REPORT ON THE ECONOMIC AND LAND USE
IMPACT OF FEDERAL REGULATIONS TO REVIEW
NEW INDIRECT SOURCES OF AIR POLLUTION
PRIOR TO CONSTRUCTION,
Prepared for
The Office of Planning and Evaluation
United States Environmental Protection Agency
by
Harbridge House, Inc.
11 Arlington Street
Boston, Massachusetts
October 1974
-------
TABLE OF CONTENTS
PART I
EXECUTIVE SUMMARY
A. Introduction 1- 1
B. Study Goals and Scope I- 1
1. Analysis of Six Development-Specific
Case Studies I- 2
2. Analysis of Review Experience in Three Regions I- 2
3. Analysis of Development Location and Size I- 3
C. Economic Impact Analysis I- 3
1. Data Acquisition and ISR Application
Preparation Costs I- 6
2. Time-Related Costs I- 6
3. Costs of Design Changes I- 7
!
D. Impact on Size and Location of Development I- 10
E. Administration I- 10
1. Data Acquisition and Analysis I- 10
2. Application Preparation and Submission I- 11
3. The Review Process I- 11
4. Conditioning ISR Permits I- 12
(i)
-------
PART II
2NTRODUCTION
A. 'Background of the Study. » II- 1
B. Study Goal and Objectives II- 3
C. Scope of Work II- 6
1. Overview. II- 6
2. Case Studies , II- 7
a. Introduction II- 7
b. The Selection Process II- 7
c. Case Study Objectives I..:;.......... II- 10
3. State and Local ISR Experience Studies.................... II- 12
a. Introduction ....... H- 12
b. The Selection Process. 8 II- 13
(1) Regulations in Effect at State Level
and Approved by EPA.................... „.... II- 14
(2) Regulations in Effect at State Level
but not Approved by EPA.... „ II- 15
c. Evaluation................................. .•. e...... n- 19
40 General Sources of Information........................... n- 20
D. Organization of the Report...................................... II- 21
-------
Page
PART III
POTENTIAL ECONOMIC IMPACT OF ISR
A. Introduction Ill- 1
i
B. Approach and Assumptions in- 9
1. Air Quality Analysis IH- 9
2. Economic Impact Analysis 111-12
a. Financial Feasibility Criteria IE- 12
(1) Minimum of " Front-End" Money Ill- 12
(2) Little or No Permanent Developer's
Investment and Maximum Capitalized
Value over Project Cost IH-13
(3) Minimumization of Cash-Out Before
Cash-In vs. Project Timing Ill-14
(4) Maximum Return on Developer's
Investment Ill-15
(5) Maximum Net Yield on Total Investment........ Ill- 15
(6) Cash Flow Per Net Leasable Square Foot Ill-17
(7) Internal Profit/Overhead Considerations HI- 18
(8) TaxShelterl 111-19
b. Cost Assumptions Ill-19
(1) Data Acquisition and ISR Application
Preparation Costs. Ill-19
(2) Design Change Costs HI-22
(3) Time-Related Costs Ill-23
C. Case Study Findings HI- 25
1. Project A , III- 27
a. General Description HI- 27
b. Development Process. Ill- 28
c. Air Quality Findings 111-30
d. Cost Analysis...'. 111-31
-------
2. Project B Ill- 37
a. General Description Ill- 37
b. Development Process IE- 37
c. Air Quality Analysis in- 39
d. Cost Analysis Ill- 40
3. Project C in- 47
a. General Description Ill- 47
b. Development Process IE- 48
c. Air Quality Analysis Ill- 50
d. Cost Analysis Ill- 53
4. Project D ; .. Ill- 58
a. General Description. Ill- 58
b.. Development Process .,...... Ill- 58
c. Air Quality Analysis Ill- 60
d. Cost Analysis.... .1 Ill- 63
5. Project E .;,....... Ill- 73
a. General Description... IUr 73
b. Development Process in- 74
c. Air Quality Analysis % HI-76
rf. Cost Analysis Ill- 79
6. Project F. HI- 85
a. General Description Ill- 85
b. Development Process HI- 85
c. Air Quality Analysis HI- 87
d. Cost Analysis HI- 90
-------
Page
D. Sensitivity Analysis HI- 95
1. Introduction ^ HI- 95
2. Application Costs HI- 96
a. Assumptions Ill- 96
b. Conclusions Ill- 97
3. Time-Related Costs El- 97
a. Assumptions Ill- 97
(1) The Scenarios Ill-97
(2) The Approaches III-100
(3) Conclusions.. III-103
4. Design Change Costs , III-105
a. Incidence of Costs HI-105
b. Impact of Emission Controls on Design. Changes III-107
c* Conclusion '. III-109
E. State and Local Experience with ISR-Related Costs m-111
1. ISR Application Costs m-111
2. Time-Related Costs HI-112
3. Design Change Costs •. HI-113
F. Conclusions IH-115
1. Data Acquisition and ISR Application
Preparation Costs III-115
2. Delay Costs m-118
3. Cost of Design Changes HI-119
-------
PART IV
ISR IMPACT ON THE LOCATION AND
SIZE OF DEVELOPMENT
A. Overview IV- 1
B. General Comments IV- 2
1. Introduction IV- 2
2. Shopping Centers IV- 3
a. Location ,..,....« IV- 3
b. Size TV- 6
3. Office Buildings and Office Parks IW 11
a. Location IV- 11
b. Size IV- 17
4. Mixed-Use Projects IV- 18
a. Location . . IV- 18
b. Size . IV- 22
C. State and Local Experience Related to Size and
Location TV- 23
1. Introduction IV- 23
2. Florida IV- 23
3. Philadelphia IV- 26
4. Oregon IV- 27
D. Case Study Findings Related to Size and Location IV- 3JD
1. Introduction IV- 30
2. Shopping Centers IV- 30
3. Office Parks IV- 32
40 Mixed-Use Projects IV- 33
E. Conclusions / IV- 36
-------
PART V
ADMINISTRATION
A. Overview V- 1
1. Florida V- 3
2. Philadelphia V- 4
3. Oregon * V- 6
B. Problem Areas in the Implementation of ISR V- 8
1. Data Acquisition V- 8
a. ISR Guidelines. V- 9
b. Developer/Reviewer Responsibilities V- 14
2. Application Preparation and Submission V- 15
a. Timing—When ISR Is Initiated V- 15
(1) The Development Process V- 15
(2) Private Development Applications V- 22
(3) Highway Applications V- 26
b. When ISR Applies V- 28
c. Reliability of Data V- 29
d. Foreknowledge of ISR V- 31
3. The Review Process V- 33
a. Timing—Duration of ISR V- 33
b. State Versus Local Review V- 38
4. Public Comment V- 40
5. Decision V- 43
6. Permit V- 52
7. Enforcement V- 53
C. Conclusions , V- 55
(vii)
-------
Appendix A State and Local Experience Development Survey Forms
Appendix B Florida Guidelines
Appendix C Oregon Regulations and Guidelines
Appendix D Philadelphia Regulations and Guidelines .
Appendix E Development of Regional Impact (DRI) and Indirect
Source Review (ISR): The Florida Experience
Appendix F Design Change Costs
(viii)
-------
LIST OF EXHIBITS
Page
I- 1 Summary of Six Case Study Analyses I- 4
1-2 Summary of ISR Related Costs * I- 5
1-3 Design Change Costs I- 9
n- 1 Study Plan: Flow Diagram . II- 8
n- 2 Flowchart of Case Study Selection Process n- 9
m- 1 Possible Developer Costs Associated with ISR m- 8
m- 2 Summary of Estimated Program Cost IE- 16
m- 3 Omitted
ffl- 4 Project A - Development Process Ill- 29
m- 5 Project A - Schematic Land Use Plan Ill- 32
m- 6 Project A - Cost Sheet in- 34
m- 7 Project A - Operational Cash Flow Ill- 35
ffl- 8 Project B - Development Process HI- 38
m- 9 Project B - Schematic Land Use Plan m- 41
m-10 Project B - Cost Sheet m- 42
m-11 Project B - Operational Cash Flow Ill- 44
m-12 Project C - Development Process ffl- 49
ffl-13 Project C - Schematic Land Use Plan . ffl- 52
in-14 Project C - Cost Sheet ffl- 55
ffl-15 Project C - Operational Cash Flow ffl- 56
ffl-16 Project D - Development Process ffl- 59
(ix)
-------
BOWL? Project D - Schematic Land Use Plan m- 62
ra-18 Project D - Cost Sheet in- 65
IH-19 Project D - Operational Cash Flow m- 66
M-20 Project D - Profit and Loss Statement in- 67
ffl-21 Project D - Volume-Decreasing Design Change Costs m- 72
ffl-22 Project E - Development Process m- 75
ffl-23 Project E - Schematic Land Use Plan in- 78
IH-24 Project E - Transit Option Design Change Costs . . . HI- 80
m-25 Project E - Cost Sheet HI- 82
IBt-26 Project E - Operational Cash Flow 8 . . IE- 83
xn-27 Project F - Development Process . . . : . in- 86
m-28 Project F - Schematic Land Use Plan . '....... 'in- 89
IH-29 Project F - Cost Sheet m- 91
Project F - Operational Cash Flow in- 92
m-31 Project F - Operational Cash Flow with ISR and Rent
Increase m- 94
ffl-32 Application Costs Sensitivity Analysis m- 98
IH-33 Inflationary Impact on Construction Costs Due to Delay in-101
m-34 Inflationary Impact on Construction Costs Due to Delay Ill-102
m-35 ISR Time Delays Measured in Oportunity Costs HI-104
/
in-36 Incidence of Design Change Costs as Used Sensitivity .
Analysis 1 HI-106
IH-37 Design Change Costs. m-108
IH-38 Summary of Six Case Study Analyses IH-116
m-39 Summary of ISR Related Costs.. . : m-117
-------
IV- 1 Regional Shopping Center Operational Cash Flow IV- 8
IV- 2 Community Shopping Center Operational Cash Flow IV- 9
IV- 3 Neighborhood Shopping Center Operational Cash Flow IV- 10
IV- 4 Estimated Growth in Central City and Suburban Office
Space in Several Metropolitan Areas, 1960-1972 IV- 14
IV- 5 Planned New Towns with a Population Greater than
50,000 IV- 20
IV- 6 Summary of New Communities Financing Guaranteed
by HUD IV- 21
V- 1 Flow Diagram of Administrative Procedures for
Federal ISR V- 2
V- 2 Shopping Center Development V- 16
*'
V- 3 Office Park Development V- 18
V- 4 Mixed-Use Development . . . V- 20
V- 5 ISR Staffing V- 39
(xi)
-------
I
EXECUTIVE SUMMARY
A. Introduction
Pursuant to the indirect source regulations (ISR) promulgated by the
U.S. Environmental Protection Agency (EPA), an air quality review must be under-
taken prior to the construction of large scale facilities that attract significant
amounts of automobile traffic. The purpose of this review is to determine whether
a facility and surrounding road network can manage the attracted traffic in a
manner that does not lead to violation of the ambient air quality standard for
carbon monoxide. In this review, the number of parking spaces at a facility
is used as an initial indicator of the quantity of traffic that the facility may attract
and, thereby, of the potential for the creation or aggravation of an air quality pro-
blem. The principal focus of the review process is on facility design, the character-
istics of the transportation system serving the facility, and, to a lesser extent,
facility location. Measures that a developer can adopt, if necessary, to prevent
the accumulation of excessive carbon monoxide concentrations include facility
design changes, improvements in the capacity of the road network serving the fac-
ility, transit improvements, carpooling incentives, and reductions in parking
supply.
B. Study Goals and Scope
The purpose of this study is to determine the potential economic and
land use impacts of the Federal indirect source regulations. To achieve this goal,
the study objectives were defined as follows:
o To assess the magnitude and incidence of the costs resulting
from possible design changes necessitated by review require-
ments, time delays, and any additional data demands generated
by the review process.
-------
1-2
o To determine the impact of the indirect source review regula-
tions on me location and design of new developments and to
assess the probable impact of location and design decisions
by developers on land use development patterns and area
patterns of vehicle miles traveled.
o To identify problem areas in administering the regulations and
to suggest guidelines to eliminate or ameliorate these problems.
Three different approaches were used to meet these study objectives:
1. Analysis of Six Development-Specific Case Studies
Six developments were selected as subjects for the case studies:
two regional-size shopping centers, two office parks, and two mixed-use (com-
mercial and residential) complexes. Information on the six developments was
used in two ways:
(i) To assess the applicability of the EPA Technical Guidelines in
reviewing a variety of existing developments and to evaluate
whether specific facilities would hinder the attainment or
maintenance of national ambient air quality standards for
carbon monoxide.
(ii) To determine the economic impact of ISR on the financial costs
and feasibility of the specific projects.
The case study findings were most important as input to the economic
impact portion of the report.
2. Analysis of ISR Experience in Three Regions
In order to provide a broader approach to evaluating ISR impact man
would be possible through an analysis of only six cases, a study was made of the
review process in three areas of the country that have already initiated some
-------
1-3
form of indirect source regulation. The review programs in Florida, Oregon,
and Philadelphia were selected for this purpose. The analysis of experiences
in the three areas was used primarily to identify potential administrative pro-
blems and possible solutions to issues that may arise during ISR implementation.
i
3. Analysis of Development Location and Size
During the course of the project, information on trends and changes
in developers' decisions on the size and location of new development was obtained
from a large body of printed materials and from numerous discussions and in-
terviews with Federal and regional EPA officials, state and local air pollution
control office representatives, developers and developer organizations, members
of the financial community, traffic consultants, and others. This data was used
as a measure of potential ISR impact on land use.
C. Economic Impact Analysis
i
Three types of ISR-related economic impacts were identified. These
were broadly categorized as follows:
o Data acquisition and ISR application preparation costs.
o Time-related costs.
o Design change costs.
After performing analyses of the effects of the six case studies on
localized carbon monoxide concentrations, costs that could be incurred by the
developers as a result of the review were estimated and financial statements
prepared to show the impact of the costs on each project's feasibility.
A sensitivity analysis was also performed to determine changes in
economic impact under alternative cost assumptions and to provide the basis for
further assessment of each of the three cost categories as independent variables.
The findings on economic impact are summarized in Exhibits 1-1 and 1-2.
Design changes may be classified as either capacity increasing (primarily high-
way-related improvements) or volume decreasing (transit, carpooling, etc.).
The purpose of design changes is to eliminate the build-up in carbon monoxide
' concentrations at specific locations.
-------
)£fk-Park
bopping Center
toed Use
EXHIBIT 1-1
SUMMARY OF SIX CASE STUDY ANALYSES
TOTAL COSTS
RETURN ON INVESTMENT
WITHOUT ISR WFTHISR WITH ISR , WITHOUT ISR
No Delay, 90 Day Delay
Project A $31,425,000 '$31,428,215 $31,749,222 19.1%
Projects 24,800,000 25,202,080 (H)** 25,301,601 (H) 21.0%
24,977,480 (T) 25,079,001 (T)
Projects 37,200,000 38,892,000 39,811,300 14.2%
Project F 13,712,000 16,480,750 16,824,121 30.3%
Project C 27,750,000 27,753,000 28,221,757 12.8%
Project D 113,982,000 115,613,300 116,464,700 (3.9%)
WITH ISR
No Delay
19.1%
20.2% (H)
20.3% (T)
12.2%
20.2%
24.6% ***
12.8%
(4.2%)
WITH ISR *
90 Day Delay
18.6%
20.0% (H)
20.1% (T>
11.3%
19.2%
23.5%***
12.1%
(4.4%)
* Inflation rate of 1 percent per month
H= Highway Design Change
T = Transit Design Change
With an 8 percent increase in rents
-------
EXHIBIT 1-2
SUMMARY OF BR RELATED COSTS
(DOLLARS)
Office Park
Project A
Project E
Shopping
Center
Project B
Project F
Mixed Use
Project C
Project D
Application
Related Costs
Technical Computer
Guidelines Modeling
$3,000 $45,000
$ 5,000
$35.000
$10,000
$3,000 $ 5,000
$40,000
Deslgi
Hitrtiwav
Case 1 Case 2 Case 3
00 0
$ 396,480 $ 151,200 $ 252,200
$1,653,000 $ 287.840 0
$2,756,842 ^$1.964, 700 0
o-o o
$1,587,300 $1, 587,300 $531,000
Design Change Related Costs
Mass Transit
Case 4 Case 5
0 0
1193,480 $120.120
0 • 0
0 0
Case 6
0 0
$126,280 $106,680
000
$50,600 $446,840 $180,600
Delay Costs
90 Days
6% Inflation 12% Inflation
per year per year
0 $139,100 $278,200
0 $ 48,317 $ 96,634 $ 96,634 $ 193,267
0 $458,315 $916,630 $916,630 $l,815,OnO
0 $145,600 $291,200 $291,200 $ 582,400
0 $233,129 $466,257
0 $425,700 $851,400 $851,400 $1,702,800
Highway
Case 1. Developer teais lull, capital: Iraeument
cost, The public assumes maintenance costs of
highway.
Case 2. Developer assumes the capital Investment
cost of design changes Involving local roada. The
"js£llc assumes the remanrrag capital Investment
and all maintenance coats.
Case 3. Developer assumes all capital costs as
veil as operating and maintenance costs of an
Interim transit system set up to service the
facility between Its opening and completion of
permanent design changes. The public bears
capital and maintenance costs of the permanent
changes
Transit*
Case 4. The developer bears full capital and
operating and maintenance costs for design
changes.
Case 5. The public assumes 80 percent of
transit equipment costs. The developer as-
sames the rematatng capital costs and oper-
ating and ipn^p**»p«"q**» costs.
Case 6. The public assumes all transit
equipment costs and the developer assumes
remaining capital coats and operating and
maintenance costs.
Case 7. The public assumes capital and
maintenance costs.
'Carpoollng and work staggering program were assumed by the developer In all cases. All Capital
costs Include short-term Interest charges. -
-------
1-6
Certain conclusions concerning the economic impact of ISR on re-
gional shopping centers, office complexes, and mixed-use developments may be
drawn as a result of the analyses performed on the six case studies. These
are presented below, broken down by type of cost.
1. Data Acquisition and ISR Application Preparation Costs
The case studies show that the expense incurred by a developer in
collecting and analyzing traffic and air quality data for preparing an ISR application
is relatively small, accounting for less than one-tenth of one percent of total pro-
ject costs in most instances.
The use of EPA Technical Guidelines can significantly, reduce the
costs associated with data acquisition and preparation of an ISR application.
It is estimated that the use of the Technical Guidelines rather than computer
modeling, and assuming monitoring data supplied by a public agency, ISR
application costs could be reduced from approximately $45,000 to $3,OQO.
2. Time-related Costs
Costs due to project delays will probably be most common pver
approximately the next two to five years. The projected short-term nature
of the incidence of delay costs is due to the fact that many of the projects which
will come up for review during the early years of the ISR program will have
already gone through several years of planning, PERT scheduling, and other
steps in the development process which limit the developers flexibility in ab-
sorbing time delays. In addition, time-related costs may be incurred in part
because delays are generally more common during the initial phase of imple-
menting a new set of regulations.
It is the finding of this study that once the ISR program is fully
underway, delay costs should be avoidable through the concerted efforts of
both me developer and reviewer. Timing the review so that it occurs at the
most appropriate point in the development process will be the responsibility
of the applicant and may require alteration of other steps in the process,
-------
1-7
especially the sequence of traffic analyses. The duration of ISR is also an
important time-related element, where expeditious treatment of applica-
tions by reviewers can contribute significantly to eliminating the occurence •"•
of delay costs.
The study examines two types of costs associated with construe- •
tion delays that could be caused by ISR. The first is the cost of inflation
during the period a project is delayed. The second is the opportunity cost
incurred when a developer's money is tied to a project longer than antici-
pated, thus causing this money to be unavailable for use in a new investment.
In three of the six projects analyzed, a 90 -day delay due to ISR would reduce
developer's return-on-investment by approximately 0. 5 percent. In the other
three projects, 90-day delays would cause a 1 to 7 percent drop in return-on-invest-
ment. In the case studies the 90-day delay costs represent 3. 5 to 7. 5 percent
of the developer's front-end investment.
3. The Cost of Design Changes
Design changes, when they are necessary to prevent violation of
t
the carbon monoxide air quality standard, are the principal source of ISR-
related costs. However, the magnitude of these costs vary depending on the j
location and nature of the development involved. Of the four office park and
mixed-use developments analyzed, two were found not to cause a violation of
air quality standards for carbon monoxide and, therefore, would not have any
design change costs. In order to correct conditions at the two developm ents
which would result in violations, design change costs would be one-tenth of one
percent of total project costs. Th^ impact of these specific costs on return
on investment is a 0. 3 percent change for the mixed-use development and a 0. 7
percent reduction for the office park, assuming the developer bears all costs.
;
The effects of design-change costs in these two cases could be reduced sig-
nificantly through public assumption of some or all of these costs (see Exhibit
1-2).
-------
1-8
Transit approaches to design changes would be feasible for both of
the mixed-use and office developments that require design changes. In Project
E, a savings of $192 per parking spa'ce could be achieved by replacing on-site
parking with park-and-ride. In Project D, transit has a lower initial cost than
highway related design changes. If the developer had to absorb all operating
and maintenance costs of the proposed transit service, this approach to design-
changes would be less attractive economically than highway modifications. The
transit option would be attractive to the developer if the community absorbed
operation and maintenance costs.
The six cases examined in the ISR study suggest that the effects of
design-change costs are likely to be most significant for large shopping centers.
This is due both to the nature of the traffic generated by these facilities and
their difficulties in adopting certain low-cost transportation options (e.g., car-
pooling). In the two shopping center developments studied, design changes
alone would increase project costs by 4 and 20 percent. In the latter case, which
consists of an expansion of existing facilities, an 8 percent increase in rents or
some public funding of design changes would enable the development to proceed
as planned, while meeting me financial feasibility criterion of the developer. In
the former case, the shopping center is located in a heavily congested area.
Although the immediate area around the project is well-served by transit, 60
percent of the shopping center's trade depends on commuter automobile trips
by persons living outside of the project's vicinity. Unless the public assumed
responsibility for major roadway modifications, ISR would be likely to prevent
the development from being built as planned. However, the development could
be built if it were reoriented to serve the local population which has good tran-
sit service.
Design changes to prevent excessive carbon monoxide accumulations
indicate the need for ISR. The ISR study found that the air quality problems
necessitating design changes will persist over time despite the gradual replace-
ment of old, high-emitting cars with newer and cleaner ones. However, the
costs of design changes will decrease as the car population becomes cleaner
(see Exhibit 1-3).
-------
EXHIBIT 1-3
DESIGN CHANGE COSTS
The Impact of Automobile Emission Control Devices
on Design Change Costs Over Time
Case B
Percent of
base year cost
Case D
Percent of
base year cost
Case E
Percent of
base year cost
Case F
Percent of
base year cost
Highway - Related
1980 ' 1985 1990
$1,250,000 . $1,250,000 $1,167,000
92% 92% 86%
$539,000 $132,000 $000
37% 9% 0%
$354,000
'7o
$40,000 $40,000
11%
$300,000 $200,000
32% 21%
$000
1980
Transit - Related
1-985
**
**
**
$90,000 $20,000
18%
$155,250 $40,000
40% 26%
**
** Transit ridership already at maximum reasonable volume.
Work staggering and carpoolirig not applicable.
Costs in constant dollars based on original completion date (base year) by project.
2
Costs do not include annual operating costs.
1990
**
$000
0%
$40,000
26%
**
-------
1-10
D. Impact on Size and Location of Development
The study analysis indicates that the impact of ISR on location will
generally be to reinforce existing trends of suburbanization. In die case of
shopping centers it was found that ISR and its attendant costs may provide
developers with a marginal incentive to locate in suburban areas where air
quality is relatively good and ISR-related costs would be minimized. The
effect of ISR on suburbanization of office buildings was found to be small com-
pared to the effects of the state of the economy and me availability of financing
and labor. Short of denial of a permit for construction, ISR was found to have
no effect on the location of mixed-use developments.
In the case of shopping centers, ISR was found likely to have a much
greater effect on the size rather than on the location of shopping centers. The
• *»•••• - ,',
economics of shopping center developments above and below the triggering point
for review were found to be insufficiently different for a developer to feel, a
large degree of hesitancy about reducing the size of a facility to avoid the, potential
i •. i. -
costs and undertainty of applying for an ISR permit. The sizes of office buildings
'. , ••'•'- '. •
and parks probably will not change as a result of ISR. Rather, office building
-developers will tend to reduce the sizes of their parking facilities and rely on
transit, carpooling, staggered work hours, or off-site parking instead. There
was insufficient information to evaluate the effects of ISR on the sizes of mixed-
use developments.
E. Administration
A number of potential problems in implementing indirect source
regulations were identified from the experience of three areas which have already
initiated review programs:
1. Data Acquisition and Analysis
Difficulties in data acquisition and analysis have been expressed by
both developers and reviewers. Questions concerning assumptions and techniques
to be used in monitoring, modeling, receptor siting* and traffic projections were
-------
i-ii
most frequently raised. Assistance from the Federal EPA in preparing guide-
lines not only seems to be desired by.reviewers, but also could be useful in
terms of eliminating a duplication of efforts at the regional and local levels and
i
in expediting the preparation and dissemination of essential guideline material.
2. Application Preparation and Submission
Minimizing potential problems connected with wjien to initiate ISR
will require efforts on the part of both developers and reviewers. The developer /
must adjust his planning process so that ISR is initiated at the most appropriate
time. The adjustment should include reassessing the timing and nature of traffic
studies required to complete the ISR application.
On the part of the reviewer, the three area cases show that, for
various reasons, early review as encouraged by the Federal EPA is not always
preferred at the state and local leveL Although concerns about allowing time
for local involvement have some merit, it is also important to understand the
impact that postponement may have on developers.
Timing problems have also been experienced in connection with high-
way projects in the three study areas although efforts are being made to integrate
an air quality review into the overall highway planning process.
3. The Review Process
In order to minimize adverse economic impacts and reduce uncertainty,
an expeditious review process can provide a significant benefit for developers.
In the state and local experience cases, however, there is evidence
that reviewers are encountering problems processing ISR applications within 90
days or, in some cases, 180 days. One of the reasons for this seems to be in-
adequate staffing. Additional manpower funding, accelerating training programs
for existing staff, and even the creation of one or more positions of "roving re-
viewers" could all serve to eliminat^ problems related to the length of processing
time.
-------
1-12
4. Conditioning ISR Permits
Along with timing, conditions to permits seen to have caused the
most difficulties in the study areas administering ISR. The major issues
raised were with regard to timing Of design changes mat have public involve-
ment and determination of the effectiveness of alternative design changes.
The issue of possible delays related to public'involve mentiA design
changes can be resolved by issuing a permit in cases where^deveiopefs'will in-
stitute an interim bus system or similar alternative to service a facility until
the permanent design change is completed.
The question of'the effectiveness of design changes has no easy
solution and is an area where contributions by Federal EPA In the form of
case studies and technical analyses could provide significant benefit.
-------
PART II
INTRODUCTION
A. Background of the Study
The purpose of this study is to determine the potential economic and
land use impacts of the indirect source regulations (ISR) promulgated by the U. S.
Environmental Protection Agency (EPA). * These regulations were established in
response to a D. C. Court of Appeals order of 31 January 1973, in the case of Na-
tional Resources Defense Council v. EPA, which directed EPA to ascertain that
state implementation plans (SIP) adequately provide for maintenance of the national
ambient air quality standards (NAAQS).
EPA subsequently determined that no state plan contained adequate
provisions for controlling indirect sources of air pollution, with indirect sources
defined as new facilities which may generate significant amounts of automobile
traffic. Such facilities include but are not limited to highways and roads; parking
facilities; retail, commercial, and industrial facilities; recreation, amusement,
sports, and entertainment facilities; airports; office and government buildings;
apartment and condominium buildings; and educational facilities.
On 18 June 1973, EPA promulgated regulations requiring that all
states submit plans for preconstruction review of indirect sources by 15 August
1973. By the time of the August deadline, no state had submitted the required
plan, although in the period prior to February 1974 fourteen state plans were
officially offered. Two of these plans—those submitted by'Florida and Guam—
were fully approved by EPA, while the plan submitted by Alabama was deemed
acceptable except for a procedural deficiency related to public comment provisions.
Although these regulations are called "complex source," regulations in some
states, the term "indirect source" will be used exclusively in this report in
accordance with accepted Federal practice.
-------
n-2
For those states which either submitted deficient plans or foiled to
submit any plans, EPA promulgated regulations on 25 February 1974 covering
i
the review of new indirect sources of air pollution. These regulations are to be
withdrawn if a state later offers an approvable plan. The federally promulgated
indirect source regulations will become effective for any facility on which con-
struction has begun on or after 1 January 1975. EPA initiated review procedures
on 1 July 1974 to help developers secure approval in advance for projects on which
construction is planned soon after 1 January 1975.
The concept of indirect source review is primarily to regulate the
localized concentration of carbon monoxide (CO). Photochemical oxidants are to.
be considered only in the review of airports and large highway segments (50,000
or more vehicles per day) or in conjunction with the application of other control
measures. Because the automobile is the primary source of CO emissions,
facilities will be reviewed in terms of their relative contribution to congestion
through examination of their traffic flow characteristics.
The regulations specify different sizes of facilities to be reviewed in
"urban" and "non-urban" areas. The nation's Standard Metropolitan Statistical
Areas (SMSA's) constitute the "urbanized" areas.
Under these regulations, the following indirect sources must be re-
viewed:
Roads and Highways
(Within 10 years of construction in an urban area)
New 20,000 vehicles per day (average)
Modified 10,000 vehicle increase per day over existing traffic (average)
Pursuant to parking management regulations, facility-by-facility review in 19
major urban areas must include an evaluation of impact on both localized CO
and vehicle miles traveled (the latter also providing an indicator of contribution
to photochen ical oxidants).
-------
n-3
Airports
(Within 10 years of construction in an urban or non-urban area)
New 50,000 operations or 1.6 million passengers per year
Modified 50,000 operation per year increase over the existing
level, or 1.6 million passenger increase per year
Other Indirect Sources
Urban Area Non-Urban Area
New Parking for 1,000 cars Parking for 2,000 cars
or more or more
Modified Parking for 500 cars Parking for 1,000 cars or
over existing number more over existing number
In addition to information concerning the amount of automobile traffic to be gen-
erated by a facility, with their application for approval developers must submit
measured or estimated air quality data at the site of the project prior to and
after construction.
EPA is encouraging state agencies that develop their own programs to
work with appropriate local governmental agencies.
B. Study Goal and Objectives
Before the indirect source'regulations become effective, the EPA
Office of Planning and Evaluation (OPE) decided that a study should be undertaken
as a critical part of its efforts to evaluate thoroughly the possible economic impact
of EPA standards and regulations and to assist in the development of land use
policy within the agency. In addition, the study should be designed to address
some of the concerns related to the proposed indirect source regulations that were
raised during the public comment period (November 1973).
Indeed, the public comments on the regulations have focused on several
key issues with respect to potential economic and land use impact. For example,
in terms of economic impact, one group presented the following argument
in support of not only encouraging but also facilitating early and judicious review
and decision on indirect source applications:
-------
n-4
For any project of the size for which a permit would be required, the
work and expense that would be involved would prohibit a project pro-
ponent from proceeding to a point immediately prior to actual erection
of the structure without assurance that the development could proceed
to completion. Whether the project is private or public, the land must
be acquired, or, at a minimum, options for land acquisitions obtained
at considerable expense. Preliminary engineering must be completed
at least with respect to the feasibility of the site for the proposed source.
In many cases, zoning variances must be secured and supported by de-
tailed documentation on design and impact. Preliminary architectural
plans must be prepared and when approved, converted over an extended
period of time into actual working drawings. Moreover, with respect
to all public projects and some private projects, detailed environmental
impact statements must be prepared under the National Environmental
Policy Act or comparable state legislation. It is not unusual for such
preparatory work to involve expenditures of millions of dollars. Indeed,
certain phases of this work, particularly site preparation, are paid
for through interim financing, which could not be obtained unless
the project had already been approved by the Director.
In view of the "front end" expense involved in the development of an
indirect source application it is essential, for public and private
project proponents alike, that the Director's determination be made
as early as possible. In the case of a private project, the right to
an early determination reduces the likelihood that a worthwhile proj-
ect will be abandoned by reason of the owner's or operator's uncer-
tainty of his ability to proceed. In the case of a public project, e.g, t
schools, hospitals, redevelopment projects, roads and airports,
an early determination will avoid the unwarranted expenditure of
public funds. *
Other public comments of an economic nature have been related to
the consequences of the increased risk and uncertainty for the developer that may
result from implementation of the indirect source regulations. Consequently,
an implicit goal of this study is to try and reduce or eliminate some of the
National Realty Committee, Inc., Comments on Proposed EPA-Promulgation
of Indirect Source Regulations for Inclusion in State Implementation Plans,
submitted to the Environmental Protection Agency on 29 November 1973, pp.
22-24.
-------
n-s
most important areas of uncertainty to avoid imposing undue hardship on
the development industry.
With regard to possible land use repercussions, public concern has
been expressed that the regulations may lead to a proliferation of many small
developments. Some groups voicing this opinion feel that such a trend would
be contrary to the intent of the regulations since it might encourage a con-
tinuation of "urban sprawl" and its environmentally detrimental effects, including
increased area-wide vehicle miles of travel.
The EPA response to these land use-related comments is as follows:
The Administrator certainly does not intend and does not believe that
the encouragement of small, strip-type developments will be the effect
of these regulations. First, it should be stressed that the primary
purpose of the regulations is to ensure that proposed projects are
designed and located in a manner consistent with air quality require-
ments. If the proposed project would interfere with a national stan-
dard, changes in the design, or extension of mass transit should be
considered. Only if a project cannot be made compatible with air
quality requirements would it be necessary to prevent its construc-
tion. Furthermore, as long as there are economic incentives fa-
voring development of large projects, the Administrator does not
believe that developers of larger projects will change their scope
of operations solely for fear of indirect source review. As is dis-
cussed below, developers will be encouraged to submit their
plans for indirect source review at the earliest stage in the de-
velopment process that the required information becomes avail-
able. Thus, applicants should be able to obtain guidance and
a final determination from the reviewing agency at a point
where total project investment and expenditures for the source
will be quite low, and will usually be able to make necessary de-
sign modifications so that a large indirect source can receive
formal approval.
A determination of the validity of the assumptions upon which the above statement
is based has provided another frame of reference in formulating the study design.
In summary, to further the Office of Planning and Evaluation's efforts
both to develop land use policy within the agency and to evaluate thoroughly
the economic impact of EPA regulations, the primary goal of this study is to
-------
n-6
determine the economic and land use impacts of indirect source review. To
achieve this goal, the study objectives were defined as follows:
(i) To assess the magnitude and incidence of costs to the developer
associated with indirect source regulations and resulting from
possible design changes necessitated by review requirements,
time delays, and any additional data demands generated by
the review process.
(ii) To determine the impact of the indirect source review regula-
tions on developer location and facility design decisions, and to
assess the probable impact of these decisions on land use de-
velopment patterns and area patterns of vehicle miles traveled.
(iii) To identify problem areas in administering the regulations and
to suggest guidelines to eliminate or ameliorate these problems.
C. Scope of Work
1. Overview >
The entire study encompassed a period of just three months.
This limitation to the scope of the project was imposed because OPE felt (i)
that it was essential to identify tentative if not final answers to questions of
economic and land use impact as well as potential implementation issues and
(ii) that this should be soon enough to allow several months for evaluating the
study findings and recommendations prior to the effective date of the regulations
(1 January 1975).
Ideally, the breadth of the study objectives would call for an analysis
of sufficient magnitude to permit statistical inference to be drawn by categories
of type and size of development and geographic location. However, the time con-
straints of the project precluded such an approach. Consequently, three more
limited information sources were used which, in combination, could provide a
significant contribution to meeting the study objectives. These sources were:
-------
..EXHIBIT n-2r ;
FLOWCHART OF CASE STUDY SELECTION PROCESS
Criteria
1. Nature of
development*
2. Timing
3. Quality and depth
of information
resources
Preliminary Selection Process
EPA Regions
State Air Pollution
Control Agencies
Public and Private
Agencies and Interest
Groups
t
Preliminary Case Study
Recommendations
Criteria
1. Geographic
distribution
2. Inter city/suburban/
rural mix
3. Locations with
and without mass
transit
4. Locations with and
without transportation
control plans
5. States with and
without indirect
source regulations
6. Different scales
within a specific
development
category
7. Phased developments
vs. single-concept
projects
Intermediate Selection Process
j Preliminary Case Study Recommendations |
Harbridge House Evaluation
I
j Refined Case Study Recommendations \
Direct Developer Contact
Prospective Case Study Candidates I
EPA Comment and Approval
\
j Final Case Study List \
* Includes type, size, and location.
-------
control nffjffiiJg who referred Rubr&dge House to further sources of information,
including state departments of transportation, developers, or contractors and
planning agencies. Forty-one cases were subsequently recommended by the
people contacted.
After screening the recommended developments based on the case
study criteria and conducting follow-up discussions with government officials
and developers, the list of 41 cases was eventually reduced to the six most suit-
able facilities. In terms of geographic distribution, these include one case each
from the. Mid-Atlantic region, the South, the Mid-West, and the Far West, and
two cases from the Pacific Coast region. By type of development and local sit-
ing, the cases fall into the following categories:
• Two regional shopping centers (one urban and one suburban).
• Two mixed-use developments (both urban).
• Two office parks (one rural and one suburban).
&, Case Study Objectives. The findings of the case studies were
most important as input to the cost impact portion of the report. Although other
types of information were obtained during the preparation of the cases, the
case studies were specifically focused upon two objectives:
(i) To apply EPA Technical Guidelines to existing developments
to determine whether as originally designed the guidelines
could be applied easily to the development process and to
evaluate whether the facilities would hinder the attainment
or maintenance of national ambient air quality standards for
CO.
(ii) To determine whether the financial feasibility of a project could
be jeopardized by ISR-related costs (e.g., for consulting studies,
permit fees, design change requirements, and time delays).
n-9
-------
n-7
• Six development-specific case studies.
• Three state and local experience studies.
• General discussions, Interviews, and literature review.
Each of the three sources is discussed in detail below. The relationship of the
input from these sources to the overall study plan is graphically presented in
Exhibit H-l.
2. Case Studies
a. Introduction. In addressing the study objectives it was considered
essential that there be a means of testing the likely impact of ISR within the context
of an actual application. The case study methodology was selected as the most ap-
propriate approach to use for this purpose. Each case represents an existing de-
velopment. The economic impacts were determined by working ISR-related costs
into the actual financial statements for each facility.
b.' The Selection Process. Six developments were selected as sub-
jects for the case studies. These represent three types of facilities: shopping
centers, office buildings, and mixed-use (commercial and residential) complexes.
OPE had decided that the focus of the case study portion of the project should be
on these types of development rather than on event-oriented facilities (such as
sports stadiums) or on government-sponsored projects (such as highways and air-
ports).
Each of the cases represents a development which is either completed
or under construction. The reason for choosing facilities in these stages of de-
velopment rather than facilities that were still in the planning stage was the con-
cern that the study process not bias or delay progress for a proposed project,
wh- .1 will eventually have to undergo zoning hearings, indirect source review,
parking management supply regulatory assessment, or other environmental pro-
ceedings.
Exhibit n-2 shows the criteria for selection as well as a flowchart
of the case study selection process. As a first step, contacts were made
with each of the 10 EPA regional office representatives and state air pollution
-------
EXHIBIT II-l
STUDY PLAN: FLOW DIAGRAM
Sate Selection
Reviewer & Developer
Interview*; Info
Gathering
00
*AAQS - Ambient Air Quality Standard for Carbon Monoxide.
**VMT - Vehicle Miles Traveled.
-------
n-ii
The technical guidelines referred to above were prepared by the
EPA Office of Air Programs (GAP) in order to provide review agencies with
a screening technique for proposed indirect sources, pursuant to 40 CFR 52.
22 (b). The purpose of the guidelines is to provide a. means of identifying key
design and operating criteria which, if met, should ensure that NAAQS for car-
bon monoxide are met in the vicinity of indirect sources.
Because monitoring in th£ vicinity of indirect sources has indicated
that the highest concentrations of CO occur near exit/entrance gates, at nearby
intersection approaches, or along access roads, the guidelines focus on design
and operating parameters for these areas. The four key design and operating
parameters of emission levels are:
• Volume demand flow rate in each lane.
• Volume demand to capacity ratios in each lane.
• Functional type of roadway.
• Average highway speed or posted speed limit, whichever is lower.
The guidelines were used exclusively to determine whether the case t
studies would violate NAAQS. In an actual situation, however, the final deter-
mination of violation may be based solely on the methodology presented in
the guidelines, since the alternative of monitoring and modeling is also
available to ISR applicants. This is explained in the Preface to the guide-
lines:
If this methodology indicates that there may be difficulty in meeting
the 1- or 8-hour NAAQS for CO, this is not necessarily grounds for
denial of a permit for operation of the source. The methodology is
intended as a conservative screening technique to identify situations
in whi''h a potential problem may exist. Should such a problem be
indicated ,ho option for more complete analysis should be offered.
As a result of applying the guidelines methodology, three of the cases
were cited as requiring relatively significant levels of improvement to prevent
violation of NAAQS. For each of these cases a variety of "design change" scenarios
were developed to determine what combinations would enable the project to fulfill
-------
n-12
ISR requirements at the lowest cost to the developer. The design changes and
their nature and cost implications for the real estate development industry are
discussed in detail in Part IV of this report. The term "design changes" as used
in this report refers to roadway and gate modifications, mass transit improve-
ments, and other actions which will limit automobile congestion and improve traf-
fic flow in general.
In each of the cases, the results of applying the guidelines method-
ology were compared to Federal standards,for CO (one-hour: 35 ppm or 40 mg;
eight-hour: 9 ppm or 10 mg). State variations in standards, where relevant,
were not considered—partly to protect the identity and location of the developments
being analyzed. Six developers contributed substantially to the study by providing
financial data which were used to project the economic impact of ISR on specific
sources. In order to protect the confidential nature of some of these data, all
of the case studies have been disguised.
The time limitations of the study permitted the preparation and as-
sessment of only six case studies. Because this number does not represent a
statistically valid sample size, care must be taken in using the cases to draw
general conclusions on overall economic impact by either type of development
or type of developer. In addition to the diversity of organizational forms, the
types of activities, and the financial feasibility criteria used, wide variations
in cost by geographic area and over time preclude inferring more from the case
studies than what is specifically covered by the two objectives listed above.
3. State and Local ISR Experience Studies
a. Introduction. In order to provide a broader approach to assess-
ing ISR impact than is possible through an evaluation of six case studies, an
analysis was made of the experience to date in three areas of the country that
have already initiated some form of indirect source review. The information
obtained from this approach was evaluated to determine whether there was
-------
n-i3
evidence of adverse economic and land use impact as a result of the review
process. Policy and procedural issues which may have arisen during the im-
plementation of ISR were also investigated.
b. The Selection Process. The first step in selecting the three
most suitable areas was a survey of all 50 states to determine their current
position with regard to promulgating and implementing indirect source regula-
tions. Information was obtained through direct contact with representatives of
each state's department of air pollution control or the equivalent agency, supple
mented by a review of indirect source regulations for particular states. Each
state was then classified according to its regulatory status as follows:
Regulatory Status Number of States
Regulations in effect at state level
and approved by EPA 2
Regulations in effect at state level
but not approved by EPA 8
Regulations finalized but not yet in
effect at state level 5
Regulations in draft form or in
public hearings 14
States without legislative authority
to promulgate indirect source
regulations 10
States still drafting regulations 13
It was decided that tl.u otates from the first two categories would make
potentially suitable candidates and that the final selection would be based upon the
Includes Puerto Rico and the District of Columbia.
-------
n-14
length and magnitude of their experience to date. A brief description of the review
expertesge of the statea within these two categories follows. As the descriptions
illustrate, state regulations can differ from one another as well as from the Fed-
2
eral regulations. Nevertheless, these differences are often useful in highlighting
potential strengths or problems within the regulations.
(1) Regulations in Effect at State Level and Approved by EPA
• Alabama
Indirect source regulations have been in effect in Alabama since 23
September 1973. Designated areas are defined as counties with a population of
200,000 or more. Parking space size cutoffs for review are the same as the
Federal limits for "designated" and "non-designated" areas. Three cases related
to proposed highway construction have been reviewed. So far the state has faced
no significant opposition to the regulations. On the contrary, public comment has
focused more on the designation of air quality maintenance areas (AQMA's) than
I
on indirect source review.
• Florida
Indirect source regulations have been in effect in Florida since 15
December 1973. All unenclosed parking lots with a capacity for 1,500 or more
vehicles and all enclosed facilities with a capacity for 750 or more vehicles are
subject to review. No "designated" versus "non-designated" area differentiatioa
is made. So far an estimated 36 applications have come up for review—12 pri-
vate development projects and 24 state road projects. Amendment of the
current regulations is anticipated to tighten some portions and ease others.
No major problems have been encountered in implementing the regulations.
Florida has additional review experience in connection with its "Development
of Regional Impact" (DRI) assessment process. •*•'.
The descriptions represent the status of each state as of 1 June 1974.
2
EPA has no direct control over the nature of the state-adopted regulations pro-
vided they are at least as strict as the Federal regulations.
-------
n-is
(2) Regulations in Effect at State Level but Not Approved by EPA
• Kentucky
About six facilities with associated parking facilities and several state
highway projects have been reviewed since Kentucky's regulations became ot'tVo-
tive on 11 January 1974. Designations for review are made according to the nature
of a parking facility:
—New unenclosed facility with more than 1,500 spaces.
—New partially or totally enclosed facility with more than 750 spaces.
—Increment in parking spaces to more than 1,500 spaces at unenclosed
facility or by_ 1,500 spaces.
—Increment in parking spaces to more than 750 spaces at partially
or totally enclosed facility or by_ 750 spaces.
—Unenclosed facility with more than 1,500 spaces which will be
increased in capacity by 25 percent or more.
—Enclosed facility with more than 750 spaces which will be increased
by 25 percent or more.
• Maine
In Maine indirect source review is in part controlled by existing
legislation—the state's Location of Development Law (38 MRSA, Section 481-488)—
which has been in effect for about four years. Under this law all structures with
60,000 square feet of ground area and all developments of 20 acres or more are
subject to environmental review. Some additions to the regulations will be needed
to gain EPA approval as a mechanism for indirect source review. To date only
one development within the Federal regulatory definition of an indirect source
has come up for review.
• Nebraska
Nebraska's regulations have been in effect since 26 February 1974
but have not yet been submitted to EPA for approval. Review in "designated"
areas is required for constructing new parking facilities of 1,000 or more spaces
or modifying facilities by adding 500 spaces or more, or for inducing 1,000 vehicle
trips in one hour or 5,000 vehicle trips in eight hours. In "non-designated" areas,
the review figures are raised to 2,000 new spaces or 1,000 additional spaces. So
-------
far no applications have come up for review but one is anticipated shortly—n
modification of a roadway.
• Nevada
Indirect source regulations in Nevada became effective .on 27 March
1974. Cutoffs for review are as follows:
—Shopping centers 500 parking spaces
—Drive-in theaters 500 parking spaces
—Parking lots 500 parking spaces
—Garages 500 parking spaces
—Sports complexes 1,000 parking spaces
—Commercial developments 1,000 parking spaces;
500 sleeping or room
accommodations
—Industrial developments 1,000 parking spaces
— Institutional developments 1,000 parking spaces;
500 sleeping or room
accommodations
—Amusement parks 1,000 parking spaces
—Recreation areas 1,000 parking spaces
—Residential developments 500 units
—Highways 10,000 designed daily traffic
—Sewer, water, power, or
gas lines ; 5,000 designed new con-
nections
—Airports 25,000 landings and take-
offs annually
—Any single source which can cause, allow, or permit
the emission of an air contaminant of greater than 50
pounds/hour.
—Any combination of single sources located at a single
premise which can cause, allow, or permit the emission
of an air contaminant of greater than 50 pounds/hour.
—Any single source, upon notice from the Director.
So far, two or three applications have been submitted for review.
-------
n-iv
• New Hampshire
This state's regulations went into effect on 11 January 1974. New
facilities with 750 spaces or more or modifications of 500 or more are subject
to review. To date no facilities have been reviewed.
• New York
New York's regulations have been in effect since 5 November 1973.
Eight major facilities with associated parking (five shopping centers, two mixed-
use developments, and one convention center) are in various stages of review, in
addition to a number of highway projects. It is the opinion of state air pollution
control officials that developers feel intimidated by the .regulations and have been
holding back on submitting applications. Particular concern has been expressed
by the private sector over the requirement that a facility not exceed once in 10 "
t
years one-half the difference between existing CO levels and NAAQS. The state
is now preparing an amendment to allow a facility to generate CO concentrations
of up to three-quarters the difference between existing air quality and NAAQS.
All facilities with 1,500 spaces or more are reviewed, except in the County of
New York (Manhattan) where all garages or parking facilities, regardless of size,
t
are subject to review.
• Oregon
Since 1 January 1972 Oregon has had an effective pre-construction
review procedure for (i) new facilities within the municipal boundaries or five-
mile limit of any city with a population of 50,000 or greater or (ii) any parking
facility used for the temporary storage of 50 or more motor vehicles or having
two or more levels of parking. More than 100 cases have been reviewed under
these regulations, with about 20 applications a month being received during the
spring. Some changes are now being drafted to make this procedure suitable for
indirect source review.
-------
n-is
• Vermont
Indirect source regulations have been in effect in Vermont since 6
November 1973. EPA approval is currently pending. Facilities which have or
will have 200,000 square feet of parking lot space as well as all facilities to be
located in a town or municipality where the NAAQS for CO is exceeded are sub-
ject to review. No facilities have been reviewed so far under these regulations.
*****
Upon completion of the survey, it was decided that Florida and Oregon
would make excellent areas for in-depth study. Florida's program has met Federal
approval and a range of large-scale development projects in the state have already
undergone review. In addition, the existence of the state's Development of Regional
Impact Program gives an extra dimension to the ISR experience in Florida.
Although not yet approved at the Federal level, Oregon's review
process has covered more cases in total than any other state. The triggering
point of 250 parking spaces within an SMSA in Oregon: is much lower than-the
Federal limit; therefore, Oregon's experience is important in terms of the possible
impact of ISR (or even parking management plans) on small developers. The
imposition of transit-related conditions is another significant feature of this
state's program.
The remaining states presented difficulties in attempts to select a
third area for study. Either the number of cases which had been completely
reviewed were small and/or the cases that were reviewed were primarily high-
way construction projects rather than private developments.
After some discussion with EPA members of the study committee, a
decision was made to examine local review programs in order to determine
whether a suitable local area of study could be identified. This decision to
look for a substate experience was consistent with EPA efforts to encourage
review, wherever appropriate, at the local level.
-------
n-i9
Subsequent inquiries identified Philadelphia as a good local-level
candidate. In addition to providing insight into the prospocts anil problems i>t'
local review, the Philadelphia experience is interesting for a number of other
reasons. Briefly, Philadelphia's Air Management Regulation X, adopted on 20
August 1972, was basically a mechanism to incorporate air quality considerations
into the planning process. Under this regulation the following types of development
were required to submit an air quality impact statement:
—Industrial or commercial facilities with 500,000 square feet or
more of floor space.
—Residential facilities with 100 or more dwelling units.
—Highways.
—Mass transit facilities.
On 4 May 1974 Regulation X was amended to more closely resemble
ttfiei3Tederal indirect source regulations. The cutoff points for review have been
maintained at parking spaces for 250 or more vehicles within the central business
district (CBD) and 500 or more parking spaces outside the CBD. The regulation
addresses all pollutants, not just CO.
Files on 16 downtown projects are currently being maintained; all
but three of these are public projects. To date three cases have completed the
review process.
o. Evaluation. In each of the three areas—Florida, Oregon, and
Philadelphia—the records of the reviews undertaken were examined. Information
on tho size and types of projects; number of approvals, conditional approvals, or
disapprovals; timing; location; mass transit access; and other pertinent data are
presented in Appendix A.
In addition to a review of the records, interviews were conducted
with ISR officials and developers who had participated in the review process.
planning commissions, state departments of transportation, lending institutions,
-------
n-2o
and other involved parties were also contacted. The information, opinions, and
ideas obtained from these various sources were ultimately brought together and
evaluated for points of disagreement, areas of misunderstanding or confusion,
and/or evidence of commonality. The findings, in turn, were related to the ap-
propriate study issues, including problems or guidelines for ISR implementation
and potential economic and land use impacts.
4. General Sources of Information
During the course of the project, information was collected from a
wide range of printed literature; numerous discussions and interviews with
Federal and regional EPA officials, state and local air pollution control office
representatives, developers and developer organizations, members of the finan-
cial community, and traffic consultants; and Harbridge House and EPA-related
research and experience in the areas of real estate development, transportation
and traffic engineering, cost analysis, and environmental impact assessment.
The distribution of persons interviewed for the state and local experience is
as follows:
Florida 6 state air quality officials
13 regional and local air quality officials
2 state planning officials
2 state DOT officials
5 developers
Philadelphia 5 city air quality officials
1 state air quality official
2 city planning officials
2 state DOT officials
Oregon 3 state air quality officials
10 developers
Lending
Institutions 15 (some of these serve more than one area)
-------
11-21
D. OrsaiuEation of the Report
Instead of presenting information using the three sources cited above
as headings, this report has been divided into a series of topical categories. In-
sight and data derived from all sources on a particular subject are, therefore,
presented in some portion(s) of the report.
The report has been organized into five major parts as follows:
Part I Executive Summary
Part n Introduction
Part m Potential Economic Impact of ISR
Part IV ISR Impact on the Location and Size of Development
Part V Administration
Part I of the report presents the study conclusions and recommenda-
tions. The recommendations focus on actions which can be taken immediately
to ensure greater equity and efficiency in implementing ISR. The suggestions
relate to both policy and procedural questions and are presented approximately
in order from the most to the least important in terms of the significance of the
i '**
issue(s) which they address.
This part is followed by this" introduction to the main body of the re-
port. The introduction presents a brief background of the regulations as well
as a description of the study objectives and scope of work.
Part in explores the potential economic impact of ISR, as evidenced
by the case studies, the state and local experiences, and general comments
from developers and lending institutions, with the major emphasis being on the
case studies. As used in this report, the term "economic impact" actually re-
fers tc financial impact. The impacts discussed here are basically those borne
by the developer, although in some cases they fall upon the general public (e. g.,
for transit and roadway improvements). The entire gamut of economic costs,
-------
n-22
such as those that may be related to job losses or changes in tax revenues, are
not dealt with in this report.
Part IV focuses on possible changes in the location and size of new
developments that may result from implementation of the regulations. This is
a particularly difficult area to pin down with any degree of precision, because
of several relatively new factors which are also impacting on developers1 deci-
sions concerning size and siting. These factors include inflation and tight money,
construction material shortages, delays in urban renewal programs, and so forth.
However, some evidence on the level of impact which may be anticipated has been
derived from state and local experiences, and has been compared with current
and future trends.
Part V focuses on the key administrative and procedural issues in-
herent in implementing ISR. The discussion in this part covers questions of
timing, staffing, data reliability, regulatory interpretation, coordination with
other agencies, and so forth. The analyses of two states and one city which
have already initiated a review process provide the basis for much of the ma-
terial presented in this discussion.
-------
PART in
POTENTIAL ECONOMIC IMPACT OF ISR
A. Introduction
In the past the Council on Environmental Quality, the Environmental
Protection Agency, and the Department of Commerce have conducted a series of
studies to assess the economic impact of air and water pollution abatement re-
quirements on a number of industrial activities such as baking, cement, electric
• power generation, fruit and vegetable canning and freezing, iron foundries,
leather tanning, non-ferrous metals smelting and refining, petroleum refineries,
pulp anoT paper mills, and steel-making. Although a number of these industry
categories encompass a wide range of business types—from small, single-
proprietor companies to vertically integrated, multinational corporations—
none approaches the complexity and diversity of the real estate development in-
dustry which is the subject of this impact assessment.
The types of firms involved in the real estate development industry
can range from publicly or privately held development corporations and govern-
mental agencies (e. g., state departments of transportation) to small-scale,
single-project developers. The financial criteria used to determine whether a
project will be a "go" or "no-go" situation will vary, depending on whether
financial feasibility is based on the potential for the project to increase rental
or property value, the prospect for "mortgaging out," the percent of cash in
before cash out, the return on developer's equity, tax shelter considerations,
or the prospects for vertical integration (the presence of internal profit centers
tha* must be supported).
Further complicating an assessment of the potential economic im-
pact of indirect source regulations is the fact that some of the measures which
could be used to minimize mobile source pollution are outside exclusive control of the
developer. Such measures (referred to hereafter as "design changes") include
-------
m-2
off-site highway and transit improvements. Thus, in contrast to the owners
of stationary sources who can control the timing and cost allocation of install-
ing scrubbers or other abatement devices, developers may find that they can
exert little or no control over the scheduling priorities and/or the allocation
of state and Federal funding needed to implement a particular design change.
