Joint Development Frequently Asked Questions
View the answers to commonly asked questions about joint development below.
- What is joint development and how does it differ from transit-oriented development?
- What are the benefits of joint development to a transit agency?
- What are the benefits of joint development to the private sector?
- What is the joint development law or policy of the Federal Transit Administration?
- What is specifically eligible under FTA’s Joint Development laws and policy?
- Can the proceeds from excess property disposal be used to fund joint development?
- How does one apply for permission to use FTA funds for a joint development project?
Joint development is a form of transit-oriented development that directly involves FTA participation in any of the eligible activities listed below or the use of real property with an FTA interest.
Although joint development is not a discrete program of the Federal Transit Administration, FTA grantees may use FTA capital assistance for joint development activities from a number of FTA programs. Joint development may occur concurrent with the development of a FTA assisted project (such as a transit center or construction of a new fixed guideway) or it may be proposed as a stand-alone project to be developed at an existing facility.
Transit-oriented development refers more broadly to mid to high density multi-use development that provides a number of community and transit benefits, and usually increases transit ridership. FTA supports the development of TOD policies and plans as a planning activity but FTA oversight doesn’t apply to TOD itself since there is no direct FTA participation in the construction of TOD.
Transit agencies can benefit from joint development activities by sharing in both cost and revenue with another partner. Examples of revenue-sharing include land leases, air rights development, station interface or connection-fee programs, concession leases, and benefit assessment districts. By sharing the cost of development, transit authorities can share some of the cost burden of constructing, maintaining, or rehabilitating transit facilities such as construction expenses, participate in incentive-based programs that provide benefits (e.g., density bonuses) in return for off-loading construction costs, and allow joint use of equipment like air-conditioning systems.
A private entity, like a developer, benefits because the accessibility advantages of being near a transit station are capitalized into higher rents or greater occupancy.
Federal transit law (49 U.S.C. 5302(a)(1)(G)) permits the Federal Transit Administration to issue public transportation grants “for the construction, renovation, and improvement of intercity bus and intercity rail stations and terminals,” including the construction, renovation, and improvement of commercial, revenue-producing intercity bus stations or terminals.
FTA’s Joint Development Guidance (72 FR 5788 published on February 7, 2007) seeks to afford FTA grantees maximum flexibility within the law to work with the private sector and others for purposes of joint development. It generally defers to the decisions of the project sponsor, negotiating and contracting at arm’s length with third parties, to utilize federal transit funds and program income for joint development purposes. The policy also aims to promote transit-oriented development, subject to the broad parameters set forth therein.
By statute, the following activities are expressly eligible:
- Renovation and improvement of historic transportation facilities;
- Real estate acquisition;
- Site preparation;
- Building foundations;
- Open space;
- Safety and security equipment & facilities;
- Facilities that incorporate community services;
- Intermodal transfer facilities;
- Construction, renovation, and improvement of intercity bus and intercity rail stations and terminals;
- Transportation-related furniture, fixtures and equipment;
- Project development activities; and
- Professional services.
Yes. FTA Circular 5010.1D lists alternative disposal methods for both real property and FTA funded equipment. One allowable method is to use the proceeds from disposal actions to reduce the gross project costs of another eligible capital project. This may include approved joint development projects. Note that a transfer of real property meeting the tests for joint development is not a disposition, and the proceeds are deemed program income.
Before becoming eligible for FTA funding, a joint development improvement must be approved by the FTA Regional Administrator, or designee, responsible for the project sponsor’s locality. Under Federal transit law, only FTA grantees may sponsor a joint development improvement. Below are the steps:
- Grantee submits proposal to FTA Region with joint development checklist.
- FTA Region staff reviews.
- If the proposal is straightforward, Region staff approves.
- If there are issues with the proposal, Region staff consults with Headquarters joint development resource staff.
- HQ and Region staff agree on issue resolutions.
- Regional Administrator signs off on project.