Joint Development

What's New

In January 2024, FTA published an updated Joint Development Guidance (Circular 7050.1C ). The guidance continues to support flexibility for transit agencies to pursue joint development projects, which FTA hopes will result in more value capture opportunities that help create value for both transit systems and surrounding communities. The updated circular contains a change to fee collection for zero-emission vehicle charging equipment. This guidance supersedes Circular 7050.1B.

Overview

Joint development projects involve:

Integrated development of transit and non-transit improvements, with transit projects physically or functionally related to commercial, residential, or mixed-use development
Public and private investments that are coordinated between transit agencies and developers to improve land owned by a transit agency or related to a transit improvement
Mutual benefit and shared cost among all parties involved

For example, a transit agency may partner with a developer to lease property owned by the transit agency near a transit station to build office space or residential units, thereby raising revenue (via the rent payments) for the transit system in the process.

Another example of a joint development is the coordinated construction of an underground transit station and a mixed-use development above it in the air rights. A project like this could be accomplished using a public-private partnership (P3) form of procurement.

Joint development is a form of value capture, as a transit agency captures some of the economic value created by its transit system and uses the funds to help finance expenses.

If a project receives financial assistance from FTA, then it is an FTA-assisted joint development. Joint development projects may utilize financial assistance from FTA through:

New grant funding through one of FTA’s planning or capital grants programs, or
The development of property or air rights previously acquired with FTA grant funding

FTA does not offer a grants program specifically for joint development. FTA-assisted joint developments are subject to the requirements of the FTA grants program through which they received funding.

Request FTA review of joint development projects

FTA Guidance on Joint Development

FTA Guidance on Joint Development (Circular 7050.1C) provides guidance and clarification for using FTA financial assistance or FTA-assisted real property for joint development. The circular also discusses the statutory criteria for project eligibility as joint development.

FTA Circular 7050.1C includes the following elements:

Defines and clarifies the term "joint development"
Explains how a joint development project can qualify for FTA assistance
Describes the legal requirements applicable to the acquisition, use, and disposition of real property acquired with FTA assistance
Outlines the most common crosscutting requirements applicable to FTA-assisted joint development projects
Describes FTA’s process for reviewing joint development project requests

To be eligible for FTA funding or use of FTA-assisted property, joint development projects must:

Enhance economic development or incorporate private investment;
Enhance the effectiveness of public transportation and be related physically or functionally to public transportation, or establish new or enhanced coordination between public transportation and other transportation
Provide a fair share of revenue that will be used for public transportation
Provide that a person occupying space in a facility constructed with FTA funds must pay a fair share of the costs of the facility through rental payments or other means
If equipment to fuel privately owned zero-emission passenger vehicles is installed as part of a joint development improvement, collect fees from users to recover the costs of construction, maintenance, and operation of the equipment

Not all joint development projects use FTA funding, FTA-assisted real property or other assets. FTA Circular 7050.1C applies only to joint development projects assisted by FTA, which, therefore, have an FTA financial interest.