In order to assess the impact of ISR on the real estate development
industry, it is necessary to understand the economic posture of the industry.
Several segments of the industry are currently facing economic problems and
obstacles which are far worse than anything they have experienced in the last
three or more decades. Inflation, high interest rates, tight money, and short-
ages in certain critical building materials are the most commonly cited causes
of the developer's economic problems. In the analyses of the six case studies,
only inflation has been incorporated to reflect current and projected conditions.
There has been no attempt to determine the possible effect of changing interest
rates, tight money, material shortages,' or other factors on ISR-related costs.
Nevertheless, it is important for the policy-maker and ISR-reviewer to recog-
nize that equity and efficiency in applying the new set of regulations may be
crucial to real estate development within the present-day context of economic
uncertainty.
Briefly, problems currently affecting the industry include the fol-
lowing:
• Inflation - Real estate development is experiencing escala-
tion in the costs of both materials and labor. For example,
the price of residential construction has been rising at a rate
of one percent per month. Shopping centers, however, have
"The Housing Slump Cripples Even the Giants," The New York Times, 28 July
1974, p. 1, section 1.
-------
III-3
been averaging increases of approximately 2 percent per
month, or 25 percent during 1973. Construction materials
alone are projected to increase in price by 18 percent in
1974.2
Interest Rates and Tight Money - The high cost of money
has affected developers in several ways. To begin with, as
the cost of financing increases, direct cuts are made into the
developer's cash flow return. Presently, short-term loans
are costing upwards of 14 percent and long-term loans are
g
up around 9 3/4 to 11 percent. Furthermore, mutual savings
banks and savings and loan associations, which have tradi-
tionally financed construction projects and mortgages, are
draining off their resources to the short-term money market
because of the Federal ceiling on rates of interest charged
to their depositors. Long-term money is not always avail-
4
able. The higher cost of long-term money and its scarcity
will limit the supply, of new developments to areas where the
costs can be (at least partially) passed along in higher prices
or increased rents.
Finally, with mortgage rates so high, people cannot afford
to buy homes. A securities firm estimates that every one-
point rise in mortgage rates drops 250,000 of California's
"Shopping Centers Pressured," The New York Times, 4 June 1974, p. 47.
2 ;
"High Price Increases Hit the Raw Materials Used in Construction," Wall
Street Journal, 23 May 1974, p. 1.
g
New England Merchants National Bank, 8 August 1974.
4
"The Housing Slump Cripples Even the Giants," op. cit.
-------
ni-4
seven million families out of the housing market. With new
housing curtailed, localities cannot grow to support retail
and commercial activities, thus impacting on the developer
from the demand side of the equation.
Building Material Shortages - Shortages have been identified
in steel, wood products, gypsum, cement, and lighting and
plumbing fixtures. Steel is by far the most important mate-
rial to building contractors. The steel shortage is sufficiently
critical for the steel industry to be cutting back on its product
line in order to speed up deliveries. Therefore, developers
no longer have the same amount of flexibility they used to
have; in addition, they may end up paying more than necessary
for a higher grade product, simply because the lower grade
item is not being produced.
Energy - The problems of the uncertainty of money market
lending rates and the availability of building materials are
aggravated by the unknown magnitude of the nation's energy
problem. Developers have no long-term perspective on how
life styles will be affected by shortages in gasoline and other
petroleum products 10, 20, or 30 years from now. They are,
however, reluctant to plan developments that are wholly or
largely dependent on transit rather than on automobile accesi-
bility until they have a clearer picture of what conditions to
anticipate.
Growth Control - The nation is experiencing a wave of growth
control policies: ceilings on residential units permitted in a
"The Housing Slump Cripples Even the Giants," op. cit.
-------
ni-5
community, population limitations, freezes on residential
zoning, moratoria on sewer hookups and building, and sub-
divisions to thwart high-density development. According to
the U. S. Department of Housing and Urban Renewal, 226
1
cities are imposing some form of growth control. For
example, developers are being forced out of 30 communities
in New Jersey's Passaic basin and 40 communities in Florida
(one of the fastest growing states in the country).. Moreover,
in Ohio and Illinois alone 160 cities have sewer moratoria.
• Federal Funding - 'The U. S. Department of Housing and
Urban Development, which has backed numerous new com-
munity and downtown renewal projects in the past, has limited
grant monies. Furthermore, the Federal government has in
effect put a moratorium on low-income housing by denying
subsidies. Without Federal backing, many large-scale urban
i'
projects cannot be implemented in a favorable economic cli-
mate, let alone during a tight money period. -The costs and
the risks are too high for the private development industry
to undertake on its own.
As a result of these forces, a number of real estate development
companies have recently gone out of business. The smaller developer without
equity backup has been particularly vulnerable. One developer .cited a 40 per-
cent erosion among people currently in the field, with the remaining 60 percent
2 ' - •• '?
operating at reduced scales. . '-- '"'-•
"National Policy Debate Spurred by Cities' Efforts to Limit Growth," New
York Times, 30 July 1974, p. 10.
2
"1974—'Great Year of the Shake-Out' for Developers," The Boston Globe,
2 June 1974, p. A-47.
-------
m-6
The impact of current economic problems on the three types of
development focused on in this study—shopping centers, office buildings and
parks, and mixed-use projects—has been uneven. The residential building
industry has been the hardest hit, followed by office construction. Both resi-
dential and office development projects are literally stymied in some areas of
the country. Retail business, however, is still growing, but at a slower pace
than in prior years.
The housing industry (which is related to mixed-use development
such as new towns and urban renewal projects) is faced with a curious dilemma.
Market economics support a housing boom:
. . . There is tremendous pent-up demand for housing. People
between 30 and 40 years old are the ones who form the most fam-
ilies and would like to buy the most homes. Swollen by the baby
boom that followed World War II, this segment of the nation's
population is expanding by five ftiillion people during this decade.
Housing economists have been saying for years that this demand
will take an average of 2. 5 million housing starts a year to sat-
isfy.1
Mortgage money, although available, is priced too high for prospective home-
2
buyers. Asa result, the housing industry is carrying unsold inventory.
The office development industry is also facing some difficult prob-
lems. New York City, which has traditionally been a center for enormous
building activity, experienced a 20 percent decline in the dollar volume of
office construction projects during the first five months of 1974 whem compared
3
with the same period a year ago. New York City is overbuilt with 30 million
"The Housing Slump Cripples Even the Giants," op. clt., p. 4.
2
Ibid., p. 1.
3"Worst Slump Since '50's Hits City Building Trade," The New York Times,
28 July 1974, p. 1.
-------
m-7
square feet of excess office space. Construction is also lagging in Boston and
on the West Coast. Boom areas in Texas and much of the South are said to have
already reached their peak construction volumes. It is projected that New York,
Houston, Chicago, and Los Angeles have a sufficient office supply to satisfy
the market for the next three to five years.
•¥;""'
Shopping center developers, (at least the larger ones) are weathering
the storm more successfully than their housing and office counterparts since,
even during inflationary periods, the public will frequent the department
store, but with a tighter grip on the pocketbook. Encouraged by the major de-
partment stores, the shopping center developer is still actively engaged in
searching for sites. The current problem for him in many instances is the com-
petition. Who will get the anchor tenant's commitment? This competition in a
climate of escalating costs and falling profits is using up liquidity at a time when
the industry needs a cushion. Thus, only the larger established operations with
substantial credit lines can afford to keep in the running.
Within this context, It is understandable that developers are very
Uncertain as to how they-will react to ISR and how the regulation w;ll ultimately
impact on their developments. For the purpose of this study , the costs that
developers may incur as a result of ISR have been divided into -three broad
categories:
• Application costs.
• Time-related costs.
• Design change costs.
Various items which may fall under each category are listed in Exhibit III-l.
-------
ni-s
EXHIBIT m-1
POSSIBLE DEVELOPER COSTS AND CHANGES IN DEVELOPMENT
PROCESS ASSOCIATED WITH ISR
• Application Costs
—Earlier development of complete plot plan and architectural details.
—More extensive study of topography and meteorological conditions.
—Traffic analysis.
—Monitoring.
—Air quality analysis using Technical Guidelines and/or diffusion
modeling.
—Appearances at hearings.
—Results modification.
• Time-Related Costs
—Processing time.
—Need to follow up to induce action toward decision.
—Carrying costs.
—Land options.
—Taxes.
—Reallocation of project priorities.
-Adjusting work effort and flow.
—Adjustments to time schedule.
-Danger of loss of lead tenant.
-Contingencies by lenders and tenants dependent on regulations
and delay.
—Slowdown of processing projects within developer's office.
-Employment consequences.
-Cost increase in relation to efficiency.
-Profit/loss influence.
—Litigation and appeals.
• Costs of Implementing Design Changes (if necessary)
—Land costs.
—Design change costs.
—Negotiation with local, county, and state highway personnel on
incidence of design change costs (including preparation of high-
way EIS, if needed).
—Construction cost increases.
-From delay.
-From phasing.
The incidence of specific costs will vary according to the nature and timing
of a particular facility.
-------
III-9
B. Approach and Assumptions
An Indirect source review was performed for each of the six case
studies described in Section C. Based on the results of the air quality analysis,
least cost design changes were proposed for developments which caused any
violations of NAAQS for CO. tn determining the design changes, attention was
given to potential improvements of the traffic network and to mass transit and
other volume decreasing alternatives (e. g., staggered workhours and carpool-
ing). The costs of the design changes and the other expenses incurred by the
developer as a result of the review were added to each development's financial
statements in order to assess the economic impact of ISR on the development.
The economic impact of ISR in the case study developments was as-
sessed first with respect to a go versus no-go decision on the part of the de-
veloper. Then, in order to obtain a comparison among the cases, the financial
feasibility criteria were run through for each case—both with and without ISR.
Because of the number of cost assumptions that were made in the
case study financial analysis, a sensitivity analysis using a variety of alterna-
tive cost assumptions was undertaken. The analysis (presented in Section D)
isolates and describes the differential impacts of the major cost parameters
related to ISR.
Finally, in order to supplement the economic impact analysis, cost
impacts experienced in areas currently implementing review regulations were
compared with the case study projections (Section E).
1. Air Quality Analysis
The air quality analysis was performed entirely by using the U. S.
EPA Interim Guidelines for the Review of the Impact of Indirect Sources on
Ambient Air Quality. Computer modeling methodologies were not used in the
analysis. In addition, monitoring to obtain background CO concentrations was
-------
m-io
not undertaken in any of the case studies. Instead, background levels were ob-
tained from local and state offices of air quality control, and consultants who
had conducted environmental analyses for particular projects among the six
cases.
The impact of roadways or exits/entrances on CO concentrations at a
nearby receptor were estimated by adding the impacts of individual traffic lanes
at a reasonable receptor site. RecepWs were selected based upon the following
Guidelines' definition:
Reasonable receptor sites are those locations where a person or
persons might reasonably be exposed for time periods consis-
tent with the National Ambient Air Quality Standards for carbon
monoxide, (p. 39)
Zoning maps, aerial and street-level photographs, on-site surveys and, in some
cases, land use plans were used to determine areas where a person might be
exposed to concentrations for periods of one hour, eight hours, or both.
Relatively conservative assumptions were used in placing receptors
close to the source—the roadway or exit entrance. For example, if a land use
plan called for an area to be converted to residential use but specific site plans -
were not available to determine the set-back distances, the receptor was placed
at a distance of 10 meters from the nearest upwind traffic lane. This procedure
is in accordance with EPA/OAP practice.
All roadways and exits/entrances within a quarter of a mile of the
case study site were examined for impact on receptors. Maps, traffic reports,
and other sources were also examined for evidence of relatively significant impact
on receptors outside of the quarter of a mile area. Where appropriate and where
• j
information was available, concentrations at the more remote receptor sites were
calculated—although the costs of any design changes needed to correct conditions
outside the quarter of a mile limit were not included in the economic impact ana-
lysis.
-------
iri-ii
Determination of wind direction was based on reasonable (in terms
of the area's meteorological conditions) and worst case (in light of sensitive re-
ceptor location) criteria. As mentioned, each road was modeled according to
the Guidelines on a lane-by-lane basis. ln"cases of multilane highways estimates
for distances beyond the 50 meters shown in the Guideline , gra'phs were made on
a proportional basis. The impact on receptors located within the indirect source
was calculated according to the area source concentration methodology described
in Appendix H of the Guidelines.
Where, based on the calculations, violations were found to occur at
reasonable receptors, the least cost design changes were recommended. The
bases used to estimate the costs and effectiveness of the design changes are in-
cluded in Appendix F. The assumed opening date and therefore the assumed
automobile mix was 1975. Potential violations of national standards were also
examined for the automobile mixes for three future years in the sensitivity
analysis in Section D.
-------
m-12
2. Economic Impact Analysis
a. Financial Feasibility Criteria. The methodology used to assess
the economic impact of ISR on the three types of development is comprised of
guidelines concerning how several key financial feasibility criteria should appear.
The criteria are described below:
(1) Minimum of "Front-End?1 Money
Front-end money is that sum spent by a developer from his own funds
prior to undertaking a project. It also includes that money spent to determine
whether a project should be undertaken. Such funds are totally irrecoverable if
the project does not proceed, but are usually recoverable within six months to two
years (depending on the size and complexity of the project) if the project is under-
taken. Front-end money represents the "cutting edge" of the developer's re-
sources since it is literally that portion of resources invested to generate addi-
tional resources to keep the developer Jin business. Understandably, then, front-
end money is very "expensive" and is spent only when the developer's professional
experience and his intuition suggest that the odds favor the ultimate feasibility of
a project.
Front-end costs could include options or leases to control the land until
feasibility is determined, marketability studies, soil borings to determine founda-
tion costs, and title searches/examinations to make sure that a clear, unencum-
bered title can be obtained. Obviously, the amount of front-end money expended
would depend on (i) how complex and time-consuming a project is likely to be;
(ii) how "tight" the developer's total supply of front-end money happens to be
(larger developers could obviously undertake larger and longer process projecta);
and (iii) how willing the developer is to trust his experience and intuition. Under-
standably, then, there is no single rule for determining what is the appropriate
front-end money commitment for most projects and most developers.
-------
m-13
(2) Little or No Permanent Developers Investment
and Maximum Capitalized Value Over Project Cost
i
Front-end money also represents an important part of the developer's
investment in a project. The remainder of his investment in a project, comprised
of further studies and land acquisition, is contingent on the project's moving
forward.
The developer's investment (front-end plus other developer expenses)
is too precious, for the reasons cited above, to form a permanent part of the
long-term financing that supports the mortgageable/marketable life of a project.
Consequently, institutional or substantial private lenders are called upon to pro-
vide the necessary funds for this long-term financing support. In exchange for
this, lenders require a sufficient rate of interest on the loan. It is this mort-
gage, defined by the use of other people's money, that helps to create a devel-
oper's value. Once this money replaces the developer's investment, he is mort-
gaged out, although he still owns the project. Thus, it is important for the
developer to mortgage out as early as possible so that his investment is recov-
ered for use in other projects and is not tied up in permanent commitments.
The feasibility of a project is determined in part by the speed with
which a developer is likely to recover his investment and whether he can re-
place all of it with other permanent financing commitments. The degree of
"spread" or excess of the capitalized value of a project over its cost is also an
indicator.
Once a project has been successfully financed, built, and tenanted,
the developer can either keep the project to obtain the annual net cash flow or
he can sell it. If he chooses to sell the project, he can sell it as a single piece
or he can "syndicate" the sale by forming shares in the project. Syndication
increases the number of potentially interested buyers andusually results in the
'i
developer's being able to secure a better sale price. In this sense, the effects
-------
m-14
of syndication are similar to the effects of stock splitting on a security exchange,.
There are certainly more people who are potentially interested in investing
$50,000 in real estate than there are in investing $2 million.
Through syndication the developer can also make "shares" much
more valuable than their cost. Specifically, he can structure the shares so that
one group is comprised of 85 percent of the net cash flow and 15 percent of the
depreciation, while another group might be comprised of a substantial share of
depreciation and almost no cash flow.
Projected profit from outright sale or syndication is treated as
present worth of the value added or it is treated as capitalized value over pro-
ject cost. It is not a general part of project financing. Consequently, if initial
investigations suggest a significant long-term requirement of the developer's
investment (because institutional commitments are unlikely to mortgage out the
developer in the project), the project would probably be considered to be eco-
nomically unfeasible.
(3) Minimization of Cash-Out Before
Cash-In vs. Project Timing
Once a project is committed, the extent of cash-out (borrowed)
before cash-in is an important consideration. However, it is not as critical
as whether the development is proceeding as fast as possible. For instance,
it might be better for a developer to spend money for plans, studies, and so
forth, in advance of funding schedules If this would allow him to start construc-
tion earlier in order to take advantage of the weather, present construction
costs, union contracts still in force, materials availability, and the like. For
example, construction loans are currently running at 12 to 15 percent interest
per year. Saving three months by pouring concrete prior to the winter or re-
ducing time by using materials presently obtainable could save the developer
substantial loan costs. Such actions could also reduce construction costs
because they would minimize the developer's exposure to inflation.
-------
ra-15
(4) Maximum Return on Developer's Investment
Even though the developer's Investment might not be Involved lit <\
project for long, an attractive rate of return for the period in which it is involved
is sought by the developer. This is understandable in view of the importance,
value, and power of the developer's front-end money. There are no fixed criteria,
but this rate of return is not likely to be less than 12 to 15 percent. Depending on
both the risks involved and the expertise of the developer, the return on his invest-
ment could be as high as 25 to 30 percent. Return on his investment is usually
more important than return on total investment because the money that matters
to the developer is his own. The rest of the investment is money that he "rents
from someone else.
(5) Maximum Net Yield on Total Investment
Again there are no fixed rules. Generally, developers attempt to
maximize net yield on total investment which is a summary ratio that involves
a few simple component concepts. One concept is "program cost," a compila-
tion of all costs for developing but not necessarily for operating or maintaining
a project. An itemization of program cost is included in Exhibit III-2.
Another concept is "net cash flow," which is simply the excess of
rental revenues over both debt service (interest and amortization, and the long-
term capital cost of development) and operating costs (insurance; security;
maintenance; repairs; possibly heat, light, and air conditioning; taxes; broker-
age fees; legal, accounting, management, and miscellaneous fees). For exam-
ple, if a project's gross revenues are $300,000 and it has a debt service cost
of $130,000 and an operating expense of $70,000:
$300,000 - ($130,000 + $70,000) = $100,000
then the net cash flow would be $100,000.
-------
Ill-16
EXHIBIT m-2
SUMMARY OF ESTIMATED PROGRAM COST
Site Area:
Buildings: (square feet)
Parking:
LAND: (cost)
DEMOLITION
SURVEYS, TOPO, BORINGS:
SITE PREP. (Fill, Grading, Etc.)
UTILITIES: (Water, Sewer, Septic, Drains, Etc.)
BUILDINGS: (Attach Schedule)
Major Stores:
Miscellaneous Stores:
Offices:
Free Standing Units:
Mall Areas:
SITE IMPROVEMENTS:
(Paving, Lighting, Striping, Sidewalks, Curb)
Landscaping:
Fencing:
Pylons - Signs, Etc.
ARCHITECTURAL & ENGINEERING FEES:
INTERIM EXPENSES:
Legal: (Titles, Contracts, Financing, Leases)
Real Estate Taxes: (During Construction)
Insurance:
Advertising-Publicity-Sales Promotion)
Commissions: (Leases, Etc.)
FINANCING:
Bank Service Charges
Interest on Construction Loan:
Mortgage Brokerage Fees: Construction:
Permanent:
Permanent Mortgage Commitment Fee:
Title Insurance:
DEVELOPMENT FEE:
ACCOUNTING - PERMITS - MISCELLANEOUS
TOTAL PROGRAM COST:
-------
m-17
The third concept involved in net yield on total investment is the
"financing constant" or "mortgage constant." This is the ratio of the annual
debt service to the size of the loan. A few examples should suffice to illustrate
that the longer the term of the loan, the lower the financing constant.
If a loan is obtained for one year at an interest rate of 12 percent
and is payable monthly, the financing constant is equal to 106. 6 percent. If the
loan is payable in two years, the borrower must pay 56.5 percent of the loan
each year. Given a 10-year period to pay back the loan, interest and amorti-
zation would total 17.2 percent, or $172,165 annually. For a 20-year term, the
constant would drop to 13.22 percent, and for a 30-year term, to 12.34 percent.
(Annual debt payments are quickly derived from standard mortgage or compound-
ing tables which list monthly amounts to be paid on the principal and interest on
the unpaid balance of the principal.)
The financing constant, net cash flow, and program cost are all im-
, portant to the measure of net yield on total investment which is determined by
dividing net cash flow by program cost and finding the excess that the quotient
represents over the financing constant. For example, one rule of thumb
sometimes used is to look for an excess of 1 1/2 percentage points for every
year that a project takes to be built. This rule is based on the premise that
the longer a project takes and the more complicated it is, the more risk it in-
volves. This is entirely consistent with the previous discussion on the critical
importance of the developer's investment. The longer the developer is involved
in getting a project built the longer his investment is at risk and the more he
must seek a reward commensurate with this risk. In short, what all of this
represents is a type of risk/reward ratio for the developer.
(6) Cash Flow per Net Leasable Square Foot
This indicator is often used by developers to assess the feasibility of
a project. As a rule of thumb, developers look for $1.00 per square foot in
-------
ra-i
office parks and $2.00 per square foot of small tenant space in shopping
1
centers.
This index, like other on&s, could be misleading. Different financ-
ing arrangements could distort its meaning. For example, a developer, by over-
s
financing a project, could show a casn flow per square foot which underestimates
his actual return.
Project characteristics could also cause this indicator to give an in-
accurate reading of the financial situation. M a shopping center which has an
unusually low quantity of small tenant floor area, $2.00 per square foot could
represent an inadequate cash flow in view of the financial exposure required of
the developer to build the center. Consequently, despite wide use of the ratio
in the development industry, the standards of $1.00 for office parks and $2.00
for shopping centers are not always met.
(7) Internal Profit/Overhead Considerations
One criterion frequently cited is the extent to which a project offers
to maintain a respectable profit (at 8 to 18 percent) for the developer's person-
nel overhead. This criterion is certainly neither a necessary nor a sufficient
one for a developer to proceed with a project. However, in some cases it might
be a contributory factor once it has been determined that a project offers mini-
mally requisite credentials. For example, a residential developer who has a
full-time complement of professional staff might undertake otherwise marginal
(lower payoff) projects in order to support and retain valuable people. Likewise,
a development corporation which holds a large non-revenue-producing asset such
as raw land might attempt to dispose of this asset through development or to sim-
ply "put the land to work."
These figures were cited by developers participating in the six case study
analyses and have been verified by major representatives of the lending com-
munity such as Connecticut General Insurance Corporation.
-------
(8) Tax Shelter
Tax shelter can be one reason for a party to be attracted to syndi-
cation [see the discussion under Section B2a(2)',~"ab6ve% However, in that situation
the developer is "taken out" of a project by a high tax bracket investor or cor-
poration. While development corporations frequently do have a substantial
amount of shelter in their projects, tax shelter today is simply not the guiding
raison d'etre for development. In fact, in most cases it plays a minor role in
the determination of project feasibility by the developer.
*****
In summary, developers frequently say that in order for a project
to be feasible it must "stand on its own." Generally, this means that:
• The project, once built, will be marketable and will return
a sufficient net cash flow.
• The project will provide the developer with a good return on
his investment. 1
• The project is financeable and the developer can be mortgaged
out so that his investment comprises a minimum of the perma-
nent financing.
• The project can be built expeditiously.
• A minimum of front-end money is required.
b. Cost Assumptions. Various cost and timing assumptions were
required in order to analyze the six case studies presented in Section C. These
assumptions are described below:
(1) Data Acquisition and ISR Application Preparation Costs
The ISR preparation and application costs were assumed to equal
$45,000, broken down as follows:
-------
m-20
Approximate Cost
Date acquisition (historic meteorolog- $ 500.00
ical data, topographic information,
land use plans, etc.)
Extra traffic engineering studies 7,000.00
(volume demand-to-capacity ratios,
lane by lane, for all principle roads,
intersections, and access points within
',
a quarter of a mile bf the indirect
source; traffic flow projections for one
year after full operation of the facility)
Monitoring (assuming CO measure- 18,000.00
ments made with non-dispersive infra-
red device; simultaneous meteorological
and traffic count recording; four recep-
tor sites)
Computer modeling (Gaussian plume 8,000.00
dispersion model)
Legal review 3,500.00
2
Evaluation of design changes (if poten-
tial CO violation is found)
Conventional traffic engineering studies generally do not supply all the data
needed for an air quality analysis (e. g., lane-by-lane data). This topic is
discussed more fully under Part V of the report.
2
For the purpose of this analysis, no cost was assumed for in-house evaluation
of design changes neededs prior to finalizing air quality impact projections
and submitting an ISR application. It is highly probable, however, that many
developers, after gaining some experience with ISR, will elect to assume
certain costs for this type of evaluation in order to reduce some of the uncer-
tainty and delay which may be associated with the review process.
-------
m-2i
Approximate Cost
Application completion (formalizing $ 2,000.00
site plans, preparing the application,
meetings with review officials, etc.)
Response to public comments and/or 1, 500.00
participation in hearings
Appeals process (if necessary)
$ 45,000.00
When an evaluation of a particular case made it apparent that some
of the costs included in arriving at thd $45,000 figure had been absorbed by the
developer as part of his normal procedures or in response to other government
regulations, appropriate reductions were made in the projected cost. No up-
ward adjustment in the application cost was made, however, to take into account
monitoring at more than four receptor sites, because this was not required in
the regulations although monitoring at more than four sites would be desireable
for a truly accurate assessment of potential CO violations. The decision not to
increase the application costs was made to keep the assumptions within the most
likely range and to offset any overestimation in costs for legal review, meetings
with review officials, and other activities related to the review process.
For some of the six case studies, less expensive application costs
based on the assumptions of the use of the Technical Guidelines rather than com-
puter modeling and of monitoring data being supplied by a public agency are pre-
sented in Section D, Sensitivity Analysis.
For the purpose of this study, appeal hearings were not assumed to be
necessary.
-------
(2) Design Change Costs
Two types of design changes were examined to determine the lenst
cost alternative for the developer: capacity increasing design changes, generally
involving roadway modifications, and volume decreasing design changes, en-
compassing transit options as well as alternatives like work schedule changes
and carpooling. The major assumptions used in determining highway and tran-
sit design change costs are described in some detail in Appendix F. In addition
to the basic capital construction, operating and maintenance costs, the follow-
ing assumptions were used in determining total design change costs:
• No special engineering problems would be encountered.
• Land acquisition costs where additional rights of way were
required would cost no more on an area-wide basis than the
price paid for the original site.
• Relocation costs would not be involved.
• The effectiveness of each design change could be ascertained
with relative certainty.
In addition, design changes were assumed to be carried out with'in
the normal construction period. However, major changes which involve public
participation and funding might actually take substantial periods of time to
implement. Some state DOT'S estimated that a minimum of three to five years
would probably be necessary to institute a major road improvement, while the
period of construction for the developments considered in this analysis ranges
from one to five years. Therefore, added delay costs could be incurred or a
project stopped altogether due to an ISR permit condition that a particular de-
sign change be effective one year after full operation or because many lending
institutions have stated that they would not finalize a loan until a design change
involving public participation is under construction or is in place.
Engineering problems such as poor subsoil conditions or the need to relocate
utilities might easily double or triple the costs of a design change.
-------
A sensitivity analysis is presented in Section D on the costs of
es a M))jx>.i;a,t:\ Ui.->i.-;
to se-rrioe* facility ctatfng $he -pe>m
-------
m-24
long-planning horizon involved with facilities of a size which
triggers ISR. For example, the planning periods for the six
case studies described in Section C range from one to five
years. The majority of developments that will be seeking
ISR after 1 January 1975 in order to begin construction over
the next few years will have already gone through PERT
scheduling or other forms of time and money allocation.
Due to the long-range planning, developers will lack some of
the flexibility needed to properly plan for ISR as a time-
related element. This cost assumption is therefore most
applicable in the early stage of IRS implementation. After
the first year or so where projects could schedule ISR in tandem
with other pre-construction permit requirements, delays
could probably be avoided altogether. The time delay dost
function used in the case study analyses equals the projected
inflationary increase in construction costs over the next two years,
1
or a rate of one percent per month. No delay,time was attri-
buted to monitoring or modeling activities. It was also assumed
that developer has some degree of flexibility in timing so that
construction crews would not be sitting idle at a site waiting for
an IRS application approval—a costly situation which was found to
have occurred in a couple of instances in the state and local exper-
ience studies. ,
Section D, the sensitivity analysis, presents variations in the
cost assumptions including an assumed rate of 6% per year infla-
tion, a zero time delay and 180 day maximum delay allowed under
the Federal ISR.
Interest Rates
Interest rates were assumed to remain constant despite any delays
due to ISR based on forecasts that interest rates will drop slightly
and then level off over the next two years.
1F.neineerinp-News-Record. HXCTT. no . 13. 19 Seotember 1974, pp. 65, 201.
-------
Ilt-25
C. Case Study Findings
For each of the six case study analyses, a determination was made
of the impact of indirect source regulations on a developer's financial position.
The determinations were based on the following types of costs:
(i) Cost of data acquisition and application preparation.
(ii) Time-related costs.
(ill) Costs of physical design changes.
The assumptions used in measuring each of the three types of costs have al-
ready been discussed.
Each case is presented below with the discussion broken down as
follows:
• General description.
• Development process.
• Air quality findings.
• Cost analysis.
The general description provides some insight into the nature and scale of a
specific project. This is followed by a step-by-step breakdown of the project's
planning stages prior to construction. The timing of various pre-construction
activities would have some bearing on where E5R was to be superimposed. It
was not necessarily assumed that ISR would fall at the conclusion of any traffic
analysis. In certain cases, the developer would undoubtedly have contracted
-------
a traffic study earlier if ISR had been required. The air quality findings iden-
tify the necessary design changes if any are required. The impact analysis
incorporates all of the ISR-related costs into the developer's financial state-
ments.
Two financial statements are shown for each case. The project
cost sheet illustrates the breakdown of each project's total capital investment
costs with and without ISR. A second statement, the pro forma cash flow, has
been developed for each case, with and without ISR, based on the developer's
projection of income w^f »v°4- and ffnrpf^f^p incurred one year after realization
of a positive cash flow.
The project descriptions cover the base case assumptions and then
draw from the results of the sensitivity analyses. The assumptions used for the
sensitivity analysis are desribed in Section D, following the case study descriptions.
-------
UI-27
1. Project A
a. General Description. Project A is an office park which is
located in a rural area of the country that is rapidly suburbanizing. Develooment
from the time of its original conception to the completion of construction spanned
a 10-year period. More than one million square feet of gross leasable area
are incorporated into the development.
At the time options were taken on the first 50-acre land parcel, the
property was undeveloped, open space. However, there were office uses immedi-
ately adjacent to the site and on the opposite side of a major interstate highway
which bounds the project.
The developer of Project A considered four sites in the general met-
ropolitan vicinity for an office park. Each was in a suburban location with rela-
tively reasonable land costs. The developer ultimately selected his site for the
following reasons:
• It had the best highway access.
• It lay directly in the path of growth emanating from the met-
ropolitan core.
• The land itself had interesting topographical features.
• There were already viable office uses near the site.
Aside from the above locational factors, the developer was operating
under certain broad feasibility criteria. He also drew from some prior although
limited experience in office park development. Aside from profit considerations,
he had two major objectives: to minimize his front-end costs and to avoid insti-
tutional uncertainties. A zoning change was manageable since he would be
protected through land options. .'
The developer of Project A would be considered relatively small
scale. He has minimal liquidity, and 'he finances as little as possible out of his own
\
-------
ni-28
pocket prior to obtaining an interim or permanent financing commitment. He
performed no market analyses or traffic studies on Project A.
The developer uses his real estate track record to convince lending
institutions to grant him loans. Often his buildings are not tenanted when he
lines up permanent financing; in Project A, however, every office building was
fully tenanted before the completion of construction.
This developer owes some of his success to aesthetic sensitivity. He
spends relatively large sums of money on site improvements and landscaping.
Project A is 40 percent greenbelt. These amenities are paid for out of loan
commitments. ;
Project A was subject to a zoning code for parking. One space had
to be provided for every 300 square feet of gross leasable area. The on-site
parking is more than adequate. Transit patronage by office park employees is
negligible. •:.
b. Development Process. The developer spent four months in-
vestigating property that could be developed and taking options on parcels that
appeared to be promising for an office park (see Exhibit III-4). Multiple sites for
development curtails a developer's risk if one prospect should fall through. The
option on Project A was taken in April of Year I. A planner was engaged to pre-
pare a preliminary site plan for a zoning change; negotiations started the following
month with the local zoning board. Approval was granted at the end of the
summer for the first 50-acre parcel.
The developer purchased the land and commissioned an architect
to prepare designs on the first complex of buildings. Ground was broken in
January of Year n. Interim financing was used for the initial construction, and
three permanent loans were negotiated during the course of the second year,
pursuant to a commitment by a major American corporation to occupy the first
building.
-------
EXHIBIT m-4
PROJECT A - DEVELOPMENT PROCESS
Year I
(Months) 1 ;;2 3 4 5 6 7 8 9 10 11 12
.Site Selection .
. Option on 1st Parcel
Development Site Pltai
Zoning Change on 1st Parcel
YearH
123456789 10 11 12
Ongoing Land Acquisition Program
Ongoing Architectural Design
Building Construction
Permanent Financing
Securing of Tenants
i
to
\O
-------
111*30
The developer of Project A limited his front-end investment to pre-
liminary planning consultant fees. He spent his own time investigating possible
sites and then applying for a zoning change. These costs totaled about $10,000,
or less than one percent of total project costs. The option he obtained on the
first parcel was interest free. Indirect source review procedures would have
started either concurrently with the application for a zoning change or after it
had been granted.
c. Air Quality Findings. Relatively low peak-hour trip genera-
tion rates are found at the Project A office park, primarily as a result of the
tenant mix. During peak hours, arriving traffic equals 1.34 vehicles per 1,000
square feet while departing vehicles account for less than . 1 vehicles per 1,000
square feet.
The road network providing access to the park consists of 2 four-lane
arterials, a single six-lane arterial, a four-lane collector road, and an interstate
highway with two interchanges servingjthe vicinity of the development. Traffic
does not exhibit any unusual peaking or directional split characteristics.
Exit/entrance gates to the park intersect one of the four-lane arterials
and the four-lane collector. Both driveways are two lanes in each direction;
driveway traffic has the right of way over other vehicles. Use of the two opposing
gates is split equally.
A ring road, with development on either side, provides internal
access. Each building or group of buildings has its own parking area. There
are a total of more than 4,000 spaces in.the park.
Exhibit m-6.
-------
The EPA method for assessing air quality indicated that the park
and the area within a quarter of a mile of it were not in violation of either the
one- or the eight-hour standard. Air quality at both interchanges, one outside
the quarter-mile area, was assessed and found to be in compliance (see Exhibit 111-5)1
One section of the interstate highway, about a mile from the site,
was found to exceed both the one- and the eight-hour standards. Because this
violation was located outside the bounds of ISR, design changes were not esti-
mated. While a reviewer, has the authority to exercise his discretion in
determining whether a developer should be penalized -for air quality violations
beyond the quarter-mile periphery, this was far enough away and of such little
casual relationship to the development that it probably would not have been cited
as a violation.
The fact that this facility meets standards results from a combina-
tion of the surrounding roadnet and the travel patterns generated by surround-
ing development. The area where the park is located is considered a high-
growth area by the state transportation department. The interstate highway
bisects this area. The side where the site is located is largely residential.
Much of the impact of other non-residential development on the site roadnet
is absorbed by the interstate. Residents in the vicinity, for the most part,
use the interstate ring road which is only a few miles away.
In summary, the major impact on the roads surrounding the site
(excluding the interstate) results from the office park. As indicated previously,
the park has low peak-hour generation and well-developed driveways and access
roads. Under these conditions traffic flows smoothly and air quality is main-
tained at acceptable levels during peak-hour traffic.
d. Cost Analysis. Indirect source review would enter the devel-
opment process in early fall of Year I. It would be triggered by plans to build
a complex of buildings encompassing more than 300,000 square feet with as-
sociated parking of more than 1,000 spaces. Because no design changes are
-------
Office
Residential
Residential
(dense)
R5 Office
(dense)
Residential
• R4
• Rl
Office
Office
(dense)
Office
(dense)
R3
•
Office
(dense)
Office
(dense)
0
CO
to
Residential
Office
(dense)
K2
Agriculture
Agriculture
Office
Agriculture
Residential
(dense)
Rl •
Area of potential'violation of CO standards
Receptor sites
-------
HI-33
required in Project A, the review costs would most likely range from $45,000
for preparation, approximately $260,000 in construction delay, and the add-
' itional carrying cost and debt service of these expenses to $3,000 for appli-
cation costs and no construction delay.
As shown in the financial summaries with and without the hypotheti-
cal review (Exhibits in-6 and in-7), total project costs could be increased by
$324,222 ($31,749,222 - $31,425,000), and pre-tax cash flow could be reduced
by $31,611 ($734,062 - $702,451), representing less than one percent of gross
income. Over the long term, these increased costs and decreased returns
would have little impact on the feasibility of the development.
The spread between the capitalized value of the project and the actual
project cost would be reduced from $7.5 million to $7.2 million. This excess
value would be created by the developer and would be a good indication of the
project's financial success; the reduction would be minimal.
Another indication of the financial feasibility would be the percentage
of cash on cash return. This is expressed as follows:
^ *. ^ ^ T* ^ Cash Available for Debt Service
Cash on Cash Return = —' _ . . _—
Project Cost
Project A has a cash on cash return of 12.1 percent without ISR and 12.0 percent
with ISR. As a rule of thumb, developers look for a figure of 10 percent or more.
The developer in this project has overflnanced, a common and ac-
cepted strategy. Portions of profit and overhead expenses are included in the
costs presented in Exhibit in-6. In essence, the developer would receive at
least part of his return when financing takes place.
The pre-tax cash flow per net leasable square foot is $0. 82 with-
out ISR. The 5 percent reduction of $. 04 per square foot to $. 78 with ISR might
disappoint the developer but still would not jeopardize the financial feasibility
of the project.
-------
EXHIBIT m-6
PROJECT A - COST SHEET
Without ISR
Investment Costs
Land
Construction
Other
Grading, Utilities, 6 Site
Improvement $ 1,800,000
Architectural & Engineering 675,000
Legal 90,000
Advertising 6 Promotion 180,000
Leasing, Overhead, & j
Contingency 1,530,000
Indirect Source Review
Financing During Construction 2.250,000
$ 2,400,000
22,500,000
With ISR
Computer Modeling and 90-day delay
$ 2,400,000
22,757,559
i 1,800,000
675,000
90,000
180,000
With ISR
Technical Guidelines and No Delay
$ 2, 400, 000
22, 500, 000
$ 1, 800, COO
675, 000
90, COO
180, COO
1, 530, COO
3, 000
2, 250, 215
TOTAL PROJECT COST
6,528.215
$ 31,428,215
-------
Rental*
Expense
EXHIBIT m-7
PROJECT A - OPERATIONAL CASH FLOW
Without ISR
Management
Maintenance
Insurance
Property Taxes
Cash Before Debt Service
Debt Service
Pre-Tax Cash Flow
Pre-Tax Cosh Flow per Net Square Foot
With ISR
Computer Modeling and 90-day delay
$ 6,525,000
(2.727.000)
$3,798,000
(3,063,938)
$ 734,062
$0.82
$ 6,525,000
(2.727.000)
$ 3,798,000
(3,095,549)
$ 702,451
$0.78
With ISR
Technical Guidelines and No Delay
$ 650,000
1, 130,000
400,000
547, OOP
$ 6, 525, 000
(2,727,000)
$ 3,798,000
(3.064,251)
733,749
$0.82
Includes 5 percent vacancy factor.
-------
IH-36
In sun, the long-term impact of ISR would not create a financial burden
and. the project would have gone ahead as planned. In the short run when front -
end money is critical, ISR might be a problem, since the developer in this case
reduced his front-end costs to the bare minimum. He estimates that prior to the
hypothetical review, less than $100,000 had been expended on land options; archi-
tectural, engineering, and legal fees; and overhead. In addition to deliberately
minimizing his equity involement in the project, the developer moved to regain
his front-end funds at the earliest possible date by covering these expenses with
the financing obtained (i. e., by mortgaging out).
Costs of $45,000 to prepare for ISR,an increase of 50 percent over front-
end expenditures without ISR, would not have been incurred, however, if the
developer had decided to test the site first using the Technical Guidelines. It is
likely that most developers in planning a project requiring a substantial capital
investment will prefer to use a modeling approach from the outset to provide the
most accurate base for determining what, if any, design changes will be .needed.
Nevertheless, in cases such as Project A, which are located in relatively undeve-
loped and uncongested areas, a developer may indeed decide to initially apply the
Technical Guidelines and only proceed with modeling if there is evidence of a
.potential CO violation. The assumption of this latter approach to an ISR application
for Project A has been made as one of a series of sensitivity tests, described in
Section D. In this case the application costs have minimal impact and if no delays
were incurred in construction, the costs of ISR would be negligible.
-------
ni-37
2. Project B
a. General Description. Project B is a regional shopping center which
has been developed over the course of six years. It contains 630,000 square feet of
gross leaseable area and approximately 2100 parking spaces. The facility is located
in an urban-type area which is unusual in that it is densely populated with middle-income
families. However, the property acquired by the developer was considered blighted
prior to development. In a manner characteristic of urban decay, the site was occupied
by old gas stations and a honky-tonk amusement park.
The developer's strategy"was to coordinate the center with the two
major freestanding stores in the area in order to make the facility a hub of retail
trade. The market area is basically free of competition; consequently, this de-
velopment has reduced shoppers1 travel time by providing opportunities for con-
centrated shopping activities..] Since the area is subject to the provisions of a
transportation control plan and parking management regulations, the potential to
reduce vehicle miles traveled (VMT) was a salable feature of the development.
The modal split for the facility is 60 percent automobile and 36>
cent transit and four percent walk-in population. Parking spaces at the facility
correspond to the number required by city zoning limitations. In addition, a munici-
pal lot adjacent to the center is open at night for overflow parking during peak hours.
b. Development Process. The developer of Project B chose to
build a regional-scale shopping center in an urban area. Two of his high priority
considerations for site selection were (i) the income of the surrounding popula-
tion and (ii) the competition within the market area. The preliminary market study,
which focused the developer on the project's location, was conducted in-house and
represents the only market study undertaken.
Exhibit III-8 outlines the development process from the acquisition of the
land option in the fall of Year I to the opening of the facility in the fall of Year VIL
Zoning approval was received in the summer of Year n and was followed immedi-
ately by the purchase of the land. The developer paid interest and taxes on the
land during the period in which he held the option. Negotiations with anchor ten-
ants commenced in the fall of Year H and continued until the fall of Year IV, after
the final site plan was established.
-------
EXHIBIT HI-8
PROJECT B - DEVELOPMENT PROCESS
Year I
LLan(
YearH
i Option i
.Zoning .
Land Pu
Archit
. Negc
1 Anc
Year m
irchase
ect
rtiations with
nor Tenants
, Final S:
, Traffic
Year IV
Year V
1
te Plan
and Parking Anal1
, C
ysis
Construction
Permit'
.Construe
Year VI
•
tion
Year VH
• B
CO
00
-------
HI-39
Traffic and parking studies were undertaken initially to develop a
parking garage design. The analysis continued to encompass more complete traf-
fic planning for the surrounding roadnet. Indirect source review was assumed to
enter the development process in Year II, after zoning approval and before the
land purchase. With ISR, traffic planning would have been shifted to an earlier
period in the development process.
c. Air Quality Findings. Peak-hour trip generation rates at this
shopping center represent 2.3 trips per 1,000 square feet inbound and 1.5 trips
per 1,000 square feet outbound. Vehicles must approach and depart through a
heavily loaded street system.
The site is located adjacent to the crossing of a major six-lane ex-
pressway and two major.arterials, one eight lanes wide and the other twelve lanes.
Two-lane and four-lane roads surround the remainder of the site. Twenty-six
percent of the traffic reaches the site by means of the expressway; 29 percent
uses the twelve-lane arterial; and 21 percent uses the eight-lane arterial. The
directional split on these roads favors the peak direction in conventional propor-
tions.
A six-level parking structure is located at one corner of the site.
There is one entrance/exit gate on each road bordering the garage. Use of the
two gates averages a 50-50 split during the week. However, on Saturdays, when
there is unusually high congestion, traffic favors one gate at a split of 70-30.
Use of the EPA methodology indicated 7 one-hour violations and
2 additional eight-hour violations. Changes in signalization were the first de-
sign changes tested. Under optimal signal timing, violations would be reduced to
_ _
One of the least costly design changes which might be applied in this particular
case is the use of signs or traffic officers to reassign traffic on Saturday and
to more evenly distribute flows between the two gates. The state-of-the-art
of traffic engineering, however, does not provide sufficient data to determine
the relative impact of traffic officers or signs on proportional reassignments
of motor vehicles and consequently, the effect on air quality could not be
assessed. Therefore, this ootion was not included in the design changes tested.
-------
m-40
5 one-hour and 2 additional eight-hour problems. The cost of these design changes would
be $70,000 to the developer in the absence of public support (see Exhibit III-9).
Two other design changes are recommended: widening three streets
bordering the site at a cost of $167,000 and increasing the on/off capability of
expressway ramps at a cost of $763,000. These costs only include allowance for
the actual construction and materials. Because this area is quite developed, con-
struction of this kind would be much more expensive. An additional $500,000 has
been estimated to account for right-of-way taking and the rerouting of traffic
during construction.
These design changes are only aimed at not exacerbating existing
I
CO violations with site-generated traffic, so as not to hinder the rate of attain-
ing NAAQS for CO. They do not account for violations caused by through traffic
on the expressway and other roads.
d. Cost Analysis. Indirect source review would enter the develop-
ment process of Project B in Year n either concurrent with or after zoning
approval. The increase in project costs with ISR as shown"6n Exhibit El-10, most
likely would range from about $2.:6 million to $1.7 million:
• Delay in construction $0 — $ 833,300
• Design changes 1,500,000
• ISR preparation 35,000
• Interim financing $157,000 - 243,000
The impact of construction delay could probably be reduced or eliminated by in-
cluding ISR in the project's timetable. Design changes, estimated here to cost
$1.5 million, could easily run significantly more because of the urban location.
fiideed, it is quite possible that the proposed design changes could not be imple-
mented because condemnation of adjacent development for right-of-way taking
might not gain approval. The effectiveness of applying mass transit options was
doubtful since the project already had a very high transit modal split (see Appendix F).
The reason that increased transit ridership was not feasible is that for the urban
resident population transit ridership levels are high. The location of this facility,
-------
EXHIBIT III-9
PROJECT B - SCHEMATIC LAND USE PLAN
Commercial/
Residential
Commercial/
Residential
Commercial/
Residential
Commercial/residential
Commercial/
Residential
Commercial/
Residential
Commercial/
Residential
Commercial/
Residential
R7
Commerc ial/
Residential
Commercial/
Residential
Commercial/
Residential
B
•
Area of potential violation of CO standards
Rl • Receptor sites
-------
EXHIBIT m-10
PROJECT B - COST SHEET
Without ISR
Investment Costs /
Land Acquisition $ 3, 700, 000
Construction 27,500,000
On-Slte
Design Changes
Other
Architectural 6 Engineering
Miscellaneous* 1,100,000
Indirect Source Review 2, 200, 000
Interest During Construction 2,700,000
6,000,000
TOTAL PROJECT COST
$37,200,000
With ISR
Computer Modeling and 90 day delay
$3,700,000
$28,333,300
1.500,000
29,833,300
1,100,000
2,200,000
35,000
2, MS, 000
6,278,000
$39,811,300
27,500,000
1.500,000
1.100,000
2,200,000
35,000
2.857.000
J 3. 700,000
$29,000.000
6,192,000
38,892,000
Includes legal fees, leasing commissions, consultants fees, taxes during construction, and overhead.
-------
ffl°43
The developer estimates a minimum of 18 months just to receive a
decision from government agencies on an application to make the recommended
design changeso This time delay problem is not unique,to ISR, ' The appeal .would
have to start with the community planning board and then proceed to the city high-
way departments the state highway department, and finally the Federal government
(to the case of changes to the expressway ramps). The costs of these appeals and
the delays would have increased total project costs from $37 million to more
than $60 million, A negative cash flow would result, and the project would
terminate JEametMa&ely if these costs could be anticipated,, In this'analvs-te the costs
fflddrSSiJetf •fco^^ffi.-azre EesbieasSrto the review period1 'itself and • include' these • delays
and appeals only by considerating tie use of interm trsuaaiit measures to cover this delay.
ISR preparation costs are estimated as $35,000, The developer has
done some traffic analysis that would be duplicated by the preparation, reducing
the normal $45„ 000 cost by $10,000„ However, the traffic planning would have
to be done earlier in the development process and be covered in the developer's
front-end money.
i
Exhibit BDML1 shows that fee developer' Ms a cash flow per net leasable
sqeare foot of $3. 00, This hlgher-thaxrusual square foot return is necessary be- •
cause of the relatively small leasable area provided for tenant stores. Tenant
store area generates the return for a developers department store area just breaks
even. Because tenant area comprises a relatively small part of the facility, the
developer requires a higher square foot return to receive an'acceptable cash flow.
This developer looks for an annual cash flow of around $400,000 on a project re-
quiring financial exposure of $40 million. Because 33R costs would reduce the
cash.flow to less than $130,000 and the square foot return to less than $1.00^ the
development would probably be stopped by ISR,
l(Cont'd)
however, also enabled the development to attract a large number of automobile
riders commuting to and from the suburbs, resulting in the 60=40 modal split
cited previously for the facility. If the facility had been located in such a way as
to service only the urban population and parking spaces had been reduced in keep-
ing with the high level of transit ridership of this segment of the market, then the
facility could probably be constructed and operated incurring only minimal or no
ISR~related design chamge costs.
-------
EXHIBIT ni-11
PROJECT B - OPERATIONAL CASH FLOW)
Income
Net Rental*
Expense
Operating Expenses
Unrecaptured Property Taxes**
Cash Before Debt Service
Debt Service
<*°hn°"
Cash Flow per Net
Leasable Square Foot
Without ISR wtth ISR
Computer Modeling and 90 day delay
$4.710.000 $4,710,000
$400,000 $400,000
200.000 200,000
(600,000) (600.000)
$4,110.000 $4,110,000
(3,720.000) (3,981,130)
390, 000 $ 128, 870
$3.00 $0.99
•Net rental excludes Incremental charges (e. g., portions of properly taxes, etc.) which are borne directly by tenants.
"Total property taxes approach $1,600,000.
With ISR
No Delay
$400,000
200.000
$4,710.000
(600.000)
$4,110.000
(3,889.200)
$ 220.800
$1.70
-------
m-45
This conclusion becomes unmistakable after an examination of the
developer's return on his investment before and after ISR. With financing at 75
percent of project costs, which is typical in the development business, the
developer has a return on his investment of 14 percent. A projected return of
this magnitude would be required in order for the developer to absorb the risks
involved. The developer is contemplating financial exposure of $40 million,
including more than $9 million of his own funds. If he is successful in receiving
unusually high rents from both department stores and tenant stores, and if costs
do«ot escalate beyond those projected, then, after six years of effort he will
receive a 14 percent return on equity.
Any additional costs, such as those required by ISR, would increase
his own investment in the project. In this project ISR costs would reduce the
return on his investment to 11 percent, and the project would become financially risky
for the developer to undertake. There are too many uncertainties and there is
too much financial exposure for the developer to continue the project in hopes of
gaining only an 11 percent return on his investment.
The costs related to ISR would stop development of this project, which was
already marginal. The rental rates charges to the department stores are as high as
they can be prior to ISR. The tenant stores are playin'g twice the normal rate and could
not bear sufficient quantity of ISR,expenditures to save the project. The losses-, the
developer would incur as a result of stopping the project at this stage with no attempt
to redefine the project would total $1.35 million, broken down as follows:
• Indirect source review $38,000
• Traffic analysis for ISR • 7,000
• Carrying cost of the land 450,000
• Architecture and Engineering 500,000
2 ,
• Miscellaneous ' 350,000
Short-term financing is obtained at 12 percent.
2
Includes legal fees and overhead.
-------
m-46
These losses would impact on the developer's valuable front-end money, which is
required to initiate new developments. Early recognition of the problem created
by the center's location and market may have prevented the total loss of the project's
front end investment, through a decision to relocate the facility or other re-
definition of the project.
-------
IH-47
3. Project C
a. General Description. Project C is located in the central busi-
ness district of a major city. It is a mixed-use development with more than twOj
million square feet of gross leasable area combining office and commercial uses.
The site is conveniently served by mass transit. Parking is provided in enclosed
and multilevel structures.
Extensive demolition activity preceded the development of Project CJ
The site was characterized as a rapidly declining area with much unused resi-
dential and commercial space. Small at-grade parking lots were common. Pro-
ject C was conceived as an attempt to revitalize a decaying section of the down-
town area.
More than one developer has been involved with Project C since its i
conception. The high risk associated with downtown development, aggravated
by delays for political approval, forced certain ventures out in the early years. '
Even the present developer had to prepare four different proposed site plans,
each of which represented a significant departure from the previous one and
thus required multilevel political approval.
The site plan revisions chart an interesting project history. Each
one represented an improvement for aesthetic reasons; the final design also in-
corporated significant traffic-related changes. The parking spaces on site were
reduced by 20 percent. This change was partially in response to foreknowledge
of the management of parking supply element in the local transportation control
plan, although aesthetics also were a major consideration. The developer esti-
i
mites that the reduction in the number of parking spaces and the changed parking
locat'nn cost $2.7 million. This total represents increased costs for parking be-
cause oi underground construction, increased land costs resulting from the
Although the costs of underground construction cannot be broken out, this por-
tion of the total is related to aesthetic decisions for the parking lot design rather
than any design characteristics pertinent to ISR or parking supply management.
-------
m-48
dropping of one department store to build a central multtdoekixl parking jpir.-vjjo.
consultants' fees, delays in the face of escalating construction costs, and so forth''.
The final design scheme was purposely designed to minimize Project
C's impact on traffic congestion; thus, it would not be a major problem in com-
plying with indirect source regulations. The only exception to meeting ISR pro-
visions would be in terms of how and where exhausts are vented from the enclosed
garage in order to minimize the impact on ambient air quality. Because the EPA
Technical Guidelines are not designed to analyze enclosed multilevel parking, fa-
cilities, final resolution of the need to adjust the ventilation system was not pos-
sible within the confines of this study.
b. Development Process. Downtown projects are often problematic
to developers because of the fragmented ownership of land parcels. Project C
was no exception. The land-banking program spanned nine of the ten years of
the development process (see Exhibit 1JI-12). The developer, however, had-no
responsibility for acquiring the land directly. Rather, a redevelopment agency
packaged the land in parcels prior to each stage of development. Furthermore,
in the event of time delays, the developer was protected by options on the prop-
erty. Each parcel taken down by the developer was already zoned for the uses
he proposed to construct and represented a discrete phase in the multistaged
project.
The remaining stages in Project C's development process were as
follows. An architect/planner was commissioned toward the end of Year II to
begin preparing site plans. Traffic analysis was started nine months later.
Market analyses were contracted for toward the end of Year IV. At that point,
the developer still had some flexibility in terms of how much of a given use should
be represented.
The developer took title to the first three-block parcel in the spring
of Year V and began construction concurrently. It is here that a significant
-------
EXHIBIT 111-12
PROJECT C - DEVELOPMENT PROCESS
Year
I
Lai
Year
II
id Acquisitii
Year
in
an Program
Year
IV
by Outside /
Year
V
Agency
Architectural Design
Traffic
^
Opl
on Pare
Fit
Analysis
Market Anal1
Year
VI
and Planning
I
ysis ,
ion Developer Exer
ell
( Equity
lancing
Building Con
Tenant Cor
Construcl
Year
vn
cising Optior
struction
imitments
ion Financin
Year
vin
is on Parcels
g
Year
IX
Year
X
-------
m-50
departure from orthodox real-estate decision-making is evident: the developer
broke ground without an anchor tenant commitment for his first structure, an
office building. Furthermore, he financed the first five months of construction
out of his own equity. The construction loan on the first building did not take
effect until late summer, after the major tenant commitment had been finalized.
It is assumed that indirect source review would not have impacted on this
project until the end of Year VI or Year VII, prior to the construction of the first
parking facility. The reason for this is twofold: Parking for the first office
building was below the trigger point for review, and designs for the first major
parking facility had not yet been finalized. Ground was broken for the first office
building in Year V. Ground was broken for the second building in Year VII; the
design for this second building incorporated plans for parking in excess of the
ISR cutoff point.
