Transportation Transformation: Event Recap & Support for MBTA Reforms

On Thursday, April 9, NAIOP hosted the Transportation Transformation Conference, which featured federal and state transportation officials as well as national experts who discussed the role of transportation in a growing Massachusetts economy; new technology and other innovative solutions to transportation challenges; and what the future holds for the nation and Massachusetts.

The event was held the day after Governor Baker’s Special Panel to Review the MBTA released its detailed report on a plan of action to reform and improve the MBTA. MassDOT Secretary Stephanie Pollack discussed the report’s findings at the event. NAIOP supports the recommendations outlined in the report and looks forward to working with the Baker Administration, Legislature and the business community to create a reliable and safe public transit system.

The following is a guest blog and event recap by Fred Wagner, Principal at Beveridge & Diamond, former Chief Counsel of the Federal Highway Administration (FHWA), and moderator at the Transportation Transformation Conference. The post originally appeared on Enviro Structure.

TRANSPORTATION TRANSFORMATION RECAPThe NAIOP Massachusetts Transportation Transformation conference held on April 9 was one of those rare trade association meetings where you didn’t want the sessions to end.  Ideas flowed from the podium and from the audience faster than the New England melting snow flowed into the Charles River.

Perhaps unwittingly, transportation thought leaders from local, state and federal agencies echoed the philosophy of legendary architect Daniel Burnham (D.C.’s Union Station, NYC’s Flatiron Building):  “Make no little plans; they have no magic to stir men’s blood and probably themselves will not be realized.  Make big plans, aim high in hope and work, remembering that a noble, logical diagram once recorded will not die, but long after we are gone be a living thing, asserting itself with ever-growing insistence.”

Over 300 attendees heard Vinn White, Senior Policy Advisor to the U.S. Department of Transportation Secretary Anthony Foxx, describe the draft “Beyond Traffic” report  and how the challenges of demographic and technological trends will shape our transportation network looking 30 years into the future.  After showing this well-viewed YouTube video showing traffic flow in Ethiopia’s Meskel Square, he asked what these images of chaos had in common with what you’d see in Davis Square in Somerville, Massachusetts.  The answer?  People.  People living their lives, trying get to work, bringing kids to school, or visiting friends and family.  In short, Mr. White suggested, even if our major intersections thankfully don’t resemble the bedlam from Meskel Square, we may have more in common than we think.

Newly confirmed MassDOT Secretary Stephanie Pollack described how in her view, there was no such thing as a transportation plan that existed in isolation.  Rather, she wanted to know from communities what they thought their biggest challenges were, and then look to transportation infrastructure to help solve those challenges.  “Don’t just pull projects off the shelf that have been there for 30 years,” she has instructed her new staff.  “There’s probably a reason they’ve been up on that shelf for so long.”

Secretary Pollock’s views were supported by Jay Ash, the new Secretary of Housing and Economic Development in Massachusetts Governor Baker’s Administration.  He commented to the receptive audience how unusual it must be for them to hear a Transportation Secretary and an economic development executive being so much on the same page.  Secretary Ash reiterated how he had, over the course of his career in public service and in his new role, visited communities all over the Commonwealth with visionary plans.  All of them demanded to some extent an improved transportation network to convey people to new centers of commerce, education, or recreation.

Finally, Gabe Klein, the former head of Washington, D.C.’s and Chicago’s Departments of Transportation, and Harriet Tregoning, the Director of the U.S. Housing and Urban Development Office of Economic Resilience, both provided a glimpse into the future of urban/suburban transportation.  Pedestrians, bicyclists, streetcars, and yes, even automobiles, living in harmony, operating on re-engineered streets that provide safe and reliable means of mobility.

“Change is coming faster than we believe,” Mr. Klein predicted.  Autonomous vehicles could be a reality in less than 5 years, given the current pace of technological advances and investment by huge companies like Google and Amazon.  Parking downtown could be a thing of the past, as people share solar-powered, self-driving cars, moving seamlessly between work and errands, never really needing a place to leave an empty, under-utilized vehicle.  Imagine planning a new mixed-used development without the burden of complying with a parking ratio?  Not quite worthy of a John Lennon lyric, perhaps, but even so…

Gatherings like this serve as a reminder why all of us in the development sector love our work.  We get to “make big plans” and, with any luck, see them come to life.

