Providence Streetcar Financing Strategy and Value Capture Analysis
The Rhode Island Public Transit Authority (RIPTA) has been studying transit improvements, including a proposed streetcar project to link core urban areas of Providence. The preferred alignment would connect major universities (Brown, Rhode Island School of Design and Johnson & Wales), hospitals and medical facilities, downtown area attractions and bus connections, and the Jewelry District. The Jewelry District is an urban neighborhood near downtown that is being prioritized for re-development opportunities.
HDR led the economic, real estate development and value capture-based financing assessment for the proposed streetcar project. This included evaluating the economic development potential across different uses (residential, office, retail, industrial) by applying a combination of:
- Detailed land-use data by use with vacant parcels identified;
- Real estate market data on vacancies and historical absorption rates;
- In-depth interviews with public and private sector development experts;
- Case study findings from other streetcar projects nationally; and
- Risk analysis techniques to capture the likely range of effects, recognizing that future development estimates inherently include some uncertainty.
The results of the analysis included market estimates of development potential for the entire study area by use based on square feet of development, likely property value premiums, housing units, and estimates of net new jobs and population. HDR used the transit oriented development assessment of property value increases as input to the financing strategy for the project. Specifically, we evaluated tax increment financing and special assessment district strategies of funding options that link value capture to revenue generation.