JOINT DEVELOPMENT STUDY

The report, hereafter referred to as the Study, was prepared in 1996. The purpose of the Study was to explore and explain transportation uses of joint development. The Study is comprised of a glossary, literature review, and joint development case studies. The case studies include:

• Boston Central Artery Project
• Allied Junction Multi-Modal Station Development, N.J.
• Washington State and Seattle Air-Rights and Public/Private Financing
• San Diego Light Rail, Air Rights and Privatized Financing
• Pensacola Highway I-110 Project

The Study defines Joint Development as an effort by a public agency and a private developer to undertake a construction project. Joint Developments are usually a voluntary joining of governmental entities with private for-profit organizations to undertake mutually beneficial development in connection with public infrastructure. A Joint Development agreement generally contains formal legally binding language between a public entity and a private individual. Projects may also be initiated through a co-development. A co-development is an informal working arrangement in which the public agency and the private developer work together to complete their individual projects in a mutually beneficial way. The co-developers usually attempt to site and coordinate their projects based on a non-binding legal agreement.

Each case study within the Study is targeted on one of the following joint development activities:

• Telecommunications utility accommodations
• Jointly developed projects

The analysis of the case studies concentrates on several key issues related to joint development:

• Agency objectives - project options
• Public agency development policy and organizational capacity
• Acquisition of Property
• Sale and Lease of Property
• Market Demand
• Financing
• Zoning

Successful joint development requires planning, supportive zoning and a single point of contact for the project. The Study identified four conditions necessary for successful joint development:

• Healthy real estate market
• An agency with an entrepreneurial outlook
• Coordination of zoning/rezoning with local agencies
• Realization that benefits of joint development transcend the generation of revenue.

The Study identified several factors which may inhibit joint development:

• Laws and regulations which prohibit or hinder agency cooperation/involvement
• Agencies' lack of experience with joint development projects
• Lack of incentives for developer to enter into joint development agreement
• Agencies' goals may not be compatible with developer's profit maximization goals
• Uncertainty about length of occupancy - most agencies agreements include a clause requiring tenants to vacate on 30 days notice

Lessons learned from the case studies are:

• The public must be kept informed.
• The pace of the project development/approval process may need to be streamlined to maintain project viability.
• The telecommunications field is moving very quickly because of market demands. State and federal policies may have to be adapted in order to take advantage of this opportunity to lease DOT lands.
• Joint development/multiple use needs support from local agencies and policy approval at both the state DOT and federal levels.
• Agencies should have realistic expectations, demonstrate strong public commitment, and demonstrate the benefits to the public sector.

Some innovative ideas drawn from the Study:

• Wetlands banking - The Allied Junction project in New Jersey utilized Wetlands Banking to address remediation requirements.
• Philadelphia formed a corporation for the management of its Interstate 95 airspace. The corporation is financially self sufficient and must have approval from several community groups before any new lease can be executed.
• San Francisco has the nations' only Transit Impact Fee. The fee is levied against developers who are building within specified areas. It is used to fund transit improvement projects.
• In several instances the Study identified a trend in which the Environmental Impact Statement functions as a planning tool.
• In some of the case studies, joint development served as an engine for economic revitalization and redevelopment.

To provide Feedback, Suggestions or Comments for this page contact Janis Gramatins (janis.gramatins@dot.gov)