Railway station financing mechanisms : international benchmarks - Proceedings Breakfast Discussion Tuesday, March 12, 2013

 
                    Proceedings	
  
              Breakfast	
  Discussion	
  
           Tuesday,	
  March	
  12,	
  2013	
  

      Railway station financing
mechanisms : international benchmarks

Contents

 Opening                                                   Erreur ! Signet non défini.	
  
 Remi DORVAL                                                                        2	
  
 President of La Fabrique de la Cité (The City Factory)   Erreur ! Signet non défini.	
  

 Railway station financing mechanisms                     Erreur ! Signet non défini.	
  
 Richard ABADIE                                                                    3	
  
 Global Infrastructure Leader chez PwC                                             3	
  

 Discussion                                                                           15	
  

Opening (in french)
Remi DORVAL
President of La Fabrique de la Cité (The City Factory)

    Nous poursuivons aujourd’hui notre cycle sur le financement des infrastructures. Nous nous
étions réunis autour de l’étude menée avec l’OCDE sur le financement de la « croissance verte ».
    Nous nous intéressons aujourd’hui au financement des gares. La Fabrique de la Cité ayant pour
principe d’apporter un éclairage international sur les grands problèmes de la ville, nous avons
demandé au cabinet PwC d’analyser les mécanismes financiers de quelques gares récemment
construites ou réhabilitées aux États-Unis, en Europe ou à Hong Kong. Il en ressort une grande
diversité dans les approches des différents pays, mais nous pouvons sans doute en tirer des idées
intéressantes.
   Ce travail a mobilisé plusieurs personnes : Richard Abadie, qui a dirigé l’étude (PwC), Philippe
Bozier qui a coordonné l’étude avec l’aide de Clément Martin (PwC France), ainsi que Roberta
Odoardi et Francesco Gargani (PwC Italie).

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Railway station financing mechanisms
Richard ABADIE
Global Infrastructure Leader, PwC

    We will be talking about what we are seeing in the infrastructure market at the moment.
    If we start with station development, it is quite important when we are looking at studies like this,
on railways mechanisms, not to just dive straight into the financing side. Probably like most of you, I
have travelled around the world quite a lot and I get to see and spend time in many, many railway
stations around the world. It is not always a very pleasant experience. Sometimes I would much
rather not be there. As I travel around the world, I ask myself, 'What is it that I like about railway
stations when I am in them?'
    I have been to the railway station at Washington, DC. For those of you who have been through
there, you would remember it. It is an unbelievable station with incredible architecture. It is
something worth looking up on the Internet if you have time. For most of you who have not travelled
through the railway station in DC, I strongly recommend it. Many, many people visit that railway
station, not because they want to travel, but just to see the architecture and the like.
    Now, the reason for highlighting some of those stations is just to show that at the end of the day,
with all those objectives in mind, a station has some aesthetic appeal. You want to go there. If you
want to turn it into a commercial enterprise, it must be somewhere you want to go into and possibly
remain, rather than just passing through as quickly as possible.
     I have also travelled through Delhi station. I can tell you that the problem there is it is the type of
station you want to pass through very, very quickly. You do not want to spend time in Delhi station.
What you tend to find in Delhi station is that the economics of the station themselves are pretty
limited because people are not spending money when they go through there.
    I have listed objectives in station development.
    -     The first one is that they are generally large assets and you want to showcase the
          ability of the station. The second point is that as a traveller, you want to pass through
          a station quite efficiently with limited impediments. As a user of any station in the
          world, if you are going to spend your money in the station, a little bit like airports, you have
          got to have retail facilities, commodities that are available to you at very, very short notice
          and easy access.

    -     Then the other thing that we will get on to around financing is that there are very few
          stations in the world that are commercially successful on a standalone basis that are not
          attached to a wider urban development programme. We will go through some of the
          case studies and I will show you what I mean by that.

