Capstone Project 5 - Freight and Economic Development · Capstone Project 5 - Freight and Economic Development Your state, comprised of rural and urban areas, had seen decades of

Capstone Project 5 - Freight and Economic Development

Your state, comprised of rural and urban areas, had seen decades of prosperity dwindle as manufacturing and jobs moved out of the state and out of the country. However, economic conditions globally, such as rising costs of labor and resources in other countries, political unrest and security concerns has prompted companies to rethink their supply chains. Recently, your Governor announced a major Economic Development Initiative. Special incentives, such as classification as a tax-free zone for new and expanding businesses, have been put in place to encourage entrepreneurship and relocation to the state. With a strong workforce, proximity to the states’ three ports and situated in geographic crossroads that would serve several multi-state freight corridors, there are several regions in the state that provide an optimum area to target under this initiative, with one standout. The State Department of Transportation is working on an overall comprehensive statewide freight plan, and also working with the local Metropolitan Planning Organization to develop an updated regional plan to serve the area that has been targeted as the most promising area for economic development due to the connecting interstate highway and rail freight corridors. In addition, this region boasts a regional airport that is established in governance as an independent public authority. The airport has extensive room for air cargo expansion. Any business expansion at the airport that puts more vehicles on the roadway will require improvements to the two lane arterial roads connecting to the airport. There is available state-owned right of way that could allow for direct interstate access to the airport if an additional ramp connection was built. The Economic Development Office for the state is in discussion with a nationally recognized business looking to locate a large fulfillment center within the region to allow it to be positioned to fulfill the growing e-commerce business. The location under consideration by this business is in proximity to the interstate and the direct interstate connection would also serve them, however their access would disrupt a popular recreational trail that traverses this area bringing user to a nearby lake that is popular with local residents for kayaking and fishing. The state and local MPO are also in negotiation with a several large warehouse and distribution providers servicing national chains to relocate to this region and they are close to final agreements with several of them. Community leaders, while excited about growth opportunities, are expressing concern about the potential negative impacts such as increased congestion and reduced air quality, as well as noise issues from the airport expansion. Like most locations in the country, truck parking shortages are a challenge in the region and concerns are raised about where all the additional trucks coming into the area to service these facilities will stage/park if they have limitations on their arrival and dwelling times at the warehouse/distribution centers which is a common practice. There is significant pushback towards the Governor’s plan from many in the general public who are concerned that the state is undertaking a disproportionate amount of the investments. To quote a recent newspaper editorial, the state taxpayers are “underwriting corporations/businesses through their tax dollars”. Many people believe this and have concerns about “return on investment”. They point to the fact that with increasingly automated warehouses, the

number of jobs projected by the Governor are likely over-estimated and that the businesses will come and stay for the tax incentive period and leave. To this end, the Secretary of Transportation has been asked to develop an action plan that would enhance the transportation network for the region and within it identify opportunities to engage discussion with the industry on cost sharing for some of the projects that directly benefit them. The action plan will also outline how the public will be engaged in discussions and strategies regarding projects that will transform the region as the economic expansion moves ahead. and will look to capture the return. You are charged with presenting the Secretary of transportation with outlining an action plan to:

• Identify the major stakeholders this economic development effort is going to impact (public and private, including agencies) and assess the advantages and disadvantaged to the various stakeholders.

• How will you engage stakeholders in this effort and define their roles?

• Identify the various infrastructure projects and associated investment projects that would make the expansion economically viable? What are the pros and cons?

• Outline policy or regulatory issues, if any, that might be encountered.

• How would you address the truck parking concerns? Are there any examples of innovative strategies or partnerships that could make additional truck parking accommodation and not place the cost burden fully on the taxpayers?

• What funding options might be explored for the other projects?

• Identify elements that should be considered in determining the formula for return on investments for transportation costs for projects.

Capstone 5 Group:

Tamiko Brim- Burnell – FHWA

Elisha DeFrain - MI DOT

Oana Cristina Deselnicu – CO DOT

Bernadette DuPont – FHWA – KY (Team Leader)

Katelyn Dwyer – AASHTO

David Gray - SC DOT

Christina Leach – FHWA NV

Keith Skilton – FHWA NJ

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Capstone Project 5:

Freight and Economic Development

Governor’s Economic Development

Initiative for TriPort

November 2017

Great State’s Transportation Task Force

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Transportation Task Force

Tamiko Burnell FHWA-HQ Elisha DeFrain Michigan DOT Oana Deselnicu Colorado DOT Bernadette Dupont FHWA-Kentucky Katelyn Dwyer AASHTO David Gray South Carolina DOT Christina Leach FHWA-Nevada Keith Skilton FHWA-New Jersey


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Table of Contents List of Tables ..................................................................................................................... .ii

Executive Summary ........................................................................................................... iii

1. Purpose and Objective .................................................................................................. 1

2. Scope and Methodology ................................................................................................. 1

2.1. Scope ............................................................................................................... 1

2.2. Methodology ..................................................................................................... 1

3. Steps .............................................................................................................................. 2

3.1. Identify Stakeholders and Access Advantages and Disadvantages ................. 2

3.2. Determine How to Engage Stakeholders and Define Roles ............................. 3

3.3. Identify Infrastructure Needs and Assoicated Investment Projects ................... 4

3.4. Outline Policy and Regulatory Issues ............................................................... 6

3.5. Determine How Truck Parking Concerns Will be Addressed ............................ 7

3.5.1. Tier 1: Parking Located at Delivery Site ................................................ 7 3.5.2. Tier 2: Parking at Other Sites ................................................................ 8

3.6. Explore Funding Options .................................................................................. 9

3.6.1. Highway Improvements ........................................................................ 10 3.6.2. Truck Parking ....................................................................................... 10 3.6.3. Public Private Partnerships and Private Investment ............................. 11 3.6.4. Additional Funding Sources and Funding Mechanisms ....................... 11

3.7. Identify Elements to Consider when Determining Formula for Return on Investments ........................................................................................................... 11

3.7.1. Economic Impacts ................................................................................ 12 3.7.2. Fiscal Impacts ...................................................................................... 12 3.7.3. Benefit-Cost Analysis of Transportation Improvement Alternatives ...... 12 3.7.4. Business Impacts ................................................................................. 13