View event photos

Farewell to Real Estate Icon Norman Leventhal

NBLNorman B. Leventhal passed away April 5, 2015 and his loss is being felt not only by those who knew him, worked with him, and admired him, but by so many of the residents and workers in the state, who benefited by his vision and skills as a master builder.

He created landmarks throughout the City of Boston and in many of its surrounding communities. Each stands out as a thoughtful creation, built to endure throughout the ages.

The list of his projects would populate any list of Boston’s great buildings: Rowes Wharf, Center Plaza, 75 State Street, One Post Office Square, Meridien Hotel, South Station, and the Post Office Square park/garage.

Norman was passionate about his work, his family, and his city. His philanthropic interests were far and wide. He never stopped caring.

Our condolences go out to his wife and family.

Beyond Traffic: Imagining a Brighter Infrastructure Future

The following is a guest blog by Fred Wagner, Principal at Beveridge & Diamond, former Chief Counsel of the Federal Highway Administration (FHWA), and moderator at the upcoming NAIOP Transportation Transformation Conference in Boston on April 9.The post originally appeared on Enviro Structure. The Beyond Traffic report will be one of many topics discussed at the upcoming event. We hope to see you there!

U.S. Department of Transportation Secretary Anthony Foxx has a favorite saying that he attributes to one of his public school teachers:  “Having no plan is a plan.”  Well, now the USDOT has a plan, or, as it calls it, a “framework,” to create the foundation for transportation infrastructure improvement for the next 30 years.  It’s called “Beyond Traffic,” a remarkably comprehensive analysis of existing data, expected trends, and policy suggestions for the entire spectrum of future transportation choices.

On April 9, NAIOP Massachusetts, The Commercial Real Estate Development Association, will host a forward-thinking conference  -“Transportation Transformation” – examining the role of transportation in a growing Massachusetts economy and its impact on real estate development.  A representative of the USDOT’s Office of Policy will kick off the NAIOP event by describing the Beyond Traffic framework and offering ideas on how the concepts reflected in Beyond Traffic could be applied to regional and local transportation planning efforts. Beveridge & Diamond is proud to sponsor this important event.

While it’s difficult to summarize a 300+ page document in one blog post, I’ll give it a go.  The over-arching theme could be this:  “Let’s make infrastructure investment decisions based on the reality of what is and what is likely to be, rather than simply based on short-term fixes to maddening congestion challenges.”

What are some of those realities?

  • We face an aging transportation system that desperately needs attention.
  • More and more Americans will be settling in “mega-regions” around the country, potentially exacerbating congestion in our already most populated cities.
  • Younger people will likely continue to drive less, and look to alternative means of mobility.
  • At the same time, the proportion of older Americans will continue to grow, placing greater demands on travel for work and leisure in that segment of our population.
  • Innovation will alter the way we think about commuting, from ride-sharing options, to increased telecommuting, to autonomous vehicles.
  • Our changing climate will demand that we stress adaptation for some of our most crucial transportation infrastructure.

Some of the data revealed in Beyond Traffic is no doubt sobering.  The U.S. population is expected to increase by 70 million by 2045.  Transportation costs will continue to be the second largest expense for U.S. households (besides shelter) and, at the same time, will likely remain the second highest source of GHG emissions.  We face a huge investment gap at the same time a political solution to long-term funding at the federal level remains a daunting challenge.

Yet, for every significant challenge, great opportunities exist.  Technological advances have resulted in a doubling of vehicle fuel efficiency standards.  Americans have much greater flexibility in how and where they work.  GPS technology tells us where we need to go, but can also be used to help us find parking spaces downtown or in garages more efficiently.  Autonomous vehicles can potentially allow even more vehicles to use our highways and streets, but do so more safely and efficiently.  (Never mind getting additional work done while your car drives you to your destination.)  Freight shipments will also become more efficient as automation connects ports to rails to trucks.