Before I get onto that, I get asked very often, 'What is happening in the world of infrastructure
finance?' Now, this is partly relevant to station development, but probably the first point is the most
important one.
What we are seeing around the world, and it is no different in France, and the UK for that matter -
both countries have been downgraded recently - is that the traditional sources of capital for
infrastructure have been governments and cities borrowing money themselves and investing
it in infrastructure. That will still continue in future. Nothing will change in that regard. The
problem is that the cost of finance for governments and cities is going up as their credit ratings are
being downgraded.

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The other thing we have seen, particularly in the Western world, are significant austerity
programmes where governments are looking to cut back spending rather than invest it. I draw a
parallel between the UK and France in this regard. France's infrastructure is much better than the
UK's, but the UK probably has a £250 billion infrastructure programme over the next 10 years. The
largest project in that infrastructure programme is what is called High Speed 2, the second high
speed line in the UK. That is going to cost £30 billion.
     I understand that the “Grand Paris project” is about the same size in terms of €30 billion, £30
billion. These days, there is not much difference between the currencies. The point there is that it is
very difficult for governments alone to do this financing when they are of that size. For those of you
in the financing markets at the moment, it is very, very difficult to raise bank finance. Some of the
French banks I know are prepared to lend to some of the big sponsors, such as VINCI. They will do
that on a long-term project finance basis, but the level of debt in the markets is significantly down
because of regulatory pressures.
    I mentioned many of the banks have exited the market while they try to delever. Many of the
banks that have left the market are either in trouble as banks - they have been nationalised - or
alternatively, they are trying to rebuild their capital basis and therefore lend less to projects.
    The fourth point there is regarding governments around Europe, and I know in France,
there has been a review of the PPP model. I do not know where it has come out. I think François
Hollande has said that he will continue to support it, but that is happening again around the world.
There are reviews of the support structures that government have in place.
    The last point, which is what I want to touch on because it is relevant to railway stations, is that
there is increased talk of capital markets, so that is project bonds, pension funds buying project
finance debt, insurance companies, institutional investors, infrastructure debt funds, guarantees and
the like. I will touch on that a little bit later. What I would say on this particular point, which is quite
interesting to me, is that the biggest new entrant into the infrastructure finance or project finance

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market is Allianz. Allianz has set aside €1 billion to invest in greenfield infrastructure. I would expect
quite a lot of that to come to France and possibly to find its way into the railway station sector.
    That is just a quick update, both on the objectives of stations and also some of the challenges
we are facing in the infrastructure finance market. It is important that we recognise stations in their
own right, rather than just as commercial enterprises. We looked at nine stations in our study. We
selected those stations in conversations with a couple of people in the market. These are by no
means the only stations that have used some source of innovative finance. I am sure if I went
around this room, there would be other examples as well, but there are nine examples.
    I do not intend going through all nine of them today. You can go through them at your leisure.
All nine of those case studies are specifically in the document. All have different features, but you
can see that quite a few of them have what is called TIF, Tax Incremental Finance. There is no
French term for it.
    There are a couple of sources of revenue when you are looking at developing a station that are
outside the public sector's direct investment. You clearly get public sector support in a station, but of
the three sources of finance I would like to emphasise, the first one is capital contributions from
developers.

    Now, you remember when I took a step back, I said there are no significant station
developments I am aware of that have not involved real estate development in the surrounding area
or above the station. The first point there really is that what traditionally happens when you are
developing these stations and you have got some land capture around there, you tend to try and
pick up a capital contribution from the developer in the area.
   There are a couple of examples. Andrew Macdonald, works for Transport for London as
Corporate finance Manager based in London. He has worked on two station developments in
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London (Canary Wharf and Vauxhall, Nine Elms and Battersea). He can give his thoughts. I guess
the most important thing from the experience in London is that TfL, as the station developer, is trying
to extract value from the property developers in the area.
     I cannot quite remember the exact numbers, but for those of you that have travelled through
Canary Wharf in London, the business district, there is a new Crossrail station being developed that
you may have seen, although it is on the outskirts of Canary Wharf. The group that runs Canary
Wharf is a property development that have contributed I think £200 million to the development. We
can check that number. There is another station being developed in London at the disused power
station, Battersea Nine Elms. The Malaysian developer there is going to contribute about £200
million as well.
     If you look at areas such as the Mass Transit Authority in Hong Kong, they adopt a
different model when it comes to development. This is in the case study. The city gives them
the rights for new lines and the rights for all the property development along the line. MTR take over
all the property along the railway line and they pay the city a nominal rental amount. Then MTR
takes the development profits on the line. Before railway station, after railway station, property value
increases and that is captured by MTR, the railway developer. These are alternative ways of doing
the same fundamental principle, which is extracting rent or charges from the private sector
developers in the area. That is the first point.