The developer would have sought approval for all of his major parking
facilities at the end of Year VI or early in Year VII in order to avoid a major
change in plans at a later date. The development concept which was finalized
in Year VI incorporated all on-site parking facilities, not just the next one
scheduled for construction.
The cost analysis for this project is presented to reflect a single re-
view for all parking facilities prior to construction of the first facility. The de-
veloper would have preferred to have as much uncertainty as possible removed
at the earliest point in time.
c. Air Quality Findings. Trip generation rates for this mixed-use
development vary according to vehicle origin/destination within the facility. During
the retail peak hour, 3.0 trips per 1,000 square feet of retail space and 0.72 trips
per 1,000 square feet of office space are generated.
The surrounding road network is designed roughly as a grid and is
composed primarily of four-lane streets. A four-lane expressway with ramps
providing direct access into the center's retail garage bounds the development
on one side.
-------
m-5i
The retail garage is the largest of the two parking structures. BuiltT
on four levels, it provides about 3,000 spaces and takes up three city blocks.
i
Access is provided by a one-way pair of streets, one depressed and one at ground
level, in addition to elevated expressway ramps. Rfty-eight percent of the ga-
rage traffic uses the elevated ramps which provide separate entrance and exit
gates of three lanes each. Twenty-eight percent use the depressed road, enter-
ing at one two-lane gate and exiting at one two-lane and one single-lane gate.
The remaining 14 percent use the two one-way gates at street level which provide
two entrance lanes and three exit lanes.
A separate three-level garage of 1,150 spaces provides for office and
hotel parking. Located underground within the development, the garage is acces-
sible on two sides. One gate on each side provides both entrance and exit on two
lanes. The use of these gates is balanced. There is no connection between the
first and second levels in the garage; the second and third levels do connect,
however.
Use of the EPA methodology in this case yielded interesting and prob-
lematic results. In all places the CO concentrations along the road segments
did not violate both one-hour and eight-hour standards (see Exhibit III-13). How-
ever, the parking garage emissions, when modeled in the only known manner (as
several at-grade lots), equaled 33 ppm during one-hour periods and 19.8 ppm
during the peak eight-hour period. When these area source emissions were added
to the roadway emissions, several of. the roads downwind from the site exceeded '
the one-and/or the eight-hour standard.
The modeling method is admittedly at fault here. However, no appro-
priate method has been developed for a multilevel, partially enclosed parking
facility. In view of this situation a decision was made not to recommend design
changes on the roads which exceeded standards. Even if another methodology
-------
EXHIBIT 11-13
PROJECT C - SCHEMATIC LAND USE PLAN
Offic
e/Comm
ere ial
Office/C
immerc ial
Offic
e/Commerc
ial
Of
ice
Office/C
ommerc i; .1
V R6
l
m.
**
to
R5
R4
R3 • R2
Offic
e/Comm
ire ial
Office/Commercial
Office
/Commercial
OffiOi
/Commercial
Office/Co
tnmercia
Rl «
Area of potential violation1'of CO-standards
Receptor site
-------
ni-53
were developed to handle this case and the garage concentrations were still found
to be high, it can be assumed that a carefully planned ventilation system would
minimize the impact of CO from the facility on the surrounding roadnet.
d. Cost Analysis. Project C involves a complex of buildings con-
structed over a six-year period. The first building would not in and of itself have
required ISR because parking for it was well below the regulation level. Addi-
tionally, land for subsequent construction was to be acquired as needed. There
was no option cost for this sequential land take-down, and the land arrangement
contained a proviso indicating that the developer would not be financially responsible
for subsequent parcel acquisition if any public agency prohibited the remainder
of the planned project. Thus, the second building becomes the critical structure
in the project for ISR, because this structure was built concurrently with a garage
which contains more than 1,000 parking spaces.
From the unusual land acquisition arrangement described above, it
might be assumed that if indirect source regulations prohibited construction of the
second building and its associated parking, the impact on the developer would be
minimal since he would not have to carry additional land. Further, the financing
for the first building was structured to include all of its costs and still yield a
worthwhile return.
However, the developer would most likely be in a break-even or loss
position for many years if his second building were to be stopped; planning a
multibuilding project involves substantial front-end expenses. Although the first
building covered its own costs, it was not financed to carry the costs of planning
for the entire project. In this case the developer, who knowingly operated in a
In such a situation, the parking facility itself becomes a stationary source as
opposed to an indirect source.
-------
m-54
loss position until his second office building was built and tenanted two to three
years after he broke ground on the first building, took a substantial risk.
The project planning costs do not show up as separate items in Exhibits
m-14 and m-15 prior to indirect source review. Some of them might be hidden
in categories such as architectural and engineering fees and overhead items. Many
of them would not show up on the statements for the second building since they
would be distributed over all subsequent project construction.
Exhibits ni-14 and m-15 incorporate the hypothetical economic impact
of ISR on the developer's financial position. The air quality impact analysis shows
that CO emitted by the traffic generated by Project C would not exceed NAAQS.
In fact, no design changes would be required under ISR. Consequently, the only
incremental expenses would be the following.
• $5,000 for traffic consultants' fees over and above the work
already prepared. If the Technical Guidelines were applied
first and it was determined that there would be no violation
costs of data collection and analysis may be limited to $3,000
(see section D).
:
• Under the assumption of three-month delay for ISR, an estimated
$423, 870 for escalating construction costs, plus a total of $42, 887
in ISR-related interest charges, would be incurred. Proper plan-
ning of ISR, however, may eliminate some or all of the time-related
costs (see the sensitivity analysis in Section D).
Under conditions of a cost of $5, 000 for preparation of the ISR application
and a 90-day delay, the project costs would increase by $471,757, compared to an
approximate increase of $3,000 using the technical guidelines and with no delay costs
(see Exhibit III-14).
Even with a 90-day delay, nevertheless, the impact of ISR on the developer's
net cash flow would be a drop from $1. 10 to $ 1.00 per square foot. The industry rule
of thumb is to look for a $1.00 return per square foot of net rentable office area. Because
Since public funds wer^ involved, an EIS was carried out at the beginning, thereby
minimi ?nne: expenses related to 1ST?.
-------
EXHIBIT m-14
PROJECT C - COST SHEET
Without ISR
Investment Costa
Land
Construction
Site Improvement
Buildings
Tenant Work
Other
Loan Commitment
Construction Loan & Interest
Architectural & Engineering
Interior Design
Supervision & Other Overhead
Legal
Insurance
Taxes During Development
Advertising & Promotion
Leasing Commission
Anchor Tenant Fee Rent/
Existing Lease Buy-Out
Miscellaneous & Contingency
ISR
Subtotal
$ 900,000
14,129,000
4.371.000
350,000
.1,763,000
626,000
426,000
1,367,000
50,000
393,000
70,000
100,000
890,000
875,000
666,000
$ 775,000
19,400,000
TOTAL PROJECT COST
7. 575. OOP
$27,750,000
With ISR
Computer Modeling & 90 day delay
$ 775,000
$ 900,000
14,552.870
4.371.000
19,823.870
350,000
1.805,887
626,000
426,000
1,367,000
50,000
393,000
70,000
100,000
890,000
875,000
665,000
5.000
' 7.622.387
$28,.221,757
With ISR
Technical Guidelines and No Delay
900,000
14,129,000
4,371,000
350,000
1,763,000
626,000
426,000
1,367,000
50,000
393,000
70,000
100,000
890,000
875,000
665,000
3,000
$ 775,000
19,400,000
e
a
7,578.000
$27,753,000
-------
EXHIBIT m-15
PROJECT C - OPERATIONAL CASH FLOW
Income
Without ISR
With ISR
Gross Rental
Less Vacancy and Rent Loss @ 5%
Net Rental Income
Expense
Operating Other than Taxes
(Includes maintenance, manage-
ment, insurance)
Property Taxes
Cash Before Debt Service
Debt Service ) '
Pre-Tax Cash Flow
Pre-Tax Cash Flow per Net
Square Foot
Computer Modeling and 90 Day Delay
$5,280,000 $5,280,000
(264.000) (264,000)
$5,016,000 $5,016,000
$1,200,000 $1,200,000
912,000 912.000
(2.112.000) (2.112.000)
$2,904,000 $2,904,000
(2.376.500) (2.422.260)
$ 527,500 $ 481.740
$ 1.10 $ i.oo '
•The developer entered into a partnership with a flnamrfng institution for the development, ownership, and sale of this.
building. The flnamHng institution advanced funds for less than the total program cost of the building.
With ISR
$5,280,000
(264,000)
$5,016,000
$1,200,000
912,000
1.10
-------
111-57
$1.00 meets tine developer's return objective, it is unlikely that the loss of
$0.10 per square foot would be passed along to the tenants in increased rents.
This conclusion is substantiated by the existing rents that average $11 per
square foot, which is very high for the metropolitan area under consideration.
The developer would have difficulty convincing tenants to absorb any increase
in excess of this amount.
A reduction from $527,500 to $481,740. ($1.10 per square foot down
to $1.00) represents an 9. percent decline in the pre-tax cash flow. This is
a considerable drop from the developer's standpoint. However, it is important
to relate a reduction in pre-tax cash flow back to income to assess the real impact
of a new expense. The loss in cash flow represented by ISR would be $45,760
($527,500 - $481,740). This figure represents less than one percent of net rental
income, a fairly insignificant amount.
ISR would have had only a minor impact on the timing of a net positive
cash flow return. Project C reached a turnaround position in terms of revenue
17 months after the time of initial occupancy when the building first opened. Full
occupancy (estimated at 95 percent) was achieved five months later. The additional
ISR costs, totaling $471,757, would have delayed the net positive cash flow by one
month, using the time the building first opened as the starting point. Full occu-
pancy would have occurred in 22 months, the same timing as without ISR.
Project C is unusual since the developer did not mortgage out at the
time construction began on his second building. Rather, he entered into a part-
nership with the lender who advanced $24. 5 million for the permanent financing.
This arrangement meant that some of the developer's equity was tied up in con-
struction. As a result, the developer is much more concerned with the long-term
appreciation of his project and its attractiveness to potential purchasers. ISR
would not have affected the appreciation capabilities of the project.
-------
m-58
4. Project D
a. General Description. Project D is a mixed-use development
located well within the limits of a major city but away from the heart of the cen-
tral business district. More than one million square feet of commercial and
office space are represented, along with several hundred residential units.
Project D is part of the city's urban renewal program and is eligible for certain
tax benefits. On balance the project has improved an area originally populated
by small manufacturing operations, older warehouses, office buildings, and com-
mercial activities. The development has converted an unsafe zone which most
downtown residents avoided into a viable locus teeming with people.
Although served by several bus lines, the development incorporates
extensive on-site parking in enclosed structures. The following ratios were
applied for the major parking facilities:
1 space per 1, 000 square feet of net leasable office area
3 1/2 - 4 spaces per 1,000 square feet of net leasable
retail area
There is no parking management program planned or in effect for
Project D. Although the city does not have a full-fledged transportation control
plan, it is actively encouraging transit usage and carpooling.
b. Development Process. The land-packaging program ran the
entire length of Project D (see Exhibit ni-16j. An agency separate from the de-
veloper has been responsible for purchasing contiguous parcels from a prolifer-
ation of owners. From the outset the developer began an active market analysis
program which has been constantly refined and updated.
The market consultant's recommendations for the highest and best
uses were balanced with the developer's conception of the magnitude of services
his project would offer. Therefore, economics was not the sole dictator of
-------
EXHIBIT III-16
PROJECT D - DEVELOPMENT PROCESS
Year I
Continuol
Market A
• -
Architec
, Final Sit
Year H
is Land Acq
nalysis
;ural Design
5 Selection
Desi
Year in
uisition Pro
—
and Plannir
gn Finalizei
Year IV
gram
«
I
/
Year V
Interim
Active P
Year VI
Financing
rogratn to St
Traffic A
Negotiati
Construe
Year VH
icure Tenan
nalysis ...
3ns for Peri
Year VIE
;s
nanent Final
ion of Buildings
Ter
1
1
lant Commil
Permane
Year EK
j
icing
itients
nt Financing
Year X
I
1
B
Ol
CO
-------
HI-GO
design. An architect/planner was brought on board in Year I as the development
concept was beginning to crystallize. In Year n the actual boundaries of the site
were finalized.
Active negotiations with the city for plan approval began in Year II.
A plan was filed officially early in Year HI and approval given during that year.
During Year V an interim loan became effective to cover the initial
construction which started in Year VI. Prior to groundbreaking the developer
began an active tenant program. Not until Year Vn was the first major tenant
committed, however.
Back in Year VI a traffic consultant was hired to prepare a traffic
study which was published in Year Vn. The architect/planner brought onstream
at the outset had incorporated some design features for traffic flow in all of his
plans. The need for more detailed analysis, however, did not arise until ground
was actually broken for the first complex of buildings.
Permanent financing became effective in Year VHI after two years of
active soliciting among lenders. With tenants starting to commit themselves in,
Year VQ, the financial community took a more favorable view of the develop-
ment's feasibility and was willing to advance funds.
ISR would logically have fallen in Year V, prior to construction of the
first building complex. It is assumed that the traffic analysis would have been
moved back to at least Year V in order to meet the requirements of the review
process.
c. Air Quality Findjngs. In this mixed-use development trip gen-
eration varies with traffic origin/destination within the center. During the peak
hour the office space generates 2.33 trips per 1,000 square feet and the retail
space generates 2.06 trips per 1,000 square feet.
-------
IH-61
The surrounding roadnet is comprised of two-, four-, and six-lane
roads forming a rough grid around the project. Bordering the site on three
sides axe three 4-lane roads. Two of these roads meet and end at their junc-
tion, forming an offset intersection with the end points of two other roads, one
a two-lane and the other a four-lane road. A six-lane road runs directly through
the site and despite its heavy peak-hour1 load empties into the third road border-
ing the site.
Peak-hour traffic, particularly on the roads just indicated, is un-
usually unbalanced by direction. In some instances peak directional volumes are
five or six times as high as the off-peak direction. This condition has potential
to create severe overload on any road that does not have overcapacity built in.
Traffic to the site enters immediately off the street through six gates
to three multilevel garages. Four gates provide access and egress to one garage.
There is one gate each for the second and third garages. All three garages are
connected and all three employ persons to direct traffic to available spaces by the
shortest route.
Use of the EPA methodology showed severe air quality problems on
several roads surrounding the site (see Exhibit III-17). Calculations showed
nine 1-hour violations and five 8-hour violations.
Roadway design changes to bring the area into compliance at least
cost would require several minor adjustments. At one intersection adjacent to
the site, improving the signalization by replacement of the existing signal and
the addition of a timer would bring three 8-hour violations into compliance at a
cost of $19,000.
Some major improvements would also have been necessitated. Re-
alignment of the intersection where the end points of four roadH meet un«J Uic
widening of one of the approaches from four to six lanes would bring five of the
one-hour violations into compliance at a cost of $147, 000. The addition of a
-------
EXHIBIT III-17
PROJECT D - SCHEMATIC LAND USE PLAN
Open Space .
R6 •
Commercial
H
O5
to
Rl •
Area of potential violation of CO standards
Receptor site
-------
111-63
peak-hour lane on the road through the site would alleviate two 1-hour problems
at a cost of $96,000. Extension of that road to its appropriate connection would
reduce the problems created by its emptying into a four-lane facility. At a cost
of $356,000 two 1-hour violations would be brought into compliance. Finally,
the widening of another bordering road from four to six lanes would rid the area
of the last two 8-hour violations. In order to prevent a bottleneck at a four-lane
bridge farther up the road, in addition to the roadway widening tiie capability of
two more lanes would have to be added; the cost would be $789, 000. A car-
pooling program was also considered for Project D. The potential violations
were sufficiently high that the program would not eliminate any of the highway
design changes listed above. Since the design changes were required anyhow, an
additional cost for setting up a carpooling program was not added to the total high-
way-related design change costs. In the case of trans it-related changes, however,
although the projected effectiveness was the same as in the case of the highway
options, it was a critical element in conjunction with other transit options in lowering
CO concentrations below NAAQS. Therefore, carpooling costs were included in the
trans it-related calculations.
d. Cost Analysis. The developer of Project D is unique among
the development companies represented in the case study analyses in that he rep-
resents a subsidiary of a publicly held conglomerate. The parent company is
attracted to real estate (i) to fulfill a social commitment to revitalize decaying
downtown areas and (ii) as a tax shelter. These two development criteria vary
significantly from those generally cited for real estate projects, such as mini-
mization of front-end investment, positive cash flows at attractive returns per
gross leasable square footage, and creating a spread between a project's capi-
talized value and its costs.
The following discussion will focus primarily on the tax shelter cri-
terion and how it can operate to the advantage of a major corporation. In order
-------
m-64
to illustrate the tax shelter mechanism, it is necessary to present a profit mul
loss statement for the project in addition to a project cost sheet :md operational
cash flow.
Almost $114 million was spent on Project D in land, construction, and
other investment items (see Exhibit m-18). The project generates an average an-
nual negative cash flow of $2,879,000 (see Exhibit IH-19). Such poor performance
is partially offset by the tax shelter benefit which is explained below.
Losses generated internally to a corporation, when offset against
profits, will reduce corporate income'taxes—thus the term tax shelter. Ven-
tures involving large depreciation expenses are particularly appropriate for a
tax shelter since depreciation has no impact on cash outflow.
The profit and loss statement for Project D (see Exhibit 111-20) shows
a pre-tax loss of $3, 982,000. This loss is larger than the pre-tax negative cash
flow shown in Exhibit IH-19 because of depreciation charges on buildings and re-
lated improvements. This loss, when incorporated into the financial statements
of the conglomerate, will reduce overall pre-tax profits and, thus, the base on
which income taxes are computed.
The tax shelter is derived by applying the corporate income tax rate
to the pre-tax loss, in this case:
0.48 x $3,982,000 = $1,911,360
The $1,911,360 in effect represents the tax saving that would accrue to the par-
ent by declaring the $3,982,000 loss in operating income. Ideally, the tax shel-
ter would offset the pre-tax cash losses if it were the only feasibility criterion
applied by a corporation. The tax shelter in the case of Project D is $967,640
less than the pre-tax cash loss. Therefore, the $967,640 loss would have to be
absorbed internally by the parent corporation.
A profit and loss statement differs from a cash flow statement for the same time
period in two ways: it includes a charge for depreciation, a non-cash expense;
and it does not include a deduction for amortization of the principal on a loan.
-------
EXHIBIT m-18
PROJECT D - COST SHEET
Investment Costs
Land-
C onstructlon
Buildings
Site Improvements
Interior Work
Without 1SR
$80,400,000
7,700,000
5.600.000
$ 3,800,000
93,700,000
TSR Design Costs
Other
Architectural & Engineering
Financing
Project Management
Legal Fees
Accounting/Property Taxes/
Counsultants other than A & E
Contingency
ISR-Consulttng Fees
ISH-Related Interest Charges
TOTAL PROJECT COST
:, 824,000
1,040,000
804,000
350,000
454,000
i, 010,000
16.482j(|00
$113,982, IM>0
With ISH
VHth Conputer Nbdelingand 90 Day Delay
$ 3,800,000
$ 3,800,000
$81,174,000
7,700,000
5.600.000
94,474,000
1,443,000
$80,400,000
7,7(K1,000
5,600.000
93,700,000
1,443,000
4,824,000
8,040,000
804,000
350,000
454,000
2,010,000
40,000
225.700
16.747.700
$116,464,700
4,824,000
8,040,000
804,000
350,000
454,000
2,010,000
40,000
148,300
16,670.300
$115,613,300
-------
EXHIBIT m-19
PROJECT D - OPERATIONAL CASH PLOW
Income
Net Rentals (reflects
relevant vacancy factors)
Other Income
Expenses
Maintenance
Overhead
Utilities & Property Taxes
Promotion
Other
Cash Before Debt Service
Debt Service
Pre-Tax Cash Loss
$10,922,000
(3.765. OOP)
$ 7,157,000
(10.036,000)-
($ 2,879,008)'
WithlSH
wfth'Cohlpate'f Modeling and 90 day delay
809,000
675,000
1,119,000
654,000
508.000
$10,922,000
(3.765.000)
$ 7,157,000
(10,276.000)
($ 3,119,000)
WithlSR
$6,372,000
809,000
675,000
1, 119,000
654,000
' 508.000
$10,922,000
(3,765,000)
$7,157,000
(10,103,000)
($3,036,000)
-------
EXHIBIT m-20
PROJECT D - PROFIT AND LOSS STATEMENT
Without ISR
With ISR
Income
Net Rentals (reflects relevant
vacancy factors) $6, 372, 000
Other Income 4, 550, 000
Expenses
Maintenance 809, 000
Overhead 675,000
Utilities & Property Taxes 1, 119, 000
Promotion 654, 000
Other Items 508, 000
Depreciation* 3,123,000
Interest 8,016,000
Pre-Tax Cash Loss
Computer Modeling
$6,372,000
4,550,000
$10,922,000
809, 000
675,000
1,119,000
654, 000
508,000
3,171,000
8,241,000
(14,904,000)
($3,982,000)
& 90 Day Delay
$10,922,000
(15,177,000)
($ 4,255,000)
With ISR
$6,372,000
4,550, OOP
809,000
675,000
1,119,000
654,000
508,000
3,160,000
8,164,000
$10,922,000
(15,089,000)
(4,167,000)
*Uslng a straight-line method for 30 years.
-------
m-68
Despite the obvious advantages to the parent company in the way of
tax benefits, there are caveats that must be kept in mind. As a publicly held
company the parent must be sensitive to its stockholders when proposing any
change in corporate philosophy of financial condition. In the case of Project D,
even though the loss from the subsidiary is carried over to the parent and
certain tax benefits achieved, the loss may be too large to keep the consolidated
corporate earnings at a level which meets the expectations of the stockholders.
Dividend payments could be restricted to past levels or not paid at all. A reduc-
tion in earnings could also mean that internally generated funds would not be
adequate to meet the company's long-term growth parameters.
The ultimate effects of stockholder dissatisfaction can be seen in the
market value of the stock. Barometers such as price/earnings ratios and divi-
dend payments are closely scrutinized when analyzing a stock, and if these cri-
teria do not measure up to stockholder expectations, existing stockholders will
sell their shares and potential stockholders will either look elsewhere for in-
vestments or buy the parent company's stock, but at a lower market price. The
ramifications of this situation are that the market value continues to decline and
the ability to raise capital publicly is severely impaired.
Options open to the management of the parent company, should this
situation occur with regard to Project D, would be to change the performance of
the subsidiary to income producing, to reduce substantially the losses incurred,
or to sell it completely.
If implemented, subsequent phases of the development would help off-
set the losses shown on the cash flow and profit and loss statements. These
phases are envisioned as producing high revenues with relatively low fixed costs.
Also, the visibility gained from downtown renewal would probably boost the con-
glomerate's sales in other areas over time.
With proper planning ISR should not result in the developer incurring add-
itional delay-related costs. If delay costs are not avoided, however, a three month
delay for review could increase developer costs as follows:
-------
m-69
$1,443,000 Roadway design changes
40,000 Additional traffic consulting fees to
meet requirements of ISR
774,000 Construction cost escalation @ 1% per
month during 3-month review period
(assumes delay on only first structure
built on site)
$2,257,000
225,700 Estimated interest charges on amounts
drawn during interim financing over 2-
year period
$2,482,700
The timing of ISR would not affect the cost of land since the developer
could acquire the land at his convenience from the agency responsible for land
banking. With and without a 90-day delay, ISR-related costs when superimposed
over the financial statements (see Exhibits III-18 through III-20) have the following
impacts:
• With a 90-day delay project costs are increased from $113.9 million
to $116. 5 million (see Exhibit ni-18). Without a delay costs are in-
creased to $115.6 million.
• With a 90-day delay the pre-tax cash loss is increased by $240,000
(from $2, 879, 000 to $3,119, 000) (see Exhibit III-19). Without a
delay the pre-tax is increased by $157,000.
• With a 90-day delay the pre-tax loss shown on the profit and loss
statement increases $273,000, from $3,982,000 to $4,255,000 (see
Exhibit 111-20). Without a delay the increase on the profit and loss
loss statement is $185,000.
• With a 90-day delay the revised differential between the tax shelter
(0. 48 x $4,255, 000 = $2,042,400) and the pre-tax cash loss is
$1, 076,600. The developer had been losing$967,640 without ISR;
thus, ISR would cause him to lose an additional $108, 960. Without
a delay the additional loss would be $68, 200.
-------
Ill-70
How would these impacts have affected the developer's decision pro-
cess ? Even with a three month delay the developer would probably have .absorbed
all of the ISR-related costs.
The impact of ISR on the actual incremental loss to the developer is $108,960.
This figure represents 4 percent of the developer's original real loss, or 1
percent of annual revenues.
Shifting to transit-related design changes, the area is characterized
by good service. Buses operate at short headways, picking up passengers at
convenient intervals. Schedules are posted at bus stops, and benches are pro-
vided for waiting riders. Despite the Service, the system is underutilized. Im-
provements in air quality from volume-decreasing design changes, consequently,
would have to come from an incentive program for transit use, a disincentive
program for automobile use, or both.
The prime contributor to the peak-hour CO violation is the office use.
A volume-decreasing program should therefore focus largely on the office em-
ployees* Two possibilities would be to institute a carpooling program with an
anticipated effectiveness of 5 to 10 percent and to subsidize transit usage by
employees located at Project D. Assuming half the employees would use the
existing transit system at the developer's expense, the cost would be almost
$150, 000 annually.
f
A program of staggered work hours was ruled out for Project D.
Because the development was comprised of multiple uses, each with different
periods of maximum traffic flow, a staggered work hour program would simply
shift the peak hour CO level to another time of the day.
Joel L. Horowitz, "Transportation Controls Are Really Needed in the Air
Cleanup Fight," Environmental Science & Technology, VIII, no. 9, September
1974, p. 804.
2 •
The precise effectiveness of certain volume -decreasing design changes is un-
known for this project. Assumptions have been made regarding the effective-
ness of implementing multiple volume-decreasing options. A discussion of the
effectiveness of different design changes is presented in Appendix F.
-------
m-71
The office use, however, is not the sole contributor to the air quality
problem, particularly over an eight-hour period. It would therefore be helpful
to create an alternative for people patronizing the retail area of the development.
A dial-a-ride system could be set up to service the retail facilities. People
would be picked up at their homes and taken to Project D at no additional expense.
This personalized service is particularly suited to shoppers who generally prefer
\
the convenience of auto-type travel. The coordination of trips to different areas
using a dial-a-ride system would help reduce auto use.
Costs for all three of these programs—carpooling, transit subsidies,
and dial-a-ride—are presented in Exhibit in-21. The capital costs incorporate
purchase of the dial-a-ride vehicles, promotion for the dial-a-ride system to
alert people to its existence, and the setting up of a carpooling program. The
carpooling campaign would combine some promotion with analysis of likely
rider combinations based on origin/destination patterns for on-site employees
and their preferred hours of travel to and from the project.
The operating costs presented on an average annual basis combine
the costs to run and maintain the dial-a-ride system, the cost of the transit
subsidies to the developer, and the maintenance of the carpooling program over
time. It seemed only reasonable to assume total subsidies of both the dial-a-
ride and transit services in light of the minimal utilization of the existing transit
service. .
The developer of Project D, if faced with the decision of implementing
the highway design changes versus the transit-related options, would likely select
the former. The high annual operating expenses associated with the dial-a-ride
system and the transit subsidy program would reduce his existing cash loss posi-
tion (before ISR) by a factor of 14 percent from a negative $2,879,000 to a nega-
tive $3,292,840. Since most of the transit-related costs could not be capitalized,
he would realize minimal benefits from the transit option on his profit and loss
statement in terms of depreciation and interest expenses.
-------
ra-72
EXHIBIT HI-21
PROJECT D - TRANSIT-RELATED DESIGN CHANGE COSTS
Capital Costs*
Dial-a-Ride Vehicles (20) $ 80,000
Dial-a-Ride Promotion 10,000
Carpooling Plan Development 20,000
Subtotal $110,000
Operating Costs**
Dial-a-Ride (3,200 trip miles per day
@ $. 32 per mile for 260 days) $266,240
Transit Subsidization 145,600
Carpooling Program Maintenance 2,000
Subtotal . $413,840
*These costs would be covered by loans and amortized over time.
**These costs would be deducted each year on the project's cash flow statement
as operating expenses.
-------
in-73
5. Project E
a. General Description. Project E is a suburban office park lo-
cated on the fringes of a rapidly developing American city. The site is serviced
by a major expressway and limited mass transit. Sixteen years have been esti-
mated as necessary for completion of the project's 1.5 million square feet of
office space.
The developer of Project E operates exclusively in one metropolitan
area and so far has limited his developments to office parks. His primary in-
terest is locating office space in suburban areas adjacent to the homes of execu-
tives, the developer's key market. Sites must also have good highway access.
Project E fits all of the above criteria while having some additional
attractive features. The site selected was large enough to incorporate other than
office uses. The developer had learned from prior experience that uses congre-
gating on the fringe of a development can ruin the quality features of that develop-
ment (e.g., by bringing visual blight and traffic congestion) unless the developer
can exercise some degree of control. Conversely, the location of certain uses
adjacent to an office park can enhance its attractiveness. For example, res-
taurants, shops, banks, and movie theatres are logical complements to office
facilities and a draw for office tenants if the support commercial activities are
well planned and well designed.
Aside from the advantages of a large plot, the developer of Project
E was attracted to the site because he was relatively assured of a zoning change.
This developer will not follow up on a piece of property without an intuitive feel
that the land can be rezoned. He always uses options on the land during zoning
negotiations as a safeguard.
Finally, the site had interesting topographical features and was
readily adaptable to an office park. The existing vegetative cover would work
well aesthetically with low-rise office buildings.
-------
111-74
The parking facilities on the site service each building or building
complex. The developer allows five spaces per 1,000 square feet of net leasable
area although he admits that only a maximum of 4.3 to 4.5 spaces are ever used.
No more than 50 spaces are allowed per acre for aesthetic reasons. The devel-
oper has sought to blend parking tastefully into the surrounding landscape while
conveniently serving the office buildings.
b. Development Process. Project E incorporates several inter-
esting departures from the development decision-making process already de-
scribed (see Exhibit III-22). To begin with, the developer was sufficiently in-
terested in the land ultimately developed that he retained an architect to prepare
preliminary site plans prior to taking an option on the property. Over a year
later, a two-year option was obtained on the land and negotiations were started on
the zoning change. A plan was submitted in the second quarter of Year III of the
project; approval was granted three months later. .
Instead of purchasing the land immediately and proceeding with the
development process, the developer chose to hold on to his option for the entire
two-year period. This creates an interesting contrast to Project A, the other
office park, where the development process moved along without a break. A de-
lay in real estate is not unusual, however. Developers may have numerous rea-
sons for holding on to land already zoned through options. They may be awaiting
a decline in interest rates or they may be catering to the needs of a major tenant
who cannot make a commitment until a future date.
Just prior to the expiration of the land option, toward the end of
Year IV, the developer of Project E became actively committed to the project;
he commissioned an initial traffic study and he started negotiations for a per-
manent loan. The tenant for the first building made a commitment in the middle
of Year V. The permanent financing became effective one to two months later,
simultaneous with groundbreaking.
-------
EXHIBIT 111-22
PROJECT E - DEVELOPMENT PROCESS
Year I
Year
Year
YearlV
Year V
Year VI
Site Selection
Architectural Design
Option on 1st Parcel
, Continuous Land Acquisition Program
Complete in Year IX
, Zpning Change Incorporating Most of Site
I
Traffic Analysis
Permanent Loan . __ Permanent^ Financing.
Negotiation '
t
Tenant Commitments
Construction
of Buildings
-------
ra-76
New construction, loans, and tenant commitments have proceeded in
piecemeal fashion over the 16-year development period. Some buildings have
broken ground with tenant commitments, others without. Financing is handled
separately for each building or building complex.
Federal indirect source regulations as currently promulgated would
not have affected Project E until Year DC. All buildings constructed prior to that
time had total associated parking of less than the 1,000 spaces, as required for
review of a new facility in an SMSA. This assumes interpretation for large-scale
"phased" developments as presented in the 9 July Federal Register (p. 25293).
Thus, the review would probably not have created much of a problem for the
developer.
Traffic analyses on Project E have been updated continuously since
Year IV. The developer was concerned about traffic congestion and designed the
road network on the site to alleviate bottlenecks. He also instituted roadway de-
sign changes on the access road to the site at his own expense.
c. Air Quality Findings. This office complex, including more
than 6,000 parking spaces, represents one of several developments impacting on
the street system in the vicinity of the development. Alone it generates 2. 3
vehicles per 1,000 square feet outbound and 0.5 vehicles per 1,000 square feet
inbound at peak hours. This unbalanced directional flow at the site represents a
minor factor in the flow of traffic on the adjacent major access road; it is the
absolute volume of through and turning traffic which creates the congestion.
Access to the site is provided by a six-lane median divided arterial
which connects with an interstate highway diamond interchange on one side and
a four-lane collector road on the other. Between these boundaries the road in-
tersects with a four-lane arterial and several driveways to developments, in-
cluding two entrance/exit gates for the office park. Turning movements from the
six-lane arterial to the four-lane arterial and to the driveways into the park are
-------
ra-77
accommodated by separate turning lanes, signalization (for left turns only), and
channelizing islands. Both entrance/exit gates provide left-turn and right-turn
storage and signalized access to the arterial. The distribution of peak-hour
traffic between the gates is balanced.
A four-lane ring road provides the major internal circulation at the
park. Office buildings with their own separate at-grade parking lots surround
this road on both sides. The lots associated with each building or group of
buildings represent an overcapacity of spaces, obviating the need to change lots
in search of a space.
Use of the EPA methodology indicates critical air quality situations
at all three signalized intersections and over free-flow sections of the six-lane
arterial and four-lane collector (see Exhibit 111-23). Under optimal signal tim-
ing, which is within the realm of operation of the vehicle-actuated signals, the
six-lane road is in violation of one-hour standards at all signal approaches. A
free-flow action from the interchange to the first intersection (with the four-
lane arterial) also exceeds one-hour standards. The intersection approach of
the four-lane road creates another one-hour violation. Two additional eight-
hour violations are indicated at one of the driveway intersections. On the free-
flow sections of the collector road which bounds the site on one side, a single
one-hour violation exists with two additional eight-hour violations. Neither
the interstate highway nor its interchange creates any air quality problems.
Because of the nature of traffic at the office park during the peak
hour, the first design change tested was a program of staggered work hours
and carpooling. With a cost of $10,000 this program substantially reduced all
violations and eliminated violations a;t the entrance/exit gates to the park. Sub-
sequent design changes which were considered for other areas of potential vio-
lation assumed implementation of this program.
The origin-destination patterns of the office park traffic indicated that work-
hour staggering and carpooling could be combined effectively.
-------
Residential
EXHIBIT m-23
PROJECT E -r SCHEMATIC LAND USE. PLAN
Residential
R4
Res idential
Office
Commercial
Office
•
R5
Office
••••••••••••••••••••••••••••••••••••••a
W&fytf^&ftffitfffiif &£&&&£•$•
j&S&SS&SjOl FiLb^^^j
R2
Residential
Residential
i
-q
oo
Area of potential violation of CO standards
Rl • Receptor sites
-------
ra-79
The least cost highway related design changes would involve an extra
lane for traffic leaving the interchange on an approach to the park and construc-
tion of an off-loop at the interchange. Construction of the cloverleaf would re-
quire relocation of the existing off-ramp. At a cost of $210,000 these changes
would allow traffic to flow uninterrupted on the major arterial bordering the
facility.
One section of the collector road which exceeds standards could be
brought into compliance at least cost by the addition of one peak-hour lane. Be-
cause the flow along this road is directionally unbalanced during the peak period,
the extra lane would favor the peak direction with enough through capability to
meet the standards. The other violations on this road could be alleviated by
adding left-turn storage to segments bordering the park. The cost of these
changes would be $134,000.
The transit program proposed as an alternative to these highway
design changes consists of a park-and-ride facility located in the vicinity of the
interchange. The parking lot would have a capacity of 1,500 cars. Converted
school buses would shuttle people back and forth between the lot and the office
park. Use of the system would be encouraged by elimination of an equivalent
amount of parking within the office park.
As shown on Exhibit m-24, the low cost of this program is a result
of the savings in on-site parking lot construction. Because of the particular
care the developer takes with the aesthetic characteristic of his projects, the
cost per parking space on-site was calculated to be $192 more than at the park-
and-ride facility. It was assumed that the developer would still buy the land
which was originally planned for parking and use it as a greenbelt.
d. Cost Analysis. ISR occurred in Year IX of Project E's de-
velopment process. At that time 725,000 square feet of office space were al-
ready completed and tenanted with long-term leases in effect. Only the re-
maining 775,000 square feet could have borne the cost of the review and asso-
ciated design changes.
-------
m-80
EXHIBIT m-24
PROJECT E - TRANSIT OPTION DESIGN CHANGE COSTS
Capital Costs
Land
11-Acre Parking Lot $ 89,500
3-Lane Access Road (to Lot) 204,000
(one lane reversible for
peak direction)
Construction
Parking Lot 414,750
Access Road 55,000
*
Bus Acquisition
(School-Bus Type) 60,000
Implementation of Staggered Work Hours 10,000
and Car Pool Program $833,250
On-Site Lot Construction Savings (678, OOP)
$155,250
Annual Operating and Maintenance Costs
6 Buses with Total of 93 Vehicle Miles
per Day @ 81^/VM for 260 Days $ 19,600
$ 19,600
*Assumes six buses @ 10,000 each.
-------
Exhibit III-25 illustrates the cost for construction of 775,000 square
feet of office space without ISR. Total costs are shown as $24,800,000. The
same gross leasable area would generate $0.94 per gross square foot in pre-
tax cash How (see Exhibit 111-26).
All costs directly relating to ISR are itemized below for both the
highway-related and trans it-related design change costs and with and without a
90-day delay:
Capitalized'Costs Highway Transit
• Design Changes $354,000 $155,250
• Construction Delay of 3 Months _ 86,280 86,280
(based on 200,000 square feet representing
the only structures where construction tim-
ing would have been impacted by review)
• No Delay 0 0
• Additional Consulting Fees 5.000 5,000
Subtotal (with delay): $445,280 $246,530
Subtotal (without delay): $359,000 $160,250
• Interest @ 12% on Capitalized Costs
with delay 53,434 29,584
without delay 43,080 19.230
Total Capitalized costs
(with delay): $498,714 $276,114
Total Capitalized costs
(without delay): 402,080 179,480
Other Costs (with delay)
• Interest on Land Loan for Additional 2.887 2.887
3 Months1
ISR-Related Costs to Developer
with delay: $501,601 $279,001
without delay: $402,080 $179,480
The transit option would incur $19,600 in annual operating costs in addition to
the totals shown above.
~T~'.
The developer took a land loan to cover the purchase price of much of the
project's property after the option on the first parcel had expired. This is
an unusual practice. Most developers limit land acquisition to only those
acreages which are undergoing immediate development. Ownership on un-
developed land is protected through options.
-------
EXHIBIT m-25
PROJECT E - COST SHEET
Investment Costs*
Land
Construction
Site Work
• Base Buildings
Tenant Work
°***- «•**"•
Other
Architectural and Engineering
Engineering Tests and Survey
Appraisal
Commitment and Securing of Construction
Loan
Closing Costs
Construction Financing (without ISR)
Overhead and Other Development Costs
Interior Design
TjiT^a^apIng
Promotion and Contingency
ISR Prepartlon
Interest @ 12 percent on Capitalized
ISR Costs
Interest on Land Loan for AddUtonal Three
Months
TOTAL PROJECT COST
Without ISR
.Highway
wlthJSR
Transit
WlthBB-
Highway
with ISR
No Delay
Transit
with ER
No Delav
, ComffJar Modeling & 90 Day Delay ' ' "
$1,438.400
1,131,229
14,395,649
2.502.728
18,029,600
—
848,778
39,945
9,663
469,324
129,813
~ 3, 065, 585
599", 137
19,971
99,856
49,928
—
—
—
6,332,000
$24,800,000
. $1,438,400
1,131,228
14,481,929
2.502,728
18,115,880
354,000
848,778
39,945
" 9,663
469,324
129.813
3,065,585
599,137
19,971
99,856
49,928
5,000
S3j434
2.887
5,393,321
125,301,601
$1,438,400
1,131,229
"14,481,929
2.502.722
18,115,880
155,250
.-*&™
39,945
9,663
469,324
129,813
3,065,585
599,137
19,971
99,856
49,928
5,000
29,534
2.887
S.868.471
^SjOW.OOO.
1 1.131.229
14, 395,649
2, 502, 721
;
848,778
39,945
9,663
469,324
129,813
3, 065,585
599, 137
19,971
99.856
49,928
5,000
43.080
--
$1.438,400
1,131,229
14,395,649
2. 502, 722
18,029,600
354,000
848,778
39,945
9,663
469,324
129,813
3.065,585
599. 137
19,971
99.856
49.928
5.000
19.230
..
5.380,080
$25,202,080
$1,438,400
18,029,600
155,250
5,356.230
$24,977,480
*These figures are baaed on 775.000 gross square feet of office area constructed from Year IX to the completion of the project. The figures
themselves are averages, since more than one building Is represented In the 775,000 gross square footage.
-------
EXHIBIT in-26
PROJECT E - OPERATIONAL CASH FLOW
Income .
Gross Rent (based on net leasable area)
Less Vacancy Allowance @ 5%
Net Rental Income
Expense
Operating Expenses*
Cash Before Debt Service
Debt Service (@ 9.3%)
Pre-Tax Cash Flow
Pre-Tax Cash Flow per Gross
Leasable Square Foot
Without ISR
Highway
With ISR
Transit
With ISR
90-Day Delay
$4,950,000
(247,300)
$4,702,500
(1,670,760)
$3,031,740
(2,306,400)
$ 725,340
$0. 94
$4,950,000
(24-7,500)
$4,702,500
(1,670,760)
$3,031,740
(2,353,049)
$ 678,691
$.88
$4,950,000
(247,500)
$4,702,500
(1,690,360)
$3,012,140
(2,332,347)
$ 679,793
$.88
Highway
With ISR
No Delay
$4,950,000
(247, 500)
$4, 702, 500
(1,670,760)
$3,031,740
(2,343,793)
$ 687, 947
$.89
Transit
With ISR
$4, 950, 000
(247,500)
$4, 702, 500
(1,690,360)
$3,012,140
(2,322,906)
$ 689, 234
$.89
B
1
s
*Based on inside leasable area and includes operating expenses in the ISR transit option.
-------
ra-s-4
When the costs with a three month delay are superimposed on Project
E's financial statements as shown in Exhibits m-25 and III-26. Both the highway
and the transit design change options would decrease pre-tax cash flow per gross
square foot to $0. 88. However, the transit option would yield a slightly larger pre-
tax cash flow, a difference of about $1, lt)0 annually.
The developer has indicated that the implementation of roadway de-
sign changes would have ruined the project's design. All of the project's build-
i
ings were purposely set back at least 25 feet from any roadway. Road widenings
would have narrowed this distance. It is likely, therefore, that he would choose
the transit-related option.
Nevertheless, the developer feels that the design change costs have
been understated because they assume developer ownership of the land for the
park-and-ride facility. This is true only in part. Land for the parking lot could
prove to be very expensive if landowners try to take advantage of the developer's
predicament by increasing the price far above the value of the property.
This developer tries to obtain a return of $1.00 per square foot for
office space. The reduction from $0.94 per square foot without ISR to $0. 88 per
square foot with ISR represents a pre-tax revenue loss of $42,000 annually. How-
ever, the return with ISR is acceptable to the developer, who indicated that he
would most likely proceed with the project.
ISR would not have significantly affected Project E's timing on gen-
erating a net positive cash flow return aside from the three-month review delay.
The key variable that affects cash flow return over time for an office building is
occupancy. The remaining 775,000 square feet represent multiple structures,
many of which were commissioned by prospective tenants prior to construction.
These tenants would not have been likely to abandon their plans for buildings in
Project E because of ISR.
-------
in-85
6. Project F
a. General Description. Project F is a five-year modification to
convert an existing community shopping center to one of regional scale. Specifi-
cally, it involves the addition of three major stores and 2,300 parking spaces,
with a 150 percent increase in gross leasable floor area. The facility is located
in a suburban area which has been experiencing intensive office and residential
development and extensive commercial strip development.
The modification was conceived as part of the phasing program for
the original shopping center. One reason the developer committed himself to the
expansion was the feeling that he would be concentrating rather than dispersing
growth in an area which was experiencing piecemeal sprawl.
The development is serviced by three bus routes. One is a shuttle
bus. seraice carrying passengers between this center and another major shop-
ping facility located nearby. It is estimated that 10 percent of the visitors at
one facility also visit the other facility on the same day. The shuttle bus is mun-
cipally operated and pays for itself. The other two bus routes are major parts
of a city-wide transit system. One line has half-hourly service in both directions
and travels in and out of the downtown center. The other offers hourly frequen-
cies.
In negotiating with the municipality for final site plan approval on
the modification, the developer agreed to set up bus stops on the project site
and to contribute to transit system costs. The transit modal split for this
development is estimated to be 25 percent.
b. Development Process. The normal development decision-
making process for a shopping center modification diverges slightly from that
for a new facility (see Exhibit in-27). In the case of Project F, the expansion
took place on property which was already owned by the developer and which was
appropriately zoned for the development. Market studies had already been per-
formed which supported the additional gross leasable area at the center, and the
-------
EXHIBIT HI-27
PROJECT F - DEVELOPMENT PROCESS
Year I
123456789 10 11 12
Year n
12345^6789 10 11 12
Archit
Negotiati
iCt
3ns with Anchor Tenants
Final Site P
Ian
.Traffic
Analysis.
Anchor Tenant Commitment
snan
.Local Plan Approval
Construction Permits
_Permanent_ Financing_pn Existing^ Center_
Construction
.Interim
Financing for
Construction
of
Modification
s
oo
-------
Ill-87
existing center was performing well financially. The problem in the case of
Project F was to design a site plan which would be attractive to potential depart-
ment store tenants.
An architect was commissioned toward the end of Year I to draw up a
generalized plan. At the same time several major department stores were ap-
proached to determine whether they would be interested in locating in the expan-
sion. Not until the middle of Year II was the site plan finalized to the satisfaction
of the developer and his first-priority department store tenants. At that time a
commitment on the part of all but one of the anchor tenants was also sought.
The front-end expenses related only to the shopping center modifica-
tion were financed through the loan on the original center. A separate interim
loan was negotiated to cover construction costs of the modification. When the
modification opened in Year V, the lending institution financing the existing cen-
ter effectuated a separate permanent loan for the modification.
The site plan for the modification had to undergo local planning ap-
proval. The developer was required to approach the planning agency prior to
submitting a final site plan in order to settle any differences. Once approval was
received, the developer applied for his grading permit. Upon issuance of the
permit he began construction. Theoretically, the project would undergo review
during Year II after the traffic studies have been completed.
c. Air Quality Findings. Trip generation rates for the expanded
center are lower per 1,000 square feet than for the original development. Thirty
trips per 1,000 square feet represent an average weekday, with 38 trips per 1,000
square feet on an average Saturday. During the commuter peak hour when the
street system around the site is most heavily loaded, unfarlny. f.r?iffk-. '-'.fii;il= 2, 2-
vehicles per 1,000 square feet and departing traffic equals 2.0 vehicles per
1,000 square feet.
-------
UI-88
Primary access to the site is provided by a system of four-lane and
six-lane arterials as well as an interstate freeway with two interchanges serving
the vicinity of the development. One of these interchanges is within the quarter-
mile limit for review. Forty-three percent of approaching shoppers use the free-
way; the remainder are fairly evenly divided among the four approach directions.
With a few'exceptions the roads in the vicinity (including the freeway)
peak at 10 percent of average daily traffic with a directional split of 55-45. These
characteristics do not create any unusually adverse or unbalanced traffic flows
in the area. Prior to modification, three of the arterials bordering the site ap-
proached their desirable service volumes. In addition, the arterial providing
access to the freeway at the interchange closest to the site has reduced capacity
along the overcrossing.
As a result of public interest and comment prior to ISR concerning
the ability of the road network to serve the modified facility, the expansion was
required to meet several conditions. Traffic flow provisions included road
widenings, right-turn lanes, signalization, and a grade separation when volumes
require it. The developer had to assume the responsibility and costs for these
conditions.
Entrance into the expanded site is provided on four sides. Internal
roads allow circulation through the at-grade parking areas that surround the
block of buildings in the center. During periods of peak accumulation, finding a
parking space could require driving the length and/or width of the center.
Using the EPA methodology to estimate the impact of the modification
on air quality, sections of the freeway adjacent to the site represent the major
eight-hour violations; a section of one of the bordering roads is also in violation
of the eight-hour standard (see Exhibit III-2"8). There are no one-hour problems.
Background levels were assumed to be quite high in the area, based on informa-
tion from the environmental agency tor the city.
-------
EXHIBIT m-28
PROJECT F - SCHEMATIC LAND USE PLAN
Residential
Commercial
Residential/
Commercial
R7
Commercial/
Residential
Residential
(dense)
Residential
Commercial/
Residential
Residential
(dense)
Residential
Residential (dense)
R4
Commercial
Residential
Residential (dense)
Residential
Rl
Commercial
Commercial/
Residential
Residential
(dense)
R2
Commerc ial
Commercial
Residential
H
i
oo
\o
Residential
(dense)
Residential
(dense)
Commercial
Residential
(dense)
Commercial
Residential
School
Residential
(dense)
Residential
Area of potential violation of CO standards
Rl • Receptor sites
-------
111-90
Least-cost design changes to alleviate the air quality problems on
the freeway would involve developing the off-ramp capability at one interchange
by increasing the loop radius and adding a de-acceleration lane, at a cost of
$170,000. In addition, an increase in through-lane capability would be required
over one section. This could be achieved by adding one through lane, a de-
acceleration lane, an acceleration lane, and an off-ramp spur, at a cost of
$700,000. Least-cost improvements to the road bordering the site would re-
quire construction of a service road, including right-turn islands at driveway
entrances, representing a cost of $70,000.
Because of the relatively high modal split and the dispersed nature
of origins and destinations, transit was not considered an effective alternative
in this case.
d. Cost Analysis. Indirect source review was assumed to enter
into the development process in Case F during September of Year n when the
traffic analysis is completed. The total increase in project costs, including ac-
quisition of land and carrying costs during construction, would be $3.1 million.
The review could create at least a three-month delay, causing construction costs
to increase by $260,000.1 ISR preparation would add only $10,000 to costs since
the environmental impact report which was prepared duplicates much of what-is
required by ISR. However, because of the air quality impact of traffic generated
by the modified facility, substantial design change costs would be incurred. In-
creased debt service would add another $0.2 million.
Financial summary sheets for the modification with and without ISR
are shown in Exhibits III-29'and m-30. Land costs for the modification arc;
not included in total project costs because they are part of the investment cost of
the original mall.
This impact could be avoided through proper planning (see Section D, Sensiti-
vity Analysis).
-------
EXHIBIT m-29
PROJECT F - COST SHEET
Investment Costs Without ISR
Land*"
Acquisition of 10 Acres for —
Design Changes
Construction
On-Site *8- 559' 50°
Desien Chanees
$ 8,559,500
Other
Grading. Utilities, & Site Finish $ 1,401,188
Architectural & Engineering 537,400
Legal 150,000
Environmental Impact Review 75, 000
Indirect Source Review —
Brokerage Commissions 766,300
Promotion Opening & Advertising 65,000
Interest During Construction 1,704,188
Contingency, Insurance, & Taxes
During Construction 453,424
: 5,152,500
TOTAL PROJECT COST $13,712,000
With ISR
Computer
$ 8,818,861
940,000
$ 1,401,188
537,400
150,000
75,000
10,000
766,300
65,000
1,906,948
453,424
»
Modeliagjand 90-Day Dela^
$ 1,700,000
9,758,861
5.365,260
$16,824,121
WthlSR
$ 1.700,000
8.559,500
940,000
9,499,500
1,401,188
537,400
150,000
75,000
10,000
766,300
65.000
1,822,938
453,424
5.281.250
*Land costs for modification are covered by the loan on the original mall.
-------
EXHIBIT 111-30
PROJECT F - OPERATIONAL CASH FLOW
Without ISR
Income
Rental* $2,271,000
Expense
Nfenagement $ 23,500
Maintenance ^.5,000
Property Tax & Insurance "1)1, 200
Ground Rent 70,000
Miscellaneous 15, O'DO
(204,700)
Cash Before Debt Service $ 2, 066, 300
Debt Service (1, 369, 800)
Pre -Tax Cash Flow $ 696,500
Pre-Tax Cash Flow per Net
Leasable Square Foot $2. 51
With ISR With ISR
Computer Modeling and 90 Day Delay NO Delay
$2,271,000 $2,271,000
$ 23,500 $ 23,500
5, 000 5, 000
91,200 91,200
70, 000 70, 000
15, 000 15, 000
(204, 700) (204, 700)
$2,066,300 $2,066,300
(1,680,730) (1,646,427),
$ 385,570 $ 419,873
$1.39 . $1.51
* No allowance for vacany or rent loss.
-------
ni-93
As shown in the operational cash flow without ISR, the pro-tax cash
flow per net leasable square foot equals $2.51. The developer seeks a pre-tax
return of $2.00 or more. Consequently, the addition of ISR costs, including a three-
month delay, wpuld/bring the return per net leasable.square, foot down to $1.39,
and would indicate a definite reason for stopping the project.
It is doubtful that the developer would attempt to absorb all of the
project's increased costs. Most likely the tenants would be required to bear as
much of the burden as possible. It is estimated by the developer that tenants in
the area would accept up to an 8 percent rent hike. The operational cash flow
with an 8 percent increase in rents is shown in Exhibit in-31.
The pre-tax cash flow per net leasable square foot would increase to
$2.05 with the increased rental income, with delay-related costs and $2.17 without
a delay. These returns exceed the developer's criterion of $2.00 per square foot.
Consequently, the project would proceed with increased rents.
A pre-tax cash flow statement over time would not be applicable to
this project. The developer was assured of 100 percent occupancy in the first
year, thus generating a positive cash flow almost from the center's opening. For
many developers a satisfactory return does not guarantee the financial feasibility
of a project. Front-end money and the ability to mortgage out at an early date
are often the critical factors. In Case F an addition of $10,000 in front-end
money for ISR preparation is minimal, about 2 percent of the developer's in-
vestment without ISR. This increment would not present a barrier to mortgag-
ing out on schedule.
-------
EXHIBIT m-31
PROJECT F - OPERATIONAL CASH FLOW WITH ISR AND RENT INCREASE
Income
Rental
Expense
Management
Maintenance
Property Tax & Insurance
Ground Rent
Miscellaneous
Cash Before Debt Service
Debt Service
Pre-Tax Cash Flow
Pre-Tax Cash Flow per Net
Leasable Square Foot
With 90-Day Delay
$ 2,452,680
With No Delay
$ 23,500
5,000
91,200
70,000
15.000
(204,700)
$ 2,247,980
(1.680.730)
$ 567,250
$2.05
23,500
5,000
91,200
70,000
15,000
$ 2,452,680
(204, 700)
$ 2,247,980
(1.646.427)
$ 601,553
$2.17
B
i
-------
IU-95
D. Sensitivity Analysis
1. Introduction
For a more comprehensive perspective on the cost-related effects
of an ISR, this sensitivity analysis categorizes the ISR-related costs into the fol-
lowing groups: application costs, time delay costs, and design change costs.
For each group several scenarios are presented in order to gage the full cost
impact of an ISR.
-------
111-96
-• Application Costs
a. Assumptions
In the case studies in Section C, an application cost of $45,000 was
assumed, based upon 10 days of on-site monitoring at four different receptor
sites and computer modeling to project the air quality impact of the indirect
source. Two of the cases, Projects A and C, were found to have no potential
violations of CO standards. With some insight into the factors which lead to
the build-up of CO concentrations and a knowledge of the basic traffic, meteo-
rological, and background CO levels for a particular site, it is possible for a
developer to anticipate that an area would have limited air quality problems
and therefore decide to apply the Technical Guidelines before initiating a mod-
eling effort. If the developer's initial review of the site was correct and use
of the Technical Guidelines showed no violations, the developer could stop
the analytical portion of the ISR application preparation, eliminating the costs
of modeling. Modeling would not be necessary because the Technical Guide-
lines represent the more conservative approach. This could occur in cases
where monitoring is performed by an agency other than the developer. For
example, many indirect sources are attracted by new highway construction.
In such a case some, if not all, of the monitoring carried out to meet EIS
and/or ISR for the roadway project may be used to fulfill the indirect source
data needs as well.
Combining the assumptions of the use of the Technical Guidelines
rather than modeling and of the elimination of monitoring gives a good approxi-
mation of the low end of the range of costs which may be associated with pre-
paring an ISR application.
The high range of the application costs was not calculated because of the tre-
mendous variation in costs which may arise as a function of the number of
receptor sites reauired, malfunctioning of instruments and/or bad weather
which may result in the monitoring period exceeding 10 days, the amount of
effort needed to participate in public hearings, respond to public comments,
and so forth.
