Funding Our Future 35 : an analysis on the compatibility of value capture financing with a highway redesign project

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2023-04-20

Authors

Duong, Andrea

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This report will study financing options for Our Future 35, a cap and stitch project along Interstate 35 in Austin, TX. A cap and stitch highway design features a sunken roadway with stretches of buildable park land (cap) and widened bridges that are more pedestrian and bicycle friendly (stitch). Historically, I-35 has served not only as a physical divider of the city, making it difficult for residents of East Austin to access other parts of the city, but as a racial, social, and economic divider as well. As part of a larger project, I-35 Capital Express, Our Future 35 will reconfigure a 10 mile stretch of the interstate to allow for expansion of the interstate while providing better connectivity between the east and west halves of Austin. Although the Texas Department of Transportation has announced an estimated $7.5 billion for the expansion, this has been allocated for pedestrian and bicycle improvements, access and egress improvements, and the managed lanes, not the cap and stitch portion. The Urban Land Institute estimates Our Future 35 costs to be around $313 million, but funding solutions are still in the air. In exploring financing options for the project, this report will look at: Tax Increment Reinvestment Zone (TIRZ), which leverages the expected increase in tax revenue to secure loans for upfront costs for public infrastructure improvements; Transportation Reinvestment Zone (TRZ),which similarly uses increased tax revenue to finance transportation specific projects; and Impact Fees, payments made by new developments to provide public services. This report will also assess case studies that have either used these financing mechanisms, or are similar in project scope to Our Future 35, including: The Triangle Project, Dripping Springs; Lumpkin Road Drainage and Mobility Improvements, Houston; Eastlake Extension Project, Horizon City and Klyde Warren Park, Dallas. Due to the nature of state by state governance and ordinances differing greatly from one another, only Texas case studies have been chosen.

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