Value capture fuels transit expansion in Charlotte area
State and local transit planners in North Carolina are looking at a plan that combines two forms of value capture in order to construct and operate commuter rail running north from Charlotte.
The plan, made public in December, would rely both on tax-increment financing (TIF) and special assessment districts.
TIF provides funds to a project based on anticipated increases in property tax revenues from induced development in a defined district near the project. This value-capture method is best-suited for capital improvements, as it eventually expires, typically in 15 to 30 years.
The Charlotte plan would provide an ongoing source of revenue from special assessment districts in areas served by the rail line. Properties in these districts would pay a higher tax rate in perpetuity, providing a source of revenue to both build the system and to operate it into the future.
Paul Morris, a deputy secretary at the North Carolina Department of Transportation, told the Charlotte Observer the value capture plan would be a first for the state.
Planners anticipate at least two types of development in the corridor: 1) Transit-oriented housing, retail and other functions near commuter-rail stations, and 2) manufacturing, warehousing and other “freight-oriented development” in between those stations, where they would have access to the upgraded Norfolk Southern tracks.
Other funding for the project would come from a local sales tax and from the state.