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3.7.5. Social Impacts ...................................................................................... 13

4. Conclusion ................................................................................................................... 13

5. References ................................................................................................................... 15

List of Tables 1. Stakeholder Group 1 ..................................................................................................... 2

2. Stakeholder Group 2 ..................................................................................................... 2

3. Stakeholder Group 3 ..................................................................................................... 3

4. Stakeholder Group 4 .................................................................................................... 3

5. Summary of Improvement Types and Associated Pros and Cons ................................ 5

6. Policy Issues, Potential Impacts, and Potential Solutions ............................................. 6

7. Funding Sources ........................................................................................................... 9

Appendix A: Sample Survey Questions ........................................................................... 16


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Executive Summary At the direction of the Governor, a taskforce was developed to evaluate the current freight climate in the state and to make recommendations for an Economic Development Initiative. The task force focused on the State’s assets and challenges, with particular interest in the area associated with the TriPort Metropolitan Planning Organization (MPO). There were three primary goals of the taskforce. Below is a summary and recommendations for each. Determine how the public will have the opportunity to provide meaningful input on the initiative Stakeholder groups will evaluate their opportunities and risks. They then create an action plan that detailed steps on how to engage their communities to gain more insight. A few of strategies that are recommended for use are:

Attend neighborhood meetings Present the goals of the initiative at public meetings Conduct surveys Follow existing outreach processes for those stakeholders who have an

established approach such as MPOs Enhance the transportation system After the task force reviewed the applicable freight policies and regulations and analyzing the needs of the stakeholders, the following recommendations were developed.

Develop public private partnerships to address the cost of truck parking needs Amend local zoning ordinances to require truck parking Provide incentives to owners of fulfillment centers to provide truck parking Utilizing weigh stations as truck parking Local governments should review regulations to better accommodate freight

Identify opportunities to engage in discussion with industries on cost sharing Utilize cost-benefit and return on investment analysis to develop a decision-making platform for businesses, local and state governments and communities in TriPort. Action Plan To move forward with these recommendations, an Action Plan is necessary. It is recommended that the Governor: 1. Delegate authority to the State’s Secretary of Transportation. (one week) 2. Sign an MOU with TriPort mayor defining roles and responsibilities. (one month) 3. Provide funding source for implementation of these recommendations. (next

legislative session – 2 months)


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1. Purpose and Objective

The Governor formed a Transportation Task Force to evaluate the current freight climate in the state, and to make recommendations for an Economic Development Initiative. This report documents those recommendations with the goal of improving economic conditions statewide. The State has the advantage of being the geographic crossroads of multi‐state corridors, as well as being near three ports. The State’s strong workforce is another asset. Timing for this initiative is perfect as the State is currently developing their State Freight Plan. The State has focused on the TriPort MPO as it is freight centric. It has three modes that are readily assessable, the Interstate, Freight Rail corridor, and a Regional Airport. The State also owns right‐of‐way in the MPO area that could allow direct interstate access to the airport. Like most areas, there are a few challenges to consider. Truck parking is always a concern, and if the airport expansion moves forward the two‐lane arterials will have to be improved and a new ramp built to allow direct access to the airport.

2. Scope and Methodology The scope of this review was limited to the existing freight assets and activities within the state. The methodology below details on how the information was gathered and analyzed. 2.1. Scope The scope of the review focused on the State’s assets and challenges, with particular interest in the region associated with the TriPort Metropolitan Planning Organization (MPO). The review of these areas is important as it provided a baseline for making observations and recommendations.

2.2. Methodology The Governor identified the following goals for the State:

Enhance the transportation network

Identify opportunities to engage in discussions with industry on cost sharing

Outline how the public will be engaged These goals determined the methodology used to develop the Governor’s seven step Action Plan.

1. Identify stakeholders and access advantages & disadvantages for each 2. Determine how to engage stakeholders and define their roles 3. Identify infrastructure needs and associated investment projects – determine advantages and

disadvantages (later referred to as “pros and cons”) 4. Outline policy and regulatory issues 5. Determine how truck parking concerns will be addressed 6. Explore funding options 7. Identify elements to consider when determining formula for return on investments


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3. Steps The Governor shared the following goals which lead to the seven steps to be completed by the Transportation task force. 3.1. Identify Stakeholders and Access Advantages & Disadvantages for Each Input from stakeholders is extremely important for the development and implementation of the action plan. Engaging stakeholders and understanding their needs may lead to opportunities to partner with them to enhance the transportation network. As economic expansion is advanced, the public, Governor’s Office, State Department of Transportation and elected officials, to name a few, will have an integral role in determining which projects and strategies will improve the economy in our region. Tables 1, 2, 3, and 4 list the stakeholders that were identified. The chart also includes potential opportunities and risks that will need to be considered.

Table 1. Stakeholder Group 1.



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3.2. Determine how to engage stakeholders and define roles Stakeholder committees have been established and will meet once a month for the next year. Representatives from these stakeholder groups will be invited to participate on this committee with the purpose of providing in‐depth information about their interests and needs. Interests will need to be balanced to successfully implement the plan.


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The groups will develop an action plan to conduct outreach with their community. One strategy that the groups will be asked to consider includes attending previously scheduled events that are open to the public. This initiative has the potential to affect many areas, therefore it is important that there be a systematic way to collect the input and conduct an evaluation of results. Additionally, a small sub‐set of the groups will design a survey tool that can be used for the range of outreach efforts. Appendix A contains some potential survey questions. As groups meet with communities and businesses they will disseminate the survey. The survey along with the input from each meeting will be analyzed for trends and priorities. A summary of survey results will serve to verify information in the report and ensure it reflects the views of the stakeholders. The report will be used to assist decision‐makers in identifying infrastructure needs and associated investment projects.

3.3. Identify infrastructure needs and associated investment projects Table 5 outlines the projects that support economic development and summarizes the pros and cons of the improvements needed.


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Table 5. Summary of Improvement Types and Associated Pros and Cons


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3.4. Outline Policy and Regulatory Issues TriPort DOT leadership, TriPort MPO, and the Governor’s office tasked the DOT’s Transportation Task Force with identifying institutional barriers or limitations to pursuing the economic development initiative. This process ensures the project meets all local, state and federal standards. Such policies and procedures are in place to help expand the local economy by promoting and encouraging development projects that enhance the state and local economic base, and expand job opportunities in the TriPort MPO Region. There are multiple issues that could potentially impact movement on this project. Table 6 shows several of the issues, the impacts, and potential solutions.