-------
Ill-97
The minimum cost was estimated to be $3,000, based on the follow-
ing estimates:
• Data collection and application of the $ 1,000.00
Technical Guidelines
• Preparation of the ISR application $2,000.00
(including formalizing site plans, meet-
ings with public officials, and other
ISR-related activities)
$ 3,000.00
b. Conclusions
Only Projects A and C have been tested for variations in applica-
tion costs because the determination of no potential violation could be made
using the Technical Guidelines, thereby eliminating the need for modeling.
The results of the sensitivity test are shown in Exhibit III-3TJ. In
the case of both projects the initial impact and change in level of impact under
least cost assumptions are very minimal representing under one-tenth of one
precent of the total project costs.
3. Time-Related Costs
a. Assumptions
Two approaches were taken to determine the sensitivity of the
case study findings to changes in cost assumptions. The first was to calculate
the impact of various delay scenarios on construction scheduling and the second
was to examine the same scenarios in terms of opportunity costs.
(1) The Scenarios
The following scenarios were used for the sensitivity analysis:
-------
m-98
EXHIBIT HI- 32
APPLICATION COSTS
SENSITIVITY ANALYSIS
Project A
Total Project Costs
Total Cost
Percent Change
Without
ISR
$31,425,000
—
With ISR Appl
$45,000
$31,470,000
.14%
ication Costs
$3,000
$31,428,000
. 01% •
Project C
Total Project Costs
Total Cost
Percent Change
Without
ISR
$27,750,000
—
With ISR Appl
$5,000!
$27,755,000
.02%
ication Costs
$3,000
$27,753,000
.01%
Since public funds were involved in this project an EIS was required,
thereby minimizing expenses related to ISR.
-------
111-99
• No delay
• A 90-day delay
• A 180-day delay •
The "no delay" scenario was designed to represent the case of a
developer who anticipates and properl^ plans for ISR and for whom the review
f
is completed within the allotted period of time. Projects for which the planning
I
phase is just beginning would conceivably fall into this category. Under such a
scenario no time-related ISR costs are incurred.
The 90-day delay scenario, on the other hand, represents the
situation that faces many developments which are scheduled to break ground
over the next one to five years. These projects have gone through the planning
and PERT scheduling phases of the development process prior to the promulga-
tion of the ISR regulations. Consequently, these facilities will face a certain
amount of unplanned delay time. A 90-day period has been assumed, since
this represents the basic period of time required for review, as described in
the Federal Regulations (that is, 30 days for preliminary determination, 30
days for public notice and comment, and 30 days for a final decision).
The 90-day delay scenario corresponds to the assumption used in
the case studies and is repeated here in the sensitivity analysis for ease of
comparison with the alternative delay periods.
All six of the case studies are presented in term of a 90-day
delay. Only projects B, D, E, and F are tested under the third scen-
ario or the 180-day delay period. The reason for this is that Projects A and C
we1 iound to have no potential CO violation and, therefore, it was assumed
that the review in such cases would not require any extensions of the basic 90-
day period.
The 180-day period was selected as the maximum delay for the re-
view process, assuming three 30-day extensions to each phase of the review
-------
m-ioo
period, pursuant to Federal law. The selection of the 180-day period, however,
assumes that only the review period itself is a time .burden on the developer and
that any efforts related to preparing the ISR application, including monitoring and
modeling, can be absorbed into the project schedule without creating any further
delays.
(2) The Approaches
The first approach to estimating the time-related costs for a pro-
ject was to determine the impact of a delay on construction scheduling. For
this purpose it was assumed that an unplanned delay in the start of construction
would push the completion date an equivalent number of days into the future.
It was further assumed that as a result of the delay the total cost of construction
would be increased in accordance with projected inflation rates and that additional
interest charges would also be accrued as a result of the increased construction
costs.
In the case of phased projects, it was further assumed that delays
impacting on construction costs would only affect the portion of the facility not
erected at the time ISR is initiated.
For thfs approach, the inflation rates used were set at 12 and 6
percent a year. The 12 percent rate is based on projections by a number of
sources (as reported in Engineering News Record) to be the likely rate over the
next two years. The six percent rate assumes some change in the national
economic picture which would reduce double-digit inflation to a rate closer to
historic levels (see Exhibits 111-33 and m-34).
The one exception to this approach was Project E where an addditional cost was
added to account for interest on a loan which the developer took out to cover the
purchase price of the land after the original option had expired.
-------
EXHIBIT III-33
INFLATIONARY IMPA~ .' ON CONSTRUCTION COSTS DUE TO DELAY
(6% per Year Construction Inflation)
Project A
Project B
Project C
Project D
Project E
Project F
Time Delay
No Delay
90 Days
No Delay
90 Days
180 Days
No Delay
90 Days
No Delay
90 Days
180 Days
No Delay
90 Days
180 Days
No Delay
90 Days
180 Days
Time Delay Costs
$
$
$
$
$
$
$
$
$
$
0
139, 100
0
458,315
916,630
0
233, 129
0
425, 700
851,400
0
48,317
96,634
0
145,600
291,200
Percent of
Total Project
Costs Without ISR
0
0.44%
0
1.23%
2.46%
0
0. 84%
0
0. 37%
0. 75%
0
0. 19%
0. 39%
0
1.06%
2. 12%
Return on
Investment
Without ISR
19. 1%
19. 1%
14.2%
14. 2%
14.2%
12.8%
12.8%
(3. 9%)
(3.9%)
(3.9%)
21.0%
21.0%
21.0%
on O07
oU. o/o
on O07
O U » O /o
°,0 V?
OU. O/o
Return on
Investment
with Delay Costs
19. 1%
18. 9%
14. 2%
13. 7%
13.1%
12.8%
12.5%
(3.9%)
(4. 0%)
(4. 1%)
21.0%
20. 9%
30.3%
29. 7%
29. 1%
These costs include the interest on the overall increase in construction costs due to inflation.
-------
EXHIBIT 111-34
INFLATIONARY IMPACT ON CONSTRUCTION COSTS DUE TO DELAY
(12% per Year Construction Inflation)
Project A
Project B
Project C
Project D
Project E
Time Delay
No Delay
90 Days
No Delay
90 Days
180 Days
No Delay-
' 96 Days
No Delay
90 Days
180 Days
No Delay
90 Days
180 Days
No Delay
90 Days
180 Days
Time Delay Costs
$
$
$
• $
$
$
$
$
$
$
0
278, 200
0
916,630
1,815,000
0
466, 257
0
851,400
1,702,800
0
96, 634
193,267
0
291,200
582,400
Percent of
Total Project
Costs without ISR
0
0.89%
0
2. 46%
4.88%
0
1.68%
0
0.75% '
1.49%
0
0. 39%
0.78%
0
2.12%
4.25%
Return on
Investment
without ISR
19. 1%
19. 1%
14.2%
14.2%
14. 2%
1 9 R<7
I/. O/Q
12. 8%
(3.9%)
(3.9%)
(3.9%)
21.0%
21.0%
21.0%
30.3%
30. 3%
30.3%
Return on
Investment
with Delay Costs
19. 1%
18. 7%
14. 2%
13. 1%
12.1%
12. 8% C
12. 1% H
(3.9%)
(4. 1%)
(4.3%)
21.0%
20.8%
20.6%
30. 3%
29.1%
27. 9%
These costs include the interest on the overall increase in construction costs due to delay.
-------
m-io3
The second approach is to determine the opportunity costs associated
i
with a particular delay scenario. Opportunity costs, a term intrinsic to econo-
mists' vocabulary meaning the value of the best alternative, has been calculated
for projects B, D,E, and F in an effort to assess the "value" of a delay due to ISR.
tn these cases the yield for the alternative to tying up the developer's front-end
investment money for a specific period of time was made equivalent to the actual
rate of return for the case study project. Although, the rates of returns ex-
perienced by developers are relativeiyhigh compared to other types of invest-
ment, at the time an ISR delay may conceivably occur, the front-end investment
is relatively low (see Exhibit 111-35).
(3) Conclusions
Anticipating a certain amount of time for the review process so that
no delay-related costs are incurred, is a responsibility that developers should
begin to undertaks as soon as possible
During the first few years that the regulations are in effect, however,
many projects will be too far along to permit ISR timing to be readily absorbed
and delay-related costs may occur.
The sensitivity analysis shows that if the rate of inflation dropped
from 12 percent to 6 percent, the variation in return on investment with and
without ISR is as follows:
12% inflation 6% inflation
90 - days 0.2% - 1.1% 0.1% - 0. 6%
180 - days 0.4% - 2.4% 0.2% - 1.2%
The six case study projects are fainly evenly distributed over these ranges.
Three experience impacts at the low end of these ranges and three experience
impacts at the high end.
In terms of opportunity costs, developers would experience an increase
of anywhere from 3.5% to 7.5% for a 90-day delay and 7.0% to 15.0% for a 180-
day delay on their front-end investment. Although its role in the development
prpcess makes front-end investment valuable, the absolute dollar figures
are relatively small (e.g. a range of $11,034 - $52,264 for a 90-day delay and
$22,068 - 104,528 for a 180-day delay.)
-------
EXHIBIT 111-35
ISR TIME DELAYS MEASURED IN OPPORTUNITY COSTS
Project
B
D
E
F
(D
(2)
(D
(2)
(D
(2)
(D
(2)
Front-End Rate of Return
Investment Without ISR
$1,345,000 14.2%
407, 000
$1,504,000 (3.9%)
1, 179, 820
$ 653,681 21.0%
255,887
$ 258,740 30.3%
147,120
-------
m-i05
4. Design Change Costs
Several probable situations relating to public assumption of design change
costs have been examined in the sensitivity analysis.
a. Incidence of Costs
• Highway Design Changes. Design change costs for projects B,D, E,
and F, which are those projects that may require highway design changes,
have been calculated for the following cases /see Exhibit ni-36).
—Developer supports all capital investment of highway design changes;
maintenance is supported by the public sector, since highway change
was dedicated to it by the developer. This is what has been assumed
in the preparation of the "with E3R" cost sheets.
—Developer assumes only the local share of capital investment for
changes on roadways eligible for Federal or state sharing programs.
Maintenance is assumed by the public.
—Public supports all capital investment for highway design changes.
However, the developer while waiting for the highway design changes
supports an interim transit system. This interim waiting period
has been assumed to be one year.
• Transit Design Changes. Such design changes were alternatives con-
sidered in projects D and E; hence, for only these two projects total
cost impacts for the following cases were presented:
—All capital investment and maintenance of transit design changes
are supported by the developer.
—Developer supplies local share of capital investment for transit
equipment assuming Federal assistance; public assumes operating
and maintenance expenses.
In examining the impact of design change costs, it should be remembered that sometimes
developers incur design change costs for other reasons as in response to a directive from
a zoning board or city planning department.
-------
Exrairm-36
INCIDENCE OF DEIGN CHANGE COSTS
AS USED IN SENmVTTY ANALYSIS
PROJECT C
B O + M
C
D O + M
C
E O + M
C
F O + M
C = Capital
O 4. 1W - f\n
Case 1
1,653,000
000
1,587,300 1,
000
396,480
000
2,756,842 1,
000
Highway
Case 2
287,840
000
587,000
000
151,200
000
964,700
000
Case 3
000
000 ,
33,000
498,000
12,200
240,000
000
000
•• r
Transit
Case I Case H Case m Case IV
121,000 50,600 33,000 33,000
413,840 '" 000 413,840 147,600
173; 880 120,120 106,680 106,680
19,600 000 19,600 000
'
Investment Cost
BTnttnor anr\ Matntonnnna Print
Highway*
Case 1. Developer bears full capital investment
cost. The public assumes maintenance costs of
highway.
Case 2. Developer assumes the capital investment
cost of design changes involving local roads. The
public assumes the remaining capital investment ..:
and all maintenance costs.
Case 3. Developer assumes all capital costs as
well as operating and maintenance costs of an
Interim transit system set up to service the
facility between its opening and completion of
permanent design changes. The public bears
capital «"H TTiaintennnnft costs of the permanent
changes.
Transit* v
Case L The developer bears full capital and
operating and maintenance costs for design
changes.
Case n. The public assumes 80 percent of
transit equipment costs. The developer as-
sumes the remaining capital costs and oper-
ating g™^ Tnnintenq^fifi COStS.
Case m. The. public assumes all transit
equipment costs and the developer assumes
remaining capital costs and operating and
maintenance costs.
Case IV. The public assumes capital and
maintenance costs.
H
o
Ov
"Carpooling and work staggering program costs weie assumed by the developer in all cases. All capital
costs include short-term interest charges.
-------
Ill-107
—Public assumes all capital investment expenditures for transit
equipment; developer assumes operating and maintenance costs.
This is a likely alternative since often there are public funds
available for capital investment expenditures on public transit
equipment, but no funds available for operation and maintenance.
—Public assumes all costs, capital investment, and operation and
maintenance.
Other assumptions include the following:
• Interest will vary with each case taken. Total interest on construc-
tion during the project is computed as the interest at the financial
constant of the project on the sum of the on-site construction costs
plus the developer's share of the highway design change cost
(or interim transit option) required to meet air quality stan-
dards.
• The interim transit option open to the developer, while the
public takes on all highway design change costs, will be assumed
to be in operation for a one-year period. For an office park,
operation of transit vehicles will be over 260 days; for a shop-
ping center or mixed land use development, 365 days of use
are assumed.
• Vehicles for the interim transit option are assumed to be
leased in the more economical way open to the developer--as
opposed to purchasing vehicles for only one year and having
all the associated operating and maintenance costs.
b. Impact of Emission Controls on Design Changes. Exhibit IIT-37
shows the increasing rates of emission''controls on automobiles over time and
the impact that this can have on the number and magnitude of design changes re-
quired under ISR, The CO violation identified in each of the case studies
-------
EXHIBIT IH-37 1
DESIGN CHANGE COSTS
The Impact of Automobile Emission Control Devices
on Design Change Costs Over Time
Highway - Related
Transit - Related
Case B
Percent of
base year cost
Case D
Percent of
base year cost
Case E
Pe'rcent of
base year cost
Case F
Percent of
base year cost
1980
$1,250,000
92%
$539,000
37%
$354,000
40%
$300,000
32%
1985
$1,250,000
92%
$132,000
9%
$40,000
11%
$200,000
21%
1990
$1,167,000
86%
$000
0%
$40, 000
11%
$000
0%
1980
**
$90,000
82%
$155, 250
40%'
**
1985
**
$20,000
18%
$40,000
26%
**
1990
**
$000
0%
$40,000
' 26%
**
c
t
h-»
o
00
** Transit ridership already at maximum reasonable volume.
Work staggering and carpooling not applicable.
Costs in constant dollars based on original completion date (base year) by project.
"Costs do not include annual operating costs.
-------
m-109
were based on a 1975 completion. In order to determine whether the developer
of each project might decide todelay construction in order to take advantage of
motor vehicle emission controls, each violation was recalculated assuming
the completion date would be delayed to 1980, 1985, and 1990. The adjustment
factors used to reflect the application of national CO emission control programs
are shown below.
1980 .41
1985 .32
1990 .21
Because the adjustment factors represent the national age mix of automobiles,.
they may not reflect an individual state's or region's age mix. When further
refinement of these adjustment factors is possible, those refinements should
be used in preference to the national adjustment figures.
For comparison purposes the costs shown in Exhibit 111-37 are
represented in constant dollars.
c. Conclusion. Under alternative incidence assumptions design
change costs range from less than one percent to 21.6 percent of total project
costs without ISR. The negative impact on return on investment ranges from
zero to 10.4 percentage points. The two permanent transit options tested show
a negative return on investment towards the low end of this range, 0.5 to 1.4
percentage points. Interim transit, in the two projects which offered this alter-
native, proved to have a worse impact on the developer's return on investment
than did full developer assumption of permanent highway changes because of the
high operating costs associated with the interim options.
The impact of automobile emission control devices over time reduced
design change costs to zero in two out of four cases by the year 1990. In 1985
design change costs, as a percentage of the base year costs, range from 9 to
Environmental Protection Agency, Interim Guidelines for the Review of the
Impact QI Indirect Sources on Ambient Air Quality, Research Triangle Park,
North Carolina, July 1974.
-------
in-iio
92 percent. The same figures for 1980 show a range from 32 to 92 percent.
The one case in which design change costs did not decrease substantially in
any of the three years represents a downtown shopping center located in the
vicinity of heavy auto commuter traffic,,
-------
Ill-111
E. State and Local Experience with ISR-Related Costs
The purpose of this section is to determine whether costs similar
in magnitude to those projected in the case studies have actually been experi-
enced in areas with ongoing review procedures. Thus, findings concerning ISR-
related costs in Oregon, Florida, and Philadelphia will be presented. Additional
information gathered from discussions held with a number of different develop-
ers and lenders has been included.
1. ISR Application Costs
Experience relevant to Federal ISR preparation costs can be drawn
from the Florida experience. Florida has the longest record of experience with
an ISR review process that meets all aspects of EPA requirements. Discus-
sions with developers actively engaged in projects in the state have provided
many examples of costs associated with the application process. Costs cited
for analyzing CO concentrations for new developments—both with and without
monitoring—have ranged from $5, 000 to $65,000.
Unfortunately neither the Oregon nor the Philadelphia experience pro-
vides reasonable checks on the costs cited in Florida. The Oregon process has
been dominated by small (less than 500 spaces) developments for which review has
been perfunctory when compared to Federal ISR procedures. Large developments of
ICR magnitude in Oregon are required to prepare environmental impact state-
ments covering noise and water in addition to air quality. The expense of this
preparation cannot be compared, or broken down for comparison purposes, with
F jdcral LSR preparation costs.
A sinrlar situation is found in Philadelphia. This is due to the fact
that, to date, only projects with public involvement have come up for review.
Such projects are already responsible for EIS, pursuant to NEPA requirements.
Money is allocated from the outset for environmental analyses. Again, the costs
attributable to air quality analysis cannot be broken out.
-------
m-112
Conversations with developers and lenders have indicated time and
again that ISR preparation costs, according to Federal requirements, do not
pose a serious financial concern. The reason often cited for the lower level of
concern associated with ISR preparation is the ability to ascertain the relative :
magnitude of costs associated with preparation. Contingencies are relatively
minimal in the application procedure.
2. Time-re la ted Costs
Florida again provides the most relevant example for comparing the
delay costs inputed in the case study to actual costs experienced by developers.
Time delay under ISR review in Florida has been cited as resulting in costs
ranging from $500 to $25,000 per day. Figures within the higher range of the
cost spectrum include opportunity costs. Another reason for the wide range is
the mixture of fixed and variable costs which are factors in time delay quantifi-
cation. The proportions will vary with the size of a project and the number of
cost elements impacted by delay. The costs were primarily due to problems in
initiating a new program, including a longer review period and the incidence of
ISR at a fairly late point in the development process.
Oregon, with its proliferation of small developments, does not pro-
vide representative examples of the magnitude of delay costs mat may be exper-
ienced under Federal ISR. The experience of one large developer, however,
illustrates the major impact that ISR can have on development in Oregon. Cur-
rently, ISR has caused a delay of more than one year in the construction of a
large regional shopping center. This delay has resulted in an estimated 20 per-
cent or $3 million increase in construction costs and an additional $1.4 million
increase in interim and permanent financing due to a rise in the financing constant
(from 9.0 to 9. 5 over the period of a ye^r. Spreading the $4. 4 million total over
\
a year yields approximately $12,000 per day for comparison with the Florida ex-
perience. Under the Federal regulations a delay of a duration equivalent to the
Oregon case would not be experienced, since the maximum period is 180 days,
t
unless the timing of the review results in a project being postponed until the start
of a new construction season.
Philadelphia, again, provides no insight into the magnitude of delay costs
that may be experienced by private developers. Public projects, such as the ones
reviewed to date in Philadelphia, incorporate flexible schedules not possible
-------
m-113
in the private sector. Interest rate increases are of limited concern in public in-
vestments. Construction cost increases due to delay cannot be attributed to the
review process because of the multiple and overlapping delays involved in im-
plementation of public projects.
Time delays were viewed as critical by the developers and lenders
interviewed. The concensus was that delays could not only significantly in-
crease carrying costs, but might also force a project into the next construc-
tion season or result in losses of options, failure to meet commitments to ten-
ants, and the like.
3. Design Change Costs
Evidence from Florida indicates that some developments have in-
curred major design change costs, although there is often some uncertainty as
to whether to attribute these costs to ISR or DRI. For example, in some cases
DRI approval might be conditional upon a statement from a DOT official that he
has reviewed existing and projected traffic flows for the roadnet surrounding a
proposed development and that the developer has agreed to make any DOT-suggested
changes necessary to maintain suitable roadway level-of-service characteristics.
From experience to date, such DOT assessments could require a developer to pay
from $0.25 million to $1 million to make the specified roadway improvements.
Although these costs are originally attributable to DRI, they might also serve
as design changes appropriate to receiving ISR approval. Therefore, such
costs might be considered in part related to DRI and in part to ISR.
In general, persons interviewed during the course of the study of
U ^ or da exp-^'ience seem to feel that design change costs—whether for ISR
or D1J—may average less than might be experienced in other states because
the ambient air: quality in Florida is relatively good. This means that the po-
tential for new development to exceed NAAQS is more limited than elsewhere,
as is the need to institute design changes to prevent violation of CO standards.
A comparison of ISR and DRI (review of developments of regional impact) is
presented in Appendix E.
-------
HI-114
Both the large and the small developers in Oregon seem to benefit
from the fact that, to date, design change requirements have focused largely on
transit improvements and parking space reductions. Relatively minor street
modifications are sometimes included in the conditions but major changes are
not. The implication of the review process in the past, whether intentional or
not, has been to utilize developers as a means of speeding up transit improve-
ments which are consistent with PMP (Parking Management Programs) and TCP
(Transportation Control Plans).
The costs of transit-oriented changes can be significantly less than
fully highway-oriented changes. In one case, an initial outlay of $325,000 was
required for buses, subsidies to the public transit system, and minor changes
in the roadnet, with operating costs of $150,000. This compares to a million
dollars or more for one major roadway change (e.g., constructing an overpass).
However, counts at the facility showed that less than one percent of visitors used
the transit provided and that most patrons continued to drive, despite a reduction
in the number of on-site parking spaces. Consequently, questions are raised re-
garding the effectiveness of transit as an "effective" design change option. Oregon
DEQ attributes the failure of the transit system at this facility to the attitude of
people there toward mass transit, the convenience associated with automobiles,
and the overall inability of the area's population density to support a transit system.
Design changes subsequent to review have not been required in
Philadelphia. Throughout the planning period, designs are carefully monitored
by several agencies because of the public nature of the projects which have come up
for review. This process has prevented the imposition of additional design
changes as a result of ISR.
Design change costs, per se, have not been acknowledged as a
major concern by the developers and lenders interviewed. These costs repre-
senta quantifiable magnitude which they have indicated is of less concern than
uncertainty associated with delay costs.
-------
Hl-115
F. Conclusions
Certain conclusions concerning the economic impact of ISR on re-
gional shopping centers, office complexes, and mixed-use developments may be
drawn as a result of the analyses performed during the six cases studies as well
as certain information drawn from the state and local experience studies
described in the preceding pages. The findings of the case study and sensitivity ana-
lyses are shown in Exhibit 111-38 and ni-39. The conclusions are presented below.
1. Data Acquisition and ISR Application Preparation Costs
The case studies show that the cost incurred by a developer in collecting
and analyzing traffic and air quality data to determine a project's impact on lo-
calized concentrations of CO are minimal and may be readily absorbed. Findings
show these costs to be generally less than one-tenth of one percent of total pro-
ject costs. The use of the Technical Guidelines can significantly reduce the
costs associated with data acauisition and preparation of an ISR application.
>>
For. example, in the sensitivity analysis assuming the use of the Technical Guide-
lines rather than computer modeling and assuming monitoring data supplied by a public
agency, ISR application costs were estimated to be reduced from $45,000
to $3,000.
Since the methodology presented in the Guidelines is based upon
conservative technical assumptions it is highly probable that where multimillion
dollar investments are involved, developers will prefer to rely on more expensive
monitoring and modeling techniques—particularly for making specific determin-
ations on the nature and extent of design change needs. The Guidelines will pro-
bably be most important for developers of small-scale projects, who have limited
sources of funds for front-end investment.
Although small-scale projects are not addressed in the case studies, such de-
velopments may come under review as the result of being sited in a TCP area
or in a locality which requires indirect source review for developments with
fewer parking spaces than specified under the triggering limits for Federal
ISR.
-------
Office Park
Shopping Center
EXHIBIT 111-38
SUMMARY OF SIX CASE STUDY ANALYSES
TOTAL COSTS
RETURN ON INVESTMENT
Project A
Project E
Project B
Project F
WITHOUT ISR WITH ISR
No Delay
$31.425,000 $31,428,215
24798000 25,202.080
Mixed Use
Project C
Project D
27,750,000
113,982,000
27.753,000
115,613,300
28,221,757
116,464,700
12.8%
(3.9%)
12.8%
(4.2%)
12.1%
(4.4%)
* Inflation rate of 1 percent per month
H = Highway Design Change
T = Transit Design Change
With an 8 percent Increase In rents
-------
EXHIBIT ffl-39
SUMMARY OF ISR RELATED COSTS
(DOLLARS)
Application
Related Costs Highway Mass Transit Delay Costs
Technical Computer
Guidelines Modeling Case
Office Park
Project A $3,000 $45.000 0
1 Case 2 Case 3 Case 4
0 0 0'
Projects - $5.000 $396.480 $. 151,200 $252,200 $193,480
Shopping
Center
Projects - $35,000 $1,653,
Project F - $10.000 $2,756,
M lied Use
Project C $3.000 $ 5.000 0
Project D - $40,000 $1.587,
Highway
Case 1. Developer bears full capital Investment
cost. The public assumes maintenance costs of
highway.
Case 2. Developer assumes the capital Investment
cost of design changes involving local roads. The
public assumes the remaining capital Investment
and all maintenance costs.
Case 3. Developer assumes all capital cosWaS
000 $ 287,840 0 0
842 $1.964,700 0 0
0 0 0'
300 $1,587,300 $531,000 $413,961
Transit*
Ca'se'4.' The developer bears toll capital and
operating and maintenance costs for design
changes.
Case 5. The public assumes 80 percent of
transit equipment costs. The developer as-
sumes me remaining capital costs and oper-
ating and maintenance costs.
Case 6. The public assumes all transit
90 Days 180 Days
Cases Case 6 Case 7 No Delay .6% Inflation 12% Inflation 6% Inflation .12% Inflation
per year per year per year per year
0 0 0 0 $ 139, 100 $ 278, 200
$120,120 $126,280 $106,680 0 $ 48,317 $ 96,634 $96,634 $193,267
0 0 0 0 $ 458,315 $916,630 $916,630 $1,815,000
i
0 0 0 0 $ 145,600 $291,200 $291,200 $ 582,400
0 0 0 0 $ 233,129 $466,257
$50,600 $446,840 $180,600 0 $ 425; 700 $851,400 $851,400 $ 1,702,800
t
well as operating and maintenance coats of an
Interim transit system set up to service the
facility between Its opening and completion of
permanent design changes. The public bears
capital and maintenance costs of the permanent
changes.
equipment costs and the developer assumes
remaining capital costs and operating and
maintenance costs.
Case 7. The public assumes capital and
maintenance costs.
*Carpooling and work staggering program costs were assumed by the developer In all cases. All capital
costs include short-term interest charges.
-------
m-118
2. Delay Costs
Over approximately the next two to five years, there is a strong
possibility that delay costs may be a fairly significant source of ISR-related
economic impact on the three types of developments analyzed in the case studies,
although depending on the length of the delay involved, probably not as significant
as may be anticipated by some members of the development industry. The
projected short-term nature of the impact is due to the fact that many of the
projects which will come up for review during the early years of the ISR program
have already gone through several years of planning, PERT scheduling, and other
steps in the development process which limit the developers flexibility in ab-
sorbing time delays. In addition, time-related costs may be incurred in part
because delays are much more common during the initial phase of implementing
a new set of regulations and in part to a combination of economic factors, in-
cluding tight money supply, inflation, construction material shortages, and so
forth. The uncertainty associated with delays rather than absolute cost gives
added importance to this type of impact.
i
There are two sources bf delay which have been examined in the
case study evaluation: delay due to the length of the review process and delay
due to implementing design changes. Regarding delays due to the length of the
review process, findings of the case studies and sensitivity analyses indicate that
there is a wide variation in impact, depending on the particular development.
In terms of impact due to inflationary increases in project costs with a delay in
the start of construction, three of the six projects showed changes of around
one-half of a percent in ROI, while three projects showed about a 1 to 7 percent
drop for each 90-day increment in ROI in time cost. Opportunity costs as a
measure of delay also vary widely, showing, for example, a range of from 3. 5 to
15 percent of front-end investment for the six case studies under assumptions
of 90 and 180-day delay periods.
-------
m-119
Delays due to the need to implement design changes, however, raise
a different set of questions. Timing can be an especially critical problem when
a project is postponed altogether until the necessary roadway or transit improve-
ment has been made. Economic impact of this type may be minimized by insti-
tuting interim measures which can be used to protect an area from violation of
NAAQS for CO until such time as a permanent design change, is implemented.
An example of this would be to allow an ISR permit to be issued for a develop-
ment if a shuttle bus system is maintained by the developer until off-site road-
way changes have been made.
3. Cost of Design Changes
•
Over both the short and long term, the cost of design changes may
be the major source of economic impact stemming from ISR. The case studies
indicate that developments in downtown or densely populated areas will be most
affected by this type of cost. In addition, the studies show that regional shopping
centers probably face the most significant design change costs due to the nature
of the traffic generated by such facilities.
Two of the four case studies requiring design changes represent
urban shopping centers. Both of these facilities showed substantially greater
design change costs as a percentage of total project costs than the remaining
facilities in violation of NAAQS. The range of developer costs, under alterna-
tive incidence assumptions for the shopping centers equalled 0.7 to 21.6 per-
cent of total project costs without other ISR-related costs, while the mixed use
and office developments showed a range from 0.3 to 1.6 percent of total project
costs without other ISR-related costs.
Design change costs can be minimized to the degree that the inci-
dence of the costs can be shared between public and private sources.
As a percent of total project costs, the spread between full developer
responsibility for costs and least developer responsibility for capital cost ranges
from 0. 07 to 3. 7 percentage points.
-------
in-120
Under alternative incidence assumptions the negative impact on the
developer's return on investment ranges from zero to 10.4 percentage points.
The two permanent transit options tested show a negative impact on return on
investment towards the low end of this range, 0. 5 to 1. 4 percentage points.
However, the interim transit program, tested in the same two cases, proved
to have a worse impact on the developer's return on investment than did full
developer assumption of permanent highway changes. Consequently interim
design changes will probably only be used to enable developers to obtain
financing for the total project during delays in permanant design change im-
plementation.
The impact of automobile emission control devices on design change
costs over time proved substantial in three of the four projects. Two projects
required no design changes by the year 1990. However, in the fourth project,
86 percent of orignial design change costs would be incurred in 1990.
The persistence of the air quality problem necessitating these sub-
stantial design change costs so far into the future can be attributed to the fact
that the facility represents a regional shopping center located downtown in the
vicinity of heavy auto commuter traffic. This facility, in particular, indicates
the desirability of examining the issue of whether, from an environmental
perspective, the size or location of the project is indeed suitable for the area
under consideration. Questions related to size and location are examined more
fully in Part IV of this report.
4. Financial Feasibility and ISR-related Costs
In the real estate development industry the financial characteristics
and feasibility criteria for specific projects vary widely, as illustrated by me
six case studies described in mis section. Consequently, ISR impact also varies
widely. In addition, the magnitude of ISR-related costs can change significantly
depending on such factors as timing (both point in time and duration of time), the
year in which me review takes place, me type of activity and location, the
-------
Ill-121
methodology used to assess air quality, and so forth. The sensitivity analysis
in Section III-D provides examples of the differentials in impact associated with
these and other factors.
With regard to the six cases, under varying cost assumptions in
only one instance did the financial feasibility of a project seem jeopardized due
to ISR. One of the two regional shopping centers studied, Project B, was a
marginal project even before incurring any additional costs. As a result of
the type of traffic attracted and the facility's location in a congested area with
very high levels of carbon monoxide concentration, a number of relatively costly
design changes would be needed to meet the regulations. Even with public
assumption of a large percentage of the design change costs, the financial
feasibility would be in question especially since tenant stores were already
paying rents well above normal, so that a rate increase could not be considered.
In the case of Project B, therefore, the development could only proceed under
ISR if it was relocated or in some way redefined to service a transit-oriented
market.
The second shopping center analyzed, Project F, stands in striking
contrast to the case described above. Project F is a modification to an existing
shopping center. Again, as in the case of Project B, design change costs were
high; in fact, the total design change costs for the modification are higher than
for any of the other six cases. Unlike Project B, however, the developer estimated
that for this development a rent increase of up to eight percent would be possible.
With this increase in revenues, the additional ISR-related costs could be absorbed,
and the developer could achieve his feasibility criterion for the project of a $2. OQ
cash flow per net leaseable square foot.
In the case of the two office parks, Project A causes no violation of
standards, so that ISR-related costs are minimal. If the Technical Guidelines
are used instead of monitoring and computer modeling and no delay costs are
incurred, total costs would probably not exceed $3,000. The location of the
office park in a largely rural, although developing area was an important factor
in minimizing the impact of the facility on ambient air quality.
-------
m-122
The second office park, Project E, does create violations of NAAQS
for carbon monoxide during peak rush hours. Due to the type of facility, a
combination of staggered work hours, carpooling, and a park and ride system
was found to be a less costly design.'change alternative for the developer than
i
a combination highway-related change. Under ISR this project could still be
financially feasible, even if the park and ride system is supported solely by
the developer. Furthermore, savings may be possible if surrounding facilities
participate in the park and ride program on a cost share basis and/or the need
to construct on-site parking spaces for employees is reduced.
Of the two mixed use developments, the analysis shows that the
traffic generated by Project C does not cause standards to be exceeded. Care-
ful planning to ensure smooth traffic flow is the key factor in the case of this
development. As with Project A, ISR-related costs would probably be minor,
since no design changes would be needed to obtain an ISR permit.
Project D, die second mixed use development, is located in a
densely populated urban fringe area, where mere are numerous points of traffic
>
congestion. The air quality analysis indicates that NAAQS can be exceeded at
these points and that a large number of ISR-related design changes would be re-
quired. The mix of uses within this project results in carpooling and staggered
work hours having relatively little impact, compared to the office park described
under Project E. Although a transit option is available, the highway design changes
would probably be preferred by the developer, since they are slightly less costly
in this instance. The impact of ISR-related costs on the project's feasibility is
different than in the orner five cases. The development has a negative cash flow
and is being used as a tax shelter by a diversified corporation that must assess
the project in terms of the financial status of its other activities, as well as the
ultimate effect of the financial changes on stockholders.
-------
PART IV
ISR IMPACT ON THE LOCATION AND
SIZE OF DEVELOPMENT
A. Overview
Part II of this report presented a number of public comments related
to the promulgation of the proposed EPA indirect source regulations. Many of
these comments reflected concern that developers would respond to the regula-
tions by either reducing the size of their planned facilities below the triggering
points for review or that they would locate in areas with relatively clean air in
order to limit the possibility of violating NAAQS for CO. The commentators
considered both of these alternatives environmentally undesirable, noting that
they would create an impetus for continued urban sprawl and more automobile
travel—a situation which, in turn, would ultimately lead to a higher level of
pollution from photochemical oxidants.
A different but related set of comments raised the issue of whether
the proposed regulations would result in air quality being the sole determinant
used in land use decisions. In response to this criticism, the EPA administra-
tor issued the following statement:
It should be emphasized . . . that the determination made pursuant
to these regulations is only one necessary step among many other
land use measures already generally established (i.e., zoning ap-
proval, site plan approval, demolition and building permit approval,
sewer tap-in approval, etc.) in order to assure that a specific fa-
cility will be designed and located in a manner not inconsistent with
the public health, safety, and welfare. It is hoped that indirect
source review will eventually be incorporated into comprehensive
State and local land use planning processes so that social, economic,
and air quality factors can be considered in an integrated manner.
39 FR 7274, 25 February 1974.
-------
IV-2
The thrust of this statement, as with previous EPA announcements regarding
clarification and interpretation of the proposed regulations, is that the review
process is not intended to stop development but rather to ensure the maintenance
of air quality.
If, as previously mentioned, developers attempt to circumvent the
regulations through changes in the size and location of projects rather than by
instituting the design changes necessary to meet review requiements, the
effectiveness of the process will be substantially reduced. Therefore, this part
of the report will explore trends with respect to the size and location of new
shopping centers, office buildings and office parks, and mixed-use developments,
and will determine the probability that ISR implementation will lead to a change
in these trends.
B. General Comments
1. Introduction
As discussed in Part III, the real estate development industry is
currently facing a number of economic problems which may eventually be re-
flected in the emergence of new trends with respect to the size and location of
development. Further complicating the situation is the implementation of ISR.
The evidence of this study is somewhat contradictory with respect
to the role of ISR vis-a-vis other factors in impacting on developers' decisions
on size and location. In some cases, ISR^ requirements seem to be the principal
determinant of new trends toward smaller sizes and/or increasing suburban
construction. In other cases, ISR appears to be only one of several factors.
including increased construction costs, energy and material shortages, high
\
interest rates, and local restrictions pn growth, which have caused developers
to reorient their planning strategy. Nevertheless, the development industry is
presently in a high state of flux and many of the trends identified in this section
may represent interim rather than long-term responses to rapidly changing
conditions. This caveat is important and should be kept in mind while reading
this portion of the report.
-------
IV-3
The discussion that follows .focuses on the location and size of new
development for shopping centers, mixed-use developments, and office buildings
and office parks, the three types of facilities covered by the case studies. The
information used to prepare the materials for this "General Comments" section,
however, has been drawn from a much wider range of sources. Private de-
velopers, organizations representing particular segments of the development
industry, air pollution control officials, planners, and members of transporta-
tion departments have all contributed to the conclusions presented here.
2. Shopping Centers
a. Location. As perceived by major department stores, the prime
tenants of shopping centers, market size and distribution have been and continue
to be the primary determinants of shopping center location. In the past there
have been some examples of large centers which located in relatively remote
(rural to semi-rural) locations in order to take advantage of large lot availability
and lower land acquisition costs. Subsequent review of the economics of such
facilities have shown them to be less than favorable, however; thus, it is the
opinion of major shopping center developers that future siting decisions will focus
on areas closer to major markets. .
With regard to whether proximity to major markets would mean sub-
urban location, urban fringe, or downtown location, a number of countervailing
forces are at work. For example, land acquisition prices, property taxes, costs
of upgrading poor quality "pass-over" land, and other costs of inner-city loca-
tions are commonly much higher than those for sites in surrounding areas. In
For example, an article appearing in the 9 March 1974 issue of Business Week
stated, "Retailers with shopping centers that are far away—10 miles or so—
from high population areas are suffering. " The article went on to cite Korvette
and Abraham & Straus as examples of chains that were experiencing "fall-offs"
in malls that were "off the beaten track. " Recent fuel shortages have greatly
aggravated the problem.
-------
IV-4
addition, major department stores often balk at the rent levels necessitated by
these incremental costs, especially those required to support large on-sitc, non-
revenue-producing parking facilities.
To simply acquire sizable plots of land—irrespective of cost—can
be a problem in downtown locations because of fragmented patterns of property
ownership. There are two possible solutions to this particular problem. One
is to construct the facility in conjunction with a redevelopment authority which
has the right of eminent domain. This practice is becoming more common, al-
though it often means that a developer who has traditionally been concerned with
shopping centers finds himself involved in mixed-use development, a trend which
is more fully discussed in Section 4, below.
The second alternative to overcoming the obstacle of large lot ac-
quisition in downtown areas is to erect multilevel shopping centers. Although
there are examples of this type of facility in existence today, there is a great
deal of uncertainty within the industry over the economic viability of such estab-
lishments—especially in view of the desire of most tenants to be on the first
level.
Despite the problems associated with downtown location, urban re-
vitalization is occurring in several localities and new urban shopping malls have
been built in such areas as Los Angeles, Pittsburgh, Chicago, Worcester,
Springfield, Salt Lake City, Oakland, and Kansas City. In some cases, such as
a major center that opened in October 1973 in Queens, New York, the develop-
ment is integrated within the existing urban scene. In other cases, the develop-
ment may be integrated within an urban sub-center such as Century City in Los
Angeles, Crystal City in Washington, D. C., and Colony Square in Atlanta.
The reasons given for renewed interest in urban locations range from
the recognition of a very subtle change' in attitude that is taking place in personal
life-style choices ("People are admitting that they miss the varied services of
-------
IV-5
the city, and many of them really want to come back— to work and, in some cases,
to live.") to the realization that there are economic advantages to such sites:
As proven in suburban regional developments where similar principles
adhere, retail opportunities flourish in such well-trafficked environ-
ments. Urban sub-regional megastructures will offer efficient land
usage for centers offering terrific concentrations of comparison shop-
ping opportunities within a single pwnership entity.2
Despite this renewed interest in urban area developments and the
fact that many suburbs—particularly those outside major metropolitan areas—
represent saturated markets, suburban sites are still highly attractive for new
mall development. There are a variety of reasons for this. The first relates
to the barriers to downtown development, including access problems, inadequate
parking, higher land costs, proliferation of land ownership, limited site avail-
ability, politics, and safety and security problems which tend to deter nighttime
shopping. A number of developers have said that politics is the number one
obstacle to inner-city development. ss
The second reason that suburban locations remain a major focus of
interest is related to the mounting influence of prospective shopping center ten-
ants in the site selection process. Several large department store chains have
been practicing the "land banking" of parcels in growth areas over the past sev-
eral years. Depending on market conditions at a particular time, the major
department stores decide to "open up land" and invite a developer to come in
and complete the shopping center package.
A third factor which is somewhat related to the point made above is
the fact department store chains prefer sites that are in proximity to the affluent
markets which have developed in many suburbs.
"Suburban Malls Go Downtown," Business Week. 10 November 1973, p. 90.
2
S. O. Kaylin, "SCW Study Offers New Base for Projections," Shopping Center
World, January 1973, p. 37.
-------
IV-6
A fourth reason favoring suburban sites is that most major depart-
ment stores are already located in downtown areas and do not want to sponsor
further development in areas which might cut into existing markets.
.;
Shopping center developers seem to feel that ISR would be only one
more factor that would encourage the selection of suburban rather than down-
town sites. Their reasons are that (i) the higher CO background levels in urban
areas would make it more difficult to plan a facility which would not worsen CO
concentrations; (ii) roadway widening and other design changes would probably
be economically unfeasible in densely populated downtown areas; and (iii) it
would often be difficult to implement mass transit alternatives effectively be-
cause of a reluctance on the part of the general public to utilize this transpor-
tation mode for shopping trips.
In addition to the perceived impact that developers feel ISR would have
on urban versus suburban locations, some localized effects of the review require-
ments might also emerge. For example, sites near major traffic arteries and
intersections requiring costly roadnet design changes in order to attain ISR ap-
proval would probably be abandoned. Some developers also indicated that they
might look more closely at sites located more than one quarter of a mile away
from major traffic problem areas.
b. Size. ISR impact on the size of shopping center developments
is of far greater importance than ISR impact on the location of developments.
All developers contacted during the course of this study—both large and small—
stated that the principal response to ISR would be the proliferation of projects
with parking spaces less than the "triggering points" (1,000 parking spaces
within SMSA's; 2,000 parking spaces outside SMSA's). In some cases, they
said that these smaller developments would take the form of freestanding de-
partment stores. In other cases, they would appear as strip development or
"mini-centers."
-------
rv-7
Developers who have traditionally been concerned with regional cen-
ters have all established divisions to investigate small-scale or mini-center de-
velopment. These large developers feel that as they begin "to go smaller," the
competition will begin to force many smaller developments out of business. Conse-
quently, while the direct impact of ISR on small developers may be minimal, the
indirect impact resulting from increased competition may be very significant.
In attempting to ascertain whether size reductions would be a significant effect
of ISR implementation, two questions were legitimately raised:
(i) Are the returns from large (regional) shopping malls signifi-
cantly greater than those from small facilities (community
and neighborhood shopping centers), so that a developer would
probably absorb a certain amount of ISR-related costs rather
than perfunctorily decide to reduce the size of a proposed
facility?
(ii) Is there evidence of a trend toward smaller size shopping
centers even without ISR?
Exhibits IV-1, IV-2, and IV-3 address the first question. They illus-
trate operational cash flows for shopping centers of different sizes. Under stan-
dard zoning guidelines (5. 5 spaces per 1, 000 square feet GLA), regional centers
would have 2,200 associated parking spaces; community centers would have 880
spaces; and neighborhood centers would have 275 spaces. The figures used in
the cash flows were derived from the most recent compilation of shopping cen-
ter financial information. These data, however, represent centers built
between 1969 and 1972. Since then rising costs and tight money have significantly
impacted shopping center developments. Nevertheless, the computations indi-
cate that if developers choose to build smaller centers in response to ISR (i. e.,
to build at community scale rather than regional scale), this reduced scale would
not significantly impair the financial feasibility of the project.
Urban Land Institute, The Dollars and Cents of Shopping Centers; 1972,
Washington, D. C., 1972.
-------
, IV-8
EXHIBIT IV-1
REGIONAL SHOPPING CENTER*
OPERATIONAL CASH FLOW
Income
Rental $ 968,000
Expenses
Operating Costs Including Unrecovered
Property Taxes (340,000)
Cash Available for Debt Service $ 628,000
Debt Service** (552, 500)
Cash Flow $ 75,500
Cash Flow per Gross Square Foot $0.30
Return on Developer's Investment of $1.5 million*** 16%
*400,000 square feet GLS of which 38% is major stores.
**$6 million total project cost @ 8.5% constant
***Assumes 75% financing.
Source: Calculated from Urban Land Institute, The Dollars and Cents of Shopping
Centers; 1972. Washington, D. C., 1972.
-------
IV-9
EXHIBIT IV-2
COMMUNITY SHOPPING CENTER*
OPERATIONAL CASH FLOW
Income
Rental . $ 326,400
Expenses
Operating Costs Including Unrecovered
Property Taxes (110,400)
Cash Available for Debt Service $ 216,000
Debt Service** (182.750)
Cash Flow $ 33,250
Cash Flow per Gross Square Foot $0. 28
Return on Developer's Investment of $537. OOP*** 15%
*160,000 square feet GLS of which 27% of GLA is major stores.
* Total project cost of $2.15 million @ 8.5% constant.
***Assumes 75% financing.
Source: Calculated from Urban Land Institute.The Dollars and Cents of Shopping
Centers; 1972, Washington, D. C., 1972.
-------
IV-10
EXHIBIT IV-3
NEIGHBORHOOD SHOPPING CENTER*
OPERATIONAL CASH FLOW
Income
Rental . $ 108,000
Expense
Operating Costs Including Unrecovered
Property Taxes (34,500)
Cash Available for Debt Service $ 73,500
Debt Service** . (66,300)
Cash Flow $ 7,200
Cash Flow per Gross Square Foot $0.21
Return on Developer's Investment of"$195. OOP*** 12%
*50,000 square feet GLA of which 32% is major stores.
**Total project cost of $780,000 @ . 085 constant.
***Assumes 75% financing.
Source: Calculated from Urban Land Institute, The Dollars and Cents of Shopping
Centers; 1972,Washington. D.C., 1972.
-------
IV-11
With regard to the second question there is some evidence that small
developers have been entering joint ventures with major chain department and
discount stores to build freestanding facilities. The initiative for this trend has
been coming from the chain stores, partly because of the uncertainties in timing
involved in setting up large multitenant malls and partly because some of them
have been able to equal or exceed demand under freestanding conditions. There
are two reasons for this. With this arrangement, a wider range of commodities
can be offered; also, some lines which they previously could not carry because of
an overlap with other stores in a center can now be sold.
In the case of freestanding facilities, it is possible that chain stores
would use ISR to rationalize a trend that already exists, thereby lessening the
resistance of large developers to "go small. " Mini-centers, however, seem to be
largely a response to ISR. Nonetheless, developers seem to feel that the environ-
mental impact of these small-scale facilities may be detrimental in terms of in-
creased VMT for shopping purposes as well as in terms of lower economies which
would prohibit landscaping, the construction of retention ponds, and other environ-
mental measures which are currently being incorporateqinto designs for regional
centers.
3o Office Buildings and Office Parks
a. Location. The markets for office space can be broken down
into five broad categories: major institutional, general commercial, medical/
dental, quasi-industrial, and pure industrial. However, as the first two markets
are the most important in terms of the number and size of facilities, they are
the focus of the following discussion.
Many factors contribute to a locational decision. Traditionally,
offices have Io9ated in the central city in order to take advantage of transporta-
-A?';
tion iaciiitiesj access to other businesses and services, and the available labor
-------
IV-12
force. However, with the increasing trend of suburban development, many
offices have gone to outlying metropolitan areas. The relative advantages and
disadvantages of urban and suburban locations are outlined below:
Suburban Advantages
• Ample on-site parking
• Free-flowing traffic movement
* Good road access on interstate
highway system
• Spacious surroundings, room to
expand
• Lower rent
• Buildings designed for tenant
needs
• Local, better educated part-
time female labor force
• Less commuting distance (in
most cases)
Urban Advantages
• Public transit
• Access to governmental
services
• Full range of eating and
shopping facilities
• Major banking and brokerage
houses and other professional
services
• Proven labor market
J. Ross McKeever, Business Parks, Technical Bulletin 65, The Urban Land
Institute, Washington, D. C., 1973, p. 12.
-------
IV-13
Suburban Disadvantages , Urban Disadvantages
• Little or no public transportation • Traffic congestion
E
« Unknown labor supply • Need public transit improve-
ments that slated until late
• Less familiar location for clients 1970's and early 1980's
• Eating and shopping facilities often • Higher rents
limited
• Obsolescent space
• More noise and crime
;•. In general, firms which demand day-to-day access to resources in
urban areas tend to select nearby locations. In some cities, certain activities
(especially in the banking field) are legally tied to the central city. Thus, con-
sumer-oriented organizations, financial and banking institutions, and law firms
usually prefer downtown locations. However, firms with an established and
self-contained routine or firms anticipating rapid expansion are more inclined
to consider outlying areas. For example, as new and medium-size firms grow,
they have less of the traditional incentives for CBD location. Further, as man-
agers with suburban office experience reach high levels, they will have a more
favorable view toward suburban location than their precedessors. Thus, pro-
duction-oriented manufacturing firms, computer operations, and machine billing
offices are increasingly favoring suburban locations. Once settled (in either
type of location), tenants rarely relocate to office space outside their normal
2
market area.
Gerald Manners, "The Office in Metropolis: An Opportunity for Shaping Metro-
politan America," Ecojiomic_Geosrap_hyj Vol. 50, No. 2, April 1974, p, 101.
2
Detoy and Rabin, op. cit.
-------
rv-14
EXHIBIT IV-4
ESTIMATED GROWTH IN CENTRAL CITY AND SUBURBAN OFFICK
SPACE IN SEVERAL METROPOLITAN AREAS, 191)0-1972*
(la Million Gross Square Feet)
SMSA
New York
Chicago
San Francisco
Atlanta
Minneapolis-
SU Paul
Houston
Boston
Dallas
Cleveland
Zone
Total
Central city CBD
Best of SMSA
Total
Central city CBD
Rest of SMSA
Total
Central city CBD
Rest of SMSA- .
Total
Central city CBD
Rest of SMSA
Total
Central city CBD
Rest of SMSA
Total
Central city CBD
Rest of SMSA
Total
Central dry CBD
Rest of SMSA
Total
Central city CBD
Rest of SMSA
Total
Central city CBD
Rest of SMSA
1960
275
140 (51%)
135 (49%)
49
48 (98%)
22
19 (86%)
3 (14%)
23
11 (48%)
12 (52%)
11
10 ,(91%)
1 ( 9%)
15 '
11 (73%)
4(27%)
i
19
18 (97%)
1(3%)
13
10 (77%)
» (23%)
8
8(97%)
-(3%)
1972
483
244 (51%)
239 (49%)
88
73 (83%)
15 (17%)
52
34 (65%)
18 (35%)
49
20 (41%)
29 (59%)
45
10 (44%)
25 (56%)
42
22 (52%)
20 (48%)
39
29 (75%)
: 10 (25%)
29
16 (55%)
13 (45%)
19
15 (T'9%)
4 (21%)
Increase
1960-1972
208
104 (50%)
104 (50%)
39
25 (64%)
14 (36%)
30
15 (50%)
15 (50%)
26
9 (35%)
17 (65%)
34
10 (29%)
24 (71%)
27
11 (41%)
16 (59%)
20
11 (55%)
9 (45%)
16
6 (35%)
10 (65%)
11
7 (64%)
4 (36%)
SMSA
Population
1970
16,178,700**
6,978,000
3,109,500
1,390,200
1, 813,600
1,985,000
2,753,700
1,556,000
2,064,200
The data presented are as consistent as possible, although variations undoubtedly exist between the metro-
politan areas in the measurement of office space and the definition of the CBD. The raw data have been
adjusted where possible to reflect, on a gross square footage basis, raedium«and large-sized (over
20.000 square feet) detached office buildings. The data exclude offices attached to factories, warehouses,
etc., and office space in hospitals and universities.
» ^
New York-Northeast New Jersey Standard Consolidated Area.
New York-New York City Planning Commission; Regional Plan Association; Tri-State Regional
Manning Commission; Fortune Magazine, February 1973;Chicago-Real Estate Research Corporation;
City Planning Department; Building Owners and Managers Association; Continental Illinois National Bank;
• •»« Francisco-Department of City Planning; Northern California Real Estate Research Committee; A.tlanta-
tlimta Ri'Rtonal Commission; Houston-Bank of the Southwest; Boston-Boston Redevelopment Authority;
\an ami Kliot, realtors,; Minneapolis and St. Paul-Metropolitan Council ot the Twin Cities Area$ Dallas-
Kimlior of Commerce; Cleveland-Ostendorf-Morris Company, realtors.
-------
IV-15
In the past decade, office development has shown a strong preference
for the less-populated areas within SMSA's. For example, 71 percent of all
new office spaces built in the Twin Cities from 1960 to 1972 were located in the
suburbs. In Atlanta, 65 percent of office development was in suburban areas: in
Houston, 59 percent of office development was also in the outlying metropolitan
areas. A comparison of growth in central city and suburban office space in
i
the major metropolitan areas is presented in Exhibit IV-4, including the amount
of new office space built in I960 and 1972 as well as the percentage increase
2
between those two years.
\
-------
While office development is increasing in many suburbs at a faster
rate than in the central city, the growth of CBD's should continue through the
1970's spurred on by office developments.
In many CBD's, Federal urban renewal funds are used to facilitate,
if not actually subsidize, the construction of new office buildings. Such develop-
ment has also been encouraged for the general good since the economic base in
some metropolitan areas is deteriorating.
Thus, recent CBD development is not merely the result of economic
growth. Powerful noneconomic forces have also contributed in certain cases.
For example:
New York - Economic Development Administration's public re-
lations activities and high-level personal contacts.
Chicago - Mayor Richard Daley's rapport with the established
business community responsible for redevelopment of the Loop.
San Francisco- Powerful Chamber of Commerce which encour-
aged communities and the Federal government to bear the in-
>'.vestment costs of the Bay Area Rapid Transit (BART) system.
~ •.. Boston > Chapter 121A of the Massachusetts statutes, permitting
^™™""^™ .
-------
rv-17
inflation); the availability of Federal funding, especially for urban renewal
and mass transit projects; and the availability of labor in suburban areas.
b. Size. Office buildings have been growing in size, although in
a vertical rather than in a horizontal sense. There are a number of reasons
for this:
Skylines have been stretching higher not only in the largest metrop-
olises but in many of America's smaller big cities, such as Louis-
ville, Hartford, and New Orleans. There are fundamental reasons
why buildings have been getting taller. Many companies are anxious
to bunch near the center of town where space is limited and land
costs enormous, so buildings must go up, and up, and up. It has
also become more convenient, and often safer, to move erect an-
thropoids in business suits up and down in an elevator rather than
horizontally along a long hall, sidewalk, or rail line. The prob-
lems of street congestion still afflict cities, and mass-transit tech-
nology is scarcely flourishing. But "inhere have been improvements
in skyscraper technology ranging from double-deck elevators to
lighter, stiffer steel frames and completely unmanned machines to
wash exterior glass walls.
I
Constant increases in size, however, have not been completely with-
out critics. For example, by public demand San Francisco's recent zoning
laws established a 40-foot height limit over three-quarters of the city.^ New
office construction is also meeting opposition as lavish consumers of electric
power.
Office building developers are generally not concerned with the im-
pact of ISR on the ultimate size of their projects (although cost impact is another
issue altogether). They seem to feel that the nature of facility use (that is,
hours of operation) is fairly amenable to control through such means as car-
pooling and/or staggered work hours.
