Multimodal Public-Private Partnerships: A Review of the Practices of Other States and Their Application to Virginia

About the report:

Virginia planners have asked how other states have implemented multimodal (i.e., serving two or more transport modes) public-private partnership (P3) investments. Accordingly, this study was designed to determine factors that cause P3 projects in other states to have or not have multimodal components. Interviews were conducted regarding other agencies’ pursuit of 23 candidate multimodal P3 projects in nine other states plus the District of Columbia: Alaska, California, Colorado, Florida, Georgia, Illinois, Maryland, Rhode Island, and Texas. Transportation may influence land development, and P3s are no exception, but the interviews showed variation in how land use impacts are considered. In most decisions regarding multimodal P3s, land impacts were considered to some degree, but the reasons varied: no expected impact, more intense development in a particular location, impacts near the facility but no exact location pinpointed, and increased real estate values near the facility. The diverse nature of P3s suggests that an opportunity may exist for agencies to use a flexible process that encourages consideration of multiple modes at multiple decision points. As one way of making this consideration easier to accomplish, this study examined how land development impacts can be evaluated for a multimodal P3 using a Virginia case study. A hedonic price model suggested that a multimodal P3 project could increase residential and commercial property values, with market-adjusted values being slightly higher after construction than before construction. For example, for residential properties, the model suggested that after construction, a parcel’s value drops by approximately $5 for each additional meter the parcel was located away from the express bus routes. Because the models are sensitive to assumptions such as the size of the project impact area, this study was preliminary. Eventually, however, the completion of additional studies may suggest how value capture can support multimodal P3 projects.

Five conclusions may be drawn regarding P3 projects in other states. First, it is not unusual for a project’s status to change from P3 to non-P3: 10 of the 23 projects for which interviews were conducted were found not to be P3s. Second, obtaining additional funds is not the sole reason for pursuing a P3. Third, milestones for considering multiple modes in P3s are not generally used: reasons include such decisions are part of the environmental review process and conditions are so fluid that milestones are infeasible. Fourth, land development impacts were considered in most, but not all, of the projects. Fifth, the conditions supporting a multimodal P3 are diverse and include the implementation of a region’s long-term vision, public pressure, and a unique opportunity to bring together stakeholders to create a project that was otherwise infeasible or to solve a specific problem. Especially because of this last conclusion—that conditions supporting a multimodal P3 are diverse—there may be merit to agencies considering multiple modes at multiple decision points as P3s are developed. Accordingly, the study recommends that Virginia’s Office of Public-Private Partnerships share the results of the interviews and the value capture case study, or excerpts thereof, as appropriate, with local, regional, and Virginia Department of Transportation planners. By knowing about practices elsewhere, it is possible that there may be insights that are applicable to a given P3 project in Virginia.

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