Beyond Traffic challenges all of us to confront how future policy choices could either complement or conflict with these trends.  While the USDOT stresses that this framework is not an action plan, it cries out for all of us to consider how to create such a plan.  Anyone interested in this topic should go to www.dot.gov/beyondtraffic to offer comments before a final version of the report is published later this year.

Good to Great: Creating a Long-term Vision for the Commonwealth’s Transportation Needs

On April 9, NAIOP will host Transportation Transformation, a thought provoking conference addressing the challenges and opportunities facing Massachusetts as we plan for the transportation system of the future. MassDOT Secretary Stephanie Pollack and Secretary of Housing & Economic Development Jay Ash will discuss the role of transportation in a growing Massachusetts economy. Vinn White, Senior Policy Advisor, Office of the Secretary, US Department of Transportation will discuss how demographic shifts will affect transportation, and nationally recognized transportation experts will discuss lessons learned from other regions, new technologies to consider, and what all of this means for real estate development. If you fought to get to work this winter, then this conference is for you!

Building off of these same themes, we thought this week was a good week to share our Good to Great recommendations to MassDOT. Special thanks to Marilyn Swartz-Lloyd, President and Chief Executive Officer, of the Medical, Academic, Scientific Community Organization (MASCO) for her input on this. Comments, as always, are encouraged!

Good to Great: Creating a Long-term Vision for the Commonwealth’s Transportation Needs
The Commonwealth’s transportation infrastructure is critical to our state’s economy, quality of life and industrial competitiveness. However, many of its elements have already exceeded capacity constraints with increasing delays on congested highways and transit systems. At the same time, demand has increased and is predicted to continue over the coming years with no major increases in capacity coming soon. Without a serious long-term plan, further declining services, increased travel times, and a degraded environment will be the future of the Massachusetts transportation system.

In 1970, Governor Frank Sargent created the Boston Transportation Planning Review that analyzed and redesigned the entire area-wide transit and highway system. It provided a blueprint for transportation policy and investment that we have been effectively following for the last 40 years. Massachusetts needs a similar long-range visionary thinking that will result in a comprehensive transportation plan for 2040.

A Vision 2040 Transportation plan, endorsed by the Baker Administration, should address tomorrow’s opportunities, focusing on the issues which may arise over the next 25 years, including long term demographic, economic, environmental, technological, cultural and governmental transformations, the potential effects of global climate change on infrastructure, and the development of new modal choices.

To successfully implement such an initiative, NAIOP supports the following guidelines:

  • Connectivity is key: Creating a seamless, reliable connection between air and rail, bus and subway, and the network of roads and transit is necessary for improving the flow of ideas and people.
  • Out-of-the-box thinking is vital: New and “disruptive” technologies are already impacting other parts of society and should be considered, making enhanced transportation information sharing through technology an integral part of the Commonwealth’s hand-held knowledge system.
  • Public Private Partnerships needed: Innovative public private partnerships can leverage the limited state resources to increase capacity to actualize a long-term plan that can be implemented over the next decades.

Good to Great: Developing a Public Private Partnership on Climate Change Resiliency

Yesterday, NAIOP was proud to participate in a Climate Change Resiliency Forum at the State House. NAIOP’s CEO, David Begelfer, joined legislators, climatologists, environmental advocates, a representative from the insurance industry and EEA Secretary Matthew Beaton to discuss this important economic development issue. NAIOP advocated for a public private partnership and echoed the comments we presented to the Baker Administration in the Good to Great report. The following is our weekly excerpt from that report. Comments are encouraged!

Climate change can have significant impacts affecting the overall economy; directly, by damaging structures, and indirectly, by compromising transportation systems, communications, and utilities. An increasing number of extreme weather events and future sea level rise may lead to more frequent and extensive flooding along the coast and inland waterways.