This refers to total labor supply by skill level required. Labor cost differen-
tials between areas are generally too small to account for changing office lo-
cation. The cost difference between fhe most expensive areas (such as New York
City or Chicago) and other suburban labor forces is only around 4 to 6 percent
2 ,
Walter McQuade, "A Daring New Generation of Skyscrapers, " Fortune, Feb-
ruary 1973, p. 78.
3Ibld.. p. 152.
-------
Owners of parking facilities, however, are much more concerned
about both ISR and parking management programs than are the developers of
office buildings; this is often the raisbn d'etre for an independently operated
parking lot or garage. A large measure of the concern of parking facility
owners is based on the fact that the type of design changes needed to ensure
traffic flow may be well beyond the financial means of the independent owner. Con-
sequently, they would probably respond by building smaller facilities. The re-
sult in some cases would be to force on-street parking, which would only in-
crease traffic congestion on surrounding roadnets.
4. Mixed-Use Projects
a. Location. Mixed-use projects (residential plus commercial
use) vary greatly in size from a single structure to an entire "new community"
complex. Locations also vary from inner-city developments to freestanding
developments in largely rural settings (although the latter are by far the ex-
ception).
Locations within urban and suburban areas are subject to the same
countervailing forces as discussed previously in connection with shopping cen-
ters and office buildings. However, on the whole, trends seem to point to higher
rates of development in the suburban portions of SMSA's.
A new and highly significant trend is to combine complementary
uses within a shopping center. Office1 space, apartments or condominiums,
and hotels are logical complements to a retail core. Developers see two major
advantages in mixed-use developments over a single-use shopping center con-
cept. The first advantage is an expression of a fundamental interest in the
profit motive. Complementary uses enhance the demand potential at a given
location. The second advantage relates to the fact that certain shopping centers
-------
IV-19
in she oast have boen ruined by the gro\vth v\C tai>ta£ar\\ v\ov\>
fringes. Developers axe purposely buying up tracts of hvm! far in o.xooss ot
their needs to thwart the onslaught of undesirable peripheral activities.
Mixed-use development has also been stimulated because of large-
scale office building construction. The trend toward condominium ownership
is providing an extra impetus to this type of project.
There are presently about 150 new towns, communities, and large
developments in various stages of planning and/or ^construction. Their total
planned population is more than nine million, with an average size of about
60,000.2 Almost all of these developments will be concentrated around exist-
ing centers of population concentration (see Exhibit IV-5). For example, of 10
new communities which have already been approved by HUD (with an estimated
population of 687,000), nine will be in suburban locations 10 to 30 miles from a
metropolitan center (see Exhibit IV-6).
Only one of the 10 new towns shown in Exhibit IV-5 is a "new town
•
in town," although Chicago now has plans for such a development to provide
housing for 120,000 residents. Although there are a few freestanding new towns
like Soul City, the scarcity of new towns based on a rural economy reflects the
reservations of the financial investor and the absence of appropriate managerial
capability. - , • ,
The Federal limitations on funding for low-income housing and the
Federal reluctance to release special planning assistance grant funds provided
for under Title VII of the Housing and Urban Development Act of 1970 are cited
g
as being especially discouraging to efforts to erect "new towns in town."
"Downtown Has Fled to the Suburbs," op.cit., p. 83.
2
U.S. Postal Service, New Towns and the U.S. Postal Service, 1973, p. 6.
2
Architectural Record, December 1973, p. 87.
-------
EXHIBIT IV-5
PANNED NEW TOWNS WITH A POPULATION GREATER THAN 50, 000
&^.
-mfe^
™
Source; U. S. Postal Service,, New Towns and the U, So Postal Service 1973,
-------
EXHIBIT IV-6
SUMMARY OF NEW COMMUNITIES FINANCING GUARANTEED BY" HUD
($ In Thousands)
Community Name
Jonathan, Minnesota
St. Charles Communities,
Maryland
Park Forest South, Illinois
Flower Mound, Texas
Maumelle, Arkansas
Cedar-Riverside,
Minnesota
Riverton, New York
San Antonio Ranch, Texas
The Woodlands, Texas
Gananda, New York
Cumulative Total
HUD
Guarantee
Commitment
Amount
Date
$21, 000
2/70
$24, 000
6/70
$30,000
6/70
$18,000
12/70
$ 7,500
12/70
$24, 000
6/71
$12,000
12/71
$18,000
2/72
$50,000
3/72
$22,000
4/72
$226,5t)0
Guarantees
Amount
Date
$21,000
6/72 *
$18,500
12/70*
$30,000
3/71
$14,000
10/71
$ 4,500
6/72
$24,000 •
12/71
$12,000
5/72
—
—
—
$122,000
Issued
Interest
Rate
7.20%
7.75%
7. 00%
7.60%
7.62%
7.20%
7. 125%
—
—
—
—
Water &
Sewer
$216
6/70
$757
6/70
—
—
$330
6/71
—
—
—
—
—
—
Supplementary
Grant
Reservations
Amount/Date
.Open Space
—
$102
6/70
$176
5/71
— .
"
—
—
—
—
—
$2, 712
Other
—
$900
6/71
(EPA)
—
—
$231
6/71
(EPA)
—
—
—
—
—
—
Population
(Protected)
50,000 in
20 years
75,000 in
20 years
110,000 in
15 years
64, 000 in
20 years
45, 000 in
20 years
30, 000 in
20 years
25,600 in
16 years
88,000 in
30 years
150,000 in
20 years
50,000 in
20 years
687,000
Dwelling
Units
(Proiected)
15,500 in
20 years
24, 872 in
20 years
35,000 in
15 years
18, 304 in
20 years
14, 390 in
20 years
12, 500 in
20 years
8, 010 in
16 years
28,676 in
30 years
49,000 in
20 years
17,200 in
20 years
223,452
Locatio^
20 mi. S. W. of
MinneapollH
25 mi. S. W. of
Washington, D.C.
30 mi. S. of
Chicago
20 mi. S. W. of
Dallas
12 mi. N. W. of
Little Rock
Downtown
Minneapolis
10 mi. S. 'A
Rochester
20 mi. N. VY. of
San Antonio
30 mi. N. '/•?
Houston
12 mi. E. v?
Rochester v
*Guaranteed under Title IV, HUD Act of 1968; all other guarantees under Title VH of HUD Act of 1970.
Source: HUD Challenge. August 1972.
-------
IV-22
Conversations with many developers seem to indicate that ISR would
not be a major force in mixed-use projects in terms of location, short of a
denial of a permit. Redevelopment authorities feel that projects that are largely
publicly funded have sufficient pre-planning to incorporate design changes,
relatively assured financial backing over the life of the project, and even some
degree of leverage with highway departments to assist in having specific design
changes made within required periods of time. Private developments, however,
might face severe constraints. Generally, large-scale mixed-use projects are
phased. Developers often prefer or are forced to be flexible on later phases
to meet the requirements of a constantly changing economic world situation.
This creates problems with respect to the early review of all stages of a phased
development. In particular, developers are concerned that many financial in-
stitutions might not provide backing for even the first stage of a development
without seeing ISR approval for the entire project.
b. Size. To the extent that developers perceive a deleterious im-
pact on phased mixed-use projects as a result of the ISR process, their response
might be to focus on the construction of smaller, freestanding projects. Such
a trend should be monitored, but at this time there is no basis for determining
ISR impact.
-------
IV-23
-fcata -tnu
Size and Location
1. Introduction
The following paragraphs present the study findings on experiences
in Florida, Philadelphia, and Oregon which are pertinent to the issue of ISR im-
pact on the location and size of new development. The information from the state
and local experience investigation is much more limited than the information on
economic impact presented in Part HI. This is due to the fact that reviewers as
well as developers who have participated in the review process are not usually
aware of sites which might have been abandoned, reductions in proposed sizes
of facilities, and other actions initiated either to circumvent the regulations or
out of fear that an application for review might be disapproved.
2. Florida
As a force by itself, ISR is exerting minimal impact on the location
of real estate development in Florida, with the exception of three counties:
Dade, Broward, and Palm Beach. In each of these counties CO standards have
been lowered from 35 ppm to 12 ppm for a peak one-hour period and from 9
ppm to 8 ppm for an eight-hour period. Siting developments of ISR magnitude
in any one of these three counties, which encompass such areas as Miami and
Fort Lauderdale, might present problems and dictate costly design changes.
However, the remainder of the state could absorb a significant increment in CO
emissions without violating standards and therefore may be more attractive to
developers in terms of future sites than the three counties.
ISR is only one factor affecting the developer1 s choice of location.
Other factors which might have to be considered include:
• Development of Regional Impact. The Florida legis-
lature requires the review of certain developments which
-------
IV-24
/
might affect the citizens of more than one locality because
of the development's character, magnitude, or location.
DRI overlaps with ISR to some degree, but it differs in that
it addresses all environmental and natural resource impacts
as well as the effect of the development on the economy, pub-
lic facilities, public transportation, and housing of a region.
Water Quality. The supply of water has become a major con-
cern in Florida. Certain areas, particularly in the southern
part of the state where the water supply is limited, are suffer-
ing from severe drought.
Growth Moratoria. Forty communities in Florida are re-
fusing permits for sewer hookups as a means of controlling
growth. Water supply shortages are of ten the leading reasons
for a moratorium. In addition, Boca Raton, through its zon-
ing code, has put a ceiling on the construction of residential
units as a growth control. *
Traffic Flow Requirements. The Florida DOT requires the
maintenance level of service "C" on all of its highways and
highway interchanges. The developer of a project that would
jeopardize a "C" classification on a roadway segment or at an
interchange must absorb, at least in part, the cost of changes
needed to maintain the appropriate level or service. Developers
of large-scale projects, especially shopping centers, consider
this requirement one of the most limiting in the state as well
as an enormous financial burden.
"Nation's Cities Fighting to Stem Growth," The New York Times, 29 July 1974.
-------
W-25
• Non-Degradation. DPC is contemplating a non-degradation
strategy for CO. The proposed course of action would limit
increases in CO concentration to a 5 percent increment above
a 1972 baseline. This would effectively prevent large devel-
opments from being constructed in rural areas.
These forces, combined with ISR, might have significant impli-
cations on the location of new development. For example, developers feel that
they might have to avoid more densely populated areas because of the obstacles
and cost of trying to meet the level of service "C" road criterion. Meeting this
criterion would have a substantial impact since DRI, and sometimes ISR, ap-
proval will not be issued without verification from DOT officials that level of
service "C" will be maintained.
If densely populated areas present problems in the locating of new
development, some developers would look elsewhere. Developers of shopping
centers, however, would probably scale down the size of their developments
rather than relocate, in order to satisfy the department store chain require-
ments for entrance to a new market. Designated Areas of Critical Concern
or the proposed non-degradation regulations, however, might discourage them
from moving into very sparsely populated areas. In this particular respect,
Florida is moving in a direction which is opposite that of EPA's ISR regulations
which impose higher triggering points outside of SMSA's for review (i. e., trig-
gering points of 2,000 rather than 1,000 new parking spaces outside of SMSA's).
The so-called "locational squeeze" might seem to encourage develop-
ers to look for sites in suburban areas, but suburban areas are generally those
which have been involved in imposing growth moratoria. Consequently, ISR is
only one of a number of factors impacting location in Florida. The actual loca-
tion patterns for new development, however, are hard to discern—although the
-------
IV-26
general consensus among developers is that suburban locations would bo tlv prin
cipal focus of activity.
In terms of the impact of ISR on size distribution, there is no strong
evidence that it is or is not a. factor for mixed-use and office projects. Develop-
ers tend to feel that is has not been a factor in these two areas so far. Small-
sized development companies in Florida seem to be the most concerned about
staying below the triggering points so they will not have to bear the costs of
monitoring, modeling, and time lost in review.
3. Philadelphia
AMS anticipates few developments of ISR magnitude in Philadelphia;
the city is already very heavily developed. There has not been, and probably will
not be, enough experience to measure the impact of ISR on the location and size
of new development.
There is, however, significant concern on the part of the City Planning
Commission regarding the possible impact of ISR on downtown redevelopment.
For at least 12 years, Philadelphia has been planning a large-scale mixed-use
project in the center city which will incorporate off-street parking structures.
The designs for these structures are not yet finalized. Because the project is
federally funded, an EIS must be prepared and is now in the preliminary stages.
The City Planning Commission is aware of Philadelphia's air quality
problems. Air quality considerations have already caused a reduction in parking
for the proposed mixed-use project mentioned above. Although plans were origi-
nally drawn up for six garages, only four are currently proposed. Still, there is
concern that these four garages will aggravate CO conditions to the extent of pro-
hibiting their construction.
The city is heavily committed economically, socially, and politically
to the project as it is now planned to incorporate retail and office uses; thus, a
-------
significant reduction in parking could jeopardize the entire project design. It is
felt that major retail anchor tenants would withdraw from participation in the proj-
ect as the result of a major reduction in parking facilities, unless it could be
proven that the transit proportion of the modal split would be large enough to ade-
quately offset the loss of parking.
The City Planning Commission feels strongly that air quality considera-
tions must be balanced against all other city goals and should not have supremacy.
Furthermore, members of the commission doubt that the denial of an air
quality permit to this development would stop the project. They feel that city
politicians would try and override an air quality decision, to the extent of ignor-
ing any conditions that might be issued with the permit.
The above opinion represents the view of one agency. This agency
is not fully aware of the enforcement powers behind ISR which become effective
on 1 January 1975. What might be inferred from the comments of the City Plan-
ning Commission is that a controversial air quality decision by AMS after the
effective date might necessitate backing from agencies at higher levels of govern-
ment. Ostensibly, the Penn DER would become involved, as perhaps would EPA.
4. Oregon
Some preliminary remarks need to be made to qualify the Oregon
experience with large-scale development prior to embarking on a discussion of
trends. To begin with, all facilities are reviewed down to 50 parking spaces.
Consequently, there is no evidence of developers purposely planning parking
facilities in the state below the triggering point. Second, most development in
Oregon is done on a small scale. The state population is dense enough to sup-
port only a handful of large-scale projects above the Federal ISR triggering
points. Finally, large-scale development beyond the five-mile periphery of the
state's three major municipalities is economically unsound; population densities
in such areas are not adequate to support major development projects. DEQ
-------
IV-28
anticipates no locational shifts within the state itself to areas beyond the five-mile
periphery for the express purpose of avoiding a DEQ review. However, across
the state line from Portland, where no controls on parking facilities are in effect,
development is booming.
Ninety percent of the parking facilities reviewed in Oregon have less
than 500 parking spaces. Office buildings are one of the most prevalent activities
being developed in the state, according to a source at DEQ, with construction
occurring primarily in suburban rather than downtown areas.
DEQ has no grounds for denying approval to suburban projects if the
projects are in compliance with air quality standards and are incorporating ac-
ceptable incentives for mass transit usage. However, the agency is concerned
about the impact of a proliferation of small-scale developments in suburban areas
on automobile emissions other than CO. There is no danger of violating CO stan-
dards, but VMT might be substantially increased as more and more small sub-
urban developments gain DEQ approvals.
Transit conditions are not always applicable to suburban development
in Oregon, and the local transit system might not be able to service the area
where the development is located. In such a case DEQ would force the owner to
encourage carpooling while providing a minimal number of parking spaces.
To date, two large-scale projects which have been reviewed have been
started in the Portland SMSA. One developer initially requested permission to
build a facility with 5,219 parking spaces. The second developer had originally
planned for 2,464 parking spaces.
In both cases, approvals for parking facility construction have been
granted in stages. The developers, therefore, must approach DEQ prior to each
new phase of project construction. The project with the original request for 5,219
i
spaces (a suburban shopping center) was already under construction when ISR
-------
W-29
procedures were initiated. An approval was granted for 1,997 parking spaces
subject to certain transit-related conditions. In subsequent reviews. DKQ has
approved 147 spaces above the original request for 5,2l'9T "The second project,
a mixed-use development, was allowed to construct 272 spaces initially to coin-
cide with the magnitude of the development's first phase. The original letter of
V,
approval outlined specific conditions for subsequent project phases.
Each developer also had to implement strategies to encourage tran-
sit usage. The suburban, regional-scale shopping center had to install a shuttle
bus service. The downtown mixed-use development was told that future approval
would hinge on the resurrection of an abandoned rail line for,transit use, major
roadway design changes, and the installation of feeder bus, mini-bus, or dial-a- *
bus service.
What makes these two cases particularly interesting is that the re-
view process did not result in a change in either the size or location of the devel-
opment. However, according to the developers, the conditions imposed during
the review process did not result in a change in the number of trips generated by
the facilities at their associated stage of development. Neither project has been
completed; both intend to add new buildings and parking facilities. Consequently,
the impact on the developers was restricted to the economic impact of meet-
ing the review requirements. The impact of the review on air quality, how-
ever, might prove to be more adverse than beneficial, since both projects are
currently experiencing more parking demand than they are equipped to handle.
The situation is far worse at the downtown project than at the suburban^one.
Visitors to the downtown development are overloading the streets surrounding
the project when the parking lot is full and are taking up on-street parking. They
have not been deterred from using their cars to visit the development. Parking
at the suburban development has proven to be just barely adequate, except on sale
days; moreover, 300,000 square feetf of gross leasable retail area have yet to open.
Even now, during sale days cars are being parked on the surrounding roadnet,
on dirt roads in the vicinity of the site, and in areas that have been purposely
barricaded to prohibit parking.
-------
IV-30
D. Case Study Findings Related to Size and Location
1. Introduction
Each of the developers who participated in the case study analyses
was questioned as to the impact ISR would have had on his project. They
were also asked to outline their future development plans and to describe the
impact ISR would have on the location and scale of prospective projects. The
responses varied according to the type of development and the size of the de-
velopment company involved. The responses are presented below, broken down
by type of development.
2. Shopping Centers
The two case studies of shopping centers, Projects B and F, were
developments of large-scale real estate companies, which both have access to
equity for front-end investment and can probably afford to lose some capital if
denial of a zoning change, ISR, or another institutional requirement prohibits
construction of a project. The review requirements would probably not' create'
a significant financial burden for either company since each of them has been'
developing sophisticated in-house capabilities for air quality analysis. However,
many such losses would increase overhead and the burden on other centers
owned by the developer, until eventually even the largest company would begin
to suffer from severe financial problems.
Both companies are concerned, however, about the administration
of ISR, especially the sensitivity of a review agency to a real estate developer's
peculiar problems. Does the reviewer really understand the magnitude of costs
associated with a delay? Another concern is the integrity of the review process
itself. Will reviewers perform perfunctory analyses of the data submitted
to assess the validity of assumptions? Will politics enter the review pro-
cess? Will ISR be used as an effective land use control to deter unwanted
development?
-------
!hax*e t'mpletncttted th
-------
IV-32
institutional requirements. Therefore, he will look for sites in countries that
have less restrictive policies on real estate development, particularly from a
pollution standpoint.
Because of the implementation of ISR, both shopping center devel-
opers say they would prefer to become more heavily involved with strip centers
with 999 spaces or less and with freestanding department stores. These devel-
opers admit that many of their locations are selected in response to department
stores rather than as a result of independent decisions. If a leading chain wants
to locate in a certain area, it will either ask the developer to prepare a plan for
a pre-selected site or to assemble a parcel within the locality. If the area is
found to have CO problems or if design changes would be hard to implement be-
cause of high-intensity land use patterns, the developer would be pressed to
gain ISR approval rather than abandon a location desired by a department store
chain. If a proposed facility were in violation of CO standards, however, the
developer would undoubtedly recommend reducing the scale of the project. If
the project could not be built with 1,000 or more spaces, the developer would
suggest going just below the triggering point for review.
3. Office Parks
The developers of the two office park cases, Projects A and, E, rep-
resent relatively small-sized enterprises. One developer operates in a single
metropolitan area and has confined his developments solely to office use. The
other has a regional base and is diversifying into mixed-use projects. Both
have traditionally been wedded to suburban locations. Both, however, are be-
,-
ginning to diversify into downtown developments.
The prospective implementation of Federal ISR took one of the two
developers totally by surprise. The other was already versed in the regulation
through a real estate trade association. Both had identical responses to the
prospect of air quality permits: to build each discrete phase of a given office
-------
IV-33
park development with its associated parking comfortably below the tviggorlug
point for review. Although each might be successful in avoiding VSR, 1:Vw i.^
always the possibility that the review agency could apply its discretionary power
in requiring ISR prior to construction of a specific phase of a given development.
Each developer is wary of the uncertainty factor, fearful of permit
denials, and concerned about equity commitments. One is in no position to ab-
sorb front-end losses if one of his projects is disapproved; he has no liquidity.
The other could afford an occasional rejection but would prefer to operate with
maximum certainty that a contemplated development was a "go" situation.
Focusing on the theoretical impact ISR would have had on Projects
A and E, the developer of A states that his likely response would have been to
redesign his project buildings and the associated parking lots to circumvent the
review process. In the case of Project E, ISR would not have impacted on the proj-
ect until the development was already half built. The 200,000 square feet con-
templated for construction in Year DC of Project Efs development process would
probably have been scaled down or broken up into smaller discrete units with
less than 1,000 parking spaces per associated parking lot. Project E's developer
was too committed to the completion of his project in Year DC to absorb further
design changes. The project site plan had already taken into account extensive
analysis of traffic flow projects, and roadway design changes had already been
instituted at great expense to him. There is no guarantee, however, that Proj-
ects A and E would have escaped ISR if the responsible review agency had deter-
mined that pre-construction review was necessary.
4. Mixed-Use Projects
Projects C and D, because of their respective scales and location,
were high-risk propositions. In each case the developer was motivated by fac-
tors above and beyond profit, primarily a strong commitment to downtown rede-
velopment. Developers committed to urban renewal are generally willing to
trade off some margin of profitability for a favorable image and national visibility.
-------
TV-34
Projects C and D were both performed by developers who has no
prior experience with large-scale downtown mixed-use projects. One had the
cushion of extensive internal equity; the other had a solid real estate track rec-
ord and access to a fairly substantial credit line.
Each developer responded to the prospect of ISR differently. One
objected to the real estate industry's bearing the responsibility for pollution
caused by automobiles. This developer, however, stated that he would abide
by the review process and not try to circumvent it purposefully. He is actually
far more concerned with the impact of transportation controls and parking man-
agement plans in areas where mass transit is not a viable option.
The other developer, representing a mixed-use case study, was
wary of issues entering the review process which would have no relation to an
objective air quality assessment. Further, he questions the reviewer's under-
standing of the mechanics of real estate development and the economic impor-
tance of timing.
In regard to how ISR would have affected Projects C and D if it had
been effective prior to their respective construction dates, neither project
would have been stopped. Both developers wanted to perfect their projects and
were willing to absorb the costs associated with eliminating problems, within
reason. Project C was already incorporating design changes with beneficial
implications for air quality but at considerable expense to the developer, who
had come very close to liquidating his equity funding resources without ISR.
At the outset Project D would probably have undergone a major re-
design. The developer's original grandiose redevelopment scheme, when bal-
anced against the realities of traffic congestion and CO emissions, in all prob-
ability would have yielded a smaller scale project. The recommendations of the
market consultant might have been weighed more carefully since the project, as
constructed, exceeded the limits recommended for certain uses.
-------
IV-35
ISR will have less impact on the location and size of future develop-
ment for the two mixed-use developers than for those representing the two shop-
ping center projects and Hie two office parks. Both of these will continue to
operate downtown and will undoubtedly conscientiously balance air quality con-
siderations against the scale of prospective projects. Both, however, have ex-
pressed concern that many of their plans for downtown revitalization may be
killed because of air quality. They point out in this regard that economics can
absorb only a limited amount of environmental sensitivity; if people cannot come
to a project by car or by some dependable form of mass transit in sufficient
quantity to support a development, there is little purpose in building.
-------
IV-36
E. Conclusions
In general, the impact of ISR on location would be to reinforce existing
trends of suburbanization. The magnitude of the impact would vary greatly, de-
pending on the goals of the developer, the severity of existing air quality problems
within specific areas, the need to service important tenants or markets, and a
variety of other factors. Shopping center developers may have a marginal in-
centive to avoid the higher CO levels in urban areas, and the economic hardships
of necessary design changes. While developers of office buildings and parks might
tend toward suburbanization, they would be more sharply influenced by the state
of the economy, availability of federal funding, and availability of labor. Short
of denial of permit, ISR would not influence the location of mixed-use projects.
The more important impact of the indirect source regulations would
probably be on the size of new developments. In the case of shopping centers,
the economics of developments above and below the triggering point for review
are not sufficiently different for a developer to feel a large degree of hesitancy
about reducing the size of a facility to avoid the costs and uncertainty of applying
for an ISR permit.
Office buildings and parks would probably not change substantially
in size themselves, but would probably reduce associated parking spaces from
traditional levels. There are two reasons for this:
(i) Carpooling and staggered work hours could be more readily
adopted by office workers than, for example, shoppers.
/
(ii) Municipal and off-site parking lots could be used to service
on-site generated needs.
New mixed-use developments are currently limited in number be-
cause of many unfavorable economic conditions unrelated to environmental
regulation. If conditions should change, to the extent that good transit systems
-------
IV-37
could be supported by the population density of the area and by the availability
of needed funds to support transit operations, size reductions in planned com-
plexes may not be necessary. At this time, however, there is insufficient in-
formation to determine ISR impact on the size of mixed-use development.
-------
PARTY
ADMINISTRATION
A. Overview
This part of the report addresses a number of procedural issues that
might arise in the process of implementing indirect source regulations. Through
the man,y interviews and discussions carried out in connection with this project,
it has become increasingly evident that efficient and equitable review procedures
may hold the key to preventing or ameliorating adverse economic and land use
impacts from ISR, while also furthering the goals of the regulations. Therefore,
i
ufthis part of the report particular attention is given to various phases of the
implementation process itself. j
/
The following discussion parallels the procedures outlined.in. Part
52 of Chapter I, Title 40 CFR 52.22, as amended. A flow chart indicating the
various procedural stages and the associated timing for each is shown in Exhibit
V-l.
The key steps in the. review process which will be discussed in greater
detail in subsequent parts of this section are as follows:
• Data Acquisition.
• Application Preparation and Submission.
• Review Process.
• Public Comment.
• Decision.
• Permit.
• Enforcement.
Potential problems that may arise for the developer, the review agency, or both
in conjunction with.each of the above steps are presented in Section B. Back-
ground information for identifying possible problem areas in the implementation
of Federal ISR are drawn from the three state and local experience studies.
-------
V-2
EXHIBIT V-l
FLOW DIAGRAM OF ADMINISTRATIVE
PROCEDURES FOR FEDERAL ISR1
Time
I Process Flow J
I
Up to 20
Days
Developer
Submits
Application to
Review Agency
Atthedevelo-
per1 s discre-
tion
Agency Checks
for Missing
or Additional
Desired Data
i
Additional Data
Supplied by Developer
Upon Request
Between 30
and 60 days
1
Preliminary
Review
Between 30
and 60 Days
1
Up to 10
Days
I
Public Comment
and/or
Public Hearing
Between 30
and 60 Days
/ Developer May File
/ Written Response
/Permit
( Granted
\With
Conditions
'Permit No1
.Granted
5
It is important to note that there is no allowance for an appeals process in
Federal ISR.
-------
V-3
Although the review processes being performed in Florida, Philadelphia, and
Oregon are not altogether synonymous in form with the proposed Federal in-
/
direct source regulations, the three experiences provide insight in terms of
certain critical issues which would apply to any air quality review procedure
for a major development or public improvement. A brief discussion follows
on the nature of the regulations being implemented in each of the three areas
and how they differ from the Federal regulations. The differences, however,
are relatively minor and should not be overemphasized. The intent of all three
state and local regulations is the same as that of the Federal — to prevent a
violation pf NAAQS for CO.
1. Florida.
Florida was the first state to implement the indirect source review
regulations under Federal approval. In Florida indirect sources are commonly
referred to as "complex sources." The objective of Florida's indirect source control
strategy is to prevent violations of Federal and state Deparment of Pollution
Control (DPC) air quality standards for all mobile source pollutants, although
the current interpretation is to address only CO. Much of the state is con-
trolled for the attainment and maintenance of NAAQS.
Prior to the Implementation of ISR, however, three counties —
Dade, Broward, and Palm Beach — had set standards for-CO lower than
the Federal NAAQS (that is, 12 ppm for one-hour peak, compared to the
one-hour NAAQS of 35 ppm and eight ppm for the eight-hour average, com-
pared to the eight-hour NAAQS of nine ppm). The limits were established
since these counties are among the most densely populated, in the state and
— f
represent important centers of tourism. It was felt-that the tourist indus-
try could be adversely impacted by even relatively minor evidence of air
pollution. With subsequent passage of ISR, the lower standards have
been maintained for these counties.
-------
V-4
The criteria for determining whether a facility requires ISR are
summarized below:
• Open parking lots for 1,500 cars or more.
• Multilevel parking lots for 750 cars or more.
• Roads for 2,000 vehicles/hour or more.
• Roads for 1,000 vehicles/hour or more in Dade, B reward,
Escambia, Polk, Leon, Sarasota, Volusia, and Alachua Counties.
• Tollways/interstates/other major roads with more than two
lanes outside of the counties named above.
• Airports designed for scheduled commercial traffic.
• Others as determined by the DPC.
These guidelines differ somewhat from those issued by EPA. The
main variation is the EPA distinction between urban and rural requirements
which is not considered in Florida.
The DPC regions average two to four ISR applications each week, so
that the number of DPC decisions on ISR varies from day to day. To date, approxi-
mately 46 applications have completed review by DPC0 Of these, 29 (or 63 per-
cent) are highway related; 12 (or 26 percent) are for shopping centers; two are
for mixed-use developments; one is for a parking garage; one is for a manufac-
turing facility; and one is for a sports stadium (see Appendix A).
2. Philadelphia
Philadelphia's Air Management Regulation X, adopted on 20 August
1972, was conceived of as & mechanism to incorporate air quality considerations
into the planning process. Under this regulation the following types of develop-
ment were required to submit an air quality impact statement:
-------
V-5
• Industrial or commercial facilities with 500,000 square feet
or more of floor spac£.
• Residential facilities with 100 or more dwelling units.
• Highways.
• Mass transit facilities.
No guidelines were issued in association with Regulation X. The submission
requirements focused on assessing all actual and potential air quality impacts
at the immediate site and within the region. The facility must be shown not
only to be in compliance with local air quality standards, but also to employ
f
the best available and practicable control technology for emissions. The
city's Air Management Services (AMS) will issue written approval, assuming
the facility is in compliance with the above conditions.
!
On 4 May 1974, Regulation k was amended to more closely resemble
Federal indirect source regulations. The types of facilities subject to review
i
under the amended regulation include but are not limited to:
• Shopping centers.
• Sports complexes.
• Drive-in theaters.
• Parking lots and garages.
• Residential, commercial, industrial, and institutional
developments.
• Amusement parks and recreational areas.
• Highway and transportation facilities.
• Sewer, water, power, and gas lines.
• Other such facilities which will result in increased emissions
from motor vehicles or stationary sources.
The cutoff points for review were maintained from the original regulation,
with the addition of a review for all new or modified parking facilities having
a total capacity of 250 or more motor vehicles within the Philadelphia CBD
and such facilities having a total capacity of 500 or more motor vehicles
outside the CBD. Like the original version, the revised regulation addresses
all air pollutants and is not confined to CO.
-------
V-6
Files on 16 downtown projects are currently being maintained. Re-
views have been officially completed on three of these as of July 1974. Of the
remaining 13, seven are not yet far enough along to undergo official review pro-
cedures under Regulation X as amended (see Appendix A).
Philadelphia's Regulation X has been submitted to EPA as part of
the Pennsylvania state implementation plan (SIP). EPA approval of Regulation
X has not yet been granted. Should this still be the case as the effective date
for Federal ISR approaches, AMS will request the delegation of indirect source
review procedures. In accordance with the 9 July 1974 Federal Register inter-
pretation (p. 25297), AMS will ask for delegation from the state if the Penn-DER (State
Department of Environmental Resources) has requested ISR delegation. Perm
DER indicates that it fully intends to request delegation and to implement Federal
ISR. However, if this decision changes, AMS will apply directly to EPA for delegation.
3. Oregon
Since 24 January 1972, Oregon has had an effective pre-construct-
ion review procedure for new parking facilities and highways. This procedure
applies to projects located within the municipal boundaries or the five-mile limit
of any city with a population of 50,000 or more. Parking facilities supplying
i ' •'" '
temporary storage for 50 vehicles or more or having two or more levels as
well as highway projects incorporating new freeways, expressways, or portions
thereof are subject to review.
The Oregon regulation does not address facilities as being complex
or indirect sources because it was promulgated before these terms came into
general use. However, the review process is designed to attain the same ob-
jective as Federal ISR, namely, preventing NAAQS for CO from being ex-
ceeded. The Oregon regulation also addresses the impact of a new facility on
(i) the development of low-polluting transportation modes, (ii) noise and water
quality, and (iii) the general quality of life in urban areas. For the purpose
of this study, only the air quality-related review procedures were evaluated.
-------
V-7
In addition to the existing regulations, proposed complex source
regulations for Oregon were promulgated on 20 May 1974. After a series of
public hearings, revisions were made and a new version was released on 24
June 1974. This version is not considered final and will still be reworked.
The proposed regulations differ from the existing review procedure In that they
attempt to place a complex source in a regional planning context. Approvals
must be in accord with all existing and forthcoming local and regional planning
documents. The Department of Environmental Quality (DEQ) is pressuring
for the drafting of regional plans that would address all environmental, land
use, and transportation issues as well as socioeconomic goals and objectives.
More than 100 cases have been reviewed by DEQ under their reg-
ulations (see Appendix A). The majority are small parking facilities with less
than 500 spaces which are located in the Portland metropolitan area. The vol-
ume of applications can reach 20 per month in the spring.
-------
V-8
B. Problem Areas in the Implementation of ISR
1. Data Acquisition
EPA has provided a methodology for "estimating peak CO concen-
tration associated with identified traffic design and operating variables" at a
proposed indirect source. As indicated earlier, the Interim Guidelines for the
Review of the Impact of Indirect Sources on Ambient Air Quality were used to
measure the CO impact associated with each of the six case studies analyzed
in this report.
Aside from the application of the EPA guidelines, the applicant has
the option of measuring the CO impact "by use of appropriate atmospheric dif-
2
fusion models . . . and/or by any other reliable analytic method." Since the
Technical Guidelines are designed "as a conservative screening technique to iden-
2
tify situations in which a potential problem may exist, " aji applicant may prefer
the modeling alternative.
The burden falls on the developer, irrespective of the methodology
used to provide sufficient data for a review. The developer relies upon the
guidance of the review agency in collecting the necessary data.' The problems
that have developed in relation to data acquisition are as follows; • •< •.
U.S. Environmental Protection Agency, Office of Air Quality Planning and
and Standards, Interim Guidelines'for the Review of the Impact of mdirect
Sources on Ambient Air Quality, July 1974, p. ii.
240 CFR 52. 22 (b) (4) (ii).
3
EPA Guidelines, op. cit., p. ii.
-------
V-9
• The absence or incompleteness of ISR guidelines specifying
the assumptions to be used in preparing required traffic-flow
data and the procedures to be followed in monitoring and mod-
eling.
• The division of responsibilities between developers and re-
viewers in terms of who monitors and who selects receptor
sites.
Prior to addressing the substance of these problem areas, it is im-
portant to note that certain problems which impact on the data acquisition process
will subsequently be addressed in Section B-2 of this report. These problems
relate to the timing of the review (i. e., at which stage projects must in
fact undergo ISR), and the reliability of data submitted as part of an ISR applica-
tion.
a. ISR Guidelines. Florida, Philadelphia, and Oregon have issued
guidelines for ISR applicants. These guidelines were either drafted independently
or were based on the submission requirements outlined in the Federal indirect
source regulations. Florida, which based its guidelines largely upon Federal
directives, has cited the need for EPA assistance in understanding the ISR inter-
pretations issued in the Federal Register and in employing proper
modeling techniques. According to DPC, the information presented by EPA to
explain indirect source review was not detailed enough to be particularly effective.
Currently, DPC is expressing a preference for more personal interaction with
:
EPA, such as additional workshops and meetings to discuss ISR. (Training
The term "ISR guidelines" here and subsequently refers to materials published
by the three state and local review agencies and should not be confused with
EPA's Interim Guidelines for the Review of the Impact of Indirect Sources
on Ambient Air Quality.
-------
V-10
courses were held by EPA, to describe pollution modeling techniques and other
technical considerations. At that stage, however, EPA was inexperienced with
ISR and all of the problem areas had not been identified.)
In Philadelphia, the guidelines for review under the amended reg-
ulation are currently restricted to highways and mass transit facilities. It is
felt that the requirements of the National Environmental Policy Act (NEPA)
should be adequate for an air quality impact analysis. So far, however, en-
vironmental impact statements have proven deficient in terms of air quality
considerations. Guidelines for other indirect sources have yet to be developed.
To date the absence of guidelines for such facilities has not created a serious
problem since the projects that have come up for review have been federally
funded and, hence, subject to NEPA.
Oregon's DEQ has issued guidelines for new parking facilities and
highway projects. The guidelines for parking facilities have been implemented
successfully for small parking facilities, which represent approximately 90 per-
cent of the cases submitted so far for review. However, these guidelines are
considered to be inadequate for large parking facilities containing 500 or more
parking spaces. The guidelines for highways have never been implemented suc-
cessfully.
!
There are in essence two types of reviews for parking facilities, de-
pending on the scale of a given project. Projects involving less than 500 parking
spaces generally submit site plans for the facility and an outline of a transit-use
incentive program. Facilities with 500 or more spaces must generally prepare
an environmental impact statement (OEIS)1 which addresses air quality along
with water quality and noise impacts. No more than 10 percent of all parking
projects submitted for review are large enough to necessitate an OEIS.
OEIS refers to the environmental impact statements required under Oregonian
law, as distinct from EIS requirements pursuant to NEPA.
-------
V-ll
The air quality section of an OEE5 must address the impact of the
parking facility on the surrounding roadnet over time. This involves trip genera-
tion assessments as well as analysis of the facility's impact on existing traffic
flows. The following topics must be covered:
• Effect of the project on the dependence of the urban dweller on
motor vehicles.
, Consistency of the project with local and regional mass tran-
sit planning.
, Effect of the project on local and regional mass transit plan-
ning.
• Effect of the project on local and regional air quality.
t Effect of the project on local and regional noise levels.
• Effect of the surface runoff from the parking facility.
In addition, a presentation must be made concerning design alternatives that will
minimize environmental impact and provide incentives to encourage the use of
alternative modes of transportation such as public or private mass transit, bicy-
cles, pedestrian walkways, and water transport.
Oregon has had a comprehensive set of guidelines for the review of
proposed highway construction projects since April 1972. The guidelines call
for two assessments, to correspond to the two-stage review process. To date
the procedures described in the guidelines have not been successfully imple-
mented. The problems relate to the timing of preconstruction review for a
highway project. It is the opinion of DEQ that an agency must enter the review
process for a large proposed project at least five years in advance of final
planning in order to maximize the effectiveness of ISR. So far, highway proj-
ects in Oregon have been planned and funded long before the review process be-
came effective. Certain projects whic/h are now pending construction even
superseded promulgation of NEPA. DEQ has questioned the legitimacy of its
authority to review a project that had been conceived and carried through final
planning before indirect sources became an air quality issue.
-------
V-12
Since the guidelines for highway projects had not been successfully
implemented as of July 1974, DEQ is not sure whether they are reasonable. A
revision may be necessary; but without any experience to draw on, an alterna-
tive has not yet been formulated. At this point comprehensive regional planning
through the land use/transportation plan and the air quality maintenance plan
(AQMP) seems to DEQ to offer more potential for control of new highway proj-
ects than ISR.
The application of the EPA Interim Guidelines for the Review of the
Impact of Indirect Sources on Ambient Air Quality to each of the six case studies •
analyzed for this report has surfaced some additional problems related to guide-
lines for data acquisition.
In general, the traffic studies which have traditionally been prepared
for private developments are not adequate to provide input to an analysis of local-
ized CO concentrations. The most critical problem relates to the absence of a
discussion of roadway capacity as opposed to roadway volume. Most traffic
studies focus on existing and projected traffic volumes by road. They fail to re-
late these volumes precisely to the capability of the road to absorb the traffic.
The measurement of localized CO concentrations using the EPA technical guide-
lines requires accurate volume/capacity ratios by lane, together with good in-
formation on signalization parameters.
Further general deficiencies relate to the area analyzed within the
vicinity of a given facility and the presentation of the road configurations. Fed-
eral ISR requires analysis of all principal roadways within a quarter mile of the
indirect source out to the quarter-mile periphery of the site. However, one may
need to go beyond the quarter mile in order to develop the necessary understand-
ing of traffic flow patterns within the general vicinity of a facility. Most traffic
studies, nevertheless, only focus on impacts occurring close to the site.
-------
V-13
Specific data deficiencies of typical traffic studies are outlined
below:
j
1. Existing Traffic Volumes
• Presented as 24-hour average daily traffic rather than in peak
one-hour or eight-hdur volumes.
• No breakdown of traffic volume by lane on a given roadway.
• No breakdown of traffic volume by direction on a given road-
way.
• No discussion of turning movements on a given roadway.
2. Traffic Signal ization
• Generally omitted.
• If included, the timing and type of signal are not discussed.
3. Mass Transit
• No discussion of service frequency.
• No ridership projections with usage during peak periods of
the day.
• No explanation of transit routes.
4. Traffic Volume Projections
• Average growth rates are used rather than ones designed to
accurately project conditions and planned development within
a specific area.
• No flexibility for any change in the scale of a project.
• No breakdown by different development phases of multi-staged
project.
• Time frames and projections do not correspond with EPA re-
quirements for-impacts one year after the facility is opera-
tional.
-------
V-14
b. Developer/Reviewer Responsibilities. Reducing the ambiguities
in terms of responsibility for various steps during the data acquisition stage could
eliminate some of the problems associated with reliability of data. Reliability
problems are discussed in detail in Section B-2. The most frequently raised is-
sues relating to data collection are who should monitor and who should select receptor
locations. As an example of the monitoring issue, AMS in Philadelphia is sensi-
tive to the inability of certain parking garage owners to finance data collection
and preparation, especially the monitoring requirements. Although the situation
has yet to arise when a prospective applicant could not pay for preparation of
the review applications, AMS has expressed its willingness to share the burden
of meeting the review data requirements.
Although the economic impact analyses documented in this report
show that the preparation of an application is of minor financial consequence to
a developer, none of the developments analyzed were free-standing parking
facilities in downtown areas. The operators of such facilities may have limited
equity funds for use in financing the preparation of an ISR application.
The issue of selecting receptor sites has created some confusion
among developers in Florida. The source of the confusion may be eliminated
with the publication of EPA guidelines for choosing receptor locations (to be
issued during the fall of 1974). However, identifying future land use plans
which may be important in projecting receptor sites will probably still be a
problem. Reviewer guidance to developers may be particularly useful in re-
solving any questions on identifying future receptors.
-------
V-15
2. Application Preparation and Submission
The Federal EPA position on the preparation and submission of an
ISR application is to encourage early review. The burden falls on the developer
to approach the review agency to determine the requirements of an application
and the acceptable methodologies for an evaluation of localized CO concentra-
tions. The information is available upon request.
The analysis of the three state and local experiences surfaced several
key issues related to application and submission. These concern the point during
the development process at which the developer submits an application, the review
of developments not specifically covered by the regulations, and the reliability of
data submitted for review. Problems were also identified regarding foreknowl-
edge of the review process, although these are generally of short-term consequence.
a. Timing — When ISR Is Initiated. The point at which the review
process is initiated may have a substantial impact on a developer's financial posi-
tion. In order to understand the developer's peculiar predicament regarding ISR,
it is necessary to become familiar with the development process and the develop-
er's level of commitment to a project it each step.
(1) The Development Process. Real estate development in-
volves an intricate coordination of decisions and actions. The major steps in the
overall process, from the initial conceptualization to the start-up of construction,
are presented in Exhibits V-2, V-3, and V-4 for each type of development ana-
lyzed in this study: shopping center, office park, and mixed-use project.
The exhibits outline the general approach to development. The devel-
opment procedure varies considerably depending on the type and size of the project
involved, the size and nature of the development company, and the new trends
within the industry. As an example, the traditional sequence of performing a
-------
V-16
EXHIBIT V-2
SHOPPING CENTER DEVELOPMENT
I
o>
to
s
*
o
TO
S
TO
«. g
I I
*2 o •
& 'O
n.
HI.
f
IV.
Perform Market Analysis
A. Investigate Demand for Commercial Development
B. Conduct Initial Demoigraphic Work on Area and Site
C. Consider Trade Area and Buying Power
D. Measure Status of Competition
E. Analyze Direction of , Urban Growth
Conduct Locational Analysis
A. Seek Available Property (Real Estate Broker)
Examine/Select Geographic Area
Identify Property (or Alternatives)
Perform Site Evaluation
1. Location and Access
Size and Shape
Topography and Physical Characteristics
Utilities
Favorable Zoning
B.
C.
D.
2.
3.
4.
5.
B.
C.
D.
E.
F.
E. Consider Traffic Patterns
Conduct Site and Technical Preparations
A. Obtain Option on Tract of Land
Propose Location to Major Department Stores
Determine if Site Satisfies General Criteria of
Department Stores !
Hold Preliminary Meeting with City
Zoning Administrator
Present Precise Pre- Zoning Plan for Review and Permit
Commence ISR-related Studies
1. Commit to Traffic Study Costs
2. Examine Viability of Access
3. Determine Air Quality Impact
(Preferred Point for Indirect Source Review)
Arrange Development Planning
A. Assume ISR Preparation Costs
Achieve Annexation into City
Undergo Zoning Presentation
Acquire Variances if Already Zoned for Commercial (Car Count,
Magnitude, etc.)
Hire Engineer for Boundary Survey and Topographies
Conduct Soil Tests
Engage Traffic Engineer
Present Precise Plan for Review
Acquire EPA and Other Applicable Approvals
B.
C.
D.
E.
F.
G.
H.
I.
-------
V-17
EXHIBIT V-2 (Cont'd)
J. Negotiate Architectural Contract for Site and Buildings, and
Contact Likely Department Store Tenants
K. Meet with City or County Concerning Utilities
L. Examine and Approve Pro Forma
M. Finalize Soils Investigation
N. Locate Department Stores on Plot Plans
(Process Could Take Several Months)
1. Prepare Business Letters for Major Department Stores
2. Indicate to Department Stores the Costs for the Ground
3. Arrange Stipulations in Exchange for Developers'
Obligations
2 O. Work on Real Estate Analysis (by Attorneys)
| (Process Could Take Eight Months)
S-t
a.
2. Secure Grading Permits, if Required.
P. Arrange Permanent Financing
1. Expose Proposal to Lenders
|j 2. Execute Application for Loan and Permanent Loan
Commitment
3. Put up "Good Faith" Deposit (Normally 2 Percent of
S " Loan Amount)
g Q. Locate and Arrange with Interim Lenders
g R. Award Site Grading Contracts
S. Let Construction Contracts
1. Requires Removal of Significant Dollar Amounts from
S Bank
2. Can Occur at Any Time
T. Have Project Coordinator Assume More Detailed Management
1. Specify Actual Parking Areas
2. Indicate Off-Site Improvements
3. Negotiate Street and Road Considerations with City and
County
U. Apply Architectural Design to Building Mass
V. Have Real Estate Broker Become Leasing Agent
1. Specifies Likely Occupancy in Layout of Space
2. Indicates Type,of Use
3. Establishes Rental Structure
W. Lease and Occupy
X. Stock and Employ Operating Personnel
Y. Open Shopping Center
Source; James A. Cook, Executive Director, California Business
Properties Association, 1974.
-------
V-18
-------
V-19
EXHIBIT V-3 (Cont'd)
m
IV. Arrange Development Planning
A. Determine Type of Office Park
B. Conduct Final Traffic Studies
b C. Acquire Land
fi D. Approach Prospective Clients
E. Analyze Pro Forma for Feasibility of Development
F. Indicate Costs and Contact Tenants
G. Finalize Financing
H. Prepare Final Engineering Studies
I. Finalize Architectural Plans
J. Secure Building Permits
K. Conduct Site Grading Improvements
m L. Determine Rental Structure and Leasing Arrangements
§ M. Begin Construction in Phases
N. Continue Leasing Space
o O. Begin Tenant Occupancy in Phases
Source; Harbridge House, Inc.
-------
V-20
EXHIBIT V-4
MIXED-USE DEVELOPMENT
I. Perform Market Analysis
A. Analyze Demand for Housing, Office, Commercial,-and Rec-
reational Space
B. Carry Out Demographic and Economic Survey
C. Analyze Trade Area and Urban Growth Areas
D. Consider Occupation and Income Levels
E. Determine Optimum Tenant Mix
H. Conduct Locational Analysis
A. Note Roadway Access and Transportation Facilities
B. Consider Location Within Urban/Rural Area
C. Compare Cost of Land
D. Determine Suitability of Site
1« Size and Shape of Tract
2. Topography
3. Drainage
4. Utility Services
5. Zoning Categories
m E. Evaluate Site Environment
a
1
O
OQ
"H .3
o
1. Land Use
2. Traffic
OQ
3. Airport Location
4. Flooding
F. Note City Services and Community Facilities
G. Check Municipal Regulations
Evaluate Site and Technical Preparations
A. Obtain Option on Tract of Land
B. Contact Local Agencies
1. Planning Agency
2. Zoning Administrator
3. Environmental Control Agency
4. Municipal Engineer
5. Building Inspector
6. Federal Housing Administration
7. School Board
C. Conduct Preliminary Engineering and Traffic Surveys
D. Prepare Preliminary Land and Site Plans
E. Prepare Preliminary Architectural Drawings
~°V * '
(Preferred Point for Indirect Source Review)
(Preferred Indirect Source Air Quality Approval)
eo -5
o <*
O g
** CQ ,
F. Secure the Title Clearance
G. Obtain Zoning Changes, if Necessary
H. Inquire About Building Permit Requirements
-------
V-21
EXHIBIT V-4 (Cont'd)
IV. Arrange Development Planning
Al Determine Most Feasible Mix for Development
B. Conduct Final Traffic Studies
C. Acquire the Land
D. Approach Prospective Tenants
E. Analyze Pro Forma Statements for Feasibility of Development
F. Determine Costs and Contact
G. Arrange Permanent Financing
H. Prepare Final Engineering Studies
I. Prepare Final Architectural Drawings
J. Secure Building Permits
K. Conduct Site Grading Improvements
L. Address Street and Grading Improvements
M. Determine Rental Structure and Leasing Arrangements
N. Begin Construction in Phases
O. Continue Leasing Space
P. Begin Tenant Occupancy in Phases
Source; Harbridge House, Inc.
-------
V-22
market analysis followed by a locational analysis is currently being eliminated by
major tenants who are approaching developers and asking them to build a center
on a site they have already selected themselves.
Timing is critical at various steps throughout the process. In addi-
tion, the major steps not only interact in a sequence, but also in relation to
their duration. A carefully planned schedule will allow some steps to be carried
out simultaneously and others to overlap. While a degree of flexibility should
be provided in the schedule, extended delay at any point in a project would im-
pact on all other points in the development process. This, in turn, would affect
the cost of a project—sometimes quite dramatically.
The relative position of ISR is shown in each of the development pro-
cess charts. ISR has been inserted prior to the significant cost and commitment
'"I
breaking point. However, extensive delay resulting from ISR could incur signifi-
cant excess costs by upsetting the schedule of interlocking activities. Often, ex-
cessive delay will require more than just a rescheduling of activities farther into
the future; it can also mean that several complementary activities must be re-
aligned.
(2) Private Development Applications. The following com-
ments on the initiation of ISR are based on the three state and local experience
studies and are restricted to private development projects. Highway projects
are discussed separately in the section that follows.
Most developers submit ISR applications to Florida's DPC at a stage-
.,.-'-•<•" .
when their design plans are fairly well formalized. Yet the major commitments,
such as financing, road improvements, or groundbreaking, are not finalized at
this point. However, a trend is evolving where developers solicit ISR at an ear-
lier stage in their design plans as they become more familiar with the review
procedure.
-------
V-23
ISR generally occurs at the same time that zoning, water, sewage,
and other required permits are being sought. The timing is most critical when
developers apply for ISR after their design plans are well established. More-
over, timing is critical at any stage if the length of the review process exceeds
expectations and scheduling of all subsequent steps in the development process
is adversely affected.
DPC also allows some flexibility in the scale of projects submitted for
review. This enables a developer to: submit an application prior to knowing the
exact specifications of his development. A design flexibility factor of 10 percent
is generally permissible. If a developer cites the need for a design flexibility
factor, DPC will accept this for ISR provided CO concentrations are projected
for the maximum size of the development.
In addition to ISR, a Florida development may be subject to review
as a Development of Regional Impact (DRI) under the Environmental Land and
Water Management Act. DRI is defined as a development which affects the citizens
of more than one locality because of its character, magnitude, or location. The
Bureau of Land and Water Management within the Division of State Planning ad-
ministers this program. DRI became effective on 2 July 1973, six months be-
fore ISR was promulgated in Florida.
DRI is broader in scope than ISR, but the two overlap. Whereas ISR
is concerned with the impact of new facilities on air quality, DRI focuses on the
total set of social, economic, transportation, and environmental impacts that
may be generated by a new development. The triggering points for DRI are gen-
erally above those for ISR. In the case of a shopping center, the facility would
be subject to Florida ISR if parking was provided for 1,500 or more cars (750 or
more cars in multilevel parking lots);,it would be subject to DRI if parking was
provided for more than 2,500 cars.
-------
V-24
Requirements for the review of air quality are duplicated in DRI and
ISR applications. This is especially true since, to date, all developments which
have applied for ISR permits have been of sufficient scale to also require appli-
cation for DRI approval. DRI currently requests a minimum of air quality in-
formation as part of its review. However, major developers frequently submit
DRI and ISR applications simultaneously in the same report. They see no reason
why both decisions cannot be rendered concurrently.
In one instance, a bottleneck was created between the two programs.
An ISR application was rejected by the local DPC office because the facility lacked
DRI zoning. The locality responsible for DRI approval decided that it could not
be granted until ISR had been obtained. The local DPC-designated review agency .
made the same stipulation concerning DRI. Even after the state DPC environ-
mental lawyer suggested to the local agency that ISR be granted, conditional upon
DRI approval, the ISR application was rejected for lack of DRI zoning.
More typically, however, the local agency receiving the DRI appli-
cation refers the air quality section to DPC for analysis. Although the require-
ments for data and analysis are the same, two separate reviews of the findings
take place. The duplication of effort in air quality review does not seem to be
an issue on the part of DPC or DRI officials. Rather, they cite the political com-
plications of a possible merger of the two programs. According to these two agen-
cies it would not be reasonable to implement effectively such a step.
As evidenced by the ISR permit denial described above, the coordi-
nation of several review processes can create problems for developers in terms
of when they can initiate ISR procedures. In states or localities where more than
one review process is necessitated for a private development, the ISR agency
should be flexible and allow its review to occur concurrently with those of other
agencies.
-------
V-25
Philadelphia's AMS has yet to initiate official review procedures on
any private development projects. It is monitoring all projects that will ultimately
be subject to review, and is encouraging the developers and/or responsible agen-
cies to come into AMS very early in the planning stages in order to expedite re-
view procedures later on. AMS is anxious to grant a review decision as soon as ....
the project's owner or the responsible agency can provide adequate information for
an air quality impact analysis. The agency wants to cause the least amount of
disruption in the development process and yet achieve a reasonable assessment
of air quality considerations.
At the moment, in Oregon the timing of ISR does not appear to be a
problem for private developers. Most developers come in early in the planning
process, obtain answers to their questions, and proceed with the preparation of
an application.
There were some timing problems when the state first started im-
plementing its regulations. There were instances where localities which de-
sired a particular development for the contributions it would make to tax base
and employment, granted the necessary zoning change but did not inform the de-
veloper that an ISR permit was needed. In some cases construction was actually
started before the developer ever learned that ISR was necessary. Subsequently,
and even with construction under way, DEQ has required developers to go through
the application process. So far no one has resisted this "late" review, although
the benefits of the process in terms of design change alternatives are minimized.
As more reviews have been undertaken, both developers and financial institutions
have become more familiar with the ISR regulations, thereby reducing the occur-
./
rence of late reviews.
In general, DEQ prefers that developers come in for review after
going through the zoning process; the purpose of this is to support the local
-------
V-26
position on a project. If ISR precedes a zoning change, the local agency re-
sponsible for land vise may feel pressured into a decision because of ISR ap-
proval. To prevent an unnecessary burden, especially time delay problems
for the small developer, in particular cases DEQ will undertake a review which
is simultaneous with the zoning process.
A number of counties require an ISR permit before a building permit
can be issued. Financial institutions are also assuming an ever greater support
\ -
function in requiring an ISR permit before entering into financial negotiation.