    The second point I wanted to cover around value capture is the tax increment financing principle.
Tax increment financing is not new. It has been around for many, many years. I would guess it
started in the United States with some of the municipal bond initiatives, where at city level, they
borrow money. Tax increment finance basically has one particular form and a second example.

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The first form of tax increment finance is your property rates, and I expect you pay property rates
as business people in Paris as well. Tax increment financing gives the city a right to levy a
special surcharge, an additional amount above the existing property rates. That surcharge is
securitised and given to the developer of the infrastructure in the area to use as a contribution to
their infrastructure.
     We have touched on capital contributions. Through the case studies, you will see that, and this
is an unfortunate fact of life, most of these instances normally have an additional special tax that is
levied on businesses and sometimes residential users in the area around the station or around the
railway line as well.
    There are basically three sources of finance - capital contributions, tax increment finance
and special taxes. We have seen very, very few examples, if any - I have not seen any - of where
you can develop a station 100% with pure private sector capital. You need a combination of
public sector capital and private sector capital, and you need to put them in combination in
the private sector sources. To summarise, we have capital contribution, tax increment finance and
special taxes.

    The final part just talks about financial structuring, and that is more a question of how you
bring all this together into a single financing vehicle. That is commercial structuring and legal. It
is not as important as the sources of the financing themselves.
   I said I would go through a couple of case studies. There were nine that you saw. As I say, you
have got the detail in your books. I will touch on two. One is Potomac Yard and the other one is the

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refurbishment of Prague station. Potomac Yard is an area south of Washington DC. For those of
you who have been through Washington DC, it is about five kilometres south of Ronald Reagan
Airport, which is a small domestic airport that serves the city. You see planes taking off quite close
to the city centre, and that is Ronald Reagan Airport. If you really want to learn more, it is about 10
kilometres away from the White House, so it is just high enough that they will not get shot down
when the planes take off.

    Nevertheless, it was a brownfield site, heavily, heavily contaminated. There was lots of pollution
because it was previously an industrial site. The city spent a lot of money decontaminating the site.
They wanted the developers to provide more residential and retail space in the area. One of
the key issues, as you can imagine with any residential development, a little like Battersea Nine
Elms, is that you have got the land, but you do not have transport access there.
     The fundamental idea is to provide transport access through the form of light rail or urban heavy
rail services. It is quite interesting. They went to the public sector, to the federal government and to
the unique government that is Washington, DC, which I guess technically is a state government.
They asked them for money. Alexandria decided that it was not worth taking the federal money.
They did not feel that with all the conditions associated with the money, it was worth doing. It is not
often in life, in my experience, that you turn down money when you are a property developer or
when you are developing infrastructure, but in this case, Alexandria said, 'No, we are not going to
take the money.'
    They tried to look for a pure private solution. CPYR is the development company that is
taking forward the residential development. The real estate developer wanted a new site there.
They were prepared to contribute about $80 million to $100 million to the development, not of the

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property because clearly that is their responsibility, but to the development of a station that would
bring residents and commuters to their area. That works out at about $100 per square metre. I do
not know what property prices are like in Paris. $100 per square metre is quite a lot of money. That
is quite a surcharge to impose on property development, but that is what they paid.
    I have seen numbers, and Andrew may comment on this later. In our research, there was talk
around Battersea Nine Elms of the surcharge per square metre being £425. Does that sound about
right?

Andrew MACDONALD
    It does sound about right, yes.