Table 6. Policy Issues, Potential Impacts, and Potential Solutions.

Policy Issues Impact Solution(s)

Anti‐Idling Not enough time to unload. Encourage retrofits for trucks

ShorePower Facilities at Businesses

Delivery Hours Restricted

Not enough time to unload. Work with State DOT, State Police, and State Legislators, if needed, to alter delivery hours or grant an exception under certain circumstances.

Land Use and Zoning

Restrictions

May impact warehouse/business location proximity to transportation.

Facilitate access from industrial areas to Interstate and Port.

Work with businesses to find adequate location.

Foreign Trade Zone

Tax revenue impact. Find revenue to fund it now, future economic development and jobs in FTZ will offset any current losses.

Congestion impact. Forecast use and prepare for it.

Size and Weight Restrictions

TriPorts max allowable weight exceeds Interstate, and therefore hinders access to Interstate

Encourage intermodal movements when truck weights exceed maximum allowable weight. If not cost effective, alter the maximum weight limits in TriPort to ensure efficient movement of goods.

Interstate Access Restrictions

Retrofitted roads damaged by semis if not built to interstate standards

Provide funding to bring roadway up to standard. Encourage practice of asset management and preventative maintenance on roadways.

Railroad Crossings Crossings are not all safe due to limited annual funding

Provide additional funding to construct grade separation or barriers.

Seek grant funding from the DOT and Economic Development Agencies to secure the necessary funds to replace grade crossings near site.

Limited Parking

Can't meet Hours of Service Requirements because of distance to delivery locations

Provide parking at delivery location

Safety issues from improper parking

Partner with private firms to share parking in nearby facilities


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3.5. Determine How Truck Parking Concerns will be Addressed With the establishment of the fulfillment center, warehousing, and distribution centers, the number of trucks operating in the region will increase. Resulting in the need for increased truck parking. The TriPort MPO has seen trucks sitting on roadway shoulders because there are no parking spaces at the distribution and warehouse centers. The most advantageous parking option for drivers is parking directly at their final delivery location. This option presents the driver with the ability to park, meet the mandates of the Hours of Service and deliver to the customer without additional driving.

The Economic Development Initiative for TriPort must take a holistic approach to truck parking by involving drivers, receivers and regulators. With the challenges and preferences related to truck parking in mind, a two‐tier approach is recommended with the receivers serving as first tier locations for parking and other sites serving as second tier locations. In both situations, a public‐private partnership is recommended so that the cost burden would not be disproportionately born by either the public sector or the private sector. Public‐private partnerships are also a strategy affirmed by a 2003 Synthesis by the National Cooperative Highway Research Program (NCHRP Synthesis 317). The synthesis also recommends other strategies to address truck parking issues. Some of the strategies cited in the synthesis have been reaffirmed in this action plan.

3.5.1. Tier 1: Parking Located at Delivery Site For this tier, the receivers, in this case the fulfillment center along with the warehousing and distribution centers, should take the lead in providing truck parking for their shipments. Prior to construction of the facilities, local zoning ordinances should be amended to require that parking be provided for trucks.

Assumptions Regarding Sites

Parking areas are not intended to provide the services found at a commercial truck stop o Sites being proposed are to provide a location where a driver can park a truck, satisfy

basic personal needs and obtain the rest required by Hours of Service Regulations o Due to issues of health and safety, it is recommended that the accommodations not

provide showers, fuel, or restaurant foods. o Due to the nature of fulfillment centers, it is assumed that it will be a 24‐hour operation

and that trucks can arrive anytime. This would help ease staging issues.

Arriving trucks will either drop and hook or loiter until trailers are loaded o Drop and hook, drivers who are not over their Hours of Service can drop and go without

needing to stop. If these drivers have reached Hours of Service, an option exists for them to rest.

o For drivers without the drop and hook option, the spaces allow them a place to wait while the trailer is loaded/unloaded

o Once the loading/unloading is finished, if a driver has reached Hours of Service, that driver then has a place to rest.

Site Features

Fences and gates to provide security for both the driver and the load being carried

Space sufficient to maneuver and park large vehicles

Accommodations for drivers while parked/waiting


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o Amenities to enable drivers attend to personal hygiene needs (bathroom, tooth brushing)

o Entertainment areas where drivers can sit and watch TV/relax o Area where drinks/snacks can be obtained

Other recommendations

Provide incentives to owners of fulfillment center and the warehouse and distribution center which could be used to help offset the cost of constructing the parking locations.

Encourage State transportation, environmental agencies, and local governments to work with owners to ease regulatory burdens and remove costs.

Work with local agency to assist warehouse and distribution centers with implementing, off hour delivery. it is recommended that the State work with local governments to allow off hours delivery.

Establish a reservation system at the parking facility.

Use communication technology (Facebook, Twitter, company website) to broadcast the number of parking spots available at the sites.

Monitor conditions of driver accommodations to ensure good service.

Encourage State and local government to provide tax credits/employment incentives to the owners for assistance with hiring.

Consider having the State Transportation Department share maintenance/operating costs of the parking lots.

3.5.2. Tier 2: Parking at Other Sites The second step to move toward sufficient truck parking is to include traditional parking opportunities at public rest areas and commercial truck stops.

Public Parking Options

Established public rest areas o As right of way and rehabilitation schedules dictate, the State should rehabilitate and

expand truck parking (Synthesis 317, p. 17) o Consider adding cameras and lighting to increase security o Ensure that existing truck parking spaces are used only by commercial motor vehicles

and cite non‐CDL drivers who utilize the spaces illegally. o Implement an ITS program to provide information to drivers on the number of available

spots at a public rest area (Synthesis 317, p. 17).

Weigh Stations o Once a weight station has stopped operating for the day/night, these sites should be made

available for use by trucks as a location for parking (Synthesis 317, p. 17) o Consider adding cameras and lighting to increase security at rest areas

Existing truck only parking o Upgrade to offer facilities for drivers o Enhance security at these locations by adding cameras and more lighting

State Transportation Department


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o Encourage State DOT to allow parking for trucks on unused right‐of‐way (outside the clear zone of roadways or excess property)

o “Close rest areas in locations that are well served by private sector businesses and shift funds to areas where additional development is desirable.” (Synthesis 317, p. 19).

