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Charlotte Red Line Value Capture

The creation of a new commuter line (the “Red Line”) – from downtown Charlotte to the town of Mooresville 26 miles to the north – has been part of the regional transportation plan for at least 15 years. Given the fact that the commuter line would not rank high enough to secure FTA funds and the county-wide sales taxes for transit project development is already committed to the Blue Line for the foreseeable future, a new funding and financing approach was needed.

 

Charlotte Red Line

WSP USA was retained to structure a financing program to fund the Red Line. The proposed structure uses value capture mechanisms, including tax increment financing and special assessment district revenues, as the principal approach to fund 50 percent of the projected $452 million project. The balance of the funding will be provided by North Carolina Department of Transportation (NCDOT) and by the Charlotte Area Transit System (CATS). We prepared a draft business and financial plan that provides the details for implementation. The value capture structure and corresponding revenue projections were generated from extensive meetings with key stakeholders, which included the major property owners and developers. Lowe’s and Ingersoll Rand, whose world headquarters are along the corridor, were two of the key stakeholders involved. 

Using innovative financing strategies, like value capture, NCDOT and key stakeholders are able to pay for a nearly half-billion dollar transit expansion that has been on hold for 15 years. The revenues from these sources will not only fund the capital cost, but will support the operations and maintenance costs for the Red Line. All of the revenue sources will go to the capital markets with a single revenue stream to fund tax exempt revenue bonds or with the revenue stream serving as the availability payment for a Design-Build-Finance-Operate-Maintain (DBFOM) public-private partnership structure.