Transit Oriented Development Goals and Strategies

I. Purpose

The Metropolitan Transit Authority of Harris County (METRO) is responsible for large-scale public investments which include important real property assets essential to operations. These assets contribute to the on-going operations of the transit system while enhancing their surroundings. METRO’s transit system expansion, along with governmental initiatives that help focus and integrate new development around transit, adds to the economic viability of these areas. By promoting high-quality, more intensive development on and near METRO-owned properties, we can increase ridership, support long-term system capacity and generate revenues for the agency.

II. Definitions

  • Transit Oriented Development (TOD) is characterized by compact, mixed-use development on or near transit facilities, either bus or rail. TOD boosts transit ridership and reduces automobile congestion, providing value for both the public and private sectors, while creating a sense of community and place. In addition, TOD leverages transit infrastructure to promote economic development and sustainable growth.
  • Joint Development is a subset of TOD and is development on METRO-owned property in which METRO has a formalized partnership with a public or private developing entity. By sharing infrastructure and development, this partnership can increase system ridership and capture a long-term revenue stream for METRO.

III. Goals

METRO’S Transit Oriented Development Program seeks to:

  • Increase transit ridership through the coordinated planning of land use and development of properties on and near METRORail stations, Transit Centers, Park & Rides or other facilities, reducing automobile use and congestion for the benefit of the environment;
  • Enhance the value of METRO real property assets by locating and designing transit facilities to accommodate both existing and future TOD uses;
  • Include a mix of uses that will support transit use throughout the day and meet identified needs of transit riders and the immediate area;
  • Provide pedestrian oriented development and create a sense of place around a transit facility that is compatible with the nature, scale and aesthetics of the surrounding community;
  • Consider local interests in the location, design, function and operation of the transit oriented development to the extent reasonable and appropriate;
  • Allow for the disposition of surplus property for development purposes and maximum asset utilization;
  • Promote the highest levels of quality in terms of urban and architectural design; and
  • Generate economic development benefits through job creation and additional revenue for the local economy.

IV. Strategies and Implementation of Transit Oriented Development

  • METRO is supportive and encourages development that adheres to the City of Houston Transit Corridors ordinance, enabling development that is more physically and functionally related to transit infrastructure.
  • METRO will work with the City of Houston to allow the Major Thoroughfare Plan to address streets with strong transit service, thus opening the opportunity to Transit Oriented Development in more areas of the city.
  • Work with the City of Houston to provide ordinances that support Transit Oriented Development and transit in general.
  • METRO is supportive of projects that are consistent with other jurisdictions’ Transit Oriented Development policies and plans that help the public see transit as a competitive option encouraging a transit ethic. METRO is also supportive of other jurisdictions creating policies that address and support TOD.
  • METRO will work in partnership with public entities and the private sector early in the development process to enhance multi-modal access to and from METRO transit services.
  • In partnership with the public and private sectors, METRO will work in concert to implement quality development and a built environment that promotes transit. Specific developments and improvements could include, but are not limited to: canopies and awnings; clear, wide sidewalks for pedestrian access; quality access for bicycle accommodations; convenient transit-focused building ingress/egress; and pedestrian safety measures.
  • In anticipation of possible Transit Oriented Development or Joint Development projects, METRO will consider build-out opportunities that allow for future development, capturing the best access to transit.
  • Develop and disseminate information, including the METRO website, as to how Transit Oriented Development enhances cohesive neighborhoods and how developers can benefit from transit infrastructure and services.
  • METRO will promote, in partnership with the private sector, TOD projects on the METRO website or other appropriate avenues to show the benefits of transit and proximity of development alternatives.
  • METRO will look for partnership opportunities with TOD projects where fare media and transit use can be an incentive to development projects.
  • On an annual basis, METRO will consider a grant program that would provide grant funds to promote the goals and concepts of transit oriented development.
  • METRO will provide transit service to projects that generate sufficient ridership, based on METRO’s service delivery standards.
  • METRO will seek opportunities to utilize land that is owned by the agency for joint use. METRO may sell surplus land, sell air rights or enter into ground leases.

Joint Development Guidelines, Policies and Procedures

I. Definition and Purposes

Joint development is a real property asset development and management program designed to secure the most appropriate private and/or public sector development that is physically or functionally related to METRO-owned transit facilities. The purposes of METRO’s joint development program are to (1) enhance and increase ridership on the METRO system, (2) achieve transit, land use, economic development and urban planning goals while maximizing revenues generated to METRO and (3) create a long-term, continuing source of revenue to support operations of METRO and increase utilization of this community’s public transit system.

The Joint Development Guidelines, Policies and Procedures support and include all of the goals and strategies of the previous Transit Oriented Development Goals and Strategies section, and additionally outline specific procedures for achieving joint development agreements for the agency.