Local Governments o Review the regulations governing the operation of commercial motor vehicles in their

jurisdiction. Where possible, relax ordinances to governing commercial motor vehicle parking

o Allow commercial motor vehicles to park on property owned by local authorities after normal business hours.

o Partner with the State to reach out to private businesses about allowing trucks to park at their locations after hours

o Educate businesses and the public about the role trucks play in the economy and the importance of having trucks parked in safe and secure locations

Funding: State and local governments should partner together to leverage funds made available through federal resources to build and truck parking. (Synthesis 317, p. 17)

Commercial Truck Stop Options

State and local governments should work with owners to study/begin implementation of an ITS program to provide information to drivers on the number of available spots at a truck stops

State and local governments should work with owners to acquire land to build new parking spaces

State and local governments should work with owners to help maintain current infrastructure

3.6. Explore Funding Options Funding options are needed for both highway improvements and truck parking are listed in Table 7.

Table 7. Funding Sources.

FUNDING SOURCES Programs

TIGER/INFRA Grants Highway Improvements, Truck Parking

CMAQ, Surface Transportation Block Grants, NHPP Highway Improvements, Truck Parking

HSIP* Truck Parking

Public Private Partnerships Highway Improvements, Truck Parking

National Highway Freight Program Highway Improvements, Truck Parking

New Taxes

Local Option Sales Tax Highway Improvements, Truck Parking

Local Option Fuel Tax Highway Improvements, Truck Parking

Local Option Income and Payroll Taxes Highway Improvements, Truck Parking

Value Capture Highway Improvements, Truck Parking

Impact Fees Highway Improvements, Truck Parking

Special Assessment Districts Highway Improvements, Truck Parking

Tax Increment Financing Highway Improvements, Truck Parking

Joint Development Highway Improvements, Truck Parking


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*If developers agree to provide all truck parking, not to be within public right‐of‐way, then HSIP funding will not be needed. Further, HSIP funds may only be used to mitigate a documented safety issue. The primary funding mechanism that is suggested is Public Private Partnerships, but other mechanisms or a combination of mechanisms can be used.

3.6.1. Highway Improvements The State should make improvements to the 2‐lane arterial roads and provide access to the Interstate via a proposed interchange. When federal funds are used, the improvement must be included in the State’s Transportation Improvement Program (STIP) as well as the MPO’s Transportation Improvement Program (TIP). For the interchange improvements, an Interchange Justification Report is required to be completed and approve by the Federal Highway Administration and be included in the State Freight Plan (if using NHFP funding). Utilization of only State funding, may allow for a shorter project timeline but, State funds are limited and it is likely that Federal funding will be needed for the TriPort project.

In addition to federal formula programs, a State could seek a Federal discretionary grant through the U.S. Department of Transportation (DOT), such as TIGER or INFRA. TIGER is a highly competitive program that has received more than 7,300 applications requesting more than $143 billion under the previous seven rounds. The average award size is $14.5 million. A State can use the flexibility of TIGER to apply funds to the planning, rail and road infrastructure required under the TriPort project. INFRA Grants provide dedicated funding for critical highway freight projects, with a maximum of 10% allowable for multimodal freight. The FAST Act authorized the program at $4.5 billion for Fiscal Years 2016 through 2020. Like TIGER, INFRA grants are extremely competitive. In the first year of funding, U.S. DOT received 212 applications totaling nearly $9.8 billion for grants, which is 13 times more than funding than was available.

3.6.2. Truck Parking The State has a variety of funding options that they can use to address truck parking capacity concerns. Truck Parking can be funded under both formula funding and discretionary programs. The State can use STBG, NHFP, HSIP, NHPP, and CMAQ formula dollars as well as TIGER and INFRA grants to fund additional truck parking capacity.

It should be noted that, HSIP funding may be used for truck parking facilities under two conditions: 1) the need for truck parking is consistent with the State Strategic Highway Safety Plan (SHSP) 2) if it will correct or improve the roadway feature that is currently a safety problem on the highway system. However, if the developer agrees to provide all truck parking, not to be within public right‐of‐way, then HSIP funding will not be needed. It should also be noted that, CMAQ does not provide funding for truck parking construction but may be used for truck stop electrification systems that reduce the need for trucks to idle. Since air quality is a concern to the public for the TriPort project, electrification may be a viable option to reduce air quality pollution. The TriPort project could propose using TIGER and/or INFRA grants to address truck parking.


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3.6.3. Public Private Partnerships (P3) and Private Investment The State could use public‐private partnerships to make improvements to the highway system and truck parking. The State could use private investment from P3’s or seek contributions from the warehouse and distribution center owners. P3’s offer many benefits including faster project completion, risks are appraised early on and risk is transferred to the private participant. However, it also increases the number of stakeholders involved in the project and will require a source of revenue for it to be a viable option for investors. The State could use STBG funds to create and operate an office to help design, implement, and oversee P3’s eligible to receive Federal highway fund.

3.6.4. Additional Funding Sources and Funding Mechanisms There are a variety of additional funding sources and funding mechanisms that the State can use for the TriPort project, including but not limited to: local option sales tax, local option fuel tax, local option income and payroll taxes, impact fees, special assessment districts, tax increment financing, joint development, leasing, crowdfunding, TIFIA loans, environmental state revolving funds, transportation state revolving funds, financing tools, GARVEE bonds, state bond banks, green bonds, and social impact bonds.

3.7. Identify Elements to Consider when Determining Formula for Return on Investments. Quantifying the outcome of the TriPort economic development initiatives is difficult due to the complexity of costs and benefits that impact the various entities involved in very different ways. Some of the most important entities involved in this project are the private businesses, warehouses and distribution centers relocating to TriPort, the state Economic Development Office who negotiated the free trade zones and tax incentives for new business relocation, the state Department of Transportation who is investing in infrastructure and capacity improvements to support the development, and the regional community whose daily life is impacted by the TriPort development. Each of these entities incurs specific costs and benefits and has specific interests and objectives to meet. Therefore, an all‐encompassing ROI measure is impossible to quantify; for example, what is a cost to one entity, can be a benefit to another: the tax incentives are a cost to the State of TriPort and a benefit to the private businesses relocating to TriPort – making the costs and benefits highly dependent on the relative perspective of each party involved.