Richard ABADIE
     It is astronomical. Do not buy property in London at those prices. What you are seeing there is
quite a wide range of surcharge that is imposed upon property development. We have $100 per
square metre and about £400 a square metre in London as a surcharge on a property. I do not
know what property costs per square metre in that particular area of London, but £400 is quite a lot
of money. Clearly, if a developer is not prepared to do it, they will not get the railway station, so it is
non-negotiable. In the Battersea Nine Elms example, it is absolutely necessary to get the asset
built.
    Potomac Yard is about $100 per square metre, with a contribution of $80-100 million coming
from the developer. The tax increment financing we talked about will be the property
surcharge, the increase in property taxes that will then be securitised to pay for the area, and
then I also mentioned the special taxes, which is the sting in the tail. In this case, they created two

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special tax districts and are going to levy additional taxes. You can see that in this case, property
taxes are increased. That is when they build a future station. There are future revenues coming on
stream as well.
    The result of all of that is that they are able to raise about $250 million to contribute towards the
station. It is a fantastic site, so this makes it a little bit easier in terms of development. That is the
one other feature I would say - when you are looking at greenfield station development and you want
to rely on real estate, clearly you have got stations that are very, very accessible to major city
centres. There is no point in building a very big station in the middle of the countryside because you
are not going to get people to live there. You need it to be attractive, close to the city,
commutable and in an appealing area for people to live.
    I mentioned the third bullet, which is the city gave up on support from the government because
they did not want to deal with them anymore. That is actually another thing that I would emphasise,
and it is a statement again of the obvious. Taxes are not popular. Increases in property taxes
are very unpopular. Special taxes are even worse.
    One thing you need is if government is going to commit to building some of these stations, they
are going to have to accept if they do not pay for it through the general tax base that they have and
the only solution is to levy surcharges and taxes upon residents in the area, it is going to be
unpopular. If you are the mayor of a city, do not expect to be re-elected on the back of your
message, which is, 'I have raised taxes.' Try and make sure you get the station built before the
taxes kick in. That is a bit of an aside there. That is one example.
     The second example is slightly different. Prague station, as you can imagine, has already been
built. It is an existing station. This was more a refurbishment of Prague station, which is another
fantastic masterpiece. Grandi Stazioni, which is the concessionary for the refurbishment, is a public-
private partnership. It is 60% owned by the railway company in Italy and 40% of its shares are
owned by the private sector. I think SNCF have a minority stake in it as well, so there is a mix of
shareholders. It is not just the Italian state-owned rail company doing it - it is a joint venture in its
own right.

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The key thing is that they were able to raise money to refurbish the station, create some
more retail space, and that is another important point that I will talk about a little later. Retail
revenues from station development are very important. They are not as important as you would
think though. They do not throw up so much additional revenue that you can clearly build a station
in its own right. It is supplemental revenue.
     When I went through Delhi station, trust me, I did not want to buy any of the food there because I
am sure it would have been contaminated. It is an awful station. If you get the aesthetics of the
station right, you can turn it into a shopping centre hub principle. It is actually quite dangerous, and
this is probably not the right point to say, but I will make the point anyhow. I had recently been
through Warsaw station and Krakow station. For those of you who have visited Warsaw and
Krakow, the stations are quite old. They are run by a state-owned company. They are not great to
travel through, but interestingly enough, because the public sector state-owned rail company in
Poland was not prepared to redevelop the stations, the private sector property developers took the
initiative to build massive shopping centres right next to the station.
    When I walked out of Warsaw central station, I walked straight into a shopping centre, and it is a
great shopping centre. If I wanted to buy food, drink, shoes, cameras, anything, I would walk into
the shopping centre right next to the station. Warsaw station and the public rail company in Poland
do not make one cent or one zloty out of the property development. The message in there is that it
is all fine saying you do not want to invest as the state-owned railway company, but if you do not
invest, some entrepreneurial private sector property developer is going to do it for you and you are
not going to get a benefit from it.
    When you are looking at a retail development like in Prague station, one of the objectives
is to raise revenues either for the state or for the rail company, rather than to have the private
sector take those revenues outside the station.             These are just two examples of the
refurbishment that has taken place. I have been through this already. I have talked about the tax