The varying interpretations and projected economic and environmental impacts from climate change and sea level rise demand that the private and public sectors coordinate their common objectives. Unfortunately, to date, there has been a serious lack of coordination or collaboration on this issue. Individual cities and towns are taking their own steps to regulate and respond to climate change and sea level rise. Within MassDEP alone, multiple climate change policies and regulations are being drafted using different climate change projections. All of these regulatory and policy initiatives are focusing on how private development projects should address this issue, and very few have addressed the public sector’s role. For example, capital expenditures will be necessary for equipping existing public infrastructure to meet storm surges. Clearly, having a “climate change proof” building in the middle of a flooded neighborhood, without power or adequate transportation, provides no real public or private benefit.

There is no question this issue will be a significant challenge for the Baker Polito Administration. Addressing climate change and sea level rise requires coordination at the highest level of state government, and the participation of many state agencies. Therefore, NAIOP urges the Administration to consider the following steps to better coordinate how this issue is addressed in order to avoid the calamities that have been suffered by other coastal states:

Create a high level point of contact (Climate Change Chief) for local, state, and federal agencies, as well as the private sector. This position should be located in the Governor’s office or within the Executive Office of Administration & Finance. Given the need for coordination across many facets of state government, and the impact of this issue on the state’s resources, it should not be located in EOEEA. Planning for responses to rising sea levels is an operational and infrastructure challenge, not an environmental policy issue. To ensure consistency across the Administration, the Climate Change Chief should have input on all policies or regulations dealing with climate change. All agency findings and regulations regarding the extent of sea level rise or climate change must not be cost prohibitive to the private sector and should include public funding and participation.

Working closely with the Governor’s office, the Climate Change Chief would pursue the following action items:

  • Establish a structure/partnership with academic and research institutions to identify, develop, test, and incorporate reliable climate change and sea level rise forecasts and climate change preparedness programs.
  • Conduct an inventory of state agency regulations adopted or now under review/proposed dealing with how existing and new public and private development should respond to climate change and sea level rise.
  • Undertake an inventory of state and regional authorities, their threatened assets, and their infrastructure preparedness needs, and identify state monies committed to study climate change and sea level rise. Identify capital funds that should be dedicated to infrastructure upgrades for vital state and regional properties, with a priority toward vulnerable infrastructure.
  • Coordinate the agenda of the state agencies responsible for establishing a target range for sea level rise, determining its effect upon existing infrastructure and future development and developing guidelines for climate preparedness and mitigation planning and review (e.g., MEPA, MassDOT, MBTA, BBRS, MWRA, MassDEP, DPU, Mass Housing, MEMA and CZM).
  • Identify state agency personnel responsible for the review of policies, procedures, and regulations regarding climate change and sea level rise.
  • Ensure that cost-benefit analysis guides policy making. Policymakers should look at programs in terms of maximizing preparedness and resiliency benefits while minimizing burdens on fiscal and other resources.
  • Encourage consistent local efforts to address climate change preparedness including identifying susceptible infrastructure (e.g., mass transit, highways, stormwater systems, energy, fuel, communications, etc.), adopting reliable climate change projections, and establishing guidelines and regulations to incorporate climate change into future planning decisions and outreach programs.

We urge the Governor to coordinate this critical effort to ensure focus and consistency on this economic development issue.

Good to Great: Realigning Resources at Environmental Agencies

The following is our weekly excerpt from NAIOP’s report, Good to Great: Recommendations for the Baker Polito Administration. Comments are encouraged!

When considering a long-term vision for the Commonwealth’s environmental agencies, NAIOP encourages the Executive Office of Energy & Environmental Affairs (EEA) to start by realigning resources to ensure 1) environmental protection and 2) that resources are appropriately allocated to ensure timely and predictable permitting. In recent years, the regulated community has observed that a larger percentage of staff at the environmental agencies is focused on the development of new policies and regulations instead of the expedient implementation of existing regulations (i.e., permit approvals, compliance assistance, etc.). Prompt and predictable permitting is critical for economic development projects and ensures increased tax revenue for the Commonwealth. Compliance assistance programs provide a preventive and cost effective approach to ensuring environmental protection.