Instead of an overall ROI measure, we recommend specific analyses or ROI estimates to be calculate for each of these entities individually, highlighting their unique position relative to the TriPort development project. The State DOT may be interested in conducting cost‐benefit analyses of various construction alternatives for the interstate access ramp and arterial capacity and safety upgrades to decide the most cost‐effective way to deliver these infrastructure improvements. The State Economic Development Office may want to conduct an Economic Impact Analysis to understand the extent of job‐creation and value‐added infused in the project region and a Fiscal Impact Analysis to measure changes in government revenue and expenditures. The businesses relocating to the state will want to understand their ROI and long‐term profitability measures incorporating the tax incentives for the time they are effect and afterwards, when they lapse. The community in the development region will be interested in the Economic Development Office’s Economic Impact Analysis where they can gather job


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impact information, as well as in broader social impacts derived from the development that can be assessed in Air Quality, Noise and Trail Realignment studies. Some of the main elements that should be considered in these various studies are: Economic Impacts, Fiscal Impacts, Benefit‐Cost Analysis of Transportation Improvement Alternatives, Business Impacts and Social Impacts.

3.7.1. Economic Impacts

Total employment ‐ reflects the number of additional jobs created by the development project.

These include the direct (direct employment by warehouses), indirect (changes in employment

from local supplier industries) and induced jobs (effects created when workers at the warehouses

and distribution centers spend more on local goods and services) created by the development

Property Values – as a reflection of generated income and wealth

Tax Revenues – from new businesses and additional employment

3.7.2. Fiscal Impacts

Cost of Development – includes those costs directly related to the project (public infrastructure

expenditures, tax and free trade zone incentives), plus any additional expenditures required to

support the growth that ensues (budget expenditures associated with future growth from the

development, such as education, public health, social services for the workers, public

transportation costs, etc.).

Public Benefits of Development ‐ increased revenues from property and sales taxes, fees, user

charges, utilities, and intergovernmental transfers. If most of the new jobs are taken by in‐

migrants, the revenue impact will be diminished by the higher service costs associated with

population growth.

3.7.3. Benefit‐Cost Analysis of Transportation Improvement Alternatives The Benefit‐Cost analysis should be the conducted for the entire expected life of the transportation improvement project, which in this case is 30 years. Given inflation and the time‐value of money, a dollar is worth more today than it will be tomorrow. To account for this economic fact, future costs and benefits need to be “discounted” over 30 years to calculate today’s value (a.k.a., Net Present Value, or NPV). The discount rate might be specified by various state authorities, but this report recommends that two scenarios with 3% or 7% discount rates be implemented and the results compared between the two. All elements below shall be monetized in 2016 dollars so they can be directly compared.

Travel Time, Reliability, Logistics (i.e. congestion)

Vehicle Operating and Maintenance Costs

Safety Benefits

Capital Construction Costs

Operation and Maintenance costs

Air Emissions Costs or Savings


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3.7.4. Business Impacts

A “Return on Investment” (ROI) analysis should be conducted by the private businesses relocating to

the state. ROI is a calculation of the most tangible financial gains or benefits that can be expected from

a project versus the costs for implementing the suggested program or solution. ROI is represented as a

ratio of the expected financial gains (benefits) of the project divided by its total costs. The formula is:

ROI = (net benefits/total cost) Some of the elements to be included are:

Estimated Business Profits – considering the financial incentives from the state

Total Business Output ‐ value of products being moved

Capital Construction Costs or Rent Expenditures – for building or renting the space for the new

warehouses and distribution centers

Staffing Costs

3.7.5. Social Impacts

Land Use – Study to assess recreation trail realignment impact to local community

Air Quality – Study to understand the short and long‐term effects of increased truck traffic and

general vehicle traffic along the development corridor

Noise – Study to understand the effects of noise increase due to increased economic activity on the

local community and property values.

Increased truck traffic in surrounding communities ‐ Study ways to mitigate the traffic and create

alternative route options.

As communities compete for private investment and jobs in an uncertain global economy, they will need greater access to better information on the expected benefits and costs of economic development projects to make sound decisions about them. Communities also need to be aware of any negative impacts of development, such as air and noise pollution which can detract from its existing quality of life. The analysis approach outlined above will serve as solid decision‐making platform for businesses, the local and state government, and communities involved in the TriPort development.

4. Conclusion

At the direction of the Governor, a taskforce was developed to evaluate the current freight climate within the State and to make recommendations for an Economic Development Initiative. The task force focused on the State’s assets and challenges, with particular interest in the area associated with the TriPort Metropolitan Planning Organization (MPO). There were three primary goals of the taskforce. Below is a summary and recommendations for each. Determine how the public will have the opportunity to provide meaningful input on the initiative Stakeholder groups will evaluate their opportunities and risks. They then create an action plan that detailed steps on how to engage their communities to gain more insight. A few of strategies that are recommended for use are:


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Attend neighborhood meetings

Present the goals of the initiative at public meetings

Conduct surveys

Follow existing outreach processes for those stakeholders who have an established approach such as MPOs

Enhance the transportation system After the task force reviewed the applicable freight policies and regulations and analyzing the needs of the stakeholders, the following recommendations were developed.

Develop public private partnerships to address the cost of truck parking needs

Amend local zoning ordinances to require truck parking

Provide incentives to owners of fulfillment centers to provide truck parking

Utilizing weigh stations as truck parking

Local governments should review regulations to better accommodate freight Identify opportunities to engage in discussion with industries on cost sharing

Utilize cost‐benefit and return on investment analysis to develop a decision‐making platform for businesses, local and state governments and communities in TriPort.

