redevelopment Areas (CRA), created by the City or County
Tax Increment Financing (TIF) 3
Property owners
Recurring
IMPROVED PUBLIC REALM
VALUE CAPTURE
1 City of Jacksonville does not currently have active density bonuses available, but it is under discussion as part of an affordable housing plan. St. Johns County and City of St Augustine both have workforce housing density bonuses available. 2 There are currently 90 active special districts across Duval and St. Johns County, as of November 1, 2023, 77 of which have bonding authority. 3 https://www.miamidade.gov/govaction/matter.asp?matter=180059&file=true&yearFolder=Y2018
These improvements are often funded by the public but result in increased
HIGHER LAND VALUES
property values for private landowners
Table 6-1: TOD FUNDING MECHANISMS
Figure 6-2: SUMMARY OF INVESTMENT-TO-VALUE CAPTURE CYCLE
FCCR TOD
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