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How is the minimum threshold for a "fair share of revenue" calculated?

Project sponsors and other joint development participants determine the amount of revenue expected to be generated by the project and negotiate the share of that revenue the project sponsor will receive, taking into consideration the type of project and priorities that the project sponsor and/or local government and stakeholders want to advance.

FTA has determined that the minimum threshold for a “fair share of revenue” a project sponsor receives cumulatively from joint development must be at least the amount of the original FTA investment in the joint development project. The revenue can be received in one lump sum or disbursed in multiple payments at a frequency or timing negotiated by the project sponsor.

Example: A transit agency bought property for $2 million in 1990 and FTA’s share of the land acquisition cost was 50%. Therefore, the original FTA investment was $1 million and the minimum threshold for a fair share of revenue for a joint development on the property today is $1 million. This means the transit agency must receive at least $1 million cumulatively over the life of the joint development agreement.

Updated: Wednesday, October 4, 2017
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