Action Plan To move forward with these recommendations, an Action Plan is necessary. It is recommended that the Governor: 1. Delegate authority to the State’s Secretary of Transportation. (one week) 2. Sign an MOU with TriPort mayor defining roles and responsibilities. (one month) 3. Provide funding source for implementation of these recommendations. (next legislative session – 2

months)


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5. References

“Washington State Truck Parking Study.” Washington State Department Transportation, December 2016 “Jason’s Law Truck Parking Survey Results and Comparative Analysis.” Federal Highway Administration, Office of Freight Management and Operations, August 2015 Arnold, Robert. “Eligibility of Title 23 Funds for Truck Parking Memorandum.” Federal Highway Administration, December 5, 2016 Trombly, Jeffrey. “Dealing with Truck Parking Demands.” National Cooperative Highway Research Program, NCHRP Synthesis 317, 2003


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APPENDIX A:

SAMPLE SURVEY QUESTIONS

Public Stakeholders Questions for the public stakeholders will focus on concerns for quality of life and the local and

regional economy. Subjects may include commute time, parking and jobs. Following are

questions for consideration

Are you currently experiencing significate delays due to truck traffic? And how much time

has it added to your dairy commute?

If you live or work near a port, rail yard, or port what level of increase traffic has your area

experience over the last 10 years? Please circle the percentage that applies, 10%, 20%, 30%,

40%, or %50.

Please list the three top roads that you would recommend a transportation project to

improve the traffic flow.

Is there truck parking on your local roads?

As a stakeholder and interested part, what do you see as your role in the economic

development and transportation process?

Private Industry Stakeholders

Are you currently experiencing significate delays in and out of your facility? And how much

time has it added to your schedule transport times?

What level of increase traffic has your business experience over the last ten years? Please

circle the percentage that applies, 10%, 20%, 30%, 40%, or %50.

Please list the three top roads that you would recommend a transportation project to

improve the traffic flow.

Is there available truck parking near your delivery and drop‐off locations?

Based on your business, where in the community would you recommend increasing truck

parking?

What type of freight infrastructure investment would you recommend to help increase your

investment in the community?

As a stakeholder and partner, what do you see as your role in the economic development

and transportation infrastructure enhancements?

Governor’s Economic Development Initiative for TriPort

Capstone Project 5 – Freight and Economic DevelopmentOctober 2017

Introductions:Transportation Task Force:

• Tamiko Burnell, FHWA - HQ• Elisha DeFrain, Michigan DOT• Oana Cristina Deselnicu, Colorado DOT• Bernadette Dupont, FHWA-Kentucky Division• Katelyn Dwyer, AASHTO• David Gray, South Carolina DOT• Christina Leach, FHWA – Nevada Division• Keith Skilton, FHWA – New Jersey

Agenda:1. Introductions & Agenda – Bernadette Dupont, FHWA-Kentucky

2. Current Situation – Bernadette Dupont, FHWA-Kentucky

3. ID stakeholders and access advantages & disadvantages for each – Christina Leach, FHWA-Nevada

4. Determine how to engage stakeholders and define their roles – Tamiko Burnell, FHWA-HQ

5. ID infrastructure needs and associated investment projects –pros and cons – Keith Skilton, FHWA-New Jersey

6. Outline policy and regulatory issues – Elisha DeFrain, Michigan DOT

7. Determine how truck parking concerns will be addressed – David Gray, South Carolina DOT

8. Explore Funding Options – Katelyn Dwyer, AASHTO

9. ID elements to consider when determining formula for return on investments – Oana Deselnicu, Colorado DOT

10. Summary and Next Steps – Bernadette Dupont, FHWA-Kentucky

Current Situation:State Assets:

• Strong Workforce• Close to 3 Ports• Geographic Crossroads of Multi-State Corridors• Currently developing State Freight Plan

Current Situation:TriPort MPO Assets and Challenges:

Assets Challenges

Connecting Interstate Highway • Truck Parking

Rail Freight Corridor

Regional Airport with an Independent Public Authority

Airport Expansion requires:• Improvements to 2-lane arterials

State Owns ROW that could allow direct interstate access to airport

• New Ramp to allow Direct Access to airport

Plans Already Underway:

• In discussion with Fulfillment Center

• Center wants to move to region

• Center wants proximity to interstate

• BUT – disrupts Recreational Trail

Plans Already Underway:TriPort MPO & State• in discussion with Warehouse &

Distribution Center

• Already in Final Agreements

Governor’s Action Plan

Goal: Boost State Economic Development

Requirements:• Enhance Transportation Network• Identify Opportunities to Engage in Discussions with Industry on Cost Sharing• Outline How Public Will Be Engaged

Governor’s Action PlanTasks:1. ID stakeholders and access advantages & disadvantages for each

2. Determine how to engage stakeholders and define their roles

3. ID infrastructure needs and associated investment projects – determine pros and cons

4. Outline policy and regulatory issues

5. Determine how truck parking concerns will be addressed. • List potential ways to address• List partnerships that remove responsibility from taxpayer

6. Explore Funding Options

7. ID elements to consider when determining formula for return on investments.

Stakeholders:Step 1: Identify Stakeholders and list Advantages and Disadvantages for each

Stakeholders: Public stakeholders:• Airport Authority• Chamber of Commerce • Elected Officials• Federal Agencies (EPA, FHWA, MARAD, FRA)• General Public/Locals/ Affected communities• Governor’s Office• Local Planning Agencies (LPAs)• Metropolitan Planning Organizations (MPOs)• Police/Fire/EMS• Port Authority• Schools• State Department of Transportation• State Economic Development Office• State Environmental Agency• Transit Agencies

Step 1: Identify Stakeholders and list Advantages and Disadvantages for each

Stakeholders: Private stakeholders:• Air cargo carriers

• Airport

• Business Owners near proposed site

• Businesses looking to relocate

• Construction

• Consultants (potential)

• Disabled and Special Needs Groups

• Environmental Groups

• Fulfillment Center (already invested)

• Industry Associations

• Lake Users

• Manufacturing Companies

• Rail Operators – Class I, II, Shortline

• Recreational Trail Users (Bike/Ped Advocacy Group)

• Transportation Companies (Carriers, Shippers, Forwarders, 3PLs,

Rail, Water)

• Utility Companies (Water, Sewer, Gas, Electric)

• Warehouse & Distribution Center (already invested)


Stakeholder Opportunities and Risks

Stakeholder Opportunities RisksGovernor’s Office • New & expanded businesses

• Jobs• Established foothold into the state, regional,

and global supply chain

• State spending limitations• Concern on return for investment• Overestimation of jobs; automation will take away

jobs• Competition from other states

State Department of Transportation

• Economic Development• Improved Transportation System• Additional Jobs within DOT