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incremental finance and I have talked about the capital contributions that come from joint property
development.
   An example of joint property development is the Crossrail station in London. It is the
Canary Wharf group, which is the real estate owner in Canary Wharf, doing a joint venture with
Transport for London to jointly develop the station. There are joint property development
agreements where the public sector will develop it, but there will be contributions from the
developers of the real estate.
   There are more details in the hand-outs that very briefly touch on some of the benefits of what
we have seen with tax incremental finance. What I will focus on for now is just the three red bullet:
 •   Direct proximity with highly developed areas (Potomac couple of miles away from the
     White House, Hudson in the middle of Manhattan...);
 •   blatant underdevelopment compared to surroundings (typically brownfield industrial
     sites);
 •   public policy permits hypothecation of rates/taxes
    TIF is successful with direct proximity of highly developed areas. My earlier point is that
you can only really make money if it is somewhere people want to travel to and somewhere that you
can actually impose surcharges on property development and surcharges on property rates where
people actually want to live. If people do not want to live there, you are not going to make any
money out of the tax increment finance.
     We talked about Potomac being close to Washington Central. For those of you who travel
through New York regularly and for those of you who have visited the Intrepid, the aircraft carrier that
sits out on the Hudson River, the Hudson development area is just south of the Intrepid, and that is a
massive new redevelopment in Manhattan. There were again no metro services, so therefore the
area was dilapidated. That has been redeveloped and they are building Line 7 to extend through
Hudson, so that is a massive property development area as well, following some of the principles we
have talked about.
    Again, another development point is that you have got to pick brownfield sites that have
traditionally been industrial sites because that tends to be where you get a lot more development
taking place. Examples are the docks in London or power stations in London or the Hudson area,
which used to be rail marshalling yards. Rail traffic historically was these underdeveloped areas.
    The third bullet there is very important (public policy permits hypothecation of rates/taxes). In
the UK, for a long period of time, the Treasury said that they would not allow authorities to ring-fence
revenues to keep for themselves. The Treasury felt that all taxes that are imposed belong to the
Central Treasury, so it required a shift in mindset, a shift in policy in government to allow for the ring-
fencing of these revenues. If you cannot ring-fence them and you cannot dedicate them, then there
is no way you can use tax incremental finance.
    I have talked about Hudson Yards. For both Hudson Yards and Battersea Nine Elms extension,
I would say that whilst the revenue has been identified, the revenue has been securitised, that has
not been enough on its own to get the projects going. In the case of Hudson, the City of New
York has had to guarantee that if the project company cannot repay the interest on the debt,
the City of New York would step in and repay the interest. There is a guarantee from the City of
New York.
    In the case of London, for the Battersea Nine Elms extension, we understand that at the
moment, there is talk of the Central Treasury guaranteeing that if the property rates and revenues do
not materialise, they will underpin them and guarantee the minimum. There is always some
form of additional intervention from government for the very, very big projects. Hudson Yards was
about $3 billion and the Battersea project is about £1 billion, so these are significant projects in their
own right, hence the need for additional intervention.

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Louis-Roch BURGARD, Président, VINCI Concessions
    Is the whole risk guaranteed by the public authority or is it just part of it ? There is a wide area of
revenue.

Richard ABADIE
    In Hudson Yards specifically, as I said, tax incremental funds is quite well understood in the US
in the form of the municipal bond market. They have done exactly the same thing. They have
created what is called a revenue bond, which means that the buyers of the financial instrument rely
not on the city to repay them, it is not a general obligation of the city, but an undertaking from the
project. Normally what happens with revenue bonds is if the project does not repay you, you as the
lender to the project lose your money.
     The buyers of these bonds for this particular project at Hudson Yards said it is a new greenfield
project in an area that is unproven. Nobody wants to live there. Just to give you a perspective,
property prices in the Hudson area are 50% lower than the rest of Manhattan, so it is an area
nobody lives in. The people that do live there you probably do not want as neighbours if you are
living in New York. The problem there is that none of the lenders or the investors in the bonds felt
that they could afford to take the risk of seeing that area change over time, so the anticipated growth
in revenues was about 4% a year. I think the payback period is about 50 years.
    The investors in that market were not comfortable with this. This is really real estate
development. They were not comfortable taking the real estate development risk. The only
guarantee they asked for was not a guarantee that in the event of termination, they get repaid - it
was just that when interest is due, it is then repaid, which is a very narrow guarantee. It is still a
revenue bond, but with one specific obligation.
    On the TfL Battersea Nine Elms example, that is still under development. I am not sure where
that is going. I think the negotiations continue.

