WHY ENTITIES LIKE SEPTA MAY USE PUBLIC-PRIVATE PARTNERSHIPS IN CREATION OF TRANSIT ORIENTED DEVELOPMENTS
3/4/2013 | Construction Blog
The Southeastern Pennsylvania Transportation Authority (“SEPTA”) recently released its annual report focusing on the theme of sustainability, aptly titled “SEP-TAINABLE”. In that report, SEPTA commits to partnering with developers, municipalities, and other organizations to invest in various Transit-Oriented Development (“TOD”) projects, which are high-density mixed-used development projects within a half mile of public transportation. Specifically, SEPTA announced that it intends to engage in one TOD per year.
It is possible that SEPTA, and other entities like SEPTA, with an eye toward development, will begin to utilize newly authorized public-private partnerships. In July, 2012, Pennsylvania enacted the Public Private Transportation Partnership Act, 74 Pa.C.S. § 9101, et seq. That Act authorizes public-private partnerships for existing and new transportation infrastructure projects. Essentially, under the Act, a public and private entity can enter into a binding agreement by which the rights for the use or control of a transportation facility are transferred from public owners such as the Pennsylvania Department of Transportation to a development entity that may be public or private.
The Act applies to a broad array of projects since the term “transportation facility” is defined expansively and means “[a] proposed or existing road, bridge, tunnel, overpass, ferry, busway, guideway, public transportation facility, vehicle parking facility, port facility, multimodal transportation facility, airport, station, hub, terminal or similar facility used or to be used for the transportation of persons, animals or goods, together with any buildings, structures, parking areas, appurtenances, intelligent transportation systems and other property needed to operate or related to the operation of the transportation facility. The term includes any improvements or substantial enhancements or modifications to an existing transportation facility.”
The public-private partnership agreement may last for a term not to exceed ninety-nine (99) years and can include services for operations and maintenance, revenue collection, user fee collection or enforcement, design, construction, development and other activities that enhance traffic throughout, reduce congestion, improve safety or otherwise manage or improve a transportation facility. The development entity may charge a user fee for the use of the transportation facility.
The Act opens project delivery options other than the design, bid and build model traditionally used since the Act authorizes agreements for design-build, operations, maintenance and financing configured in nearly any way imaginable. Of course, the projects must pass the scrutiny of a new Public-Private Transportation Board comprised of seven members. There is no set criteria for approval, but the board must deem the project to benefit the Commonwealth and the public-entity that owns the Project.
It may be too early to determine whether the Act stimulated transportation projects, but at this point it appears that it could at least steer strategic planning for some entities.