(3) Highway Applications. In the case of highway projects,
DPC has been experiencing some timing conflicts with the state Department of
Transportation (DOT). In order to apply for Federal highway aid from the Fed-
eral Highway Administration (FHWA), DOT must submit a "letter of consis-
tency" signed by the Florida DPC. This letter signifies that the proposed road-
way is consistent with the air implementation plan for the state.
The plans for major highways are generally developed eight years
before the road is actually in place. Relocation and right-of-way purchases oc-
cur approximately four years before the highway is completed. The funding pro-
cedures for these roadway projects must also be determined early in the
planning process.
The conflict between DOT and DPC arises over this timing issue.
DPC does not want to authorize that a proposed road is consistent with Florida's
air implementation plan without first witnessing a successful ISR. In order for
the CO monitoring and traffic projections to be developed in sufficient depth for
indirect source review, the plans for the highway must be reasonably well estab-
lished. -This condition cannot be realized by DOT, however, until FHWA grants
funding to sponsor plans and implement the DOT project.
FHWA establishes a comprehensive transportation planning process for each
urban area in the United States. The funds are appropriated before 31 Decem-
ber of each year and are generally available by 1 July of the following year
(1.75 percent of the FHWA funds is directed to planning and research proce-
dures). DOT bills FHWA for road construction funds on a project-by-project
basis.
-------
V-27
This conflict has not been adequately solved by either agency. Cur-
rently, DPC issues a letter of consistency to FHWA which is dependent on suc-
cessful ISR at later stages. DOT would welcome a conditional ISR approval at
the very early planning stages, with yearly CO projections developed by computer
modeling.
AMS is working closely with agencies responsible for highway proj -
ects to establish procedures for the review of highway facilities. Problems are
foreseen over the near term. As most urban highway projects require a mini-
mum of seven years of planning prior to construction, many of them would be in
the development process before the review program is implemented. The ISR
and FHWA requirements would not interface smoothly until all projects planned
prior to implementation of review are constructed or dropped. Until such time,
indirect source reviews of these projects would be occurring much further along
in the development process and, therefore, according to AMS officials, might be
resented by the state transportation agencies. AMS is actively trying to resolve
these problems with those agencies who might ultimately submit applications with
timing problems.
In Oregon, timing has generally been a much more critical issue for
highway projects than for private developments. Time with respect to the A-95
process is of particular importance. DEQ has found itself under pressure
A-95 refers to OMB Circular No. A-95 issued in response to the Intergovern-
mental Cooperation Act of 1968. Under its directives all capital grant appli-
cations for transportation projects must be submitted for review and comment
to both the state and regional or metropolitan clearinghouses. These clearing-
houses will inform all other appropriate agencies or local governments, exam-
ine the project from the comprehensive planning point of view, and arrange for
any necessary follow-up conferences with the applicant and interested agencies
or local governments. With regard to the environmental impacts of the project,
the clearinghouse is expected to inform any state or local agencies authorized
to develop and enforce environmental standards, invite their comments on the
environmental impact of the project, and transmit such comments to the ap-
plicant.
-------
V-28
to complete ISR upon receipt of A-95 notification. Yet the information available
from A-95 on the traffic impact of a proposed project is much too limited to per-
mit an indirect source assessment. The state DOT, however, cannot undertake
detailed planning and traffic engineering studies suitable for ISR until funds have
been granted, and funds will not be allocated until A-95 approval (or no comment)
has been received.
The second stage in the highway review process comes with the sub-
mission of design alternatives pursuant to the Federal Highway Administration
guidelines set forth in Policy and Procedure Memorandum 90-1. At this stage
of the process, however, not only is there strong (political) momentum to push
ahead with the project, but many of the design change options may already have
• 1 >
been precluded without determination of their impact on air quality. Conser
quently, DEQ feels that it is being forced to play the role of the "bad guy" in
highway-related cases. If it does not give approval at the A-95 stage, it is ac-
cused of killing the project. However, if DEQ attempts to initiate review at a
later stage, it faces heavy criticism for causing delays. Political pressure is
sometimes brought to bear on the DEQ as well. '
b. When ISR Applies. Ambiguities have.arisen in Florida over
when the review process does and does not apply. DPC has issued guidelines
for size criteria to determine which facilities must undergo ISR. Yet, it
also has the authority to require review for developments which are smaller than
those specified by the criteria but which, nevertheless, may present a potential
v
pollution problem.
If a developer is not sure whether his project will require review and
if he is anxious to avoid additional front-end costs should review be imposed at a
point in the development process fairly close to construction, he may apply to
DPC for a "letter of exemption. " A developer may also request a letter of ex-
emption to provide partial assurance to a lending institution that his facility is
acceptable to all regulatory agencies.
-------
V-29
The developer generally only submits a site plan to DPC with a de-
scription of the surrounding land use. An informal review is conducted between
DPC officials who are familiar with the area and the developer to determine
whether the project will pass ISR. If any doubt exists, the developer must sub-
mit the information required for a regular ISR, and a more detailed analysis of
the project is undertaken. The formal ISR procedures are not required, how-
ever, unless it is determined that the proposed facility will cause a violation of
CO standards or that it reaches the triggering point for review.
The letter of exemption signifies that the proposed facility will not
be a major indirect source of air pollution and that it does not require ISR. Ap-
proximately 10 letters of exemption have been issued in Florida so far.
c. Reliability of Data. Most of the conflict in analyzing Florida's
applications revolves around the issue of the reliability of emission and traffic
data. The assumptions made for calculations in ISR, such as the formulas for
CO readings and the calibration of emission and .toad, factors, are often ques-
tioned. However, DPC lacks the funds to carry out independent studies for ISR.
The validity of the traffic projections is another point of contention.
The reliability of traffic counts and vehicle speed readings is sometimes chal-
lenged. Standard design considerations for entrance and egress roads to a
facility must also be established.
Monitoring for only one week out of the year is a further point of dis-
cussion. Because of the impact of the tourist season, Florida experiences strong
seasonal fluctuations of population and associated air quality levels. The winter
population count is much higher than the summer count, and traffic and pollution
counts could rise accordingly.
-------
V-30
i
The Florida ISR guidelines specify a monitoring period of no less
than seven days. However, some parties have questioned this procedure, since
it is not known what degree of accuracy can be achieved in seven days of CO
monitoring as compared to a period of slny other duration.
ISR applications for developments in areas with obviously low pollu-
tion levels are often submitted without any monitoring data at all. In some cases,
DPC has accepted these applications or has allowed projection of pollution levels
by computer models.
The depth of the air quality impact analyses being performed in
Philadelphia is a problem because the responsible agencies are not providing
adequate detail. The assumptions used in determining methodological techniques
and making traffic projections are not included; thus, there can be no assess-
ment of the validity of the assumptions. When assumptions are provided, there
is inadequate explanation and justification.
'•*•:. • «••••
AMS is also concerned about background air quality data. The
agency would like to use monitoring data that are known to be of high quality (i. e.,
from reputable laboratories). AMS would compare the findings of an air quality
analysis with data derived internally for nearby locations to assess validity.
DEQ has raised questions concerning the data presented in support
of highway projects. The assumptions used for traffic projections .are some-
times considered erroneous because they may be designed to support highway
development based on biased land use trip generation and/or origin-destination
data. The gravity model used by the Oregon DOT also appears to be based on
an unrealistically high growth rate. Furthermore, it incorporates only a limited
allowance or no allowance at all for modal splits. DEQ also feels that the capac-
ity figures cited for existing roadways are often too low. Highways with a. desig-
nated capacity of 30,000 vehicles (average daily traffic) are in actuality operating
smoothly with 32,000 vehicles. The designated capacity figures, therefore, would
support new roadway construction.
-------
V-31
d. Foreknowledge of ISR. Developers have learned about ISR from
varying sources and at varying stages In their development plans. In Florida the
local planning agencies serve as valuable sources of information for DPC by re-
vealing potential developments which may require ISR. Other local permitting
agencies, such as those for zoning and water, are also in a key position to in-
form both developers and DPC about projects requiring review.
The local planning agencies also develop study maps showing land
use and density in their area of jurisdiction. These maps can help to identify
the location of present and future critical receptors. DPC cites these maps as
informative guidelines for the location of development. However, some devel-
opers complain that the maps are not detailed enough to anticipate future problem
pollution areas. -
The local and regional agencies serve as a sounding board for de-
velopers anticipating ISR. Prior to the finalization of design plans, such issues
as traffic demands and alternatives as well as pollution and zoning regulations
are discussed with the local planning board. The Broward County Planning of-
fice, in fact, has a computer program to project emissions; this could be a
valuable tool in the ISR process.
A MS in Philadelphia has undertaken a campaign to inform impacted
parties of the Regulation X review process. It is also working on gaining the
support of the Philadelphia Bureau of Licenses and Inspection (L & I). This agency
issues all permits to builders. AMS would like L & I to demand that a developer
submit an ISR approval letter prior to receiving a building permit. Finally, AMS
has developed close ties with the state clearinghouse through the Pennsylvania
Department of Environmental Resources and the local clearinghouse (the Dela-
ware Valley Regional Planning Commission). These agencies supply information
on proposed projects which AMS could follow up if ISR were applicable.
-------
V-32
DEQ in Oregon has experienced problems because certain developers
were unaware of the review process. Some reviews had to be performed after
construction of a project had started. Others are learning about the review just
prior to getting a building permit. At that point in time, a review can be most
expensive to a developer.
In retrospect, it is the opinion of DEQ that if it had an opportunity
to start the program again, its first step prior to the effective date would
be to send out information bulletins on the purpose and nature of the regulations
to every developer who has worked in or is located in the state, to all architec-
tural and engineering firms operating in the state, to financial institutions, and
to realtors.
-------
V-35
curtailed in Oregon from November through February. In addition, heavy rains
restrict paving to only three months of the year. An untimely delay could
force a developer to postpone his work for several months and his paving for
almost a year. Early review should help to prevent this problem if the devel-
opers can and do take advantage of the opportunity and do not overload the .
review staff with applications at a point just prior to the start of a new con-
struction season.
Florida's indirect source review has involved a time period ranging
from 65 to 240 days, depending on the availability of information which the de-
veloper includes in the application, the length of the technical review, and any
controversies that might arise during the period of public comment.
ISR could conceivably occur in the 65-day time frame already described—
although to date this timing has only been met for highway projects. Highway proj-
ects generally average 81 days from the date the application is received by DPC
to the date it is issued; shopping center permits require an average of 170 days
2
for issuance, a period considered too long by private developers.
The actual timing of AMS's reviews is summarized below:
Air Quality
Project Submission Date of Comments
National Historic Park Early November 1973 23 November 1973
Expressway 15 May 1974 9 July 1974
Road Widening 28 June 1974 Mid-July to End of July 1974
To date AMS has been successful in meeting the 60-day time limit. It is important
to note, however, that at the conclusion of the 60-day period the project was not
necessarily approved for construction. > •
Regional DPC office^, "Complex Air Source Log Sheets," July 1974.
2Ibid.
-------
V-36
Oregon's DEQ has tried to achieve its goal of reviewing each appli-
cation within 30 days of receipt. Some reviews, however, have taken longer—
z'jrrK^ffr saooe of t2iem has exceeded the 6CHJay Ivmil t'iVMv. Ou> u\v.<> \\\ .<\itMv.',?
sion of materials delineated in the guidelines to a decision by DEQ or the En-
vironmental Quality Commission (EQC). In cases where insufficient data for
ISR are initially submitted, the applicant is immediately informed and the re-
view completed—usually within 30 days—after receipt of the additional infor-
mation.
Time delays,therefore, have impacted developers in Florida more
severely than in Philadelphia or Oregon. Two reasons can explain the shorter
length of time involved for ISR of Florida highways. First, DPC usually pro-
vides the CO monitoring information, thereby eliminating additional time and
costs for'this purpose. Second, new or modified highways in Florida, often
located in low-density areas, generally incite less opposition than large shop-
ping centers in heavily traveled areas. In addition, DPC cites inadequate
staffing as a cause of time delays.
Each region receives an average of one or two ISR applications per
week, and each application requires two to four days for review. Highway appli-
cations require more DPC staff time, since DPC is generally responsible for
the monitoring of air quality in addition to the normal application review. The
number of applications received each week is fairly consistent because Florida's
weather allows for construction all year long.
The source sampling teams, which are based in the state DPC of-
fice, rotate from region to region in Florida. The staff at the regional DPC
offices, however, do not rotate to balance any periods of slack or excess num-
bers of review. The extreme work load in each of the regions is the explanation
given by the Division of Air, Solid Waste, and Noise for this procedure.
-------
V-37
Inadequate staffing for review purposes has already created some
problems. The West Coast Region, for example, received seyeral applications
at one point and was delayed four months in reviewing one particular application.
Two additional environmental specialists and two engineers will join this regional
DPC staff, so that the lag in processing should be remedied.
In Florida the Division of Air, Solid Waste, and Noise, which over-
sees DPC, requested funds from the Florida Legislature for 55 additional em-
ployees , intending to appropriate seven of them for ISR (one in each region and
one in the state office). The requested funds, however, have not been granted.
Oregon's DEQ is also in need of additional staffing. Some of the
!
need can be attributed to enforcement and will be discussed in a later
section. Ideally, DEQ would like to hire three additional full-time people for
ISR. One person would work exclusively oh review enforcement; the other
two would work on reviews of smaller Portland projects and those submitted
through the two regional air pollution control agencies for the Eugene and Salem
areas. «
DEQ has two people whose time is devoted exclusively to the review
process. The reviewers are trying to accommodate developers by responding to
applications within 30 days. They realize the limitations of Oregon's construction
season, particularly the limited time available for paving, an
-------
V-38
calities outside the three main Oregon cities, such as Beavei*ton, with parking
plans. There is little time for these additional skills and functions.
A summary of the current staffing situation and desired staffing re-
quirements for the three state and local experiences is shown in Exhibit V-5.
This exhibit also addresses the volume of applications within each review agency.
b. State versus Local Review. EPA has adopted a position which
encourages review at the local level whenever state air quality offices feel that
there is sufficient manpower and technical ability to permit the delegation of
this function. This position is based upon the premise that reviewers at the
local level are most familiar with problems and issues that might arise in at-
tempting to implement ISR equitably and efficiently.
The EPA position is born out in the experience of Philadelphia's
AMS. The Penn DER has been very supportive of AMS and its right to review
Philadelphia projects. Theoretically, AMS has autonomy over its review, al-
though the state could intervene and override an AMS decision. Penn DER, how-
ever, is heavily reliant on AMS's perception of the Philadelphia situation and
prefers to defer to the local agency on air quality problems in that city.
Some developers, and even some review officials take a more
cautious position regarding the local implementation of ISR. The reasons given
are based on concern over the lack of technical expertise at the local level
and the tendency to bypass air quality considerations because of social, economic,
and political pressures.
Primary responsibility for the administration of Florida's ISR rests
with the state DPC. All applications are reviewed by the approved local pol-
lution control agency in the project area and the permit is issued by the regional
offices of DPC. The regional DPC will not grant ISR approval, however, if the
local review office or locality objects.
-------
V-39
EXHIBIT V-5
ISR STAFFING,
State of
Local
Experience
Existing
Reviewers
Average Volume
Applications
Reviewed
Additional
Personnel
Florida
(by DPC regional
office)
Philadelphia
Oregon
1-2
1*
2-3 per week
3 (November
July 1974)
up to 20 per
month
2-3**
*Could be increased to 6 depending on scale, complexity, and controversial
nature of project.
**Besides reviewing applications, these additional people would be involved in
other aspects of ISR such as enforcement.
-------
V-40
Two regional agencies are also involved in the review process:
Lane Regional Air Pollution Authority, which represents the Eugene metro-"
politan area, and Mid-Willamette Valley Air Pollution Authority, which covers
Salem. There is no longer a regional air pollution authority for the Portland
area since the Columbia-Willamette Pollution Authority was disbanded as of
1 July 1973.
In essence, the Eugene and Salem regional air pollution agencies
perform the reviews. However, these agencies do not have autonomy. They
pass along their recommendations to DEQ, which issues the final approval or
disapproval. Within DEQ there are differences of opinion regarding whether
the regional air pollution agencies should be given authority to review projects
autonomously. One approach under consideration is for DEQ to limit its involve-
ment at the regional level to large-scale projects.
Another state versus local review concern is the question of which
agency or program should issue the final approval or permit of the. several
required to go ahead with a project. As a number of developers put it, "Every
agency wants the right of final review* [As a result] we keep running around in
circles, without anything getting approved."
Developers hope that local reviewers will follow EPA's position re-
garding early review so that this particular problem can be avoided.
' s
4. Public Comment
Under the Federal regulation the public is allowed 30 days to re-
spond in writing to the information submitted by the developer to the review
agency and to the review agency's preliminary determination. The public must
be informed of the proposed indirect source construction through prominent ad-
vertisement. . *•--.•.
140 CFR 52.22 (b) (8).
-------
V-41
Problems may arise in regard to comments that address issues other
than the impact of a proposed indirect source on CO concentrations. Developers
also question the need for public comment pursuant to a preliminary disapproval
or the need for a public hearing (if a state regulation incorporates this require-
ment) in addition to the submission of written comments. Finally, timing prob-
lems may arise if a public hearing is required in response to "significant adverse
public comment" or if a developer wants to appeal a negative decision on an ap-
plication. The question is related to whether those states instituting ISR would con-
sider an appeal without an intervening public hearing if the results of a technical
review were unfavorable. In the opinion of certain developers, such a procedure
would help to reduce one source of time delays—a critical factor for the real
estate industry. (The impact of timing in terms of ISR duration has already
been addressed in the previous section'on the review process.)
(
Florida is the only one of the three state and local review agencies
analyzed which experienced difficulties during the public comment period. In Phila-
delphia and in Oregon, the public projects reviewed were in certain cases subject
to public comment or public hearings pursuant to other regulatory requirements.
Private development projects in Oregon are in the large majority of cases under
500 parking spaces and generally too small to arouse controversy.
The public notice procedure for Florida corresponds to that for
Federal ISR. Upon notification of the proposed DPC decisions, the developer
is responsible for publishing a public notice in the area where the facility is to
be located. Public comments in response to the notice must be made within
30 days. If a negative decision on an application is announced after the tech-
nical review is completed, the developer must appeal within 10 days for a
public hearing to be called. It is also unwritten policy in Florida that a public
hearing may be held if "significant adverse public comment" is received. In
either case, a date is set and the facts of the case are reviewed to determine
whether there is sufficient justification for revising the decision.
- . . - . . ___
It should be noted that there is no specific provision for an appeals process in
the Federal indirect source regulations.
-------
V-43
5. Decision
According to Federal ISR, at the conclusion of the public comment
period the review agency is allowed 30 days to issue a final decision on a pro-
posed indirect source application. The decision would take the form of an ap-
proval, an approval with conditions, or a disapproval.
The development community is primarily concerned about condi-
tioned approvals and disapprovals. If a developer receives a disapproval, he
might appeal the decision or perform further analysis to verify that his project
did not violate NAAQS for CO. This raises the issue of the reliability of emis-
sions or traffic data (see page V-30). The developer might consider redesign-
ing his project. He could reduce the total scale of the development or assess
possible new design features to facilitate traffic flows. All of these options re-
quire additional time which may be very costly to the developer (see Section B2).
Another possibility is to immediately stop further work on the proj-
ect. Each developer has certain limitations in terms of how much of his own
equity he can invest in a project and how long he can afford to tie up that equity
without realizing a return on the investment. The small-scale developer is
most vulnerable since he cannot rely upon the income generated by other suc-
cessfully completed projects. Support from the financial community is also
more limited than in the case of a large, well-established developer.
Florida is the only one of the three state and local experience cases
where ISR disapprovals have been issued. Philadelphia and Oregon, however,
have both issued conditioned approvals. By July 1974, DPC had disapproved two
shopping centers. According to the environmental lawyer at DPC, one applica-
tion was denied because DPC projected that CO concentrations along a roadway
near the proposed mall would violate NAAQS. The second application was re-
jected by the local DPC office because the facility lacked DRI zoning. This lat-
ter case was previously described in Section B2.
-------
V-44
Although disapprovals are a recognized problem for developers, the
three state and local experiences also surfaced difficulties associated with con-
ditional approvals. The principal objection raised by developers with regard to
conditional ISR approval has been the imposition of conditions which are outside
the developer's control. Illustrations cited include major off-site roadway
changes and certain transit improvements which would require commitments on
the part of one or more public agencies, as well as a condition recently issued
in Florida which requires a reduction in the number of parking spaces if CO
standards are ever exceeded after a specific proposed facility is in operation.
The consensus of developers who are experienced in trying to meet such condi-
tions is that it is much better for the developer over the long run to be denied
ISR approval than to be issued an approval conditional on events outside his
control. >
Developers have also focused on the use of excessive specificity in
stating the conditions. Developers point out that if a permit is issued at an
early date but no flexibility is allowed in the conditions, many of the advantages
of an early review are lost. Subsurface conditions, utility placement, and other
factors which may not be known until final engineering studies ar« completed
,-V, " •
just prior to construction may increase the costs of one type of roadway improve-
ment to such an extent that another alternative might have a better financial
feasibility. In such a case, the developer wants enough flexibility in the condi-
tions to take advantage of the lower cost option. likewise, relocation problems
and land acquisition costs might tip the balance and favor one alternative over
another. In general, developers seem to prefer an approach where the reviewer
would list any and all design changes, together with the relative effectiveness of
each in preventing CO standards from being exceeded. The developer, in turn,
would be allowed to substitute alternatives to one or more of the design changes,
provided the total effectiveness would not be altered.
-------
V-45
Some developers have expressed a degree of skepticism over the ef-
fectiveness of transit-related conditions. The primary reason for this is uncer-
tainty as to whether persons traveling to or from new developments would actually
utilize transit. Other developers are of the opinion that it is both inequitable and
inefficient to make specific indirect source facilities responsible for transit. These
developers feel that transit must be dealt with comprehensively on an area-wide
basis rather than in a piecemeal fashion.
Another issue raised by industry representatives is whether a reduc-
tion in the number of parking spaces at a facility might not only be counter-
productive by increasing off-site traffic congestion, but also less effective in
reducing CO concentrations than the use of good design measures for parking
lots (some of these measures are described in Appendix F of this report).
Financial institutions are also very concerned about the form that
these conditions might take. During the course of this study, Harbridge House
posed several hypothetical cases to a number of major lenders. Each person
interviewed was asked what his response would be if he requested to see an ISR
permit as part of a loan application process and the permit contained one of the
following conditions:
• An on-site road widening.
• An off-site road widening.
• The construction of a major interchange.
• The institution of transit service to a facility.
In brief, a summary of the responses showed that if the nature of the
condition was such that government action was required (e. g., a new interchange,
an off-site road widening, or a mass transit extension), financing would not be
granted until the condition had been met or the improvement was almost in place.
However, if the condition called for a design change that required time or money
-------
V-46
over which the developer had control (e.g., an on-site road widening or the es-
tablishment of a shuttle bus service), the financing would be granted before the
service was in place.
Conditions to ISR approvals have been applied in each of the three
state and local experiences. In Florida, conditions most often involve traffic
and parking control strategies and support increased public transit opportunities.
Some illustrations of conditional approvals are provided below.
According to DPC, conditions for approval of a sports stadium now
under review will include the establishment of satellite parking facilities at vari-
ous shopping centers with chartered buses to carry spectators to the sports
events. This shuttling will require the shopping centers and the sports stadium
to coordinate the timing of the games and shopping hours. DPC is also planning
to include provisions for the continual monitoring of the sports stadium during
the games, in order to alter traffic plans and/or sports schedules if the CO level
approaches the point where it threatens to exceed standards. This case has not
yet been resolved.
In another case, mass transit requirements will be placed on a pro-
posed offshore power system manufacturing facility. It is projected that this
operation will employ several thousand workers. DPC conditions will include
provisions for an express bus service for 50 percent of the facility's employees.
They will also require coordination between the local transportation authority
and a mixed-use development in order to provide ample bus service for this
*j
particular complex.
A condition recently placed on a regional shopping center by DPC
was a requirement that parking be restricted if NAAQS is ever exceeded. Im-
plicit in this condition is the fact that some monitoring must be carried out after
the center is in operation. The developer is concerned that this monitoring is a
costly but unnecessary imposition, since the only time enforcement may ever be
-------
V-47
necessary is at the peak shopping period before Christmas. He has submitted
the EPA-sponsored Geomet study on shopping centers in support of this conclu-
sion.
The Florida DOT has been important in assessing the impact of new
development on projected traffic flow. During the course of its efforts to ensure
that level-of-service "C" during peak-hour traffic is maintained, DOT has, ac-
cording to some developers, worked to ensure that necessary roadway design
changes have been implemented. Sometimes the developer must contribute a
portion of the costs of the road modifications; however, the cooperation of DOT
in revising construction schedules and priorities in such a situation—although
not required—is significant in helping developers meet ISR requirements while,
at the same time, minimizing the air pollution impact associated with new or
enlarged facilities. It should be noted that the involvement of the Florida DOT
is not characteristic of most state DOT'S.
In addition to private developments, conditional approvals have been
issued for highway projects. Examples of conditions that have been applied
to highways are as follows:
• If air quality standards are being violated following the com-
pletion of construction, feasible methods of control, such as
control of traffic movement, will be investigated and a plan
for control will be provided by DOT within eight months fol-
lowing completion of construction.
• If long-term projections for five to ten years do not show an
improvement in air quality, and if projections of air quality do
not show compliance by the end of the fifth year, DOT is re-
quired to submit a plan which will show that the violations can
be corrected by the end of the fifth year. The plan is to be
submitted no later than one year following completion of con-
struction.
-------
V-48
In Philadelphia conditions have been applied in two out of the three
cases which had been approved as of 10 July 1974. Currently, AMS's approiu'-h
to indirect source review includes consideration of approval to projects \\bioh
i
may exceed CO standards but which have a net beneficial impact on all mobile
source pollutants by reducing vehicle miles traveled. Similarly, it may disap-
prove a project that does not violate CO standards but would have a significant
adverse impact on vehicle miles traveled, thereby increasing emission densities
of nitrogen oxides and hydrocarbons.
The first project involves the establishment of a national historic park
in downtown Philadelphia. A draft environmental impact statement (dated 5 Octo-
ber 1973) was submitted to AMS in mid*November of that year. The statement
focuses on a proposed 550-space parking garage. Conditional approval to con-
tinue the planning for the project was given, provided that the final EIS be sub-
mitted to AMS for approval and that the following changes be made in the scope
of the preliminary EIS:
© The preparation of a quantitative air quality impact analysis.
o A reduction in the number of parking spaces in order to dis-
courage Philadelphia's city and suburban residents from
traveling to the site by car.
9 The establishment of a program to give priority parking privi-
leges to visitors from outside the Delaware Valley through the
use of discriminatory parking fees or a specific allocation of
spaces between locals and outsiders.
There has been no response to the above comments from the responsible agency
or its designee.
In the second case, first-phase review approval was given, condi-
tional upon subsequent clarification and improvement of traffic data and air quality
-------
V-49
impact projections. This project involved a draft environmental impact for a
downtown expressway. AMS is in favor of the expressway. It believes that the
project will alleviate downtown congestion problems without having a significant
adverse impact on vehicle miles traveled. AMS's comments on the draft EIS,
however, were extremely critical of the air pollution methodology used; the sup-
portive assumptions, xwhich were presented without adequate justification; and
the preparer's understanding of Federal air pollution standards. In essence,
AMS would only approve the project subject to a redraft of the EIS. Because
AMS's comments were just recently submitted, there has been no response from
Penn DOT.
Since both projects are publicly funded, the economic impact asso-
ciated with the implementation of the ISR conditions would not be as potentially
damaging as would have been the case for a private development project. The
reasons for this differential impact have already been discussed under timing
issues related to the review process.
Conditions to ISR approvals in Oregon have primarily involved transit-
related changes. The conditions cited in a letter of approval are typically as fol-
lows : I
• The construction of a bus shelter on the site.
• The distribution of transit tickets to employees at a 20 percent
discount (the developer must absorb the 20 percent differential
because the transit agencies do not offer discount rates).
• The posting of transit schedules and route information in a
prominent location.
Facilities without transit access are subject to such conditions as
actively promoting carpooling by employees and bicycling. In such a case the
developer has to provide DEQ with the relevant transit agency's prospective
plans for servicing his facility.
-------
V-50
DEQ often requires a reduction in the number of parking spaces at
a given facility based on the type of use and the recognized level of parking nec-
essary to support the represented square footage of that use. The rules-of-
thumb parking ratios have been derived from various Federal agency sources
and a DeLeuw Gather transportation study of the Portland area. DEQ generally
allows one space per 400 square feet of leasable office area. (It also uses the
standard of 0.59 spaces per employee.) A ratio of 5 spaces per 1,000 square
feet of gross leasable retail area is also used. DEQ considers this figure high
and feels that 3.5 to 4.5 spaces per 1,000 square feet is sufficient. The local
zoning code serves as the standard for residential uses and for special cases.
Complicated situations such as mixed-use developments are permitted enough
spaces to meet their peak-demand estimates.
To date DEQ is aware of no projects that were stopped because of an
inability to meet the necessary conditions to an ISR approval.
In revising the review procedures to conform to Federal ISR, DEQ
has decided that rather than just conditioning a permit to take into account de-
sign measures for easing traffic flows and increasing transit usage, it will
require an analysis incorporating the implementation of such measures prior
to ISR approval. Specifically, the proposed regulations state that the director
of the review agency must make a determination that a complex source will not
result in traffic flow characteristics causing violation of the state air quality
standards for CO. Such traffic flow character! sties are defined in the proposed
regulations as follows:
• Minimizing vehicle running time within parking lots through
the use of sound parking lot design.
• Ensuring adequate gate capacity by providing for the proper
number and location of entrances and exits, and optimum sig-
nalization for such.
-------
V-51
• Limiting traffic volume so as not to exceed the carrying ca-
pacity on roadways significantly affected by the complex source.
• Limiting the level of service at controlled intersections signifi-
cantly affected by the complex source.
• Constructing and maintaining bus shelters and turn-out lanes.
• Making parking spaces available for park-and-ride stations.
• Posting transit route and scheduling information.
• Maintaining mass transit fare reimbursement programs.
• Constructing and maintaining exclusive transit ways.
• Constructing and maintaining bicycle and pedestrian pathways
and bicycle racks.
Some people have expressed concern in public hearings on the man-
ner in which the regulations will be interpreted and how many of the traffic flow
characteristics should be applied to different projects. For example, should
areas removed from transit have to post transit schedules and establish a fare
reimbursement program? Others have questioned whether differential imposi-
tion of various types of characteristics might create inequities. Illustrative of
this latter position is the issue of whether the requirement to dedicate a percen-
tage of parking spaces for a park-and-ride program penalizes inner-city develop-
ments near transit stops.
Most of the problems associated with the use of conditions to an ISR
approval are based on anticipated rather than actual difficulties. Developers ap-
pear very willing to comply with changes that are within their control and their
budgetary limitations. Their main concern is that they not be forced to wait in-
definitely for a highway or a transit agency to implement a specific plan which
will impact their proposed development.
-------
V-52
6. Permit
According to the Federal indirect source regulation, an applicant is
to be notified in writing of his application approval, conditional approval, or de-
nial, at the conclusion of the review process. There is no specific permit issu-
ance requirement. Permits, however, may be incorporated as part of a state's
indirect source regulation. There are some advantages and disadvantages'asso-
ciated with a permit system which will be discussed below.
Florida's DPC issues a permit for all indirect sources (subject to
their own review triggering points) prior to construction. A letter of approval
or disapproval is issued by AMS at or before the conclusion of the 60-day review
period. AMS is considering the adoption of a permit system to coincide with the
effective date of Federal ISR. It feels, however, 'that permit issuance might be
superfluous since the majority of projects submitted for review are funded by
Federal and state agencies. Federal projects need rot apply for permits issued
at the local level; state agencies must apply but need not pay a permit fee. In
Oregon DEQ issues a written approval, approval with conditions, or denial of a
project to the developer or responsible agency. DEQ would favor using a per-
mit system which it feels would have more force than the current approval/
conditional approval/denial letters.
The argument in favor of permits coincides with DEQ's desire for
more force. Developers, on the other hand, argue that permits might involve
additional time delays if an agency other than the review authority must is.sue all
permits. If Philadelphia, for example, were to shift to a permit system, the
city's Bureau of Licenses and Inspection would have to issue the ISR permits.
CFR52.22(6)(8)(v).
-------
V-53
7. Enforcement
Violators of the Federal indirect source regulations will be subject
to the penalties outlined under section 113 of the Clean Air Act of 1970 as
amended. These penalties incorporate fines of up to $25,000 per day or up to
one year's imprisonment for the first violation.
To date the enforcement power of the three agencies represented in
the state and local experience has not been exercised. Florida's DPC and Oregon's
DEQ both claim that they lack sufficient staff to monitor each facility which has
obtained an ISR approval. AMS in Philadelphia is reluctant to force ISR on cer-
tain facilities until it can rely on the support of the Federal government. As a
result, projects that are politically controversial are not being approached for
review at the present time.
\
Since DPC does not have sufficient manpower to carry out the enforce-
ment function, it must depend on outside parties to alert it to possible violations.
An example of this reliance is the case of a proposed expansion of a sports sta-
dium, the Tangerine Bowl.
In this instance, the developer was brought to court by a private
citizen who was concerned that the intent of the complex source regulations was
being violated, although according to the letter of the law the facility did not re-
quire review. The seating capacity of l!he stadium was to be increased from
15,000 to 51,000, but no plans for additional parking were made. It was felt,
therefore, that congestion would be substantially increased, since many spec-
tators would be forced to drive around endlessly looking for available off-site
parking spaces.
The ruling of the court was that a temporary expansion would be per-
mitted, at the conclusion of which monitoring is to be performed during 10 major
games to determine the impact of the stadium modification on CO concentrations.
-------
V-54
At the conclusion of the monitoring period DPC is to assess the data and deter-
mine if an indirect source permit will be issued and if the expansion will be per-
mitted to become permanent.
DPC does have broad legislative powers to enforce ISR and fine vio-
lators, but its limited staff and funding preclude maximum use of these. At this
point DPC mostly reviews applications submitted to the regional offices rather
than actively initiating ISR on potential development projects.
When DPC becomes aware of potential indirect sources of pollution,
it requires that the facility undergo ISR. DPC is unable to initiate review of de-
velopments requiring ISR as often as it feels necessary. As a result DPC is
considering relaxing ISR requirements to reduce the burden of applications per
reviewer and to allow greater latitude for enforcement.
DPC also has difficulty enforcing ISR for facilities which come just
under the guidelines requiring review. Theoretically DPC can exercise ISR
authority for any project which is considered a potential indirect source of air
pollution, but the problem of limited staffing once again inhibits this authority.
Oregon's DEQ would like to hire three additional full-time people
for ISR. One person would work exclusively on review enforcement; the other
two would work on reviews of smaller sized Portland projects and those sub-
mitted through the two regional air pollution control agencies for the Eugene
and Salem areas. At present DEQ has no one to perform the enforcement func-
tion.
-------
V-55
C. Conclusions
A number of potential problems in conduction with the implementation
of indirect source regulations have been identified from the experience of three
areas which have already initiated the regulation of indirect sources. Conclusions
concerning the problems and possible solutions associated with each phase of the
development process are summarized below:
1. Data Acquisition and Analysis
Difficulties in data acquisition and analysis have been expressed by
both developers and reviewers. Questions concerning assumptions and techniques
to be used in monitoring, modeling, receptor siting, and traffic projections were
most frequently raised. Traffic projections, in particular, seem to be creating
problems in terms of reviewing highway projects, verifying data submitted by private
developers, and analyzing design change effectiveness. To the extent that questions
exist on data acquisition and analysis, delays can be created in processing appli-
cations.
The three areas studied—Florida, Oregon, and Philadelphia— have
or are in the process of preparing guidelines to help address some of the issues
being raised on these topics. Assistance from the Federal EPA in preparing
guidelines not only seems desired by reviewers, but could also be efficient in terms
of eliminating a duplication of efforts at the regional and local levels and perhaps
expediting the preparation and dissemination of essential guideline material.
2. Application Preparation and Submission
In terms of potential economic impact, the private development com-
munity is most vulnerable to the point at which ISR procedures are initiated. Al-
though timing problems have been experienced on highway projects in the three study
areas, efforts are being made to integrate an air quality review into the overall
highway planning process.
-------
V-56
Developers are anxious to remove uncertainties as early as possible
in their development planning process. Otherwise, they risk the prospect of
losing all of their initial investment in a project. The longer a developer is
forced to wait, the larger his investment becomes as he commits himself to .
an architectural design and to future tenants.
Minimizing potential problems connected with when to initiate ISR will
require efforts on the part of both developers and reviewers. The developer must
adjust his planning process so that ISR is initiated at the most appropriate time.
The adjustment should include reassessing the timing and nature of traffic studies
required to complete the ISR application.
On the part of the reviewer, the three area cases show that for various
reasons, early review as encouraged by the Federal EPA is not always perferred
at the state and local level. Although concerns about allowing time for local in-
volvement have some merit, it is also important to understand the impact that
postponement may have on developers.
3. The Review Process
In order to minimize adverse economic impacts and reduce uncertainty,
an expeditious review process can provide a significant benefit for developers.
In the state and local experience cases, however, there is evidence
that reviewers are encountering problems processing ISR applications within 90
days or, in some cases, 120 days. The reason for this seems to be largely in-
adequate staffing. Additional manpower funding, acceleratingtrainingprogramsforexis
ting staff, and even the creation of one or more positions of "roving reviewers"
(provided at the Federal level and paid on a cost-share basis to move from office
to office assisting in ISR processing during periods of peak applications)
could all serve to eliminate problems related to the length of processing time.
-------
V-57
4. Public Comment ;
Potential problems relating to the public comment period seem to be
relatively minor compared to issues associated with other phases of ISR imple-
mentation. Those problems which were identified from the state and local exper-
ience cases are largely time-related and focus again, on the need to make the
the process more expeditious.
5. Decision
Along with timing, conditions to permits seem to have caused the most
difficulties in the study areas in terms of administering ISR. The major issues
raised were with regard to the following:
• The timing of design changes that had public involvement.
• The determination of the effectiveness of alternative design
changes.
• The use of operational conditions which call for review after
i
a facility has been completed.
The issue of time problems related to public involvement in design
changes can be resolved by issuing a permit in cases where developers will insti-
tute an interim bus system or similar alternative to service a facility until the
permanent design change is completed.
The question of the effectiveness of design changes has no easy solution
and is an area where contributions by Federal EPA in the form of technical ana-
lyses could provide significant benefit. This recommendation Is made because
for many developers, arriving at effectiveness levels can be difficult and costly—
especially when dealing with topics with which historically they have had little
experience (for example, transit, dial'-a-ride, and carpooling). Moreover, the
issue of whether capacity increasing design changes will induce additional
-------
V-58
non-site related traffic flows is a subject on which there is very little information
for reliance by either developers or reviewers.
6. Permit Issuance and Enforcement
Very few problems were found from the state and local experience
analyses which related to these phases of the ISR process. Two issues that were
raised, however, related to whether to issue formalized permits or letters of ap-
proval and inadequate manpower for enforcement. In the first instance letters of
approval generally involve less red-tape and therefore can be processed more
quickly. In the second instance, resolution of manpower problems must be made
in light of other EPA needs and priorities for areas expressing concern over the
lack of additional staff.
-------
APPENDIX A
STATE AND LOCAL EXPERIENCE
DEVELOPMENT SURVEY FORMS
• Florida
• Philadelphia
• Oregon
-------
A-2
FLORIDA PROJECT INFORMATION
Comprehensive as of 15 August 1974
-------
NORTHEAST REGION DPC
Type of Facility
Highway
Highwav
Intcrchang:*.'
Ilig;li\\'av
Shopping; (VntiT.
(Jovcrnor's Squan1
(House!
Highway
Highway
Parking (lara^f
(IVpl. of (Irni'i'al
SiTVircsl
< M't'slmiv Power
Systems
Shopping: ivmor.
Hay Meadows Mall
(IVHarloloi
Nature of
Development
New
Xew
Mixlil.
NViv
MiKlif.
Mo.lil.
Xrw
New
Size
•1 lani:
7.li miles
--
2 to -1 lain-
7110,00(1 CII.A
'2 lei -1 l:uu-
1 lunc
1 •'- mill'
i:i.">in \ s-l in
1.0:M n.-ivs
N>'« ' "'.T.S10 iU-\
Size and Nature
of Parking Lot
—
--
-
I'arkingfor 5,000
cars
~
—
1.-12S cars,
3 levels
4 separate unen-
closed parking lots
for total of 2,402
cars
Parking lot for
4,784 cars
lli,c'liway New , *.T.I;' ;
1 !
Location
SR202, Jacksonville
Jacksonville,
Belfort Road
Jacksonville,
Belfort Road
Leon County,
Tallahassee
SR 10, Tallahassee
Jacksonville, Urban
Tallahassee, Urban
Jacksonville,
Bloimt Island
Jacksonville
Jacksonville
Adjacent Land Use
Rural
Residential/
Commercial
Rural
Urban
Urban
Commercial
Commercial
Suburban
Suburban/Urban
Suburban
Transportation
Accessibility
--
—
--
Road
~
--
--
Roadway
Roadway
Application Status
Approved
Approved
Approved
Approved
Pending
Approved
Approved
Pending
Pending
Pending
Length of Review
90 days
80 days
80 days
83 days
Application
received 4/19/74
65 days
70 days
Application
received 5/31/74
Application
received 7/2/74
Application
received 7/3/74
Condition! mi I'm Mill
--
--
•-
--
--
--
--
Express bun wf
vice for SO'*. '/I
employees
--
>
-------
CENTRAL REGION DPC
Typeol Facility
Highway SR 424A
Highway SR 434
Highway
Sports Stadium,
Tangerine; Bowl
(Civic Facilities
Authority)
Nature of
Development
Modlf.
Modlf.
Modlf.
Expansion
Size
2 lane to 4 lane
2 miles
60' wide
2 lane to 4 lane
2.4 miles
2 lane to 4 lane
15, 000 seating
increased to
51.000
Site and Nature
of Parking Lot
—
No size increase
planned
Location
Winter Park
Longwood
Orlando
Orlando
Urban
Urban
Urban
Urban
Transportation
„
Roads, Buses
Approved
Approved
Pending
Pending
60 days
100 days
Application
received 5/14/74
Application
received 1/74
--
NORTHWEST REGION DPC
Type of Facility
llu;>-.v;n I'.rutp-
Nature of
Development
NV\\
1
IH-Hv.lx
Now
Hij*«:l\ | NV«
I'i.i'-.v. ;•,•. ' \u\ii:1.
i
Sue
I lain- 1.;; Tv.iU-s
i l:uu- .-. :• v.-.f.i-s
i ;ar.o 3. -i •.-••.'.t-s
C :*.-.,' :.- , '.i:v
Size and Nature
of Parking Lot
-
--
--
--
Location
Across
Apalachicola River,
near Chattahoochee
SR 270
Gadsden City
SR276
Jackson City
SR 87
Santa Rose County
Adjacent Land Use
Rural
^
Rural
Rural
Urban
Transportation
—
—
—
—
Approved
Pending
Approved
Pending
84 days
Application
received 6/28/74
74 days
Application
received 4/12/74
--
--
--
--
-------
SOUTHEAST REGION DPC
Nature ol
Type of Ficility Developmen
Boyton Beach
Slopping Center
(DeBartolo)
1 million GI.A
92 acres
Lauderdale Lakes
Slopping Center
(DeBartolo)
mterama (World)
Trade Center,
Univ., Amuse-
ment Park)
4 lane to *: lam
divided
Widening. 2 to 4
lane divided
\Uvi-.:'. ! 4 la,^ to jj ,
Size and Nature
ol Parking Lot
0,800 acres
--
-
6 parking lots for
13, 000 vehicles
-
-
~
-
-
--
Location
Boyton Beach
Lauderdale Lakes
Sunny Isles
Causeway
Urban Miami
Ft. Lauderdale
US1
Broward Cty.
Urban
SR 80
NW 7th Street
Dade County
SR 5 (US 1)
Holly Blvd.
SR 820
SR15
Belle Glade
SR 5 (US 1)
Adjacent Land Use
Rural
—
Rural/Some com-
mercial
Urban
Urban
—
Rural
Urban
Urban
Urban/Commercial
toral
Uiral
Transportation
Accessibility
Highway
--
—
—
—
—
~
—
-
—
--
Application Status
Approved
Rejected
Approved
Approved
Project
temporarily dis-
continued
Approved
Approved
Approved
Approved
Approved
Approved
Approved
Approved
Length of Review
130 days
162 days
130 days
63 days
Application
received 3/18/74
--
84 days
63 days
66 days
66 days
66 days
67 days
67 days
Condition! <»< Cot mil
-
-
--
--
--
-
--
--
--
>
01
-------
Type of Facility
Palm Beach Golf
and Ocean Club
(Pine Island
Development Co.)
Highway
Nature of
Oevelopinen
.New
Modif.
•I l.i '1 lone
SOUTHEAST REGION DPC (Cont'd)
Size and Nature
of Parking Lot
Numerous small
ota, avg. dally
raffic 25,000
ehicles
Location
Palm Beach
US 1 Dixie Highway
Adjacent Lind Use
Rural
Urban to rural
Transportation
Accessibility
Roadway
Application Status
Pending
Approved
Length of Review
160 days
Comlltumi on Pur mi t
SOUTHWEST REGION DPC
Nature of
Type of Facility Development
Highway
Highwav
Highway
Highway
Highway
Shopping Comor,
Clark Rd.
Shopping Mall
iIVBartolo)
New
Modif.
Sire
* '.snr S. 4 miles
-' ';*Tif fn 4 lane
'
Modif. • i Jiifi/. • i (^ lom-.
* * j ' '**(!* lO n IrtlH
1
i
.
Now' .' • '"".- 2. 0 milo.«
I
MiXill, ' ' JHI\(- f(> ,: Iqnii
\ '\V
Sue and Nature
of Parking Lot
—
—
—
5,725 vehicles,
unenclosed
Location
1-75
Collier-Lee
County Line
South Venice
SR 45
Collier County
SR 80 and 78
Ft. Myers
East Naples
Collier County
Sarasota
Adjacent Land Use
Natural Vegetation
Rural
Rural
Residential/
Commercial
Rural
Industrial
Transportation
Accessibility
—
—
—
Roadways
Application Status
Pending
Pending
Approved
Pending
Approved
Rejected
Length of Review
Application
received 4/16/74
Application
received 5/8/74
120 days
Application
received 4/16/74
115 days
232 days
Conditions on Permit
,.
-
--
--
05
-------
WEST CENTRAL REGION DPC
Type of Facility
Shopping Center
Mall, lakeland
Shopping Center
Shopping Center
Knsl lake Square
(DeHarlolo)
Shopping Ce.nter,
Rouse Center
Rouse Community
(Development
Corp. of I'lorlita)
Shopping Center.
Pinellus l>nrk
(ix*nanoio)
Shopping Center
Carriagt- Hill Mall
(Amterrel
N*tur« of
development
.'>'*: w
New
New
New
N.'«
New
i
i); renter. N«-«
Crosswind* Mall
Sin
933,000 ft.
347,201; Hq. ml.
1 , 050, 000 Hq. ft.
800,000 nq. ft.
7 Oil. 000 sq. ft.
740,000 sq. ft.
*5S. $10 sq. ft.
1
!
i
Size and Nature
of Parking Lot
34 acres;
5,318 vehicles;
unenclosed
One-level parking
for 4,539
62 acres;
5,250 vehicles;
unenclosed
4,500 vehicles,
unenclosed
35.5 acres;
3,545 vehicles;
unenclosed
29 acres;
3, 700 vehicles;
unenclosed
276 acres;
2.706 vehicles;
unenclosed
Location
Suburban
Urban
Urban
Urban
Urban
Urban
Urban
Adjacent Land Use
Residential/Open
space
Commercial
Residential/Open
space
Residential/Com-
mercial/Open
space
Residential
Residential/Open
field
Residential/Com-
mercial
Transportation
Private
Roadway
Private
Private/Bus
Extensive bus and
Private
Private/Limited
bus
Private/Bus
Approved
Approved
Approved
Approved
Approved
Pending
Returned for addi-
tional information^
212 days
84 days
122 days
194 days
143 days
Application
submitted 6/28/74
Application
submitted 9/24/73
-
If CO Htniulnnln
an: iixcitwli'il,
parking will )»•
rcntrlcti'il'
PortlonH 'it (lurking
lot clow:!/ If CO
standardfl i;x<:i.'i!'l*"l
Parking will («• n-
strlcted wh«-n
ambient air quality
3 eXCIHXll.-ll
—
f improv':rri'rrit.«
not made, a\nA\<:»
ion will fx=
e viewed again
"Traffic vc^.'tvrricijs questioned by Planning Board
o
~Public leiruu held.
>
-------
A-8
PHILADELPHIA PROJECT INFORMATION
Comprehensive as of 10 July 1974
-------
PHILADELPHIA REGULATION X PROJECTS AS OF 10 JULY 1974
1 1
Name and
Type of Facility
Ind'/pen'N-nce
National Historic
I'a rk — Recreational
laeilit\
Iteil l.ion Itoad
Improvement —
Koaclwav
Vine SI reel
Kx|nvssua\ --
Exprcssuax
Nature of '
")evtjlupment
Ni'tt
laciliU
Widening
1,1 4-lancs
cuiHinii-
iilish1
New
I'aciliU
Size
Not available
Not avail. iblc
Not available
Size and Nature
of Parking Lot
50 spaces
m'icrground
Not applicable
Not applicable
Location
Outside CHI)
Northeast of city,
outside fill)
Inner city
Ail|jcent L md Use
Sol available
Not available
Not available
Transportation
Accessibility
Transit and
interstate highway
Not applicable
Not applicable
Application Status
^«— ^^— ^— •—
Response to draft
EIS
Approval
AMS recommended
redraft of KIS
Length of Review
Early Nov. 11173 -
L>3 Nov. 1973
2S June 1974 -
Mid-July to end
of July 1974
15 May 1974 -
9 .July 1974
Conditions on Fniinil
1. Ifeih parking
allowance.
'2. Implemenl din
incentive- nvi'len
Cor local earn
through illn
criminalorv
parking IVi-n or
S|K-ci:illv denii/.-
natcrl Hfiai-rM lor
localH.
—
i_»_^~-^-^^
In Process
Name and
Type of Facility
Airport High-Speed
Line-- Transit
Airport Munu'ipal
Pa rkins;--i':i rages
Nature ol
Development
New line
cemuvl-
itii: »!.i»:i-
.I'.V.SiV.
Sev
Sire
Nut available
N.>I available
Size and Nature
of Parking Lot
Not applicable
'I' wit 2,000-car
st \-uotu rod aarn^cs
i
i
Location
Connects CBD and
airport
Outside CBD
Adjacent Land Use
Not available
Philadelphia
International
Airport
Transportation
Accessibility
__ — — — — —
Not applicable
llighwa\'
Application Status
Preliminary draft
EIS submitted and
reviewed
No formal applica-
tion for second
garage; first ga-
rage not subject to
revie'.v
Length of Review
~^——~——
Will start with
final draft EIS
submission
Not applicable
Conditions on Permil
-
-------
In Process (Cont'd)
Name and
Type of Facility
Drlsv Kos.s
Bridge — Bridge
Bicentennial
Transportation
Program —
Kxcliisive bus lanes.,
bikcwavs, etc.
Commuter Rail
'l\mnel — 1'nder-
groimd rail link for
IVim Central ami
Ili-ailing IJ. U. 's
IX'laware Kxpivss-
wa\ ( ove I'-- 1 • i'_;li-
IH-laware l'\pi\->>-
>. ip. igi-
wa\
!
1
Ki-:inklim»un-
\li\ed-use (res'- '
dential. ol'l'u\\
ni.Uv-li
Mea>l lloiisc
ii-i>mr.K-ri".-.'.. :•.•< -
iliMHiaK
Marki". Su\v:
h'ast- - M; \^\'-- s--
(ivt:i:!, i»:V. .•
Nature of
Development
New
facilitv
alreadv
con-
structed
but not
open
New
facilities
ami
modifica-
tions
New
faeilitv
M.nlilua-
tii^n
.\dtlitional
aeeoss
egress
ramps
X.-«
t"'K*ll il\
i
M,\!l!'ii-.l- 1
t »T. '.i-
N.-»
•••- ' ' • -N
Sue
Not available
Not applicable
Not available
Not available
Not available
Not available
'
\,-I available
.- >-.:\ bl.vks
Site and Nature
of Parking Lot
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
N.n available
N,-t Bailable
-.— p.-.rkiiig ga-
r:\fcf. spaces
•.•.".ii'tonninod
Location
Outside CBI)
Creator metro-
politan area
CISD
Inner citv
Inner citv
Inner city
'nner citv
CI3D
Ail|,ic?nl Ljnd Use
Not available
Not applicable
Not available
Kensington and
Society Hill
neighborhoods
Kensington ami
Soviet v Hill
neighborhoods
Not available
Residential
neighborhood
Mostly commercial,
some residential
Transportation
Accessibility
Delaware Kxprcss-
wav and proposed
l"ulaski Highway
Not api)licablc
Not applicable
Not applicable
Not applicable
N'ot available
Not available
Transit (bus,
rapid rail), rail,
and proposed
highway
Application Status
AMS contends
bridge should have
been reviewed; not
-i ii-
yet rcsoivcti o\
city's Law Depart-
ment
Ongo'ng participa-
tion
No submission yet
Project currently
clashed because
very controversial
Ramps undergoing
redesign
Project delayed be-
cause of financing
problems
Design of modifica-
tion not yet finalized
KIS undergoing
preparation
Length of Review
N'ot applicable
N'ot applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Conditions on Permit
•-
~
>
i
-------
In Process (Cont'd)
Name and
Type of Facility
IVnn's l.:in--
Mi.wcl-u.si'
IMIaski Illl-liu-at--
lliKhw:n
SKI'TA Transit
lni|ir>)vints--.\ll
transit program
changi's suliii'ct id
Kugiilation X
Nature of
Development
Si- 'A
I'acililA
.\\-\v
l.-u-iht',
Nru
l:u ilitii'.s
.•mil
inlf
Size and Nature
of Parking Lot
Not available
Not applicable
Not applicable
|
Location
Not available
cnn
drcatar metro-
politan area
Not iivnilablu
Planned to cut riy;lit
through inner citv
Not :iv:iil;iblc
Transportation
Delaware Exprcss-
vvnv
Not applicable
Not applicable
Project depends on
expressway com-
pletion
Project recently
rev'vccl after much
controversy; KIS
undergoing prepara-
tion
Ongoing interaction
Not applicable
Not applicable
Not applicable
„
__
__
-------
A-12
OREGON PROJECT INFORMATION
Sample of Parking Facility
Cases Reviewed in Oregon
Prior to July 1974
-------
A-13
DEVELOPMENT: Colonial Office Park (Donald E. Pollack Investments)
Type of Facility
Nature of
Development
Size
Size and Nature
of Parking Lot
Location
Adjacent Land Use
Transportation
Accessibility
Transit
Availability
Management of
Parking Supply
Application
, Status
Length of Review
Office park complex
New facility
2 buildings: one 28,680 sq. ft. , other 9,100 sq. ft. ; total of 37,780 sq; ft.
71 spaces
—
Adjacent to existing office building of 15, 000 sq. ft.
' /
Existing bus, one line at site, three lines near site
—
Conditioned permit
Application submitted 2/21/74; Permit with conditions 3/22/74
COWDOTIONS ON PERMIT
Provide bus schedules and route information for employees and tenants.
Construct a bus shelter at the site subject to Tri-Met standards.
Provide a 20% discount on mass transit fares to employees.
-------
A-14
DEVELOPMENT: Columbia Independent Refinery, Inc.
Type of Facility
Nature of
Development
Size
Size and Nature
of Parking Lot
Location
Adjacent Land Use
Transportation
Accessibility
Transit
Availability
Management of
Parking Supply
Application
Status
: Length of Review
Fuel purification facility
New parking facility
6,500 - 10,000 sq. ft. refinery; 100,000 bbl/day; 200 employees on
three shifts
80 spaces
Outside downtown suburban Portland
Part of RLvergate Industrial Park, Portland
f.
—
Bus route one mile from site; no transit changes planned
—
Approval pending
Application 4/3/74; Conditional approval 5/2/74
CONDITIONS ON PERMIT
Develop mass transit incentive program.
-------
A-15
DEVELOPMENT: Freight Lines Corporation (Headquarters)
Type of Facility
Office building
Nature of
Development
New construction
Size
92,000 sq. ft. GLA; 500 employees
Size and Nature
of Parking Lot
370 spaces reduced to 300
Location
Within city limits but outside CBD
Adjacent Land Use
Transportation
Accessibility
Transit
Availability
Expansion of existing Tri-Met bus service. More frequent service and
new stop closer to proposed site.
Management of
Parking Supply
No
Application
Status
Approved with conditions
Length of Review
Initial submission 4/1/74; Revision in parking 4/19/74;
Conditioned permit 5/13/74
CONDITIONS ON PERMIT
Continue to promote use of express and regulatory scheduled buses, shuttles, and car pools,
through currently established programs as described in information submitted.