Philippe BOZIER, Directeur de projet, Finance & PPP, PwC
    As far as I know, the Battersea project is not just a station, but the extension of the line.

Richard ABADIE
    Correct. That is absolutely right. I cannot remember the exact numbers, but there are two
stations and there is also the railway line itself. Some of that obligation will clearly be picked up by
TfL themselves, not just by the special purpose vehicle of additional contributions.
    My last point is that some of the development that takes place is not only around
brownfield sites and residential development around stations - it is around the area above the
station as well. We are increasingly seeing railway stations where the air rights above the station
are being sold for residential developments. In the case of Canary Wharf in the UK, the Canary
Wharf group made its capital contribution, but they reserved the right to have four floors of retail
development above the station itself, so that is how they were going to get paid back. They took a
head lease on the four floors and then they rented it out again, a little bit like MTR does in Hong
Kong.
    Regarding the main findings around revenue generation, I made the point that it is possible to do
it. The last point there is very important. Commercial activities, retail and rental will not pay for a
station, particularly a greenfield station in totality. You still need a public sector contribution to these
stations as well. It is meant to be a PPP (Public Private Partnership) or joint venture, rather than a
way of the public sector not putting any money into station development.
   We took all these nine stations. We did some maths on them and we can have a debate as to
whether they are accurate or not, but what we are saying here is that, and I have to get this right, the
average investment in stations was about €20 million a year. The average number of passengers
was about 20 million passengers a year.
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Now, when I say the average investment was €20 million, that was sort of the maximum amount
that could be supported by the number of passengers going through there. Looking at that from a
retail point of view, and I am not saying you directly charge your customer €1 per year, but the
theory varies. If you have got a 20-million passenger station, you can afford to extract about €20
million from the through traffic and from the property development through the retail and rental
process. It is basically EUR1 per passenger per year. If you go above that, you tend to find that the
contribution will have to be paid for by alternative means. It is a very, very rough rule of thumb.
    Then the second point is just around the amount of retail space that you can have per
passenger going through there. I would not look at that very scientifically, but let us say eight to
nine passengers per square metre of retail space. If you have more retail space than passengers,
you are not going to make it a profitable business. Those are very, very rough, based on some of
the research that we have done.
    Consultation with external parties is the last point there. It is quite important as well. Both those
projects struggled and the reason was because the public clearly did not want to pay the additional
cost to them and there were political concerns about re-election. Therefore some special deals were
cut. If you are trying to raise money for your stations, it is not something you can do very quickly. It
requires a lot of debate and discussion with the political parts of government.
    Thank you very much.

