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Transit Revitalization Investment Districts: Opportunities and Challenges for Implementation

The Pittsburgh Community Reinvestment Group (PCRG), a membership-based coalition of community development corporations and community-based organizations within the City of Pittsburgh and surrounding municipalities, has commissioned this report to assess the effectiveness of TRID as a financing tool for revitalization of core communities across the state. Transit remains a powerful revitalization tool – especially in places that were originally built around transit – and tools such as TRID can unlock urban environments to revitalization opportunities that make them once again viable and sustainable for a new generation of residents.

Introduction

This report provides an evaluation of planning and implementation efforts undertaken based on the Pennsylvania Transit Revitalization Investment District (TRID) Act. This innovative law, passed in 2004, has been cited nationally as a model for fostering transit-oriented development (TOD). TRID is intended to achieve a variety of goals including:

  • Encouraging TOD and economic development;
  • Fostering collaboration between multiple entities;
  • Promoting the use of value capture mechanisms, public-private partnerships, and other innovative financing methods to spur infrastructure investment;
  • Incorporating community involvement in planning; and
  • Generating increased revenue and ridership for transit agencies.

The TRID legislation enables the use of a district-based tax increment financing mechanism to capture increases in property values to pay for needed improvements. It is distinct from tax-increment financing (TIF) because unlike TIF, it does not require that there be a finding of “blight” in the area where it is used. It also differs from other district-based TIF strategies around the country in its explicit emphases on transit and TOD and the comprehensive, community-based planning that is required for successful TOD implementation.

Twelve TRID planning processes have been initiated statewide using funds from the Pennsylvania Department of Community and Economic Development (DCED), and others are in the early stages of planning using other state and local sources. However, thus far no TRID financing district has been created. This report aims to assess TRID’s strengths and offer some reasons as to why the tool has not yet been used for implementation financing. Using a case study approach, we evaluate TRID efforts to date and offer recommendations to help assist with future efforts. Findings from the case studies were supplemented by interviews with TRID practitioners from around the Commonwealth. Section 1 provides a brief overview of the legislation, and Section 2 provides four case studies of TRID planning efforts in Marcus Hook, Lower Merion Township (Bryn Mawr), Dormont/Mt. Lebanon, and Pittsburgh’s East Liberty neighborhood. A summary of findings about TRID successes and challenges, as well as a discussion of potential ways to overcome implementation barriers, are provided in Section 3.

TRID Overview

Goals

The TRID statute outlines a series of goals related to advancing TOD in the Commonwealth:

  • Promote local, county and regional economic development and revitalization activities through private sector investment, reinvestment and joint development activities in conjunction with public transportation improvements.
  • Encourage multi-municipal, cooperative approaches to generate new investment, reinvestment and revitalization through transit-oriented development around rail transit stations and along public transportation corridors.
  • Increase overall ridership on public transportation systems, including AMTRAK, while generating additional revenues for current and expanded services, capital improvements and related ongoing maintenance.
  • Encourage and support municipal and multi-municipal comprehensive plan implementation, including consistency of plans at the local, county and regional levels.
  • Stimulate public-private partnerships created by prospective development opportunities around, within or adjacent to the transit system, station areas and transit system components.
  • Establish appropriate mechanisms to capture the real estate taxation and other values added by joint development activities for reinvestment in the transit system and local communities.
  • Encourage greater community involvement in TRID location, design and implementation and resulting investment activities.
  • Promote flexible, cooperative, coordinated and enhanced support for innovative, intermodal solutions in TRID development and implementation activities by municipal officials, public agencies, nonprofit organizations and the private sector.
  • Support TRID implementation by maximizing use of existing Federal and State laws and programs that are consistent with the purposes of this act.

TRID is unique in that it is explicitly intended to expand the role of transit agencies in local value capture strategies. In addition to the increased ridership generated by new development near transit stops, it can also generate revenues to support transit service, capital improvements, and maintenance.

Key Provisions

Below is a summary of key provisions of the legislation.

  • Eligible TRID locations are defined by distance from a transit stop or station (at least 1/8 mile, but no more than ½ mile), and may include vacant, underutilized or potentially redevelopable land. Specific boundaries can be tailored to local circumstances based on property boundaries or other factors, when authorized by the jurisdiction and the transit agency, and supported by a TRID study.
  • TRIDs are designated by municipalities or counties, in cooperation with transit agencies, transportation authorities, and/or AMTRAK. The TRID may encompass an existing or planned station. The municipality or municipalities enter into an agreement with the transit agency, which defines the activities and commitments of each party to the TRID.
  • TRID plans are required, and must consider the need for capital improvements to transit-related facilities and adjacent public infrastructure as well as opportunities for private sector real estate development. The plan must also include a financial plan, including discussion of funding sources, a proposed amortization schedule where applicable and estimated future maintenance requirements.
  • DCED provides a 75% match for TRID planning efforts and related implementation activities, up to $75,000 per project. Municipalities undertaking a TRID planning study are also entitled to receive priority consideration for planning and implementation grants and technical assistance from DCED, working in partnership with the pertinent county planning agency or agencies and other State agencies with grant or loan programs that may be applicable to TRID. In addition, Commonwealth agencies are directed to provide State resources, programs and new capital investments that will assist local governments, transportation authorities and transit agencies to implement TRIDs.
  • Transit agencies may purchase and improve property within a TRID, consistent with existing authority and limitations on transit agencies to condemn and acquire land for public transportation purposes. A transit agency may not be the primary real estate developer, but it can purchase property, make improvements, and work with the local jurisdiction(s) to offer it for sale for uses consistent with the plan. Alternatively, they can advertise the presence of development opportunities within the plan area.
  • While a management entity must be designated to manage and facilitate implementation, municipalities retain policy and oversight responsibilities over the budgetary and programmatic actions of the entity. Neighborhood improvement districts or business improvement districts may act as the managing entity for implementation activities.
  • Value capture areas are coterminous with TRID boundaries, within which taxing entities can share incremental tax increases generated by new real estate investment in the TRID. The tax revenues are dedicated to specific improvements designated in the TRID planning study.
  • Community involvement is required during the planning and establishment of a TRID, including at least one public meeting to explain TRID and alternative implementation approaches, and another to review the proposed joint development plan and its related public improvements prior to implementation.