II. Joint Development Procedures

A. Marketing and Solicitation

  1. METRO will be open and competitive in marketing properties. Periodically, METRO will prepare and publish a list and description of its properties available for joint development and circulate this to the development community, public agencies and the general public.
  2. METRO may solicit proposals for joint development of its properties through a competitive selection process. METRO may also initiate planning processes with community input. Alternatively, projects may be initiated by a private entity or other agencies. If solicited by METRO, Request for Proposals (“RFP”) procedures shall be used to solicit development proposals. Once METRO issues an RFP for a specific site through a competitive selection process, METRO shall not accept unsolicited proposals on the same site during that process.
  3. Proposals may be initiated by public and/or private entities. Such proposals will be considered unsolicited and be governed by the procedures outlined herein.
  4. Solicited and unsolicited proposals should comply with the established goals, policies and criteria as previously outlined. All proposals will be evaluated based on a joint development evaluation form.
  5. Any properties acquired with Federal funds will follow procedures to gain appropriate FTA approvals.<

Evaluation of Solicited Proposals

  1. METRO can initiate an RFP process to solicit development proposals.
  2. In soliciting joint development proposals, METRO shall encourage developers to seek information regarding current and planned land uses in the project area.
  3. In evaluating proposals solicited through the RFP process, METRO will utilize an evaluation panel consisting of key METRO personnel, and where appropriate, urban design and/or academic professionals. The evaluation panel will use as a guideline a joint development evaluation form to review joint development proposals and follow procedures in METRO’s Procurement Manual. The President & CEO will be advised of the evaluation panel’s recommendation, and procurement procedures toward Board authorization will follow.

C. Evaluation of Unsolicited Proposals

  1. Developers may propose a joint development project and submit the proposal to METRO. Such proposals must conform with the Transit Oriented Development Goals and Strategies. If the joint development project meets the specified goals and criteria, the Real Estate & Property Management staff will analyze the proposal using a joint development evaluation form or similar document(s).
  2. Developers shall submit a recent (within the last 12 months) audited financial statement of financial assets, cash flow statement and/or provide evidence that key construction companies are bondable.
  3. A joint development evaluation form will be used to review the proposed project. METRO will advise the developer whether the proposal meets the Transit Oriented Development Goals and Strategies. If the proposal meets the goals and strategies, METRO will advise the proposer of METRO’s interest, and appropriate procurement procedures will be followed to allow for any further proposals to be received from the public. If no further proposals are received and Board authorization will be requested.

D. Preliminary Negotiation Period

  1. Upon the preliminary selection of the developer and/or proposal, METRO will enter into preliminary negotiations with the developer.
  2. METRO will determine the length and duration of the preliminary negotiation period. METRO reserves the right to terminate preliminary negotiations with the developer at any time.
  3. In order to expedite the preliminary negotiations and upon written request by developer, METRO will deliver any existing METRO-owned information, studies, reports, site and construction plans requested.
  4. During the preliminary negotiation period the developer will:
    1. Provide METRO with a comprehensive list of previous experience in the specific project described in the proposal in both the construction and operation of the said project type;
    2. Provide evidence of control of any properties not owned by METRO but considered essential to the project;
    3. Provide project development schedule(s), design(s), and construction and completion timeline(s);
    4. Provide METRO the financing plan, including source and availability of equity capital and construction and long-term development financing;
    5. Provide METRO with an economic projection for the project, including a pro forma statement of project return adequate to enable METRO to evaluate the economic feasibility of the proposed project;
    6. Draft the initial Letter of Intent (“LOI”) to be reviewed and negotiated by both parties prior to the LOI being submitted for approval by the President & CEO and the METRO Board of Directors.

E. Exclusive Feasibility Period

  1. The Exclusive Feasibility Period begins upon the METRO Board’s approval of a recommended developer and/or proposal authorization of the President & CEO to negotiate, execute and deliver appropriate documents for the project. The terms and conditions of the LOI will specify the termination date for the Exclusive Feasibility Period.
  2. METRO may grant an extension of time for negotiations in the Exclusive Feasibility Period.
  3. Developer’s responsibilities include:
    1. Developer shall provide METRO a good faith deposit (“Deposit”) in the amount of Twenty-Five Thousand Dollars ($25,000) in the form of cash or certified check or an alternative amount as determined by the METRO;
    2. Developer will provide a revised or updated project design concept plan, including a site plan(s) as necessary to describe the proposed scope of the project;
    3. Developer will provide revised or updated evidence of control of any properties not owned by METRO but considered essential to the project;
    4. Developer will provide revised or updated project development schedule(s), design(s), and construction and completion timeline(s);
    5. Developer will provide revised or updated financing plan, including source and availability of equity capital and construction and long-term development financing;
    6. Developer will provide a revised or updated economic projection for the project, including a pro forma statement of project return adequate to enable METRO to evaluate the economic feasibility of the proposed project.
    7. Developer will seek public input, and where beneficial to the goals of TOD, incorporate into the overall project.
  4. METRO’s responsibilities include:
    1. METRO will work exclusively and in good faith with the developer in negotiating and implementing a Joint Development Agreement or other documents pertinent to the project;
    2. METRO shall not solicit nor entertain offers or proposals from other parties concerning the project;
    3. METRO shall place the developer’s Deposit in an interest-bearing account. METRO shall have the right to draw down from the account payments for reasonable expenses incurred by METRO including but not limited to appraisals, research and/or market data, negotiations support, and other administrative costs expended in the evaluation of the proposal.
    4. METRO shall deliver upon written request by the developer any existing METRO-owned information, studies, reports, site and construction plans.

F. Conformity with Design Criteria for METRO Park and Ride and Transit Center Facilities

These policies and procedures shall be implemented, as appropriate, in conjunction with the most recent design criteria for transit facilities and operations.

G. Small business participation goals will be established for individual joint development projects.

H. Statutory Authority and Governing Legislation

Metropolitan Transit Authority of Harris County, Texas was created by and exists under Chapter 451 of the Texas Transportation Code.