• Increased Costs for Design & Construction• Build new ramp• Improve 2 lane arterials

• Increased Costs for Maintenance & Operations

State Economic Development

• Economic Development• Increased Commerce• Additional Infrastructure to attract future

development

• Short term occupancy - companies will leave after tax incentive period over

• Diminished ability to recruit other businesses if unsuccessful

• All eggs in one basket with one-facet (freight industry) recruitment

State Environment Office

• Improved Infrastructure • Air, Light, Noise, and Water Quality



Stakeholder Opportunities RisksMPO • Economic Development

• New Jobs• Reduced Air Quality (AQ Conformity)• Increased Congestion• Increased Noise from Airport Expansion• Shortage of Truck Parking • Disruption to Recreational Trail

State and Local ElectedOfficials

• Economic Development• New Jobs

• Reduced Air Quality (AQ Conformity)• Increased Congestion• Increased Noise from Airport Expansion• Shortage of Truck Parking • Disruption to Recreational Trail• Reputation harmed if not successful

LPAs • Increased Tax Revenue • Reduced Air Quality (AQ Conformity)• Increased Congestion• Increased Noise from Airport Expansion• Shortage of Truck Parking • Disruption to Recreational Trail

Public • Local Jobs • Reduced Air Quality (AQ Conformity)• Increased Congestion• Increased Noise from Airport Expansion• Shortage of Truck Parking • Disruption to Recreational Trail

Chamber of Commerce • Attracts new businesses to area • Impact to current business model



Stakeholder Opportunities RisksAirport Authority • Improved Access

• Business Expansion• Complaints from residents about increased noise

and congestion• Increased maintenance• Overextended – too large an investment• Safety and Security

Port Authority • Additional & Improved Roadway Infrastructure

• Overextended – too large an investment• Safety and Security

Railroads • Potential for Business Expansion • Loss of business to airport and trucking• Safety and Security

Warehouse & Distribution Center

• Additional & Improved Roadway Infrastructure

• Overextended – too large an investment• Lack of demand could lead to failure

Related Businesses(shippers, distributers, etc.)

• Business Expansion Opportunities• New Jobs• New Transit

• Overextended – too large an investment• Lack of demand could lead to failure



Stakeholder Opportunities RisksFederal Agencies • Funding/Grant Distribution

• Expand Partnerships• Projects don’t get built• Non-traditional federal-aid recipients; increased

oversight• If awarded a TIGER or INFRA grant, then additional

time, increased oversight


Stakeholder Engagement:Step 2: Determine How To Engage Stakeholders and Define Their Roles


Project Advisory Committee

State Freight Advisory Committee (FAC)

Public Outreach Committee

EXECUTIVE COMMITTEE• Governor , State DOT Leadership• State Environmental Leadership• State Economic Development Leadership

Focus GroupsGeneral Public

Note: TriPort MPO’s FAC is a member of State FAC

Stakeholder Engagement:Executive Committee:

Role: • Advise Steering Committee of State goals

Members:• Governor • State DOT Leadership• State Environmental Leadership• State Economic Development Leadership

Step 2: Determine How To Engage Stakeholders and Define Their Roles

Stakeholder Engagement:Project Advisory Committee:

Role: • Guide project through lifecycle based on guidance and desired outcomes• Review Freight Advisory Committee recommendations • Review Public Comments reviewed

Members:• State Environmental Staff• State Transportation Staff• TriPort MPO• Airport Authority in area• Port Authority in area• Utility Companies Local • Local Government Officials and LPA

Technical Advisory Group:• Recreational Trail Users• Lake Group Users• Local Businesses• Civic/Community Groups• Environmental Groups• Business Groups


Stakeholder Engagement:Freight Advisory Committee (FAC):

Role: • Advise Executive Committee on Statewide Freight needs• Incorporate future plans into Statewide Freight Plan

Members:• Industry reps• State reps• MPO rep(s)• Economic Development


Stakeholder Engagement:Public Outreach Committee:

Role: • Inform public about project • Seek public input

Members:• State DOT• State Environmental• TriPort MPO

• Local Area Chamber of Commerce


Outreach Methodologies:

• Partner with Local Media

• Public meetings/ In-Person and Telephone Town Hall meetings

• Gather input through surveys and Live Q & A• Pop-up Meetings at existing events

• Farmer’s Markets

• Festivals• Neighborhood Association Meetings

• LPA Board Meetings• Presentations at Conferences

• Webinars

• Social Media• On-line survey

• Establish Toll-Free Number


Stakeholder RoleFederal Agencies(FHWA, FTA, FRA, MARAD, EPA)

• Ensure regulatory requirements are met• Leadership role on Steering Committee• Interstate Access Approval• NEPA approval• If awarded, TIGER/INFRA grant oversight

Governor’s Office Provide interpretation and guidance on Governor’s Goals for initiative

State Department of Transportation • STIP• Environmental Process• Interstate access request• Project development and construction oversight

for PUBLIC improvements• Public Involvement & Education Program

State Economic Development Office • Public/Private Partnerships• Project development and construction oversight

for PRIVATE improvements

State Environmental Office • Input into NEPA process• Public Involvement & Education Program

INDIVIDUAL ROLES

Fulfillment Center, Warehouse, and Distribution Center

• Build infrastructure with private funds

Related Businesses (shippers, logistics, etc.)

• Input into project design


Stakeholder RoleAirport Authority • Input into project design

• Safety and Security

Port Authority • Input into project design• Safety and Security

Rail • Input into project design• Safety and Security

TriPort MPO • TIP and MTP• Air Quality Analysis• Public Involvement & Education Program

Local Planning Agencies/Governments • Input into project design• Zoning/Land Use• Truck Parking

Chamber of Commerce • Input into project design• Public outreach & Education Program

INDIVIDUAL ROLES

Infrastructure Needs:Step 3: ID infrastructure needs and associated investment projects – determine pros and cons


Improvement Pros ConsAirport access from Interstate (Ramp)

Access providedAvailable State owned ROW

• Conflict zone on Interstate• Requires Interchange

Justification Study (IJS)• Ramp must be built

Widening of 2-lane arterial Faster and easier accessImproved condition

ROW costs, potential delays

Rail Connectors Multimodal capacity Might need to add short line rail

Utilities Improved infrastructure Often have to wait on them to proceed

Truck Parking Safety, no illegal parking Land purchase, installation of facilities

