2022 Summer Issue - 61

INFRASTRUCTURE
Leveraging Federal Infrastructure Investment
This approach to reinvestment in communities is
being encouraged by the Biden administration
through actions across the federal government that
are looking to better shape equitable capital flow into
neighborhoods by addressing discrimination, segregation,
and displacement as well as integrating placebased
investments into policymaking.
" Real estate is a two-tiered system, " noted one
participant in the ULI Infrastructure survey. " Capital
flows to where wealth concentrates and encounters
barriers where household sustainability is highly vulnerable.
This is manifested in geographic disparities,
which then translate into how to allocate resources
for infrastructure investment, which serves the whole
and closes the gaps in income, community health,
and opportunity. "
In particular, to promote walkable and compact
urban development, the U.S. Department of Transportation
issued a new transit-oriented development
guidance-in the Transportation Infrastructure Finance
and Innovation Act and Railroad Rehabilitation and
Improvement Financing programs. This makes it
easier to finance complicated projects like Denver's
Union Station, which in 2010 was one of the first
transit-oriented developments to leverage this type of
funding. About $100 billion is available to real estate
developers and other entities to finance both horizontal
and vertical construction and can be used as a
source of equity to attract other sources of capital.
" The [Infrastructure Investment and Jobs Act] is
just one component of how state and local officials
and developers are looking to put together the political
and financial support for their projects, " says
Stephen Engblom, senior managing director of CBRE.
" ULI is a natural convenor on these discussions and
can act as a guidepost [on a project's environmental,
social, and financial impact] since every project
needs to attract different levels of [support] to be
successful. "
Ultimately, the more forward-thinking and flexible
regions that execute successful infrastructure
strategies for growth will generate more favorable
financial outcomes for municipalities, improve the
economy more broadly, and increase socially beneficial
outcomes. Now is the time to prioritize effective
infrastructure-led development that builds long-term
real estate and community value through a holistic
and integrated approach instead of engaging in disconnected
investments. UL
PAUL ANGELONE is a senior director at the Urban Land Institute
and leads the ULI Curtis Infrastructure Initiative.
COMMON REAL ESTATE APPROACHES TO DELIVER INFRASTRUCTURE
Type
Description
Public master
developer
The local jurisdiction provides horizontal
infrastructure work for the project site, then
sells or leases development rights for phased
vertical development. Alternatively, the local
jurisdiction hires a third-party fee developer
to execute the horizontal development, then
sells development rights to one or several
vertical developers.
Private master
developer
A private real estate developer executes site
assemblage, horizontal infrastructure work,
and development, then one or more vertical
construction developers builds on sites as
they are made available.
Example
The 28-acre (11.3 ha) Encore! is a mixed-use, mixedincome
project in Tampa. The project included $25
million in horizontal infrastructure and $132.2 million
in vertical construction. The project was financed with
mortgage debt, deferred developer fees, low-income
housing tax credits, local funds, U.S. Department of
Housing and Urban Development grants, brownfield
credits, and funds from the Federal Home Loan Bank.
The 19.5-acre (7.9 ha) Denver Union Station project
is a large-scale mixed-use development that includes
office, residential, retail, hotel, and transit uses.
Financing for the $487 million project includes company
and partner equity as well as U.S. Department
of Transportation loans through the Transportation
Infrastructure Finance and Innovation Act and Railroad
Rehabilitation and Improvement Financing programs.
Full-service private
developer
In this " all-in-one " approach, a private
developer controls all land assemblage and
executes phases of the future development
on the basis of the risk and value proposition
of the potential development opportunity.
Source: ULI.
SUMMER 2022
URBAN LAND
61
The Capitol Crossing/Third Street Tunnel project in
Washington, D.C., is a seven-acre (2.8 ha), 2.2 millionsquare-foot
(204,000 sq m) development over Interstate
395. Private capital financed the $270 million
horizontal and $1.03 billion vertical construction costs.
2022 Summer Issue

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