Therefore, NAIOP proposes the following recommendations:

  • Tie Permit Fees to Results: Permit streamlining was brought to MassDEP’s doorstep in the late 1980’s. Facing considerable time delays for the issuance of permits with no timetables, NAIOP was a founding member of the MassDEP Fees and Program Advisory Committee that established a fee program for all permits and a retained revenue account in return for the MassDEP’s agreement to set enforceable timetables for administrative review, technical review, and issuance of permits. General results were positive and fees have been adjusted gradually over the years to reflect cost of living increases. Permitting fees went into a dedicated revenue account, which was intended to supplement the MassDEP budget so that it could continue to provide its other non-permitting services. The original committee included NAIOP, AIM, Mass Municipal Association, MASSPIRG, Environmental League of Massachusetts, and other private and public sector representatives. The enacting statute establishing the agreement and authorizing MassDEP to establish the fee program is M.G.L., c. 21A, §18 and the regulations are at 310 CMR 4.00.As the architects of the Program left state government and Massachusetts faced revenue shortfalls, the original agreement was sacrificed for revenues. Gradually the Legislature began to apply permit monies to the MassDEP operating budget. Rather than decreasing the time for permit issuance based upon the lesser number of permits due to a slow economy, the General Fund percentage decreased for the MassDEP budget. As recently as 2013, the Fees Committee wrote to the Governor and to the Ways and Means Committees requesting that the agreement be honored. Business was hesitant to support the Department’s request for additional funding based upon the legislative track record applying fees for operations. NAIOP urges the Baker Polito Administration to reinstate the original agreement and ensure permitting fees are directed to the dedicated revenue account to ensure adequate resources for permit issuance.
  • Increase Use of General Permits: NAIOP encourages all environmental agencies to consider increasing the use of general permits. General permits are more cost effective and achieve the same goal as individualized permits, but do so faster and more cost-effectively and provide a higher level of certainty in outcome (including reducing the risk of permit appeals). In order for this to work, however, it is critical that agencies be committed to making these general permits effective and not so limited in scope or so overly burdened by contingent conditions that they are no longer useful. EEA should conduct an internal review of all programs to identify those that could move, in whole or in part, from individualized permits to general permits.
  • Move to Permit-by-Rule (aka self-certification): Self-certification needs limited staff resources to administer and oversee and uses enforceable third-party certifications to ensure that rules are met and standards are achieved. MassDEP is already using self-certification for some programs, but there are numerous opportunities for expanding the use of this cost-effective and proven regulatory approach.
  • Increase Permitting Staffing for Waterways Program: Waterways is responsible for issuing Chapter 91 licenses for docks, piers, and other water-dependent structures as well as non-water dependent uses and structures on tidelands and filled tidelands. It is involved in almost every major coastal project, including transportation, energy, infrastructure, commercial buildings and housing. Staff has recently been increased to five persons, still woefully inadequate to ensure timely processing of project permitting demands. The lack of staff is holding back the development of many major public and private projects. Additional resources must be committed and dedicated to new employees that focus solely on Waterways permitting and not policy development.
  • Continue Regulatory Reform Implementation: The Regulatory Reform initiative was originally motivated by a reduced budget affecting staff permitting and oversight, but the effort has also resulted in important regulatory and policy changes. Continually reviewing existing regulations to determine if they are needed or if changes are required, and closely examining the costs and benefits associated with new regulations before they are drafted, should be a top priority for the Baker Polito Administration (and is required under Chapter 238 of the Acts of 2012).
  • Provide MassDEP with Delegated Authority over National Pollutant Discharge Elimination System (NPDES) Programs and the Funding Needed to Adequately Administer the Program: As of June 2013, 46 states had been authorized to administer the federal NPDES permit program. Massachusetts is just one of four states in the nation where the federal government is in charge of the permit issuance, compliance and enforcement for the 2,990 NPDES permit holders in Massachusetts. MassDEP jointly issues NPDES permits with EPA. Having MassDEP as the sole permitting authority with EPA limited to an oversight role could result in a more efficient permitting process. In addition, as the NPDES program continues to evolve in response to increased concerns over issues like nutrient loading and stormwater impacts, MassDEP would have greater control over policy decisions. However, appropriate resources would be needed (estimated at approximately $9.5 million per year) to ensure a carefully coordinated approach to watershed management.
  • Concentrate on Implementing & Enforcing Existing Rules and Regulations: Agencies should concentrate on implementing and enforcing existing rules and regulations before expending resources on new program and policy development. This builds on the Regulatory Reform Initiative and is critical for the proper allocation of resources.

