Major Investment Study / Draft Environmental Impact Statement
7. Financial Analysis
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7.4 IMPLEMENTATION STRATEGY
SVM implementation is envisioned via a Design/Build/Operate/Maintain-Equity
(DBOM-Equity) contracting approach, wherein the contractor would have an
equity interest in the project for a specified time period. To fully utilize
this approach, however, it will be necessary to obtain waivers from Pennsylvania's
Separations Act of 1913, which regulates certain aspects of contracting
by governmental entities. Other projects, such as the Pennsylvania Convention
Center, have received waivers, so precedent exists. That said, the equity
aspect will introduce some important financial resource possibilities,
including lease-leaseback tax advantages, joint development arrangements,
naming rights, and transactions and revenues relating to coincident improvements
to freight transportation, terminaling and port operations. Further, the
project owner, to whom the DBOM-Equity contractor would be responsible,
could be a newly established authority, at the regional or state level.
This may occur since the currently proposed SVM service joins the service
areas of both the Southeastern Pennsylvania Transportation Authority (SEPTA)
and the Berks Area Reading Transportation Authority (BARTA).
In particular, the joint development opportunities
would be supported by the concurrent Transit Oriented Development (TOD)
project of the Delaware Valley Regional Planning Commission (DVRPC), as
described more fully in the next section but briefly recapped here. The
work now underway includes three principal elements: (1) development of
recommended zoning regulations changes for five station areas, in concert
with local official and community representatives (52nd Street, Port Kennedy,
Phoenixville, Pottstown, Douglassville); (2) development of a regional
TOD educational and outreach program; and (3) development of a location-efficient
mortgage program. In concert with the TOD program, two additional funding
avenues may include Tax Increment Financing and a concept called the Transit
Redevelopment Investment District (TRID), currently taking form. A TRID
would establish a coterminous Value Capture Area that would enable the
transit authority and the local jurisdiction to share the real estate tax
revenues generated by the new investment. Such tax revenues may be able
to be bonded, thereby producing a potential source of capital funds.
The planned DBOM-Equity approach to project implementation
may, however, provide some important operating revenue opportunities, from
both transportation and non-transportation sources. From transportation
sources, the potential exists to develop an incentive structure whereby,
after certain minimum ridership and revenue targets are achieved for a
specified time period, additional revenues would be divided between the
contractor and project owner according to a structured formula, possibly
with multiple levels, depending upon the amount of excess revenue, if any.
Likewise, penalties could be provided, again at various levels, for non-achievement
of targets. An important non-transportation source could be from a customer
amenities concession contract, structured similarly to airport concessions.
For example, it may be possible to develop a master concession agreement
for all SVM stations to cover such items as newsstands, coffee shops/restaurants,
mini-marts, and dry cleaners, with a structured, operating revenue-sourced
payment (some amount fixed plus a variable portion of revenue) on a regular,
scheduled basis.
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