REGION 8 BULLETIN NO: 2014-20
Subject: Joint Development Circular (7050.1)
Date: August 28, 2014
Please be advised that FTA has issued and placed on its website final Agency guidance, in the form of a circular, on joint development. The Joint Development Circular (7050.1) is available on FTA’s website at: http://www.fta.dot.gov/legislation_law/12349_16123.html. The effective date of the Joint Development Circular is October 1, 2014. Projects for which sponsors have executed joint development agreements with third parties before October 1, 2014 will be considered according to FTA’s existing guidance and statements of policy. After October 1st, joint development agreements will be considered according to the Joint Development Circular.
The Joint Development Circular is intended to guide interested parties through the FTA program and policy requirements that must be considered when pursuing a joint development project that is FTA-assisted or that will make use of real property that was previously acquired with FTA assistance. The Joint Development Circular consolidates all of the existing FTA guidance on joint development, and it supersedes any FTA guidance on joint development contained in other sources, including, without limitation: circulars 5010.1D, 9030.1D, and 9300.1B and Federal Register Notices of Final Agency Guidance on the Eligibility of Joint Development Improvements Under Federal Transit Law (72 FR 5788, Feb. 7, 2007) and Policy on Transit Joint Development (62 FR 12266, Mar. 14, 1997).
Here are some highlights of changes (not all inclusive) from existing guidance included in the Joint Development Circular:
- defines a minimum threshold for the “fair share of revenue” criterion
- requires a Baseline Market Analysis to support findings and adds a ‘due diligence’ statement to the Certification of Compliance
- describes a two-tiered FTA
- review process requires submission of a Joint Development Project Request form (replaces the Joint Development Checklist)
- excludes joint development from capital improvement grants cost effectiveness calculation.
Under 49 U.S.C. 5302(3)(G), project sponsors must meet certain eligibility requirements for an FTA-assisted joint development capital project or planning activity. One of these eligibility criteria requires that the project sponsor receive a fair share of revenue from the joint development project. Whereas previously FTA has not expressly defined the term “fair share of revenue” or set a monetary threshold for the same, the Joint Development Circular establishes a minimum threshold for the amount of revenue that a project sponsor must receive and that minimum threshold amount must be at least as much as the amount of the original federal investment in the joint development project. Project sponsors will be expected to exercise due diligence in determining the market value of the original FTA investment, and perform a baseline market analysis to demonstrate a good faith effort to provide a “fair share of revenue” to the project sponsor.
The Joint Development Circular also includes new guidance on the framework FTA uses for analyzing a proposed joint development project, including how it will assess the eligibility criteria. The Joint Development Checklist has been replaced with a Joint Development Project Request form, which will soon be available on FTA’s website. Recipients are encouraged to submit preliminary joint development project plans in advance to the FTA Regional Office in order to identify how eligibility criteria and other requirements can be satisfied. FTA will approve a joint development project proposal submitted for formal review only. All FTA recipients must include the following in their final, formal submissions of their joint development project proposals:
- a Joint Development Project Request form (available on FTA’s website)
- a Certification of Compliance (included as Appendix A to the Joint Development Circular)
- the proposed Joint Development Agreement
- appropriate supplemental documentation.
For questions, clarifications or concerns regarding the new joint development guidance, please contact David Beckhouse, Region 8 at 720.963.3306 or David.Beckhouse@dot.gov .
Thank you very much for your continued cooperation and support of FTA's Planning and Capital Programs.
Linda M. Gehrke