NAIOP Supports MTF Report on MBTA

The recent Massachusetts Taxpayers Foundation’s report The T: The End of Its Line is a must read. NAIOP Massachusetts fully endorses the report and its recommendations.

According to the report, there are some critical next steps that decision makers can and must take in the near term. The Foundation recommends that the state prioritize the following nine steps to inform a more detailed analysis so that it may develop a plan for rescuing the T:

•    Tie FY 2016 state contract assistance to the release of up-to-date State of Good Repair (SGR) backlog data
The MBTA’s asset management system, which quantifies the SGR backlog and helps to prioritize maintenance projects, has been inoperative for several years and full implementation of a new Federal Transit Administration (FTA)-funded system is several years away. This is an enormous management failing and the state should withhold additional assistance until the T can produce a comprehensive SGR backlog project list that clearly and accurately states both the size of total maintenance shortfall and the cost to keep the system from deteriorating further.
•    Conduct a detailed audit of the MBTA’s maintenance protocols
The state should insist on an independent assessment of the T’s maintenance protocols, project selection criteria, and capital spending to determine whether the T has the capacity to bring its infrastructure into a state-of-good repair.
•    Require an independent fiscal audit of the T
The Governor should request an independent, third-party, in-depth analysis of the T’s finances. The T’s long history of using financial maneuvers such as debt restructurings and securitizing long-term revenue streams have complicated its debt obligations, and the T provides minimal information on unfunded pension and retiree health care liabilities. All pose substantial hurdles to the T’s ability to continue as a going concern. Full analysis and disclosure of the T’s financial exposures is necessary before solutions can be found.
•    Halt expansion contracts for the remainder of 2015
Before the MBTA undertakes any further expansion (with the exception of the Green Line Extension), it must get its current fiscal house in order. The state and the T must perform more analysis of the impact that expansions will have on the operating budget and maintenance expenditures and must identify revenue streams to cover the ongoing costs of expansions before any additional outlays are made. A brief delay will afford an opportunity to re-examine both the way in which projects are being carried through and the sustainability of each expansion as a part of the T system as a whole.
•    Reform the procurement process including a two-year moratorium of the Pacheco Law with a report on savings
Just as its maintenance systems require a careful review, so too do the T’s procurement practices. A series of problems with T procurement practices and other policies have further eroded public confidence in the T. The size and uniqueness of the T’s capital purchases warrant a centralized procurement process with in-house experts overseeing contracts to ensure purchases are delivered on time, on budget, and fully operative.
•    Reexamine the MBTA’s governance structure
The T’s long-term problems cannot be addressed effectively unless the Authority’s own leadership is fully committed to the reform effort. Currently, the T’s Board is independent and not accountable to the Secretary of Transportation, the Governor, or the Legislature and management has too often been resistant to external examination and proposals for change. The Administration should have control over the MBTA board in the short-term to ensure compliance, accountability, and full transparency. The Administration should also have the authority to select the next general manager and work with the Legislature to determine the most suitable governance structure to develop and execute a rescue plan for the T.
•    Eliminate Social Security eligibility to align with the state pension system
The unique dual pension eligibility of T employees, dating back to the state takeover of private operators, makes no sense decades later, and it imposes significant unnecessary costs on a financially stressed system.
•    Eliminate binding arbitration
Binding arbitration stands in the way of the responsible cost-conscious management the T requires. It was eliminated for most public employees a generation ago.
•    Require full disclosure of the pension system finances
Despite efforts by the Legislature, the T has not released details regarding its pension system and assets because it asserts that the pension system is a private entity. However, the T would have no hope of meeting its annual pension obligations without the annual infusion of hundreds of millions of dollars in tax revenues. At a minimum, the T pension system should release the details on its investments and cash flows and provide actuarial valuations.