Implement mass transit and car pool incentives:
• Approximately one week prior to time of establishment of regular scheduled Tri-
Met service from city center or of Kilingsworth line change, notify and encourage
potential riders through mail advertisements, promotional displays, and personal
contact.
-------
A-16
DEVELOPMENT: Freight Lines Corporation (Headquarters) (Cont'd)
CONDITIONS ON PERMIT (Cont'd)
• Two weeks before occupying new development, give corporate personnel informa-
tion regarding Swan Island Express buses. One week before, Transport Coordina-
tor will personally contact potential riders to sell tickets. Information and tickets
will be disseminated to industries in the area. Car pools for three people or more.
will be provided preferred parking spaces.
Continue efforts to encourage carpooling.
Circulate new shuttle service schedule.
-------
A-17
DEVELOPMENT: General Electric Service Headquarters Building
Type of Facility
Office building, three units in complex
Nature of
Development
New building construction
Size
One unit - 19 stories; one unit - 4 stories; one unit - 6 stories.
510,000 sq. ft. GLA distributed as 300,000; 170,000; and 40,000.
Size and Nature
of Parking Lot
625 spaces underground, two levels, reduced to 401 parking spaces on two
underground levels
Location
Inner city
Adjacent Land Use
Downtown waterfront, a public space for recreation; also, office and
commercial activity
Transportation
Accessibility
Modal split: auto - 60%; bus - 34%; pedestrian - 6%
Transit
Availability
Bus service (more frequent service proposed)
Management of
Parking Supply
Yes
Application
Status
Approved developer initial contact 9/26/72; Original application 2/9/73;
EIS also submitted application 2/9/73
Length of Review
Local response and request for more information 3/9/73
XDNDITIONS ON PERMIT
Amendment by developer 9/10/73; plans requested not sent until 4/5/74, final approval
4/24/74.
Proposed office parking facilities reduced to 401; parking garage main entrance shifted
to Taylor Street between First Avenue and Front Avenue.
Thirty to 40 spaces for company cars will access and egress on Salmon Street between
Front and First Avenues.
-------
A-18
[DEVELOPMENT: Holly Farm Shopping Center
Type of Facility
Shopping center
Nature of
Development
New facility
Size
135,000 sq. ft. GLA - retail; 5,000 sq. ft. GLA - restaurant;
total of 140,000 sq. ft.
Size and Nature
of Parking Lot
501 spaces
Location
Suburban (Clackamas County, southeast of downtown Portland)
Adjacent Land Use
Transportation
Accessibility
Transit
Availability
Tri-Met bus service
Management of
Parking Supply
No
Application
Status
Approval with conditions
luength of Review
Original application 3/22/74; DEQ response 4/22/74; Approval 6/6/74
1 CONDITIONS ON PERMIT
Currently effective.
/
Post Tri-Met schedules for patrons and employees.
Construct covered bus shelter adjacent to McLoughlin Boulevard to meet or exceed Tri-
Met specifications.
Make Tri-Met tickets available at 10% discount to patrons and employees desiring to use
bus service.
-------
A-19
DEVELOPMENT: John's Landing
Type of Facility
Mixed use (commercial and residential)
Nature of
Development
New facility
Size
70 acres, 600,000 sq. ft. commercial, recreation, and 800 living unit$
Size and Nature
of Parking Lot
2,464 spaces
Location
1.7 miles south of downtown Portland
Adjacent Land Use
Industry, commercial, and limited residential
Transportation
Accessibility
4-lane road at site, 10 ft. per lane
Transit
Availability
Limited Tri-Met bus service
Management of
Parking Supply
No
Application
Status
272 spaces approved by EQC 3/12/74
Length of Review
Application submitted 12/18/74; Conditional aproval 3/12/74 of
272 spaces
CONDITIONS ON PERMIT ;"f.
Write into the Homeowners Association agreements and Office management agreements a
means of providing a 20% reduction in transit fares for residents and tenants in the project.
Construct bus shelters.
Provide Tri-Met scheduling and route information.
Improve Macadam Avenue to 4-lane boulevard, 12 ft. lanes, left-turn refuges. Include
measures to reduce noise.
Improve rail transit system and bus transportation.
-------
A-20
fSVSLOPMENT: John's landing, Phase I (Water Tower)
Type of Facility
Retail/office building renovation
Nature of
Development
Redevelopment project
Size
39,000 sq. ft. GLA - office; 56,000 sq. ft. GLA - retail
Size and Nature
of Parking Lot
235 spaces distributed as 1/3 structured, 2/3 surface. Phase H - 80
spaces. Approval for 278 spaces total.
Location
Downtown, outside CBD
Adjacent Land Use
Transportation
Accessibility
Transit
Availability
Limited Tri-Met bus service
Management of
Parking Supply
No
Application
Status
Approval for 235 spaces granted 7/21/73 (no letter in file); expanded to
278 spaces 9/8/73
Length of Review
Original application submitted 3/16/73; Modification (80 spaces) 7/5/73
CONDITIONS ON PERMIT
Apply usual fliree transit incentives to all 278 spaces.
-------
A-21
i
DEVELOPMENT: Kaiser-Aetna Retail-Commercial Division
Type of Facility
Nature of
Development
Size
Size and Nature
of Parking Lot
Location
Adjacent Land Use
Transportation
Accessibility
Transit
Availability
Management of
Parking Supply
Application
Status
Length of Review
Shopping center f
New facility
95, 683 sq. ft. GLA (neighborhood scale w/supermarket)
500 spaces reduced to 476
Suburban, near Salem
—
Located at intersection; two gates
Bus service
No
Approved with conditions by DEQ 5/22/74
Original application 2/12/74; Local approval 4/18/74
,ONDITIONS ON PERMIT
Construction approved for only 476 spaces. Construction also approved of convenience
shelter for transit patrons.
Implement program to encourage public transit ridership.
Provide up-to-date information on bus schedules and routing to potential riders.
Provide bicycle parking facilities.
-------
A-22
DEVELOPMENT: McGinty, John, Real Estate Shopping Center (5th and Q Streets)
Type of Facility
| Nature of
j Development
Size
Size and Nature
of Parking Lot
Location
Adjacent Land Use
Transportation
Accessibility
Transit
Availability
Management of
Parking Supply
Application
Status
Length of Review
Shopping Center
New facility
Not available
275 spaces
Suburban (Springfield, outside Eugene)
Not available
|
Near 1105
-------
A-23
DEVELOPMENT: Meyer, Fred, Shopping Center
Type of Facility
Shopping center
Nature of
Development
Modification
Size
131,519 sq. ft. GLA with expansion
Size and Nature
of Parking Lot
209-space expansion; 275 spaces existing; modification would bring total to
484 spaces '
Location
Suburban
Adjacent Land Use
Residential
Transportation
Accessibility
Bordered on all sides by road grid, some with four lanes, others with
two, all two-way streets
Transit
Availability
Served by bus line
Management of
Parking Supply
No
Application
Status
Partially approved, remainder pending zoning change
Length of Review
Application submitted 3/7/74; Approval with conditions 4/8/74
CONDITIONS ON PERMIT
Distribute bus information to employees and patrons of shopping center. Construct bus
shelter under Tri-Met standards. Provide employees with 20% discount (only those who
work at Lombard Store) who use Tri-Met. Provide site plans showing adjacent road grid
and surrounding land uses.
-------
A-24
DEVELOPMENT: Mill Park Baptist Church
Type of Facility
i
i
Nature of
Development
Size
Size and Nature
of Parking Lot
Location
Adjacent Land Use
Transportation
Accessibility
Transit
Availability
Management of
Parking Supply
Application
Status
Length of Review
Existing church with new sanctuary
New sanctuary additional parking
Expansion of parking facility from 48 spaces to 91 (increment of 43)
Not applicable
Presumably not downtown
!
' ..
Tri-Met bus service
*
*
No
Conditional approval
Application submitted 4/15/74; Follow-up letter 4/23/74; Approval
letter 5/22/74
CONDITIONS ON PERMIT
Make available current bus schedules and route information during the week. Use
facility as park and ride station.
-------
A-25
DEVELOPMENT: Moore Dry Kiln Company
Type of Facility
Nature of
Development
Size
Size and Nature
of Parking Lot
Location
Adjacent Land Use
Transportation
Accessibility
Transit
Availability
Management of
Parking Supply
Application
Status
Length of Review
Industrial corporation
Modification to existing facility
92, 000 sq. ft. manufacturing; 160 to 170 employees
117 spaces total (81 existing and 36 additional)
Suburban Portland
Manufacturing Plant (Crown Zellebach) across the street
100% auto; bad congestion at intersection near the site, although no
major highway
None available and no proposed plans to provide access
No
Approved
Application submitted 9/5/73; Approval 10/26/73
CONDITIONS ON PERMIT
DEQ wanted deductions to 89 spaces but backed off.
-------
A-26
DEVELOPMENT: Mountain Park Corporation Towne Center
Type of Facility
Mixed-use: residential, commercial, office, motel, restaurant
Nature of
Development
New facility
Size
538,000 sq. ft. feasible area, including 450 apartments
Size and Nature
of Parking Lot
2,819 spaces (3,303 originally); multilevel structures
Location
Suburban (Lake Oswego, outside Portland)
Adjacent Land Use
New community for 12,500 planned adjacent to site
Transportation
Accessibility
Kew Parkway - need to widen to 4-lane arterial by 1980 (when whole
project completed)
Transit
Availability
Existing Tri-Met bus service; want direct shuttle service by Tri-Met
to and from site
Management of
Parking Supply
No
Application
Status
Conditioned permit
.ength of Review
Application submitted 12/26/73; Conditioned permit 6/11/74
CONDITIONS ON PERMIT
Construct at least two bus shelters to meet or exceed Tri-Met specifications. Employers
provide Tri-Met tokens or script at the Towne Center at not more than 8% of cost of token
or script. Post Tri-Met schedule information.
Present two copies of final plans for progressive construction to Department when agree-
ment reached with Tri-Met for additional transit adequate to justify park and ride station.
Construct up to 300 additional parking spaces for such a facility. Spaces designated park-
ing between 7:00 A.M. and 6:00 P.M.
I
-------
A-27
DEVELOPMENT: Portland Adventist Hospital
Type of Facility
New hospital facility (actually a relocation)
Nature of
Development
Size
204-bed general hospital, medical-professional offices, school for nursing,
apartments for students. 32 acres to be developed, 8 acres open space.
Total of 40 acres.
Size and Nature
of Parking Lot
685 spaces; 1980 expansion total of 800 spaces
Location
Suburban (5 miles east of Portland CBD)
Adjacent Land Use
Residential (single-family); School community scale shopping center
Transportation
Accessibility
Near proposed 1205
Transit
Availability
Tri-Met bus service exis'ts. Proposed express bus service also near site.
Management of
Parking Supply
No
Application
Status
Approved with conditions
Length of Review
Original application 2/21/73; EIS required by CWAPA 3/23/73;
Conditional approval 9/24/73
CONDITIONS ON PERMIT
Conscientiously implement program to reimburse 50% of the direct expense for public
transportation to employees who use public transportation, excluding taxicabs.
Construct a bus shelter to meet or exceed Tri-Met specifications at the bus layover point
for the Mt. Tabor line on the project site. Complete construction to coincide with the
opening of the hospital.
-------
A-28
DEVELOPMENT: Portland Community College (Rock Creek Center)
Type of Facility
New building for educational purposes
Nature of
Development
New facility
Size
155,000 sq. ft.
Size and Nature
of Parking Lot
449 spaces
Location
Suburban low-density and rural residential; major agricultural land use
Adjacent Land Use
Transportation
Accessibility
Transit
Availability
Bus service 1 mile from site. Expansion planned directly to site.
Management of
Parking Supply
No
Application
Status
Disapproved by EQC 5/24/74; not in accordance with provisions of ORS
468. 275 to 468.305, 468.340, and 468.410 and applicable rules. Standards
and regulations construction would require extension of sewer and water
service into unserved areas—necessitate improvement of roads and transit
service extension. Would encourage development of other commercial and
residential projects in the area.
Length of Review
Submitted to DEQ 3/15/74; CRAG 8/30/73
CONDITIONS ON PERMIT
No permit or letter of approval authorized (see Application Status).
-------
A-29
DEVELOPMENT: Valley River Center
Type of Facility
Mixed-use, although mostly retail, small office representation
Nature of
Development
Facility modification
Size
Regional scale, 4 department stores 859,283 sq. ft. GLA
(805,175 retail, 54,108 office)
Size and Nature
of Parking Lot
872 additional spaces for two new department stores and some smaller
retail spaces (3,619 existing spaces)
Location
Eugene
Adjacent Land Use
Transportation
Accessibility
Access to Delta Freeway, 4-lane divided (2 lanes each way)
Transit
Availability
Bus service Lane District Transit (4 lines)
Management of
Parking Supply
No
Application
Status
Letter of approval 9/23/73
Length of Review
Application submitted to Lane Regional Air Pollution Authority 4/30/73;
EIS submitted 5/15/73
CONDITIONS ON PERMIT
EIS supplemented 9/22/73 development and implementation of transit rider ship incentive
program.
Construct no more than 677 parking spaces in ratio of 5 spaces for every 40 persons using
public transit to work or shop at the center.
-------
A-30
DEVELOPMENT: Washington Square
Type of Facility
Shopping center, enclosed mall
Nature of
Development
New facility
Size
Regional scale 1.1 million sq. ft. GLA; 107 acres; 6 major department
stores
Size and Nature
of Parking Lot
1,997 spaces approved by DEQ for two department stores, 363,612 sq. ft.
GLA. Original application for 5,219 spaces. Revised application for 1,997,
followed up by additional application for 3,364 spaces
Location
Adjacent Land Use
Public golf course; small commercial center; apartments and other
residences
Transportation
Accessibility
Borders Beaverton-Tigard Expressway
Transit
Availability
Put in own bus system feeder line (park and ride). Pressure on Tri-ivtet
to expand its service
Management of
Parking Supply
No
Application
Status
Original application submitted 11/17/72; Revised submission 6/21/73;
Approval of 1,997 spaces 7/15/73; Second major application 7/15/73
Length of Review
Approval by EQC 9/21/73 for 3,032 additional spaces
(5,219 - 1,997)
CONDITIONS ON PERMIT
Construct 1,997 spaces.
Portions of proposed area identified in plans. Specifications not specifically identified for
parking are to be prohibited from use by any vehicle other than construction vehicles.
The number of spaces available for parking are to be reduced in direct proportion to in-
creasing transit patronage to the Washington Square Shopping Center. No more than 3,032
spaces can be built on the site. (This is in answer to the application for 3,369 spaces.)
-------
APPENDIX B
FLORIDA GUIDELINES
-------
-. - - •----! r .' '•> '"
C NC'NT. r f . f. '.VAT " "
ctfNins-. COKJUV-TAMT, .1 3. siLLAX3.ee
. CATC: rs'juTAi.x
r.f.rr.r, ci«c'.s CAS
c N '' N c r ^. w. WO
*'•
•jfCIT CCNT3A-. PEOICS
AOV'.NCTSATCT, «.r.
C COUNTY .1CCTION
rO'.'.y^OS COMTMOL COKSUUTANT,
33301
POCT fricE 30X •>••:
.STC": KAVCN. raC
SCL'T^JAST PCGIOH
nATt
S W 5TP»MX
.:.LAr COV.sTY HEA'.TH OR'T.
POST c-rri'-.- oox :;<;
ST. PtTCr.SSVSS, ^LO.TIDA '3T3I
E eu:'.o."6
ico lou-Mj*;: tTM. 3Ti>riT
CUITC
COfT !.Au;t5!JALE. rtOSlDA SiJOl
t«.S!N£F.n. A. COX
t56 50'JTM S'STM
TORT PITPCE. r
TirL COVS'JLTANT, T.S
Sr. RCU'.EVARJ
CNOIKEER, C. iOI
1:395
prtEFA.?ED 3Y D1VI010N OF PLANNING
FLORIDA DEPARTMENT OF POLLUTION CONTROL
?.562 EX?.C'JT'.VE GENTE,- Gj-RCLE KAST
.1?;.co.I
TALLAHASSie FLORIDA 32301
-------
B-2
LOCAL AIR POLLUTION CONTROL AGENCIES AUTHORIZED
BY THE FLORIDA DEPARTMENT OF POLLUTION CONTROL
ALACHUA COUNTY POLLUTION CONTROL
Alachua County Courthouse
Gainesville, 32601
MANATEE COUNTY HEALTH DEPARTMENT
ENVIRONMENTAL CONTROL SECTION
202 6th Avenue East
Bradenton 33505
BROWARD COUNTY POLLUTION CONTROL BOARD
500 SW 14th Court
Ft. Lauderdale
DADE COUNTY POLLUTION CONTROL
864 NW 23rd Street
Miami 32217
fflLLSBOROUGH ENVIRONMENTAL
PROTECTION COMMISSION
906 Jackson Street
Tampa, 33602
JACKSONVILLE DIVISION OF BIO-ENVIRONMENTAL SERVICES
515 West 6th Street
Jacksonville, 32202
PALM BEACH COUNTY POLLUTION CONTROL
1500 West 8th Street
Riviera Beach, 32301
SARASOTA COUNTY DEPARTMENT OF ENVIRONMENTAL CONTROL
1301 Cattlemen Road
Sarasota, 33577
-------
B-3
GENERAL INSTRUCTIONS AND APPLICATION FORMS
FOR INDIRECT SOURCE REVIEW
STATE OF FLORIDA
General Instructions
*) Project Description. This portion of the application should
include general information on the type of business (es) to
be conducted at the site and other information regarding the
anticipated level of activity such as seating capacity,
leasable business area, future expansion plans etc.
For DOT projects, general information on project's length, number of
lanes, location, and construction schedule is required. ,
2) Meteorological Data. (For projects other than roadways). DPC will
accept the following worst conditions:
(a) Stability Class D (b) '--?ir.d
Speed 0.1 m/sec (2mph) and (c) Wind Direction should bo se-
lected to result in ttia:-:iraunv carbon monoxide levels. Other
assxur.3<2 worst conditions will ha accepted if ' adaqu-j.iely
justified.
For DOT projects these worst conditions will be accepted:
(a) Stability Class D, (b) Wind Speed
0.9 m/sec (2 mph) , and (c) Wind Direction 22.5 with respect to
highway. The wind direction as indicated allows for four (4)
specific directions. The assumed direction should be selected
so that maximum carbon monoxide concentrations are obtained .
Other assumed worst conditions will be accepted if adequately
justified.
3) Ambient Air Quality. Current maximum carbon monoxide ambient air
concentrations in the immediate vicinity of the proposed source
are required. If data is not available from regional or local
-pollution control agencies, the applicant is required to conduct
on-site testing utilizing approved DPC methods and procedures.
Location of sampling sites should coincide with model receptor
locations. Information concerning ambient air testing can be
obtained from any DPC regional office.
For projects other than roadways, projections of CO concentrations will be
based upon local development potential.
-------
B-4
4) Physical Data. Enter the required information for the proposed highway
or facility and for the nearest adjacent roads, if applicable,
5) Receptor Distances^ Enter the required information and show the
receptor numbers on the project location map. The receptors shouJci
be located so that maximum carbon monoxide levels will be detect-. -u
These locations should coincide with the location of sensitive
receptors as much as possible. The number of receptors shall be
sufficient to characterize the carbon monoxide levels in the
immediate impact area.
(6) Traffic (For DOT projects) Enter the required information for each of the yearss--
indicated. This information will usually be transcribed from
the standardized computer programs used by D.O.T.
Traffic Data (For projects other than roadways) Future projections for existing complex
sources^- J' . IT. -lied should reflect the increase; in traffic that
has cr '%ill occur from the date of aiubient air testing. The
curro.-r and future contribxitions from existing traffic will
be reflected in the Ambient Mr Quality Data. Current and
f utur i tra-ffic projections for most highways may be obtained
from c>.e Florida Department of Transportation.
7) Stationery Sources. (For projects other than roadways) Enter the re-
quired information on all incinerators, large heating units, process vents,
and so forth. ., -
(For projects other than roadways)
8) Results Section. It has been shown that the year of rr.axirr.urrx
ambient air pollutant concentrations resulting from a corr.ple:-:
source does not necessarily have to be the first or last (10th)
year of review, but may occur sometime in between. This
"critical" year is a function of traffic increase and. level oi
automotive emission controls found in any year. Accordingly ,
the applicant is required to determine the "critical" year
and provide model results for that year as well as the first
and tenth year. This determination can be made based on the
results of the calculations found in the Appendixes I, II, or
( For DOT projects) " • - - .......
Results. Enter the required information for each of the years
indicated. This information will usually be transcribed from the
standardized computer programs used by D.O.T.
The sources and methods used to
determine the projections found in the Ambient Air Quality Data
and Traffic Data Sections must be included with the application.
-------
B-5
9) Statements by fioplicant. This paragraph is provided tor tr-.i
applicant to acid to the permanent record any information r.-z-
believes should be considered in evaluating the application.
-------
B-6
12/1V7J
STATE OF FLORIDA
DEPARTMENT OF POLLUTION CONTROL
APPLICATION TO MODIFY/CONSTRUCT COMPLEX AIR
POLLUTION SOURCE (HIGHWAYS)
SECTION I - GENERAL INFORMATION
Source Type:
Project Type:
New
HIGHWAY
Modification
Source Name:
Source Location:
UTM: East
City
Applicant Name and Title:
Address : Street \
Telephone Number:
Consultant Name:
Address: Street_
Telephone Number:"
County:
North
_City
State
Zip
_City
State
Zip
Estimated Starting Date of Construction
Estimated Completion Date of Construction
Application Filing Date
SECTION II - TECHNICAL DATA
1. Brief Description of Proposed Project's Nature 'and Extent
2. Meteorological Data:
Parameter
a. Stability Class
b. Wind Direction(degrees)
c. Wind Speed^m/sec)
Worst
Conditions
Source and Date of Data:
-------
B-7
All applications will require certification by a professional
engineer, registered in the State of Florida, or qualified in
accordance with chapter 17-4 of'the Departments rules.
-------
B-8
3. Ambient Air Quality Data: Carbon Monoxide
Time
a. Current
b. 1st Year
c. Critical
Year
d. 10th Year
Year
Concentration (mg/mj)
1 Hour 8 Hour
I
Note: Future ambient air projections are made assuming the proposed
highway were not constructed.
Source of Data:
4. Physical Data:
Parameter
a. Width (ft.)
b. Elevation with
respect to
adjacent terrain
(ft. )
c. Posted Speed
Limit (rnbh}
d. Wind angle with
respect to road
(degrees
Proposed
Highway
;
Road No
•
Adjacent Roads
Road Wo
Road Uo
5o Receptor Distances:
a. Normal distance from road to
receptor (ft)
1. Proposed Highway
2. Road No.
3. Road No.
4. Road No.
1
2
REC
3
:EPT
4
OR
5
NU
6
"•BE!
7
*
8
-------
B-9
Source of Data:
7. Results
A. Carbon Monoxide One Hour
Concentrations (mg/m3)
Receptor Number
Proposed Highway
1. 1st Year
2. Critical Year
3. 10th Year
Road No.
1. 1st Year
2. Critical Year
3. 10th Year
Road No.
1. 1st Year
2. Critical Year
3. 10th Year
Road No.
1. 1st Year
2. Critical Year
3. 10th Year
Ambient Air
1. 1st Year
2. Critical Year
3. 10th Year
Total Concentration
1. 1st Year
2. Critical Year
3. 10th Year
Percent of Standard
1. 1st Year
2. Critical Year
3. 10th Year
-------
B-10
B. Carbon Monoxide Eight Hour
Concentrations (mg/m3)
Receptor Number
1 2
a. Proposed Highway
1. 1st Year
2. Critical Year
3. 10th Year
b. Road No.
1. 1st Year
2. Critical Year
3. 10th Year
c. Road No.
1. 1st Year
2. Critical Year
3. 10th Year
d. Road No.
1. 1st Year
2. Critical Year
3. 10th Year
e. Ambient Air
1. 1st Year
2. Critical Year
3. 10th Year
f. Total Conccntratioh
1. 1st Year
2. Critical Year
3. 10th Year
g. Percent of Standar
1. 1st Year
2. Critical Year
3. 10th Year
1
3
I
8.i Brief Discussion of Results: .
9. Statements by Applicant:
-------
F-U
T* ATP.
1. Project location
A. County Nap with project highlighted
B. Interchanges should be shown
11. Introduction
A. Brief description of project
1. Type and size (i.e. Interstate 6-lane, 15.2 miles)
2. Location of interchanges
3. Limits of proposal (i.e. from • to _ )
B. Brief description of .land use around the project corridor
1. Existing
2. Projected for 10 years
111. Description of method used for projections.
A. Type model used
B. Description of projections
1. On proposed project
a. Years projected
b. Location of projections
2, On existing facilities in close proximity, accomoclating
a significant amount of vehicular traffic.
/
a. Years projected.
b. Location of projections
C. Tdonl-.ify l-.r.\rric and melieorol'cnii.cnl. naivmaler:-, u::iu
(i.e. poak 1.r.il" t:i<:, ot-.o.)'
-------
B-12
IV. Result.•; of projections
A. Brief written nummary of results
B. Penults graphically depicted
1. Label one-hour or 8-hour projection
2. Label met con litions ' . •
C. Ambient data to be included if available
V . Construction Specifications
A. Section 102(dust control), 17-2 FAC
B. Chapter 17-5 FAC (open burning)
VI . Appendix ! '
A. Copy of coding sheets
1. All coding sheets used to arrive at the concentrations
graphed should be included.
B. Map of Project
1. Indicate point whe're projections were made.
'2. Show traffic projections along vith truck mix design
hour % and directional factor.
C. All other supporting material.
-------
APPENDIX C
OREGON
REGULATIONS AND GUIDELINES
-------
Department of Environmental Quality
123C S. W. Morrison
Portland, Or2gon 97205
Guide! ir.as for Review of Proposed r!ew Highway
Construction in Urban Areas
A. Purpose '
To provide basic guidelines to the Oregon State Migh-
way Division fcr th2 preparation of environmental inpact state-.
ments to be submitted as required under OAR, Chapter 340, Sec-
tions 20-050 through 20-070, for planned new highv/ay construc-
tion in urban areas.
These guidelines are intended to supplement the guide-
lines prepared by the Federal Highway Administration and set
forth in Policy and ?roc2'hire .'ienorandurn 90-1. '..'here overlapping
of requirements occurs, the more restrictive interpretation is
to be follo'.-.'ed.
-From tine to tine, as the DEQ determines the need, re-
visions to these guidelines will be published.
B. Stages of Review
Stage I Review proposal to build a nev/ hin.hway from point A
to point 3 within specific corridor alternatives.
Stage II Review design alternatives for highv/ay construction.
f
The appropriate regional air pollution,authority will
review the proposals ana na::e recorrmndations.'to DEQ at each stage
of reviev.'. EQC approval v/ill be required before a final corridor
and/or design is chosen. ' .
C. Requirements fcr and Contents of Environmental Impact Statenents
An environmental impact statenient, as a ;nininun, v/ill
be required for Stages I and II of the review process.
Tho follo-.-/inn sections outline subject natter and content
of submission which shall, as a ninviun, be covered in onvironnontal
statcnonts suLriitted during Stages I and II of the reviei/ process.
4/24/72
-------
G-2
(1) Contents of Stage I Environmental Statements
a. A description of the proposed highway improvement and
• 1ts surround1nns.
The description should include the following type of
information for each alternative corridor:
1. Type of facility proposed; length, width and loca-
tion nap of corridor; right of way width desired
including existing right of way in corridor.
2. Major design features that can be identified such
as number of lanos, probable access control, approxi-
mate location of bridges and interchanges, etc. in
the corridor.
3. Basic traffic"data estimates including trips for .
the probable design year and anticipated new trips
generated two years after completion of the highway
section an:! through 193Q. This information should
be included for the corridor, the immediate vicinity,
the urban central business district and the total
urban area within or within 5 miles of the city boun-
daries.
4. Existing highway facilities including their defi-
ciencies in terns of motor vehicle traffic flov/s,
capacities, access, etc. for the corridor and the
immediate vicinity.
5. Basic vehicle-typo data including a percentage break-
down by light vehicles, buses and commercial vehicles
(trucks) for the corricior and immediate vicinity;
basic origin-destination-trip purpose data by tyoe
of vehicle for the corridor and immediate vicinity.
This data should be supplied for the probable design
year, two years after completion of the highway sec-
tion and through 1990.
6. An inventory of socio-economic factors including
population, dwelling units, labor force, emoloyr.ont,
per capita income, automobile ownership, retail sales,
retail employment, school attendance and enrollment,
. property values, number and types of commercial and
industrial establishments, taxes, etc. for the corri-
dor and immediate vicinity. This data should bo sup-
plied for the probable design year, two years after
completion of the highway section and through 1990.
7. An estimate of when the proposal will be conr.tructcd
and the current status of the proposal with J brief
. historical resume including details of how prooosal
4/24/72 developed -*'nto its present form and status.
-------
C-3
8. A vicinity nnp(s) shall be furnished which v/ill
.shov/ the proposed corridor and its relationship to
surrounding natural and cultural features such as
lakes, streams, rivers, mountains, historic sites,
landmarks, institutions, developed areas, principal
roads and highways, surrounding terrain, existing
land use and proposed land use and other existing
environmental features that are pertinent to a
highway study.
9. Detailed maps, sketches, pictures, and other visual
exhibits should be used to show specific environnental
involvements as necessary.
b. The probable impact of the proposed development or im-
provement.
The evaluation and discussion should specifically em-
phasize significant beneficial and detrimental environ-
mental consequences upon the region and community of
building a new hiqhv/ay into or through an area for each
alternative corridor including an in depth discussion
of the follov/ing sections:
1. Effect of the project upon the dependence of the
urban dweller upon motor vehicles.
i
2. Consistency of the project vrith local and regional
. . mass transit planning and objectives.
3. Consistency cf the project with environmentally
sound local and regional land use planning.
4. Effect the project v;ill have upon air quality in
the immediate vicinity, the central business dis-
trict, and the metropolitan area during construc-
tion, tv;o years after construction and through 1930.
This section should include sufficient data for car-
bon nonoxici2, hydrocarbons, nitrogen oxicies, and
lead particulate background concentrations to allow
an objective estimate to be made of future levels.
5. Effect of the project upon noise levels in the in-
mediate vicinity, tiie central business district,
and the metropolitan area during construction, tv/o
years after construction and through ICDO. This
section should incluJe sufficient data for back-
ground noise levels to allow an objective estimate
to be made of future levels.
6. Probable adverse effects uoon v/ater quality and
solid waste r.;anarjc:7,ent during and after construction.
4/24/72
-------
C-4
7. Visual impact of the project upon the surroundings
including residents, motorists, historical or other
sites designated to have special merit, local, or
regional beautification and restoration plans and
objectives, interference with views or.vistas from
surrounding areas.
8. Discuss in detail the following impacts, recogniz-
ing that new highv;ay construction may be tha induce-
ment needed for nsw industrial, commercial, and re-
sidential development along the general corridor
route:
(a) The probable attendant environmental impacts
of these developments upon air quality, water
quality, noise levels, solid waste management,
and quality of life. . ' '.
(b) The probable impact of these developments upon
environmentally sound local and regional land
use planning.
9. Discuss in detail the following impacts, recogniz-
ing that nev/ highway construction in urban areas
will generally result in relocating large numbers
of residents, co:rr;;arcial establishments, and some
industries: •
(a) The probable attendant social and economic
impacts upon the residents, and cornr.ercial and
industrial establishments and their employees.
(b) The probable impact upon the quality of life
of those people affected.
(c) The probable impact of industry that may be
forced to-move from what may be considered to
be-an environmentally good location to possibly
a less desirable location as related to air
quality, v/ater quality, noise levels, and solid
waste managenent..
C. Alternatives
The choice of alternatives to be studied shall be made
from the three categories of alternatives presented below:
1. Alternative Corridors - a minimum of three alterna-
tive corridor locations shall be studied and dis-
cussed in detail as delineated in Sections C.(l).a.
and C.(l).b.
4/24/72
-------
C-5
2. Alternative Rights-of-V.'ay - a mini mum of three alter-
native studies of the feasibility of using existing
rights-of-v/ay, upgrading existing highv/ay facilities,
and upgrading existing public transit facilities or
systems shall he made and presented in such a manner
that an objective evaluation 2nd analysis of esti-
mated costs (social and transportntioil), engineering
factors, transportation requirements through 1990,
and environrr.ental consequences nay be made from a
review of the environmental statement.
3. Alternative Modes of Transportation - fron the list
of alternative nodes of transportation belov/ a mini-
mum of three alternatives shall be chosen and an in-
depth study and discussion made and presented in such
a manner that an objective evaluation .and analysis of
estimated costs (social and transportation), engineer-
ing factors, transportation requirements through. 1900,
and environmental consequences nay be made from a re-
viev.1 of the environmental statement. For each alter-
native in th= list belov.1 that is rejected for detailed
study a short discussion of t:i3 reasons for rejection
shall be presentee! in the environmental statement. The
fact that an alternative is r.ot presently in operation,
projected for operation, being studied for possibl? fu-
ture operation, or have noney allocated for operation
or study will not be sole grounds for rejection as en
alternative to be studied in depth in the environmental
statenant.
(a) Improvement of present bus systems.
(b) Express bus systems. •
(c) Express bus systems with park-and-ride stations.
(d) Conventional moid transit systems.
(e) 'lew node systems.
(f) Other feasible public or mass transit systems.
In all cases the choices of alternatives to be studied
shall be made in cooperation with the following interested agen-
cies and organizations:
(a) Local governmental agencies.
(b) Regional governmental agencies..
(c) Regional air pollution authorities.
4/24/72
-------
C-6
(d) Department of Environmental Quality.
(e) Mass Transit Division, Oregon State Depart-
ncnt of Transportation.
(f) Interested citizen's organizations to include
environmental groups, local residential, com-
mercial and industrial organizations directly
or indirectly affected by the choice of alter-
natives.
(g) Other interested agencies and organizations.
(2) Contents of Stage II .Environmental Statements
a. A description of the proposed hinhway improvement and
its siirro'.in»:1:-.ri5.
The description should include the following type of
infor.nation, for each design alternative within, the
'corridor chosen in Stage I:
1. Type of facility to be built; length, width, ter-
mini; map sho'./ina location of highway and new or
existing right-of-way in corridor.
2. Major design features such as number of lanes,
access control, location of bridges and interchanges,
depressed and elevated sections, capacity, etc.
3. Basic traffic data including trips for the design
year and anticipated new trips generated tv/o years
after completion of the highway section and through
1990. This information should be included for the
highway, interchanges, access roads and other roads
and streets in the corridor and immediate vicinity.
4. Easic vehicle-type data including a percentage
breakdown by light vehicles, buses and commercial
vehicles (trucks) for the design year, tv/o years
after ccnpleticn of the highv/ay section and through
1990. This information should be included for the
highv/ay, interchanges, access roads and other roads
and streets in the corridor and immediate vicinity.
5. A vicinity map(s) shall be furnished which will show
the highway, interchanges and access roads and their
relationship to surrounding-natural and cultural fea-
tures such as lakes, streams, rivers, mountains, his-
toric sites, landmarks, institutions, developed areas,
4/24/72
-------
C-7
principal roads and highways, surroundings terrain,
existing environmental features that are pertinent
to a highway study.
6. Detailed naps, sketches, pictures, and other visual
exhibits should be used to show specific environ-
mental involvements as necessary.
b. The probaiilg imnact of the proposed development or
The evaluation and discussion should specifically
emphasize significant beneficial and detrimental
environmental consequences unon the immediate vicinity
for each alternative highway design including. an in-
depth discussion of the following sections:
1. Effect the project will have upon air quality in
the immediate vicinity during construction, two
years after construction and through 1290. This
section should include sufficient data for carbon
monoxide, hydrocarbons1, nitrogen oxides, and lead
participate background concentrations to allow an
objective estimate to be made of future levels on
the highway, at interchanges, on access roads and
in the immediate vicinity.
2. Effect of the project upon noise levels in the
immediate vicinity during constpjction,_tv;o years
after construction, and through 1990. This section
should include sufficient data for background noise
levels to allow an objective estimate to be made of
future levels on the highway, at interchanges, on
access roads, and in the immediate vicinity.
3. Effect upon water quality and solid waste manage-
'nent during construction. Stu'iy should includ?
discussion of possible beneficial uses of materials
removed during construction and probable adverse
effects upon community surface water sewage systems
and ground water quality.
4. Visual impact of the project noon the surroundings
including residents, motorists, historical or other
sites designate:! to have special merit, local or
regional bsautif ication and restoration plans and
objectives, interference with views or vistas from
immediate vicinity and surrounding areas.
4/24/72
-------
C-8
C. Alternatives
The study and discussion of dcsiqn alternatives should
be presented as delineated in sections C.(2).a. and C.(2).b. for
three alternatives as a minimum. The study should include in-
vestigation of the feasibility of use of the facility for mass
transit systems, solid v:aste collection and transfer stations,
or other similar uses of benefit to the immediate vicinity and
connunity.
-------
I
C-9
Air Quality Sampling P^equiregents for Environmental Statements
Prepared for Proposed iiav/ Highway Construction in Urban Areas
as Required in Sections C.(l).b.4 and C.(2).b.l of the Guide-
Tines. . . .
Initial Survey of Corridor Area
1. Sampling gear for gases.
Use indicator tubes for CO, !!09 and reactive HC.Tube
range should approximate rar,ge~to be encountered.
2. Sampling gear for particulate.
Standard Hi-Vol samplers.
3. Sites and sampling periods for gases.
Minimum 2 sites for each 20 blocks of corridor, one
site on up-wir.d side and one site on down-wind side
of corridor.
Collect one sample each hour from 0600 hours to 1800
hours each day for a inininu.Ti of 7 consecutive days.
All sites to be run simultaneously.
4. Sites and sampling periods for particulate.
Miniinun 2 sites for each 20 blocks of corridor, one
site on up-wind side and one site on down-wind side
of corridor.
Collect one sample each 12 hours from 0500 hours to
1800 hours each day for a minimum of 7 consecutive
days. All sites to be run simultaneously.
5. Meteorological data-gathering.
Record temperature and wind speed and direction at
each site hourly while site is in operation. Days of
operation should be chosen to include worst meteoro-
logical conditions (i.e. stagnation) if possible.
4/24/72
-------
C-10
Purpose of initial survey is to determine general levels
in the corridor area and help in determination of siting of
continuous monitors for gases and Hi-Vol samplers.
Site locations- will be made in cooperation with regional
air pollution authority and DEQ. .
B. Long-torn Sampling in Corridor Area
1. Sampling gear for gases.
Indicator tubes for CO, IIO^ and reactive HC.
Minimum of two continuous monitors for CO, 1102 anc'
photochemical oxident. • •
2. Sampling gear for particulate. .
Standard Mi-Vol samplers.
3. Sites and sampling periods for gases.
Sites for continuous monitors to be determined from
initial survey data in cooperation with regional authori-
ties and DEQ.
Collect samples continuously for a minimum of 14 conse-
cutive days every other month throughout duration of
environmental study to include a minimum of 6 months.
Sites for indicator tubes to be essentially the same as
in initial survey.
Coll'ect one sample each hour from 0600 hours to 1800
hours each day for a minimum of 7 consecutive days dur-
ing periods continuous monitors are running. All sites
to be run simultaneously.
4. Sites and sampling periods for particulate.
Sites will be determined from initial survey data.
Collect one sample each 12 hours from 0600 hours to
1800 hours each day for a minimum of 14 consecutive
4/24/72
-------
C-ll
days every other n:onth throughout duration of environ-
mental study to include a minimum of 6 months.
5. Meteorological data gathering.
Record temperature and wind speed and direction at
each site hourly while site is in operation. Days of
operation should be chosen to include v.-orst meteorolo-
logical conditions (i.e. stagnation) if possible.
4/24/72
-------
C-12
DEPARTMENT OF ENVIRONMENTAL QUALITY
AIR QUALITY CONTROL DIVISION
1234 S. W. Morrison Street,
Portland, Oregon 97205
GUIDELINES FOR REVIEW OF PROPOSED PARKING FACILITIES
IN URBAN AREAS
A. Purpose: '.
To provide basic guidelines to public and private agencies and individuals
regarding the review and approval procedures of the Department for parking
facilities proposed for construction (in urban areas. The guidelines further
provide requirements for the content of environmental impact statements which
may be prepared for certain parking facilities at the request of the Department
as provided for under OAR, Chapter 340, Section 20-065.
These guidelines ?re not rules and are not intended to be all inclusive
or inflexible,but rather serve as a basis for the interpretation and imple-
mentation of OAR, Chapter 340, Sections 20-050 through 20-070.
From time to time, as the Department determines the need, revisions to
these guidelines will be published. Th.is is the first revision and supersedes
the guidelines dated April 18, 1972.
B. Classes of Parking Facilities Defined:
1. Residential - parking facilities intended primarily for residents
or tenants of apartments, condominiums, trailer parks, planned unit
developments, and similar residential developments.
2. Employee - parking facilities intended primarily for long-term or
commuter parking such as is generally associated with offices, banks,
manufacturing establishments and similar developments.
9/7/73
-------
C-13
3. Retail/Commercial - parking facilities intended primarily for short-
term or shopper parking such as is generally associated with shopping
centers, medical/dental offices, hotels, retail and wholesale stores
and similar retail/commercial developments.
4. Special - parking facilities intended primarily for long-term or
short-term parking during off-peak traffic hours such as is generally
associated with drive-in theaters, churches, fraternal organizations,
restaurants and similar developments.
5. Joint Use - parking facilities which are combinations of any or all of
the above classes of parking facilities and which through appropriate
joint use of available parking spaces would require less total parking
than would be required if each class were considered individually.
C. Delineation of Areas of Special Concern
Due to the heavy traffic and potential air pollution problems generally
associated with city centers, the following areas have been delineated as areas
of special concern which may have special review requirements:
1. Portland Central Coranercial Area - includes area within loop formed
by Stadium Freeway, Fremont Bridge, Eastbank Freeway and Marquam
Bridge and south of N. W. Hoyt Street.
2. Salem Central Conroercial Area - includes the area bounded by Market
Street on the north, the Willamette River on the west, Mission Street
on the south, and 12th Street on the east.
3. Eugene Central Cotrmercial Area - includes area bounded by Third Avenue
on the north, Jefferson Street on the west, 13th Street on the south,
and Mill Street on the east.
4. Other Areas - any area within a grid, 0.2 mile on a side, which has an
average annual daily traffic (ADT) volume of 25,000 or more motor
vehicles and within the area defined in OAR, Chapter 340, Section
20-060.
-------
C-14
Other areas of special concern may be defined at a later date..
D. Environmental Impact Statements May Be Required.
In general, any class of parking facility, other than special, proposed
for construction in any of the areas of special concern delineated above, will
be required as a minimum to have a professionally prepared environmental impact
statement submitted to the appropriate regional air pollution authority and the
Department for review.
It should be noted that the area defined as the Portland Central Commercial
Area is subject to the provisions of the Portland Transportation Control Strategy,
an amendment to the Oregon Clean Air Act Implementation Plan. Parking facilities
proposed for this area will not be required to have an environmental impact
statement prepared if they obviously comply with the plan.
Further, parking facilities for 500 or more motor vehicles proposed for
construction anywhere within the jurisdictional boundaries of OAR, Chapter 340,
Section 20-060 will usually be required to submit an environmental i.vipoct
statement. These jurisdictional boundaries include most of the Portland, Salem
and Eugene metropolitan areas at the present time.
Please refer to section G. of this document for the requirements for the
content of environmental impact statements for parking facilities.
E. Department Guidelines for Determining Maximum Amount of Parking Allov;ed by
Class of Parking Facility (tiot Applicable in Portland Central Commercial Area)
1. Residential - generally, the maximum number of parking spaces allowed
will be the minimum number required by the applicable zone code. Exceptions
will be considered for parking'recreational vehicles, trailers or similar
vehicles.
2. Employee - generally, the maximum number of parking spaces allowed will be
one space per 400 gross square feet of floor area or 0.59 space per employee
whichever is the lesser.
-------
C-15
3. Retail/Commercial . .
a. Shopping Centers: generally, the maximum number of parking
spaces allov/ed will be 5.0 spaces per 1000 gross square feet of
leaseable area reduced in direct proportion to the percentage
of total daily person trips made by transit.
b. Individual Retail/Commercial: generally the maximum number of
parking spaces allowed will be-the minimum number required by the
applicable zone code reduced in direct proportion to the percentage
of total daily person trips made by transit.
4. Special - generally, the maximum number of parking spaces allowed will
be the minimum number required by the applicable.zone code.
5. Joint Use - the maximum number of parking spaces allowed will be
determined on an individual basis assuming maximum utilization of the
concept of joint use and reduced in direct proportion to the percentage
> of total daily person trips made by transit.
F. .Department Guidelines for Determing Adequacy of Transit Service and Incentives.
It is the responsibility of the person or agency proposing construction
of parking facilities to contact the appropriate transit agency to determine
the levels of existing and planned transit service in the vicinity of their
development. The adequacy of transit service is dependent upon the type of
development proposed and may be determined by consulting with the transit
agency or various transportation consultants. If no transit service is available
or existing service is inadequate, it is the responsibility of the applicant
to secure adequate service by formally requesting the transit agency to provide
service or by providing service by other means. A letter of intent from the
transit agency delineating its response to this request will be.necessary before
approval for construction can be granted.
It is further the responsibility of the applicant to provide appropriate
incentives to encourage the maximum use of transit service such that the amount
of parking required will be minimized and the air and noise pollution resulting
from vehicle trips attracted or generated by the parking facility will also be
minimized.
-------
C-16
Acceptable transit patronage Incentives, which are presently being employed
by various applicants are delineated below by class of parking facility:
1. Residential
a. Provide up-to-date Information on bus scheduling and routes.
b. Construct bus shelters and/or bus turn-out lanes to meet or
exceed transit agency specifications.
c. Make available transit tokens or tickets at reduced rates.
2. Employee
a. Provide up-to-date information on bus scheduling and routes.
b. Construct bus shelters and/or bus turn-out lanes to meet or exceed
transit aqency specifications.
c. Implement program of employee transit fare reimbursement.
">
3. Retail/Commercial
a.' Provide up-to-date information on bus scheduling and routes.
b. Construct bus shelters and/or bus turn-out lanes to meet or exceed
transit agency specifications.
c. Provide transit tokens or tickets at reduced rates for patrons using
transit.
4. Joint Use.
a. Provide up-to-date information on bus scheduling and routes.
b. Construct bus shelters and/or bus turn-out lanes to meet or exceed
transit agency specifications.
c. Provide combination of incentives listed for other classes
corresponding to classes of parking provided.
Other transit incentives may be added at the applicant's option, or
different incentives may be substituted for those listed if they are equivalent
to the incentives listed or if the incentive listed is not appropriate for the
(project site.
-------
C-17
The applicant should also Inform the Department of other non-transit
Incentives it Intends to provide which will tend to reduce the total number of
automobile trips to the proposed parking facility. These Incentives may Include
car pool Information service, bicycle racks and paths and various pedestrian
amenities.
G. Required Content of Environmental Impact Statements for Parking Facilities.
The following sections outline 'Subject matter and content of submission
which shall, as a minimum, be covered 1n environmental .impact statements for
parking facilities:
1. Description of the Proposed Facility and Its Surroundings
The description should include the following type of information:
a. Type of facility, residential, employee, retail /commercial, special
or joint
b. Major design features; length, width, height, number of levels,
access control, number of vehicles to be stored, etc.
c. Traffic data within 0.2 miles of project site; vehicle trips on
access and through streets, existing, projected for completion of
. ,
construction, two years after completion of construction and
subsequently at five-year intervals for fifteen years.
d. A vicinity map(s) shall be furnished which will show the proposed
parking facility and its relationship to surrounding natural and ,
cultural features such as hills, parks, historic sites, landmarks,
Institutions, developed a,reas, surrounding streets, principal
highways and similar features that are pertinent to a parking
facility study.
e. General description of surrounding terrain, existing land use and
proposed land use (map pr.eferrable), other existing environmental
features .
-------
O18
f0 A schedule or an estimate of when the proposed facility will be
constructed; the current status of the proposal, with a brief
historical resume.
g. Existing parking facilities including their deficiences', the need
for the proposal, the benefits to the State, region and community.
h. An inventory of economic factbrs such as employment, taxes, property
values, etc., should be included as appropriate.
1. Detailed maps, sketches, pictures, and other visual exhibits should
be used to show specific environmental involvements as necessary.
•
The Probable Impact of the Proposed Facility.or Improvement Upon
Environment.
The evaluation and discussion should specifically emphasize
significant beneficial and detrimental environmental consequences
upon the State, region or community with specific discussion of the
following points:
a* Effect of the project on the dependence of the urban dweller
ypon motor vehicles.
b. Consistency of the project with local and regional mass transit
planning and objectives.
c. Consistency of the project with environmentally sound local and
regional land use planning.
d. Effect the project will have upon air quality in the immediate
vicinity, central commercial area and metropolitan area during
constructions at the completion of construction, two years after
completion of construction and at subsequent five-year Intervals
for fifteen years. Refer to section 4, Air Quality Prediction
Methodologies for acceptable air quality prediction techniques.
@o Effect the project will have upon noise levels in the immediate
vicinity, central commercial area and metropolitan area during
-------
C-19
construction, at the completion of construction, two years after
- completion of construction and at subsequent five-year intervals
for fifteen years. Refer to section 5. Noise Level Prediction
Methodologies for acceptable noise level prediction techniques.
f. Effect of surface runoff from parking facility on water quality of
bodies of water in project vicinity.
•
3. Alternatives.
The exploration of alternatives should include an objective evaluation/
and analysis of feasible alternatives with detailed discussion of the folldwing
specific areas:
a. Design alternatives that would minimize environmental impact of project.
b. Alternative modes of transportation including public or private mass
transit, bicycling, pedestrian modes, and water transit modes. Provide
a detailed discussion of the impact of these various modes, in combination
with Incentives which will be provided to utilize them, on the numoer of
parking spaces required and air and water quality and noise levels.
4. Air Quality Prediction Methodologies
The following references contain air quality prediction techniques which
are acceptable to the Department for use in estimating the air quality impact
of parking facilities. Other methodologies may be used subject to Department
approval:
a. Environmental Protection Agency, "Guidelines for Implementing EPA
Requirements for Maintenance of Standards," Draft document as of
July 12, 1973.
b. Beaton, J.L., Skog, J.B., Shirley, E.G., and Ranzlen, A.J.; California
Division of Highways, Report Numbers FHWA-RD-72-33 through 40.
c. Mancuso, R.L., and Ludwig, F.U., "User's Manual for the APRAC-1A
Urban Diffusion Model Computer Program," Stanford Research Institute^,
(Sept. 1972).
-------
C-20
5. Noise Level Prediction Methodologies.
The following reference contains noise level prediction techniques which
are acceptable to the Department for -use in estimating the impact of
parking facilities on noise levels. Other methodologies may be employed
subject to Department approval.
a. Gordon, C.G., Galloway, W.J., Kugler, B.A., and Nelson, D.L.,
"Highway Noise A Design Guide for Highway Engineers," National
Cooperative Highway Research Program Report 117, Highway Research
Board, (1971).
-------
APPENDIX D
PHILADELPHIA
REGULATIONS AND GUIDELINES
-------
Amendment to Air Management Regulation X
Construction Review
March 12, 1974
Air Management Services
Department of Public Health
City of Philadelphia
4320 Wissahickon Avenue
Phila., PA, 19129
215-686-7842
-------
D-2
This amendment j'eplacee in it entirety Air Management Regulation X,
CONTHUCTTOfl KE7IEW, approved August 20, 1972
REGULATION X .
Complex Source Review .
Section I ^- Definitions
Complex Source - A facility, building, structure or installation,
or combination thereof, that has or leada to secondary or adjuric-
tive activity which emits or may emit a pollutant for which there
'• ' •* .-•
is a national ambient air quality standard. These sources include,
but are n«t limited to:
1. Shopping Centers;
2. Spfrts complexes;
1 3. Drive-in theaters;
i
i . •
4. Parking lots and garages;
5. Residential^ aommej.QiaJ.,:'tjadiL3irJLal, aoad-institutional
developments; "~
6. Amusement parks and recreational areas; *
7. Highway and transportation facilities;
8. Sewer, water, power, and gas lines, and
''
9. Other such facilities which will result in lno/?oa(?m<1 j
emissions fron m(/l.oii..Y^JiifliejJ,cr.^atatioriary sources. •
National Ambloni-Air Quality Standards - Those primary and secon-
s
dary ambjl<2nt air quality standards which are promulgated by the
s
Administrator of the .Unajted-Sta-tp-^L_Eav.i:r*nriinottt«U .P^^toctAon Agency.
-------
D-3
% _ " - " — ;
Person - Any individual, natural person, syndicate, association,
partnership, firm, corporation, institution, agency, authority,
department, bureau, or instrumentality of federal, state, or local
government or other entity recognized by law as a subject of rights
and duties.
'
Philadelphia CBD - The area within the City of Philadelphia bounded
by but notincluding, Vine Street, South Street, the Schuylkill River,
and the Delaware River. . ;
Section II - General Provisions
A. No person shall construct, reconstruct, alter or install any
complex source, except as provided in Section II B. before
obtaining written approval from the Department for such
construction, reconstruction, alteration or installation. .
1 B. The requirements of Section II A. shall not apply to the
f .
following complex sources:
1. Commercial or industrial facilities with gross leasable
area or floor space less than 500,000 square feet;
2. New or modified parking facilities within the Philadelphia
CBD with.total capacity of less than 25P motor vehicles and
t
new or modified parking facilities outside of the CBD with
total capacity of less than 500 motor vehicles;
"5. Facilities of less than one hundred (100) dwelling unity or
groups of facilities of less than one hundred dwelling units;
4. Such other complex sources as the Department determines to
have negligible air quality impact.
C. Nothing contained in this Section shall be taken to oxcuae or
relieve any person from complying with any applioabi* prov.lH.lnn
of the Air Management Code or any regulation adopted thereunder.
-------
D-4
Ur Quality Inpaot Review
A. Bequest fcr Approval
Request for approval to construct, reconstruct, alter or
install any*complex source shall be made to the Department
by the person responsible for such source and shall in-
(
elude submission of an air quality impact statement
sufficiently detailed to show all actual and potential
impacts on the existing air quality resulting directly,
or indirectly, from the facility at the site, and in the
area, neighborhood and region.
B. Review Procedures
1. The Department shall establish procedures and guidelines
for use in the preparation, submission and review of air
quality impact statements and shall prescribe the infor-
"mation to be supplied'in order to determine the effect
of the complex source on air quality.
2. Information to be given in the statement shall include,
but not be limited to, the following: . .
a. Location and general description of the proposed facility
• or project.
b. Information on the nature, design, confltructlon ari4
operation of the facility.
c. Information on the transportation related anpeotu of
the project including mass transit, traffic pattema
and parking facilities.
d. The nature and amounts of air contaminants to be emitted
directly from the facility or emitted by associated
mobile sources.
-------
D-5
Any additional information, evidence or documentation that
the Department may require shall be furnished upon request.
3. The Department shall make available for public inspection
information submitted by the person responsible for the
V
proposed project or facility, as well as the Department's
analysis of the effect on air quality and proposed approval
or disapproval, and provide a period of at least thirty (30)
days after prominent advertisement for the submittal of
public comment.
C. Conditions of Approval
1. Approval to constuct, reconstruct, alter or install any
complex source shall bb granted only upon demonstration
to the satisfaction of the Department that such source
will not violate any provision of the Air Management Code
or Regulations of the Air Pollution Control Board or
prevent or interfere with the attainment or maintenance
of any national ambient air quality standard in the
neighborhood, area or region.
2. Such approval shall not exempt any person from prosecution
for violation of the Air Management Code, Regulations of
the Air Pollution Control Board or any applicable laws of
the Commonwealth of Pennsylvania or the United. States
Government. ,
Section IV - Severability
The provisions of these Regulations are severable and if any
provision, sentence, clause, section or part thereof shall bo
t
held illegal, invalid, unconstitutional or inapplicable to any
person or circumstances, such illegality, invalidity, uncon-
-------
D-6
stltutionality or inapplicability shall not affect- or impair
any of tho remaining provisions, sentences, clauses, sections
or parts of the ordinance or their application to him or to
other persons and_.oir'cumstances. It is hereby declared to be
the legislative intent that these regulations would have been
ruloptod if such illegal, invalid or unconstitutional provision,
sentence, clause or aprt had not been included therein, and
if the person oz* olTouina tauo^a to wM oh the cvc/l itia.no** or any
part thereof is inapplicable? had not specifically been exempted
'therefrom.
Section V - Effective Date
Except as otherwise provided, this Rogulation shall become
effective upon adoption.