Recreational Trail Relocation Improved facilities New Location, ROWLonger route

Facilities (fulfillment center, warehouse and distribution center

Local and regional economicdevelopment

Eating up all the landLane Zoning ordinances required

For consideration:• truck only lanes

PRIMARY

Environmental Impacts • Less congestion and pollution

• Recreational Trail impacted


Improvement Pros ConsExpansion of Existing Companies to serve new businesses

New jobs Land Use

New or expanding businesses to provide services to expanded task force

More money More money needed

Utility work • Improved infrastructure• Safety

Time constraints

Noise walls Quieter Costly

New bike/ped trails Healthier community Maintenance

Traffic Operation Centers • Shortens Incident Response Time

• Reduces congestion• Improves air quality

Funding

Truck Parking Management Centers

• Reduces congestion• Improves air quality

• Private funding• Change local ordinances

ASSOCIATED

Policies and Regulations:Step 4: Outline Policy and Regulatory Issues

Step 4: Outline Policy and Regulatory Issues

Policies and Regulations:Policies RegulationsLocal Ordinance - Truck Idling Foreign Trade Zone (Tax Free Zone) (19 USC 81) Local Ordinances - Delivery hours Commercial Vehicle Size and Weight (23 CFR 657 )Local Policy - Land Use and Zoning Planning (23 CFR 450)State Foreign Trade Zone (Tax Free Zone) NEPA (23 CRR 771)

Interstate Access (23 CFR 625.4)Railroad Crossings (at grade or separated)

Truck Parking:Step 5: Determine How Truck Parking Concerns Will Be Addressed

Enhance anti-idling ordinance; encourage

diesel retrofit


Ways to Address Parking Issue:

Truck Parking Management Center

Encourage private businesses to offer private

lots as secondary parking sites

Virtual Parking Assistance Tools

Require that Zoning Ordinance stipulate the

addition of truck parking facilities for new

businesses

Offer incentives to new businesses to

encourage investment in Truck Parking

Management Center

Utilize closed rest areas, weigh stations,

maintenance facilities as secondary parking

sites.

Provide public education program on the

safety and security benefits of having on-site

truck parking.

Ways to Address Parking Issue:

Rest Area Management

Create Appointment System

Remove requirement on developers seeking to

open private facilities which are non-essential

and cost prohibitive

Amend local ordinances to allow off-hour

deliveries


Partnerships That Remove Taxpayer ResponsibilityPublic/Private Partnerships with commercial truck stops to acquire land to build new parking spacesPublic/Private Partnerships with commercial truck stops to help maintain current infrastructure

Funding Options:Step 6: Explore Funding Options

Funding Options:Step 6: Explore Funding Options

Potential Funding SourcesTIGER/INTRA Grants

CMAQ, Surface Transportation Block Grants, NHPP

Highway Safety Improvement Program*

Public Private Partnerships

National Highway Freight Program

Targeted Taxes• Local Option Sales Tax• Local Option Fuel Tax• Local Option Income and Payroll Taxes

Value Capture• Impact Fees• Special Assessment Districts• Tax Increment Financing• Joint Development

Chen, Can and John R. Bartle, 2017. Infrastructure Financing: A Guide for Local Government Managers. https:/icma.org/documents/infrastructure-financing-guide-local-government-managers.

*If developers agree to provide all truck parking, not to be within public right-of-way, then HSIP funding will not be needed.

Potential Funding MechanismsLease

Crowdfunding (donations)

Private Investment

Credit Assistance Tools• TIFIA Loans• Environmental State Revolving

Funds• Transportation State Revolving

Funds

Alternative Bonds and Debt Financing ToolsGARVEE BondsState Bond BanksGreen BondsSocial Impact Bonds

Return on Investments:Step 7: ID Elements to Consider in Determining Formula for Return on Investments


• One size fits all ROI measure not feasible due to number and diversity of stakeholders• The proposed analyses and interested parties in each:

1. Economic Impact Analysis• State Economic Development Office• Community Organizations, Locals• Specific items to consider: employment and output (direct, indirect, induced),property values, tax revenue

2. Benefit-Cost Analysis• Department of Transportation• Specific items to consider: travel time savings, vehicle operating andmaintenance, safety benefits, air emissions, capital construction and M&O costs

3. Fiscal Impact Analysis• State Economic Development Office• Governor’s Office• Specific items to consider: cost to taxpayers (FTZ, tax incentives, infrastructure), benefits

(increased property, sales tax revenue, fees), service costs for in-migration


4. Return on Investment, Profitability• Companies relocating to TriPort, warehouses, distribution centers, shippers, logistics companies,

etc.• Analysis is particular to each business• Specific items to consider: forecasted business profits, business output, fixed and variable costs (construction, staffing, rent)

5. Air Quality, Noise and Land Use/Trail Realignment studies• Community Organizations, Locals• State Economic Development Office• Governor’s Office• Qualitative and quantitative• Specific items to consider: land use (impact to community), truck traffic impact on air quality,

noise (property values), quality of life.

Governor’s Action PlanTasks:1. ID stakeholders and access advantages & disadvantages for each

2. Determine how to engage stakeholders and define their roles

3. ID infrastructure needs and associated investment projects – determine pros and cons

4. Outline policy and regulatory issues

5. Determine how truck parking concerns will be addressed. • List potential ways to address• List partnerships that remove responsibility from taxpayer

6. Explore Funding Options

7. ID elements to consider when determining formula for return on investments.

IN SUMMARY

Next StepsGovernor:

1. Delegates authority to State’s Secretary of Transportation (2 weeks)2. Signs MOU with TriPort Mayor defining roles and responsibilities (2 months)3. Provide funding source for implementation of these recommendations (next legislative

session – 5 months)

Secretary of Transportation:1. Appoint a Champion2. Set up working group3. Set up a Public Affairs/Information Office4. Provide staff and funding

IN SUMMARY

QUESTIONS?

Photos in PowerPoint taken by Bernadette Dupont – most during the Freight Academy Experience

Documents

Capstone Project 5 - Freight and Economic Development · Capstone Project 5 - Freight and Economic Development Your state, comprised of rural and urban areas, had seen decades of