-------
D-7
PHILADELPHIA DEPARTMENT OF PUBLIC HEALTH
AIR MANAGEMENT SERVICES
REGULATION X
CONSTRUCTION REVIEW
- AIR QUALITY IMPACT STATEMENT (AQIS) GUIDELINES -
The following guidelines are to be used by persons preparing
Air Quality Impact Statements as required by Air Management
Regulation X. Complete Section I and either Section 11 or
Section III.
.' ' *
t.' GENERAL INFORMATION
A. . The statement shall contain the following basic information,
1. Name and location of proposed facility or project.
2. Name, complete address and telephone of owner.
3. Name, complete address and telephone of the
developer, architect, or planner.
B. Proposed schedule and deadlines
1. Planning and design stages.
2. Anticipated dates of commencement and completion of
construction.
C. The statement shall describe the present character and
use of the site and surroundings"of the proposed project
including the present and proposed zoning classifications.
II.. STATIONARY SOURCES
* ' >*-•
A. The statement .shall include a list of all propoised
stationary source equipment and an itemized estimate
in tons per year of air pollutant emissions including
...estimates of solid waste generation (tons/day) and
.proposed disposal method.
B. The statement shall contain statement of intent with
regard to the requirements of the Air Management Code
and Regulations in the following categories:
1. Compliance with stationary sources and administra-
tive regulations, i.e., Air Management Regulations
I, II, III, V, VII, VIII, XI, XII, XIII, and any
future Regulations of this type.
2. The submission of an Emergency Plan as required
by Air Management Regulation IV.
3. Compliance with the Parking Facility .Ventilation
Criteria as published by Air Management Services.
4. Compliance with the Construction and Demolition
Criteria as published by Air Management Services.
-------
D-8
The transportation related aspects of the proposed
project or facility shall be described in the
following categories:
1. Location and schedules of existing and/or pro-
posed mass transit facilities, particularly n@$?
or revised bus routes.
2. The effect of the proposed project or facility
on local automobile traffic patterns including
an estimate of the impact on local air quality,
3, Location and capacity of proposed off-street.
parking facilities including entrance and ©sit
locations and provisions for truck deliveries
and scheduling.
Assumptions should be stated and justified. Enough
information and references should be included to
enable Air Management Services to duplicate* the
calculations.
III. HIGHWAY/MASS TRANSIT
A. The statement shall contain a description of the
proposed route of the project, number of vehicles
or persons using the facility, and the effect of the
proposed route or facility on existing routes or
facilities (schedules, volume, etc.). ' ', '
B. The statement shall contain an estimate of the effect
on local air quality of the proposed project or
facility. .
C. If required for the proposed project, the submission
of that portion of the federal Environmental Impact
Statement dealing with air quality will meet the
requirements of this Section. ;
i
D. Assumptions should be stated and justified. Enough
information and references should be included to
enable Air Management Services to duplicate the
calculations.
Air Quality Impact Statements are to be submitted to:
Air Management Services ;
Source Registration—AQIS
4320 Wissahickon Avenue
Philadelphia, Pennsylvania 19129
-------
APPENDIX E
DEVELOPMENTS OF REGIONAL IMPACT (DRI)
AND INDIRECT SOURCE REVIEW (ISR):
THE FLORIDA EXPERIENCE
-------
DEVELOPMENTS OF REGIONAL IMPACT (DRI)
AND INDIRECT SOURCE REVIEW (ISR):
THE FLORIDA EXPERIENCE
A developer may seek approval of a Development of Regional Impact
under three conditions:
(i) If the proposed development is to be located in an
Area of Critical State Concern (legislated by Chapter 380 of the Florida Environ-
mental Land and Water Management Act), it must have a DRI application prepared
that shows it will comply with any regulations adopted for the area.
(ii) If the development is to be located in an "unregu-
lated area, " that is, an area where local zoning or subdivision regulations have
not been adopted, the developer must give 90 days' notice to the local government
with jurisdiction and to the Division of State Planning of his intent to undertake a
Development of Regional Impact. During this 90-day period, the local govern-
ment may adopt zoning or subdivision regulations for the area, or the Adminis-
tration Commission may designate the area as an Area of Critical State Concern.
If neither action occurs within the 90-day waiting period, the developer may under-
take the DRI without further regard to the Environmental Land and Water Manage-
ment Act. Approximately 25 percent of the counties in Florida are unregulated,
2
according to a recent survey by the Department of Community Affairs.
An Area of Critical State Concern is defined as an area containing, or having
a significant impact upon, environmental, historical, natural, or archaeological
resources of regional or statewide importance; an area significantly affected by,
or having a significant effect upon, an existing or proposed major public facility;
or a proposed area of major development potential, which may include a proposed
site of a new community, designated in the state land development plan.
Bureau of Land Planning, Developments of Regional Impact; A Summary Report
of the First Six Months, Tallahassee, Florida, Division of State Planning,
February 1974, p. Z.
-------
E-2
(iii) If the development is proposed in a "regulated"
area where local zoning or subdivision regulations have been adopted, a DRI
application must be filed, fa regulated jurisdictions, the developer must complete
a DRI application for development approval and submit copies to the local govern-
ment having jurisdiction, to the regional planning agency designated for the area,
and to the Division of State Planning. A public hearing is set by the local govern-
ment, and an advisory report concerning the regional impact of the development
is prepared by the regional planning agency for the benefit of the local govern-
ment. In all cases, it is the local government which makes the final decision on
a Development of Regional Impact. Their decision is subject to an administrative
appeals process at the state level, heard by the Florida Land and Water Adjudica-
tory Commission (the Governor and Cabinet), if legal action is initiated through
the normal judicial processes of the courts.
DRI became effective on 2 July 1973, six months before ISR was pro-
mulgated in Florida. A "grandfather" clause was included in the Environmental
Land and Water Management Act to exclude development projects on which con-
struction was begun prior to 2 July 1973. The DRI grandfather clause is based
on prior zoning with dedication of subdivision plotting. The ISR grandfather
clause, in contrast, is more stringent than the DRI grandfather ruling, since
the ISR clause is based on actual site alteration already being under way.
A comparison of the review requirements for DRI and ISR is shown
in Exhibit E-l.
-------
EXHIBIT E-l
REQUIREMENTS FOR ISR AND DRI REVIEW
DRI
ISR
_ Type of l-'aclllty
Airports
Attractions mxl
Recreation
Hospitals
Industrial Plants >IIH|
Industrial Parks
Office Parks
Triggering Point
Ni-w ulrport, runway, or runway extension
l''«ir Hlngle performance facilities:
I. Parking for more than 2,500 cars, or
2. Permanent seats for more than 10,000
spectators.
l''. Kncompasses more than 300,000 square
fret of gross floor area.
Type of Facility
Airports
Any facility with
provisions for large
amounts of parking
Triggering Point
New airport designed for scheduled
commercial traffic.
1. Open parking lots for 1,500 cars
or more.
2. Multilevel parking lots for 750
cars or more
W
CO
sing paiMi^t «\r *v.-i!.\'v --WOyjSf-s more than one time per day on a regular or continual basis.
-------
EXHIBIT E-l (Cont'd)
DRI
ISR
Type of Facility
Shopping Centers
Residential Developments
Schools
Triggering Point
1. Occupies more than 40 acres of land, or
2. Encompasses more than 400,000 square
feet of gross floor area, or
3. Provides parking spaces for more than
2,500 cars.
Type of Facility
Roads
[~Size of Population!
| of County |
1. Less than 25,000
2. 25,000- 50,000
3. 50,001-100,000
4. 100,001 - 250,000
5. 250,001 - 500,000
(i. More than 500,000
I Number <
[Dwelling Units
250
500
750
1,000
2,000
3,000
Triggering Point
1. More than 3,000 full-time students, or
'2. Physical expansion having such a design
population by at least 20% of the design
population.
Tollway s/interstate s/
other major roads
1. 1,000 vehicles/hour or more In Dodo,
Broward, Palm Beach, Brevard, IllllH-
borough, Pinellas, Orange, Durvul,
Escambia, Polk, Leon, Sarasota, Vol-
usia, and Alachua Counties.
2. 2,000 vehicles/hour or more In all other
counties.
More than two lanes outside of counties
named in #1 above.
W
-------
EXHIBIT E-l (Cont'd)
DRI
ISR
Type of Facility
Klcctrical Generating
Facilities and Trans-
mission Lines
Mining Operations
Petroleum Storage
Facilities
Port Facilities
Triggering Point
1. Total generating capacity greater than 100
megawatts, or addition to existing electrical
generating facility which adds a generating
capacity of greater than 100 megawatts.
2. Proposed electrical transmission line with
capacity of 230 kilowatts or more that crosses
a county line.
Solid mineral mining operation which annually re-
quires removal or disturbance of solid minerals
or overburden from an area, whether or not con-
tiguous, of greater than 100 acres, or for which the
proposed consumption of water would exceed 3 mil-
lion gallons per day.
1. Any proposed facility, or combination of facil-
ities, located within 1,000 feet of any navigable
water for storage of any petroleum produce with
storage capacity of over 50,00 barrels.
'2. Any other proposed facility or combination of
facilities for storage of any petroleum product
with storage capacity of over 200,000 barrels.
Any water port, except those designed primarily
for the mooring or storage of watercraft used ex-
clusively for sport or pleasure of less than 100
slips for moorings.
Type of Facility
Triggering Point
Any other facility
As determined by DPC.
W.
I*
-------
APPENDIX F
DESIGN CHANGE COSTS
-------
F-2
A. Introduction
Road and mass transit design change costs vary with the type and
quality of materials used, the structural design requirements, and the right-of-
way costs incurred. Material and labor prices have been increasing at a rapid
rate in recent years, as illustrated by the historical average of construction costs
shown in Exhibit F-l. The exhibit also points out the variation in costs from one
part of the country to another.
Structural design requirements vary with state regulations and the an-
ticipated needs of the transportation system. However, more important, the cost
of design changes is contingent on specific site characteristics. Such factors as
subsurface geologic conditions, drainage, and other underground structures largely
determine whether and how much the original estimated cost will increase as a
result of unfavorable conditions. Because of the increased costs of construction
when subsurface structures and utilities must be removed or relocated, the cost
of construction and modification in densely populated areas can be five to eight
times the cost of similar construction or modification in rural areas.
While some improvements may be constructed without acquisition of
additional rights-of-way, when additional land is required construction costs can
2
increase greatly as indicated in Exhibits F-2 and F-3. The fact that right-of-way
costs often appear to increase with population indicates the impact which develop-
ment has on land and construction costs. In some cases, the rights-of-way simply
cannot be acquired at any price. This is often the case in central cities where
buildings stand very close to existing roads and transit routes.
Interview with Donald Whittemore, McKee-Berger-Mansueto, Inc., Boston,
Massachusetts, June 1974.
2
While Exhibits F-2 and F-3 represent right-of-way costs for roadway design
changes, they also illustrate the possible cost impact of mass transit right-of-
way taking.
-------
EXHIBIT F-2
mSTORICAL AVERAGE OF CONSTRUCTION COSTS
.<• Average 1973 Construction Cost & Labor Indexes
City
Akron, Oh. o
Albany. N.Y.
Alb'uquerque, N.M.
Amarillo, Tx.
Anchorage, Ak.
Atlanta, Ga.
Baltimore, Md.
Baton Rouge, La.
Billings, Mt.
Birmingham, Al.
Boise, Id.
Boston, Ma.
Bridgeport, Ct.
Buffalo, N.Y.
Burlington, Vt.
Charleston, W.V.
Charlotte, N.C.
Chattanooga, Tn.
Chicago, III.
'Cincinnati, Oh.
Cleveland, Oh.
Columbia, S.C.
Columbus, Oh.
Dallas, Tx.
Dayton, Oh.
Derwer, Co.
Des Moines, la.
Detroit, Mi.
Duiuth, Mn.
Edmonton, Cn.
El Paso, Tx.
Erie, Pa.
Evansville, In.
Flint, Mi.
Fort Wayne, In.
Fort Worth, Tx.
Fresno, Ca.
Gary, In.
Grand Rapids, Mi.
'irrisburg, Pa.
iartford, Ct.'
Honolulu, Hi.
Hi ''s'on, Tx.
:.• ..ianapolis, In.
Jackson, Ms.
Jacksonville, Fl.
Kansas City, Mo.
Knoxville, Tn.
Lansing, Mi.
Las Vegas, Nv.
Little Rock, Ar.
Los Angeles, Co.
Louisville, Ky.
Madison, Wi.
Manchester, N.H.
Labor"
110
102
80
74
133
87
96
83
82
79
83
105
104
112
81
89
68
78
110
107
117
64
104
84
104
93
91
119
98
74
67
100
91
103
94
83
104
104
93
93
103
92
86
97
68
78
102
77
100
105
74
112
93
95
85
Total
107
100
89
83
136
91
100
87
88
86
88
103
102
110
87
95
75
84
104
104
109
70
100
87
102
90
93
110
97
84
78
100
92
102
93
88
107
102
93
91
100
102
89
96
75
83
97
81
100
103
80
103
96
98
88
City
Memphis, Tn.
Miami, Fi.
Milwaukee, Wi.
Minneapolis, Mn.
Mobile, Al.
Montgomery, Al.
Montreal, Cn.
Nashville, Tn.
Newark, NJ.
New Haven, Ct.
New Orleans, La.
New York, N.Y.
Norfolk, Va.
Oklahoma City, Ok.
Omaha, Nb.
Peoria, III.
Philadelphia, Pa.
Phoenix, Az.
Pittsburgh, Pa.
Portland, Me.
Portland, Or.
Providence, R.I.
Raleigh, N.C.
Richmond, Va.
Rochester, N.Y.
Rockford, III.
Sacramento, Ca.
St. Louis, Mo.
Salt Lake City, Ut.
San Antonio, Tx.
San Diego, Ca.
San Francisco, Ca.
Savannah, Ga.
Scranton, Pa.
Seattle, Wa.
Shreveport, La.
Sioux Falls, S.D.
South Bend, In.
Spokane, Wa.
Springfield, Ma.
Syracuse, N.Y.
Tampa, Fl.
Toledo, Oh.
Topeka, Ks.
Toronto, Cn.
Trenton, N.J.
Tucson, Az.
Tulso, Ok.
Vancouver, Cn.
Washington, D.C.
Wichita, Ks.
Winnipeg, Cn.
Worcester, Ma.
Yonkers, N.Y.
Youngstown, Oh.
Labor
81
102
105
101
89
67
72
75
116
103
85
129
71
83
91
95
109
102
108
75
94
98
66
71
108
97
no
106
87
78
106
117
68
93
96
77
79
96
92
99
101 .
83
110
91
92
111
99
81
86
99
85
62
103
114
103
Total
83
100
107
100
89
74
83
82
107
101
92
115
78
86
91
97
102
100
103
83
98
101
74
77
107
92
109
101
92
83
105
108
79
94
95
83
89
97
97
97
102
88
108
95
91
104
98
87
91
96
91
84
91
105
101
Historical Averaqe
Year
1973
1972
1971
1970
1969
1968
1967
1966
1965
1964
1963
1962
1961
1960
1959
1958
1957
1956
1955
1954
1953
1952
1951
1950 .
1949
1948
1947
1946
1945
1944
1943
1942
1941
1940
1939
1938
1937
1936
1935
1934
1933
1932
1931
1930
1929
1928
1927
1926
1925
1924
1923
1922
1921
' 1920
1919
Index
100
93
86
78
71
66
62
- 60
57
56
• 55
54
53
52
51
50
49
47
44
42.
42
41
40
37
35
. 35
32
27
• 23
22
22
21
20
18
18
17
17
16
15
14
13
13
14
17
16
16
16
16
16
16
16
15
16
20
17
Source: Building Construction Cost Data. MeaB§7"19747~p.
-------
F-4
EXHIBIT F-2
EXPRESSWAY AND FREEWAY LAND COSTS
(Million $ Per Lane Mile)
POPULATION GROUPS (TOOO.'s)
Facility
Type
NEW ROAUS^
Location
CBD
Fringe
Residential
0-
50
0.36 '
0.36.
0.32
50-
100
0.36
0.36
0.32
100-
250
0.43
0.39
0.36
250-
500
0.54
0.43
0.36
500-
1000
.0.72
0.54
0.46
Over
1000
1.11
0.72
0.64
•
RECONSTRUCTION^2'
CBD
Fri nge
Residential
0.36
0.19
0.16
0.36
0.19
0.16
0.43
0.21
0.17
0,51
0.23
0.19.
0.69
0.28
0.20
1.04
0.36
0.26
MAJOR WIDLfJIIiG^3'
CBU
Fringe
Residential
0.28
0.14
0.04
0.28
0.14
0.04
0.30
0.17
0.06
0.34
0.20
0.09
0.39
0.24
0.16
0.51
0.34
0.30
(1) Hew.roads refers to the cost of land needed to construct an entirely new roadway; it assumes no
land has been purchased before-hand.
(2) Reconstruction refers to that cost of land needed to construct a new roadway by partially using
existing land and partially obtaining more in order to straighten highway curves, provide shoulders,
etc.
(3) Major widening refers to that cost of land needed to increase the surface area of an existing
roadway-
Notes: Costs reflect 1973 price levels.
The above data reflect a per lane cost.
.ource; K. Bhatt and M. Olson, Capacity and Cost Inputs for Community Aggregate Planning Model (CAPM).
Working Paper 5002-3, The Urban Institute, Washington, D. C., December 1973.
-------
F-5
EXHIBIT F-3
ARTERIAL LAND COSTS
(Million $ Per Lane Mile)
POPULATION CROUP (1 OOP's)
Facili ty
Type
HEW ROADS(1*
Location
CBD
Fringe
Residential
0-
50
0.32
0.29
0.17
50-
100
0.32
0.29
0.17
100-
250
0.36
0.31
0.18
250-
500
0.41
0.-33
0.19
500-
1000
0.52
0.39
0.21
Over
1000
0.75
0.49
0.27
"
RECONSTRUCTION^
CBD
Fringe
Residential
0.11
0.09
0.17
0.11
0.09
0.07
0.11
0.09
0.07
0.13
0.10
0.09
0.14
d.n
0.10
0.19
0.14
0.11
MAJOR WIDENING^
CBD
Fringe
Residential
0.16
0.16
0.09
0.16
0.16
0.09
0.19
0.19
0.10
0.23
0.22
0.11
0.33
0.24
0.16
0.54
0.32
0.26
(1) New roads refers to the cost of land needed to construct an entirely new roadway; it assumes no
land has been purchased before-hand.
(2) Reconstruction refers to that cost of land needed to construct a new roadway by partially using
existing land and partially obtaining more in order to straighten highway curves, provide shoulders,
etc.
(3) Major widening refers to that cost of land needed to increase the surface area of an existing
roadway.
Notes: Costs reflect 1973 levels.
The above data reflect a per lane cost.
Source; K. Bhatt and M. Olson, Capacity and Cost Inputs for Community Aggregate Planning Model (CAPM).
Working Paper 5002-3, The Urban Institute, Washington, D. C., December 1973.
-------
F-6
B. Roadway Design Change Costs
Exhibit F-4 illustrates the relative costs of various design changes and
their effectiveness in increasing the capacity of a road. The costs shown are in-
tended only as an indication of magnitude to allow comparison with the estimate of
effectiveness. As indicated, costs can vary tremendously from area to area and
within an area, depending on the design and structural requirements of a project.
Exhibits F-5 and F-6 further specify the magnitude,of costs involved
*" i..
in road construction and modification. Actual costs are estimated on a unit price
basis. The cost per unit is multiplied by the quantity required (that is, fine grading
and compacting of subgrade areas: 4,350 square yards at $. 50 per square yard),
and then all of the project costs are added together. Exhibit F-7 indicates the type
of costs associated with traffic control design changes. The unit costs and their
usage which were assumed in this study are shown in Exhibit F-8.
-------
F-7
EXHIBIT F-4
RELATIVE COSTS OF ROAD IMPROVEMENTS
VS. EFFECTIVENESS IN INCREASING CAPACITY
Design Change
Right Turn Off of
Existing Roadway
New Traffic Signals
Traffic Officer
Left Turn Storage
Widening Roads 10' to
12'
a. Eliminate Parking
Revised Signalization
Change Limited Access
Grade Separation
New Feeder Roads
Improve Bridges
New Bridges
New Freeways
Relative Costs
$ 10,000
$ 15,000
$ 100/day
$ 50,000, no road
width
$ 150,000, with road
width
Indeterminate
Political
$ 40,000
4
$2,000,000
Span to 50': $100,000
Over 50': $1,000,000
$ 200, 000 to
$3-5,000,000
Effectiveness
Nil
Safety, no increase in thru
traffic
Safety, approx. 5 to 10%
increase in thru traffic
or 100 vph
Safety 15 to 20% increase
in thru traffic
500 vph
500 vph
5% increase in thru traffic
Very effective, approx. 40%
increase in thru traffic
Side road: 40% Increase
Thru traffic: 20% increase
Depends on traffic count
30 to 40% increase in thru
traffic
Depends on road network
100% in thru traffic or
5,000 vph
Source; Donald Whittemore, McKee-Berger-Mansueto, Inc., Boston,
Massachusetts, June 1974.
-------
EXHIBIT F-5
EXPRESSWAY AND FREEWAY CONSTRUCTION COSTS
(Million $ Per Lane Mile)
POPULATION GROUP (lOCG's)
Facili ty
Type
flEW ROAD^ '
Location
CBO
Fringe
Residential
0-
50
1.04
0.71
0.62
50-
100
1.04
0.71
0.62
100-
250
' 1.07
0.75
0.62
250-
500
1.10
o.ai
0.65
500-
1000
1.14
0.94
0.71
Over
1000
1.24
1.20
0.84
.
RECONSTRUCTION (2)
CBD
Fringe
Residential
1.12
0.62
0.51
1.12
0.62
0.51
1.13
0.64
0.52
1.14
0.65
0.55
1.18
0.68
o'.eo
1.26
0.71
0.68
MAJOR WIDENING^3'
CBD
Fringe
Residential
1.08
0.78
0.62
1.08
0.78
0.62
1.10
0.81
0.65
1.20
0.88 '* '
0.70
1.27
1.04
0.79, •'-
1.48
1.33
•0:98
(1) Mew Roads refers to those costs needed to construct an entirely new roadway where none existed
before-hand.
(2) keconstruction refers to those costs typical of constructing a roadway partially over an existing
one and over an area where none existed.
(3) Major widening refers to those costs associated with increasing the capacity of an existing
roadway by widening it.
Notes: Costs reflect 1973 price levels.
The above data reflect a per lane cost.
Source: K. Bhatt and M. Olson, Capacity and Cost Inputs for Community Aggregate Planning Model (CAPM).
Working Paper 5002-3, The Urban Institute, Washington, D. C., December 1973.
-------
EXHIBIT F-6
ARTERIAL CONSTRUCTION COSTS
(Million $ Per Lane Mile)
POPULATION GROUPS (IQOO's)
Facility
Type
NEW ROAUS^
Location
CBD
Fringe
Residential
0-
50
0.33
0.29 .
0.26
50-
100
0.33
0.29
0.26
100-
250
' . 0.36
0.30
0.27
250-
500
0.39
0.33
0.29
500-
1000
0.46
0.36
0.33
Over
1000
0.56
0.46
0.38
RECONSTRUCTION^5
CBD
Fringe
Residential
0.33
0.30
n.?R
0.33
0.30
n.za
0.35
0.31
0.29
0.3P
0.33
0.29
0.40
0.35
0.31
0.49
0.39
. 0.33
MAJOR ,_>
WIDEIJIHGu;
CBD
Fringe
Residential
0.33
0.31
n..n
0.33
0.31
0.31
0.36
0.33
0.33
0.39
0.34
0.34
n.4?
>0^39
0.39
0.55
0.45
0.-15
(H New roads refers to those costs needed to construct an entirely new road where none previously existed.
(2) Reconstruction refers to those costs typical of constructing a roadway partially over an existing one
and over an area where none existed.
(3) Major widening refers to those costs associated with increasing the capacity of an existing roadway
by widening i t.
•s: Costs r fleet 1973 price levels.
The above data reflect a per lane cost.
Source: K. Bhatt and M. Olson, Capacity and Cost Inputs for Community Aggregate Planning Model (CAPM).
Working Paper 5002-3, The Urban Institute, Washington, D. C., December 1973.
-------
F-10
EXHIBIT F-7
COSTS ASSOCIATED WITH TRAFFIC CONTROL
DESIGN CHANGES
* Type of Control
Traffic signal
Sources of Costs
1. Controller
2. Signal heads
3. Poles
4. Pedestrian controls
5. Turning arrows
6. Conduit
7. Street excavation to place
conduit
8. Software for computer-
controlled systems
Regulatory, warning,
and guide signs
1. Panel
2. Supports
Pavement markings
1. Length of marking
2. Width of marking
-------
F-ll
EXHIBIT F-8
UNIT COST AND USE
ROADS & WALKS inci. Subso&p
DAILY
CREW OUTPUT UNIT MAT.
IKST. TOTAL
ASPHALT BLOCKS -- olded 6" x 12" or 5" x 12", IV thick
H-'..-jrn :' • r -• 2' wide, 1-1/4'' 'hick
Ad- ;. •• .
3ASE (Jfdpur- ;..-,
BASE COl'foE '-<•
• '2 - • -ush
U subbase, small areas
i ' g'avel @ $3.25 per t. -1, 3" deep
' ' ' '• *r>
•/.'!:.,"'
/ • •' i , > F
M;H t; :an f-
BlTUMINOuS -j
• eatment, aad
-tion s, emul sioi.
r .- • on, 2 gal. per b. f., 4'1 thick
jo., per S.Y.
gal . per S.Y.
x APCI ng course, 1-1/2 thick
' •• ck
o..-s'. 1 thick
. -h ck
. - -k
4 tn jk
• -h ::oui-se, 3 4" thick
' -h.ck
~*r j-.e' . ,''->7'ng onasphai', screened and rolled
:->!,. . .0 f. ancj binder
BITUMINOUS CONCF ETE At the plant (150 Ib. per C.F.)
' " v, i <.•*•• - ,.••_-• g mi x
0 . ,-.! , ,. . -ck
Bx. V PA ''MC, -
pa. e and re-lay brick pavement on sand
P.* i.-!,£ . .- e- osed -op and sides w th cnain link
• • r.\ .., 54 ,pan. Incl. ramps & foundations, 10' wide
."•pasj. : • thumb complete in place, 40' span
ij'./ s
!5l)
'' -o",
•••":•• ' . dges, complete in place, 60 span
r. .K.
•"h spans, complete in place, 100' span
P
.'OC -n.j,-
CAL'llJy CHLORIDE delivered 100 Ib. bags, carload lots
••,,'^k '-aa "is
^oli.1 or 4 Ib. flake per gallon, tank truck delivery
CONCRETE PAVING w;th mesh, not incl. base, joints
'." ••• k
8"
1 { ; '
F.r.' Shing, •
7. eiT .j
B-26
.
170
160
140
140
455
650
455
415
380
325
955
760
955
915
760
655
1040
955
18
755
700
675
595
545
490
re -,:r, ?;nish, add to above 2 Cement 135
ragged, add to above ("inisher 285
S.F.
1
S.Y.
i
S.Y.
Gal.
Gal.
S.Y.
S.Y.
Ton
Ton
S.Y.
S.Y.
Total
"
S.F.
deck
Ton
Gal.
S.Y.
'
.70
1.10
.75
.90
.40
.75
1.10
1.50
.20
.30
.30
.60
.90
1.20
.80
1.70
.60
1.20
1.70
2.20
.75
1
.15
.20
8.50
9.50
100
5
60
75
.30
3.40
4.20
4.80
6.30
7.60
9
1.10
1.15
1.30
.50
.35
.50
.55
.60
.70
.15
.15
.10
1
1.20
1.40
1.20
1.50
1.20
1.25
1.50
1.75
1.10
1.20
' .20
.30
35
1.75
10
l.GO
1.40
1.45
1.65
1.80
2
1.50
.70
1.80
2.25
2.05
2.20
.30
.50
.35
.90
1.30
1.70
2.20
.35
.45
.40
1.60
2.10
2.60
2
3.20
1.80
2.45
3.20
3.95
1.85
2.20
.35
.50
135
6.75
10
9,800
13,000
8.50
9
7
8.25
9
12
10
10.50
11.25
12
4.70
5.60
6.25
7.95
9.40
11
1.50
.70
-------
F-12
EXHIBIT F-8 (Cont'd)
ROADS & WALKS Incl. Subs 0 & P cont'd.
CONCRETE PAVING cont'd. Curing, odd to previous page
Expansion |oints, see p. 60
Reinforcing steel mats, «6@8" O.C.
#9@8" O.C.
Coloring concrete, black, brown, add
Red, green, blue, add
CURBS Asphalt, plain, berm
With asbestos fibers
Concrete, 6" x 18'', cast in place
Precast
With 18" gutter, plain, precast
Wi th reinforcing
For curves, add
Granite, split face, straight, 5" x 16"
6" x 18" (see also p. 76)
Radius curbing, 6" x 18", over 10' radius
Corners, 2' radius
Edging, 4-1/2" x 12", straight
Curb inlets (guttermouth)
FILL Borrow. Load, 1 tiile haul, compact and shape
for embankments
As above but select fill for shoulders
For hau ling over 1 mile, add to aboveperC.Y.per
FINE GRADE area to be paved, small area
•Large area
GUARD RAIL Corrugated steel, galv. steel posts, 12'-6" O.C.
Concrete posts
For galvani zed end sections, add
Timber guard rail, 4" x 8' with wood posts, treated
Cable guard rail, 3 @ 3/4" cables, steel posts
Wood posts
Guide rail, steel box beam, 6" x 6"
Median barrier, steel box beam, 6" x 8"
Impact barrier, barrel type
Resilient guard fence & light shield, 6' high
PAINTING lines on pavement, ref lectori zed white, 4" wide
8" wide
12" wide
Ref lectori zed white, hot thermoplastic, 4" w.de
8" wide
12" wide
Parking stall, paint, white
Street letters, arrows and numbers, paint, white
Figures with hot thermoplastic, .090" thick, white
Lane tape, pressure sensitive, 4'' wide, white
Colored painting, yellow
Add to above for other colors
PARKING barriers, timber with saddles, treated type
4" x 4" for cars
6 x 6" for truck s
Folding with individual padlocks
Flexible fixed stanchion, 2' high, 3" diameter
Parking lot control, see p. 164
Precast concrete, 12" x 6' , with dowels
Traffic cones and barricades, see p. 4
CREW
B-?7
B-21
B-28
1
1
B-29
1
B-2
,
B2
^
l
DAILY
OUTPU'
245
21:
95
140
MO
140
285
285
225
39
394
39
130
156
78
435
355
390
140
135
195
130
520
520
50
100
520
r UNIT
-
C.Y.
L.F
- -t
C Y
C.Y.
Mile
S.Y.
L.F.
Ea.
L.F.
> L.F.
••
Ea.
L.F.
L.F.
•
Stall
Ea.
L.F.
L.F. or
Ea.
L.F.
L.F.
Ea.
Ea.
L.F.
MAT
.IB
05
I/'.1:
-/.c
-,.;,
':. ;C
"i/.J _j
40
3.90
2.30
18 1
2.8C
3
2.50
5.50
7
5
10.25
12%
1.25
2
35
8
1.60
INST. TOT/:
.09 j .27
3.2'." ;
j
1 ^rr -ex"
65- | i.7£
;.75 ! 5 5C
2 ; 4.6C i
2 i 5
2 • 5.6 <
. , 6.25 :
•'-^ 6.75 ;
3.50 : 8.30
;0 37
z • . • i .72 >,
i: ! 60 I
i
" "~" f ' '~
1-75
"I 3.75^
,20 I
- r .40
.25
3 i 6,90 i
2.50 4.80 1
5 23
X> 3.70
1.10 4. 1C !
3.5' .
t.9C
? );- i
| .05 1
1 ^ ~
If
j i.'fc
1.65
j 2.25-
! 1 9C
'.55
.75 2
.75 2.75
8 43
4 12
.75 2.35
-------
P-13
EXHIBIT P-8 (Cont'd)
ROADS & WALKS Incl. Subs 0 & P cont'd.
DAILY
CREW OUTPUT UNIT MAT. JHST.
SEALCOATING 2 coat tar pitch emulsion, over 10,000 S.Y.
Under 1000 S.Y.
Petroleum resistant, over 10,000 S.Y.
Under 1000 S.Y.
Non-skid pavement renewal, over 10,000 S.Y.
Under 1000 S.Y.
Prepare and clean surface for above
Hand seal bituminous curbing
SIDEWALKS Bituminous, no base included, 1-1/2 ' thick
2" thick
Brick on sane bed laid flat, 4.5 per S.F.
Laid on edge, 7,2 per S.F.
For concrete bed and joints, add
Concrete, cast in place with mesh, no base, 4" thick
5" thick
6" thick
Exposed aggregate finish, add to above
~~ -v» Precast concrete, patio blocks, 2" thick, natural
Colors
Exposed local aggregate, natural
Colors
Exposed granite or limestone aggregate
Exposed white tumblestone aggregate
Crushed stone, 3" thick, white marble
Bluestone
Flagging, bluestone, 1" thick, irregular
Snapped rectangular
Snapped random rectangular, 1-1/2" thick
2" thick
Slate, natural cleft, irregular, 3/4" thick
Random rectangular, 1/2" thick
Random rectangular, gauged 1/4" thick
For sand rubbed finish, add
For interior setting, add
Granite blocks, 3-1/2" x 3-1/2" x 3-1/2"
4" to 12'' long, 3" to 5" wide, 3" to 5" thick
6" to 15" long, 3" to 6" wide, 3" to 5" thick
Sugar cane, on sand, 2" thick
Wood chips, average 2-1/2" thick
Redwood, prefabricated, 4' x 4' sections
Redwood planks, 2" thick, on sleepers
SIGNS, stock. Stop signs, 24" x24", no posts, steel, plain
Reflecti /e
36" x 36", plain
Reflective
Miscellaneous directional signs, 12" x 18", plain
Reflc-tive
18" x 24", stock signs, plain
Reflective
24" x30", stock signs, plain
Reflective
Add to above for steel posts, galvanized, 7'-6" long
12'-0" long
Highway instructional road signs, over 20 S.F.,
including poles & foundations
Plain
Reflective
Suspended over road, 80 S.F. minimum pla>r
Re ective
B-
.
1
D-l
B-24
1
D-
1
2 Labor
D-
'
1
D-l
2 Labor
F-2
2 Labor
2Labo
1
1
240d
nod
2400
1100
2200
1100
84
.52
700
680
665
265
265
265
265
265
265
857
857
82
92
84
84
92
106
116
92
97
106
770
1400
316
246
25
25
25
25
25
75
50
125
125
60
60
S.Y.
,
S.Y.
L.F.
S.F.
Ea.
S.F.
.11
.12
.14
.15
.17
.18
.45
.70
.35
.45
.50
.25
.30
.35
.42
.50
.60
.12
.09
1.50
1.90
1.50
2
.60
1.25
1.40
.60
1.50
1.10
.80
.20
.11
1.20
1.35
9
11
18
30
5
11
9
18
18
33
5
9
1.75
2.30
3. CO
3.50
.10
.21
.10
' .21
.11
.22
2.20
3.50
.40
.41
.42
.70
.70
.70
.18
2.25
'2
2.20
2
1.75
1.60
25%
2
1.90
1.75
.20
.11
.70
.90
6
6
6
6
6
2
3
1.25
2.50
.21
.33
.24
.36
.28
.40
.05
.15
.35
.45
2.65
4.20
.58
.75
.86
.92
.30 to
1.25
.95
1
1.05
1.12
1.20
1.30
.30
.27-
3.75
3.90
3.70
4.20
2.60
3
3
3.50
3
2.55
.40
.22
1.90
2.25
15
17
24
36
11
17
15
24
24
39
7
12
3
3.55
5.50
6
-------
F-14
EXHIBIT F-8 (Cont'd)
ROADS & WALKS Incl. Subs 0 & P cont'd.
DAILY
CREW OUTPUT UNIT MAT.
INST. TOTAL
STEPS Including excavation and concrete base,
12" wide with bricks
D-l
23
L.F.
3.50
11.50
Railroad Ties
Blue stone treads, 12" x2" or 12" xl -1/2"
2 Carp.
D-l
70
65
2
2.75
3
2.85
5
5.60
Concrete, cast in place, see p. 59
Precast concrete, see p. 64
TERRACES compared to sidewalks above, deduct
S.F.
10%
TRAFFIC SIGNALS Mid block pedestrian crosswalk,
with push button and most arms
Total
6,000
Intersection, 8 signals (2 each direction), programmed
8,000
Semi actuated, detectors in side street only, add
Fully actuated, detectors in all streets, add
6,000
10,000
For pedestrian push button, add
School flashing system, programmed
Signal
2,000
3,000
GENERAL Prices given in this book are of two kinds: (1) BARE COSTS to which an allowance for
Contractor overhead and profit must be added and (2) COSTS INCL. SUBS 0 & P, to which an allow-
ance covering only the General Contractors mark-up must be applied. Items that are nearly always
sub-contracted are priced to include the Subs overhead and profit. The general contractor includes
this price in his bid with a normal mark-up ranging from 0 to 10%. The mark-up depends on eco-
nomic conditions plus the supervision and trouble shooting expected by the General Contractor. For
purposes of this book it is best to add an allowance of 10% to all items that already include the Subs
0 & P. For items that do not include Subs 0 & P, experience shows that an addition of 25% .for
General Contractors 0 & P gives best results.
OVERHEAD AND PROFIT Breakdowns on pages 217 to 222 give details on overhead and indicate
that it will run 18% to 20% for General Contractors. For on engineering estimate a profit margin of
5% to 7% seems reasonable, so an allowance of 25% should be added to all bare (costs that do not
include Subs 0 & P) costs in the book. A general contractor should be able to tell from his records
very closely what his own overhead will be. He will then add whatever profit and contingency per-
centage circumstances dictate. Subcontractors overhead and profit allowances are detailed on p.
218. These are general figures and local deviations are certainly to be expected.
SUBCONTRACTORS Usually a considerable portion of all big jobs is subcontracted. In fact the
percentage done by Subs is constantly increasing and may run over 90%. Since the workmen employed
by these companies do nothing else but install their particular product they soon become experts in
that line. The result is, installation by these firms is accomplished so efficiently that the total
in-place cost, even with the subcontractor's overhead and profit, is no more and often less than if the
principal contractor had handled the installation himself. There is, moreover, the big advantage of
having the work done right. Companies who sell the specialties are anxious that their product perform
well and consequently the installation will be the best possible.
CONTINGENCIES: The allowance, for contingencies generally is to provide for unforeseen
construction difficulties. On alterations or repair jobs 20% is none too much. If drawings are final
and only field contingencies are being considered 2% or 3% is probably sufficient and often nothing
need be added. As far as the contract is concerned future changes in plans will be covered by extras.
The contractor should consider inflationary price trends and possible material shortages during the
course of the job. If drawings are not complete or approved or a budget cost is wanted it is wise to
add 5% to 10%. Contingencies then are a matter of judgment.
-------
F-15
EXHIBIT F-8 (Cont'd)
EQUIPMENT The power equipment required for each crew is included in the particular crew cost.
The daily equipment costs are usually the sum of the weekly rental rate divided by 5 plus the hourly
operating cost times 8. (See p. 222 for further discussion and p. 223 for an example of how the daily
costs are figured.) For daily costs incl. Subs 0 & P, 10% is added to the base costs to allow for the
contractors mark-up on the equipment costs.
DAILY OUTPUT To the right of the crew column is the Daily Output column. This is the number of
units that agiven crew will install in an 8 hour day. In other words, the total daily crew cost divided
by the Daily Output will produce the unit installation costs. To calculate the unit equipment cost,
divide the daily equipment costs by the Daily Output.
UNIT To the right of the Daily Output column is the Unit column which describes the unit upon
which the price, production and crew are based, as S.F. (square foot), etc. See p. 279 for a list of
abbreviations.
MAT In the next column headed MAT is the unit material cost for the item.
INST. This column is the installation cost which includes labor and equipment. As mentioned above
this cost is arrived at by dividing the daily crew or labor cost by the Daily Output.
TOTAL In the last column is the total cost which is the arithmetical sum of the two previous columns.
SPECIAL On a few pages the column headings are EQUIP, and LABOR. The EQUIP, column in-
cludes equipment, rental and operating cost while the LABOR column represents the labor to operate
the equipment.
-------
F-16
EXHIBIT F-8 (Cont'd)
Crew B-1
1 Foreman
2 Building Labor
Hr.
$7.65
7.15
Daily
$ 61 .20
114.40
24 M.H., Daily Total $175.60
Hr.
$10.35
9.65
Daily
$ 82.80
154.40
$ 237.20
Crew B-2
1 Foreman
4 Building Labor
Hr.
$7.65
7.15
Daily
$ 61.20
228.80
40 M.H., Daily Total $290.00
Hr.
$10.35
9.65
Daily
$ 82.80
308.80
$ 391.60
Crew B-10
1 Equip. Oper. (med.)
.5 Building Labor
Equipment as specified
Hr.
$9.75
7.15
Daily
$ 78.00
28.60
12 M.H., Daily Total (labor only) ,$ 106.60
Hr.
$13.45
9.65
Daily
$ 107.60
38.60
$ 146.20
Crew B-24
1 Cement Finisher
1 Building labor
1 Carpenter
Hr.
$ 9.45
7.15
9.60
Daily
$ 75.60
57.20
76.80
24 M.H., Daily Total $209.60
Hr.
$12.55
9.65
12.85
Daily
$ 100.40
77.20
102.80
$ 280.40
Crew B-25
1 Foreman
7 Bui Iding labor
2 Equip. Oper. (med.)
1 Paving machine
1 - 8 ton Roller
Hr.
$ 7.65
7.15
9.75
Daily
$ 61.20
400.40
156.00
230.60
, 48.80
80 M.H., Daily Total $897.00
Hr.
$10.35
9.65
13.45
Daily
$ 82.80
540.40
215.20
253.60
53.70
$1145.70
Crew B-26
1 Foreman
6 Building labor
1 Equip. Oper. (med.)
Paving machine & trucks
Hr.
$ 7.65
7.15
9.75
Daily
$ 61.20
343.20
78.00
300.00
88 M.H., Doily Total $782.40
Hr.
$10.35
9.65
13.45
Daily
$ 82.80
463.20
107.60
330.00
$ 983.60
Crew B-27
1 Foreman
3 Building labor
1 Berm machine
Hr.
$ 7.65
7.15
Daily
$ 61 .20
171.60
35.60
32 M.H., Daily Total $268.40
Hr.
$10.35
'9.65
Daily
$ 82.80
231.60
39.10
$ 353.50
Crew B-28
2 Carpenters
1 Building labor
Hr.
$ 9.60
7.15
Daily
$153.60
57.20
24 M.H., Daily Total $210.80
Hr.
$12.85
9.65
Daily
$ 205.60
77.20
S 282.80
Crew B-29
Crew B-2 from above
1 Operator
1 Oiler
1 Gradall, 3 ton
Hr.
$ 9.75
8.85
Daily
$290.00
78.00
70.80
175.20
56 M.H., Daily Total $614.00
Hr.
$13.45
12.20
Daily
$ 391 .60
$ 107.60
97.60
192.70
$ 789.50
-------
F-17
EXHIBIT F-8 (Cont'd)
Crew D-l
1 Brick Layer
1 Brick Layer helper
Hr.
$10.10
7.30
Daily
$ 80.80
58.40
16 M.H., Daily Total $139.20
Hr.
$13.45
9.75
Daily
$107.60
78.00
$185.60
Crew F-2
2 Carpenters
Power Tools
Hr.
$ 9.60
Daily^
$ 153.60
14.40
16 M.H., Daily Total $ 168.00
Hr.
$12.85
Daily
$ 205.60
15.85
$ 221.45
Source; Robert S. Godfrey, Ed., Building Construction on Cost Data 1974,
Robert S. Means Company, Duxbury, Massachusetts, 1974.
-------
F-18
C. Mass Transit Design Change Costs
Mass transit design change costs, like roadway design change costs,
can vary widely. Exhibit F-9 shows the costs of rail transit systems in relation
to the year of construction. The high points in the exhibit reflect systems requir-
ing new right-of-way acquisition and construction and, particularly in the case of
New York City, having unusual construction difficulties as well as four tracks on
part of the route. Two of the five lowest points represent extensions within free-
way medians (Eisenhower and Dan Ryan in Chicago); three indicate upgradings of
•»•
existing rail lines. The differences evident in the exhibit are typical of the varia-
tion possible in all types of transit systems.
Transit vehicle costs have increased sharply in recent years. Ex-
hibit F-10 shows that there has been a 6.43 percent average annual increase in
rail car costs from 1950 to 1972. Since this increase is partially attributable
to increased car quality, future rates of increase may be somewhat-lower due to
slower increases in car quality and the enlargement and stabilization of the rail
transit car market. However, these factors could be.offset by recent large in-
creases in material costs (e.g., steel and aluminum).
Bus costs increased 20 to 24 percent from 1971 to 1973. At present
bus manufacturing is near capacity with an 18-month backlog on orders. Delivery
2
time on new orders is approximately 29 months from the time bids are solicited. .
Shortages are apparent in the supply of parts and accessories, particularly en-
gines, transmissions, sheet metal, wheels, windows, and window fasteners.
Nevertheless, there is some sign that the situation will ease as General Motors
Corporation is expected to increase its production by more than 40 percent (from
30 to 50 units per week).
Dave Sylvia, Cleveland Transit System, May 1974.
2
National Journal Reports. Vol. VI, No. 4 (26 January 1974), p. 121.
-------
F-19
Exhibit F-ll presents an overview of mass transit capital investment
costs. However, these costs tell only part of the story as annual operating costs
can also have a significant impact on the actual cost of a system. Exhibits F-12
through F-15 itemize the operating costs for rail rapid transit, buses, minibus
and bus-wagon, and taxis for dial-a-ride systems. Exhibit F-16 shows typical bus
chartering costs. Exhibit F-17 indicates the operating costs for personal transit
and guideway systems.
-------
F-20
EXHIBIT F-9
RAIL TRANSIT SYSIEM_COSTS VS. MID-YEAR OF CONSTRUCTION
_o
~0
CM
tx
c
o
ID
o
eg
O
u
I/U
100
90
80
70
60
50
40
30
20
10
9
8
7
6
5
4
3
• EXT
EXI
@> CO
To
Y'
LEGEND
ENSIONS OR UPGRAD
STING RAIL LINES
MPLETELY NEW SYSTEA
ronto:
\r,no
. -1-*—
• Chicago:
Milwaukee,
Dearborn,
' Congress
Cleveland:
Initial System 1
'
>
Toronto:
Universit
1
Toront
Bloor-
Extens
Chicago:
Eisenhower
•
'
ED
As
'oronto:
fonge Exten
Toronto:
Bloor- 1
Danforth
•
r*
j
Montreal®
'
o:
Danforth —
ion
<
N
63
2w York:
rd Street*
•, ^
New York: )'
2r
sion v
- —
an Francisco
Me
~~* ®
• B
S
•
"hirnan:
Kenn*»rlv
Lindens
void*
Chicago:
Dan Rynn —
Cleveland:*
Airp
ort
id Avenue Tj
Boston:
/Hay marl
\4 TVas
x_s_
\
xico City
i
Dston:
3uth Shore
i
t
cet - North
Kington
Atlanta
— &
Baltimore
®
• Montreal:
Extension
1945
1950
1975
980
1955 1960 1965 1970
MID-YEAR OF CONSTRUCTION
Source; J. Hayden Boyd, Norman J. Ascher, and Elliot S. Wotzler, Insti-
tute of Defense Analysis, Program Analysis Division, Evaluation
of Rail Rapid Transit and Express Bus Service in the Urban Com-
muter Market, prepared for the U.S. Department of Transportation,
October 1973, p. 37.
-------
EXHIBIT F-10
RAIL TRANSIT CAR PRICES VS. YEAR OF ORDER
500
400
= 300
_p
-S200
c
o
m
O
- 150
0£
LU
Q.
100
90
80
70
60
1945
z
fO
1950
1955
1960 1965
YEAR OF ORDER
1970
1975
1980
Source: Boyd, Ascher, and Wetzler, p. 36.
-------
F-22
EXHIBIT F-ll
MASS TRANSIT CAPITAL INVESTMENT COSTS
Rapid Rail (1974 $)
Elevated system:
At-grade system:
Subway system:
Subway car:
Subway station:
Buses (1974 $)
Conventional 40-seat bus:
Conventional school bus
converted for transit use:
Luxury, express, 57-seat bus:
Minibus:
Taxicab for dial-a-ride:
Busway
Low-cost implementation
using cones as dividers
Project requiring new land and
construction—composite cost
for both elevated and at-grade:
$15 million per dual-lane mile
$8 million per dual-lane mile
$30 million per dual-lane mile
$300,000 per vehicle
$1 million to $4 million
$50,000 to $52,0002
$10,0003
$50,000 to $70,0004
$16,800 to $30,0005
$3,000 (1972 $)6
$30,000 (1973 $)'
$4 million per dual-route mile (1974 $)
N. John Beck, Vice President, Transportation Systems, Rohr Industries, Inc.,
testimony before the Subcommittee on Transportation Appropriations, Committee
on Appropriation, U. S. House of Representatives, 5 March 1974.
Telephone interview with Dave Sylvia, Cleveland Transit System, May 1974.
3"Blue Bird Brand" Catalogue, 16 April 1974.
Dave Sylvia, May 1974.
JIbid.
r*
Boyd, Ascher, and Wetzler, op. cit., p. 27.
The City of New York, Department of Transportation.
-------
F-23
EXHIBIT F-ll (Cont'd)
Personal Rapid Transit
Elevated guideway:
Vehicle for subway/aerial
dual-mode guideway:
People Mover Systems
Four recent airport people
mover systems:
9
Costs broken down for
one system (1968 $): 1]-
• Excavating and lining
underground passage:
• Equipment, including 24
escalators and 2. 3 miles
of low-speed pedestrian
belts:
Horizontallators (1970 $): 12
• Stations:
• Excavation of tunnels:
• Guideway rails in place:
$6 million per dual-lane mile (1974 $)
q
$5,000 per vehicle (1968 $)
8
$2. 5 million to $32 million (in con-
struction year)
$5.4 million per mile
$15. 6 million
$190,000 to $380,000
$8 million per mile
$100,000
8
10
11
12
N. John Beck, op. cit., p. 15.
D. M. B. Baumann and D. G. Wilson, eds., Urban Engineering and Transportation,
American Society of Mechanical Engineers, New York, December 1968, p. 52.
Hal Pucken and James C. Williamson, "Houston Airport's Low Cost People-
Mover," Transportation Engineering Journal, February 1974, p. 262.
Baumann and Wilson, op. cit., pp. 50-51.
Urban Design and Development Corporation, A Study of Internal Circulation
Systems for the Post Oak Urban Center, Houston, Texas, 1 Mar. 1970.
-------
F-24
EXHIBIT F-ll (Cont'd)
• Elevated guideway —
open:
enclosed:
• Power system source
and distribution:
• Control system:
• Vehicles:
$1.4 million per mile
$1.7 million per mile
$170,000 per mile
$130,000 plus $68,000 per mile
$770 to $1,50&
-------
EXHIBIT F-12
RAIL RAPID TRANSIT OPERATING COSTS*1, BY CATEGORY
(Average Values, U.S. Properties Only)
Category
Number
4
5
6
7
8
9 .
10
11
12
14
15-13
Category Name
Way and Structures
Equipment
Power-Maintenance
Power (Purchased-Generated)
Conducting Transportation
Wages of Trainmen
General Miscellaneous
Injuries and Damages
Traffic
Operating Taxes
TOTAL OPERATING EXPENSES
Costs per Passenger Car-Mile
Current Dollars
1960
.128
.074
.012
.086
.420
.143
.151
.035
.001
.073
.92b
1970
.228
.154
.022
.110
.772
.238
.370
.092
.003
.082
1.57b
Annual
Growth
Rate (SO
3.12
4.74
3.20
-0.28
3.42
2.42
6.45
7.17
11.61
-1.55
2.66
Constant 1972 Dollars
1972
.261
.182
.025
.118
.890
.269
.452
.114
.004
.086
1.78b .
1980
.334
.264
.032
.115
1.164
.326
.745
.198
.010
.076
2.20b
1990
.454
.419
.045
.112
1.630
.414
1.392
. .396
.029
.065
2.86b
a. Excludes depreciation and amortization chargeable to operations.
b. Elements do not add to total because all properties did not report every item and because of
change in relative weights over time.
Ol
Source: Boyd, Ascher, and Wetzler, p. 34
-------
EXHIBIT F-13
BUS OPERATING COSTS3, BY CATEGORY
Cutcj . r>
4
7
3
-•-12
13
14
15
17
20
•. i
A . Ex - I'-
ii. Ti.n.s
C. Ll'.T'.
Category Name
equipment, Maintenance,
and Gdracjo
Transportation
Drivers', Helpers'
Wages, etc.
fut:l and Oil
S La i ion
Ti-afiic, »V!v-,rc is iti.j, vtc.
Ii:sura>:<:o uiiJ ^afi.-uy
Adr.inistrativft ,i:id General
Operating Taxts and Licenses
T..TAL OFE^ATINO COST
Jcs •^-•%p:".ciat inn a;;.- j-:,ortization chdrg
:its cio ii.- ao.: to -.r-..\i bi.-t.-u use of Chan
Cosir, p«-r Vehicl-? Kilo
Current Dollars
1900
.102
.269
.216
.027
.001
.004
.023
.055
.047
.004
.504
1970
.140
.41)4
.335
.028
.001
. 005
.033
.008
.054
.007
.732
Growth
R.UC (&)
.40
1.37
1.09
-2.32
-2.07
-.18
.91
2.01
-1.31
2. ''3
1.03
Constant 1W Dollars
U72
..52
.4.17
.373
.029
.001
.005
.0.56
. O'JO
.057
.iV)d
.805
1930
.1W
.4'J9
.427
.024
.001
.005
.03S
.116.
.US!
.010
.,«•
10-30
.105
.i71
.W
•™
.cci
.o:-5
.C-ii
.r .MI.
.045
..13
..,,-
eable to operations. ;
ion to tho two listed h-it-c. ''
je in rolativi:- wei-jlirs 'jvor tiinu.
- •:•- : .'A. :•!;:. r - :- .'J :-.•; : :-.^p, i ?. :cs tor I960 aiid 1370 from IDA Cc'-puet-rizttl Data bonk :r. Url-jn Tr<.rs; JMJC i-n. j
OS
mrce; Boyd, Ascher, and Wetzler, p. 25.
-------
F-27
EXHIBIT F-14
MINIBUS AND BUS-WAGON OPERATING COSTS
Costs
19-PASSENGER MINIBUS
Operating Costs
Vehicle
Road O&M
8-Passenger BUS- WAGON
Operating Costs
Vehicle
Road O&M
Annual
Growth Rate
'(%)
1.2
1.73
1.5
1.73
Cost per Vehicle -Mile
1972
.639
.635
.004
.304
.303
.001
1980
.699
.694
.005
.341
.340
.001
1990
' .780
.774
.006
.396
.395
.001
Source; Boyd, Ascher, and Wetzler, p. 33
-------
F-28
EXHIBIT F-15
TAXI OPERATING COSTS
Category i,'a:r.e
Driver Cost
Vehicle Operation
Tires
Gasoline
Maintenance
Labor
Parts
Public Liability-
Ins urar.ce
Other (General and
Assumed
Growth
Rate
1.69
None
.46
.91
Adrr.in j strative, j
Garage)
_ r
i^i«j
2.01
Dollars per Vehicle Mile
1970
(Current
Dollars)
.156
.025
.003
.022
.020
.011
.009
.016
.049
.266
Constant 1372 Dollars
1972 .
.174
.027
.022
.018
.055
.296
1380
.199
.027
.023
.019
1990
.235
.027
.024
.021
"••*•' j • w w •
.323 j .337
i
•
Source: Wc-iis, Jchn D. , et al, Economic Charac
Urban Public Transportation Industry, l.-.stiru-.u ior
Defense Analyses ror U.S. Department of Transportation,
February 1972.
Source: Boyd, Ascher, and Wetzler, p. 26.
-------
F-29
EXHIBIT F-16
BUS. CHARTERING COSTS
Costs obtained for 12-hour service on 24 trips in a four-
mile vicinity. Costs include bus, driver, mileage,
insurance, and maintenance.
45-passenger bus $ 154
24-passenger bus $ 168
9-passenger minibus $ 96
Source; Harbridge House, Inc., survey of major bus
lines in Cleveland, Oakland, Pittsburgh, and
Boston.
-------
F-30
EXHIBIT F-17
PERSONAL TRANSIT AND GUIDEWAY
SYSTEM OPERATING COSTS
Above-ground personal
transit system:
Subway/aerial personal
transit guideway:
Subway/aerial dual-
mode guideway:
$173,000 per mile
and $194 per vehicle
$264,000 per mile
and $377 per vehicle
$228,000 per mile
and $377 per vehicle
Source; Baumann and Wilson, op. cit., p. 52.
-------
|