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Discussion

    Andrew MacDONALD, Corporate finance, Transport for London
    Canary Wharf and Crossrail are in fact two stations in itself plus the railway line. I think Richard
has gone through the topic and covered it very well. I think from TfL's perspective, I would draw out
that when funding any station or any large project, with each of these different tools, such as using
TIF, contributions from private developers, whatever you use, you will always invariably find that one
tool is not enough.
     In particular, when we looked at Crossrail, which admittedly is a mega project, we got £150
million from Canary Wharf for a £500 million station. The other £350 million came out of a general
Crossrail pot, a third of which was funded from grants, so from general taxation; a third from debt
that was raised against future revenues. We are lucky that Crossrail is a very profitable line. If you
do not have a profitable line, that source of funding clearly will not be available to you. The final third
was from business rates, which is a form of tax incremental finance. I think the important thing is
that you will find that you will have to blend all of the different tools in different measures to be able
to deliver any project.
    The other thing that I would draw out, and Richard mentioned this, is regarding TIF. In some
ways, TIF is quite a difficult tool to use because the development risk is absolutely key since it
affects not only whether or not you get the funding, but it affects the timing of the funding as well
because you are dependent on how quickly the development comes to market and how quickly the
incremental finance can be drawn out. I thought it was very interesting to hear the results of your
study, so thank you very much. I am happy to take any questions on either of the two TfL stations.
     Dans l’expérience de TfL, il ne suffit pas de recourir à un seul outil de financement. Dans
l’exemple de Woolwich Crossrail, nous avons contribué à hauteur de 150 millions de livres sur un
total de 500 millions. Le reste provenait d’un « pot commun » monté par Crossrail constitué pour un
tiers de revenus fiscaux, pour un tiers de dette levée contre les revenus futurs et pour le tiers restant
de droits commerciaux, c’est-à-dire une forme de taxation. Il faut recourir à un ensemble de
différents outils pour assurer la réussite d’un projet.
    Deuxièmement, le TIF est un outil difficile à manipuler : le risque de développement est
prépondérant. Il affecte non seulement le financement lui-même, mais aussi le calendrier de
financement : on dépend de la vitesse à laquelle le projet arrive sur le marché et de la vitesse à
laquelle les financements supplémentaires arrivent.

    Alain MEYERE, Directeur du département Mobilité et transport, IAU IDF
     L’exposé montre que les outils ne sont pas adaptés à toutes les situations. Le TIF consiste à
utiliser des recettes fiscales supplémentaires pour rembourser des emprunts, or on se trouve
souvent dans une situation où l’on ne maîtrise ni le montant des recettes, ni le calendrier de rentrée
de ces recettes. Cela fait peser un risque sur l’opération. Comme le dit Andrew MacDONALD, il faut
recourir à toute une batterie d’outils pour éviter ce risque. Plusieurs développeurs se sont ainsi
attelés au projet de Battersea Station et ont fait faillite successivement, ce qui a pesé sur le
prolongement de la ligne de métro.
    Il en va de même pour le métro de Copenhague. On a d’abord pensé le financer par la vente
des droits de construction et par les recettes fiscales générées par la construction d’une ville
nouvelle dans l’immédiate proximité de l’aéroport. Or la commercialisation de cette ville nouvelle ne
s’est pas du tout passée comme prévu, notamment en raison de la concurrence sur le marché de
l’immobilier de la rénovation du port de Copenhague. Le calendrier de remboursement n’a donc pas
pu être tenu.
    Pour conclure, les outils sont intéressants mais ne peuvent être utilisés que pour
certaines gares. En d’autres termes, il n’existe pas de solution universelle qui s’appliquerait
par exemple à toutes les gares du Grand Paris.
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Louis-Roch BURGARD
    L’exposé a bien montré qu’il fallait utiliser plusieurs solutions. En matière de calendrier,
l’important pour les prêteurs est d’avoir la garantie du service de la dette. Richard Abadie a confirmé
que cette garantie avait été apportée. Les problèmes de timing subsistent mais sont beaucoup
moins sensibles, car le risque de défaut a disparu.

    Philippe BOZIER
    Hudson Yards est l’exemple typique d’un site sous-utilisé, dans une localisation extraordinaire.
C’est le seul exemple que nous ayons identifié d’un projet intégralement financé par un mécanisme
de TIF. Le financement se fait sous forme obligataire. La garantie de la ville de New York porte sur
les intérêts et permet de rassurer les prêteurs vis-à-vis des retards. Le premier promoteur
sélectionné pour Hudson Yards a effectivement fait faillite, entraînant deux à trois ans de retard pour
le projet. La garantie a donc été activée.

    Remi DORVAL
    Ma question porte sur le phasage non pas des travaux, mais des décisions. A-t-il fallu des
décisions successives, opération par opération, ou le projet a-t-il fait l’objet d’une décision globale
sur un territoire initial, servant ensuite de support au montage du financement ?

    Richard ABADIE
    The decision to use Tax increment Financing (TIF) is difficult. It takes a long time to get past
some of the political objections to the hypothecation of revenues. My experience is that developers
of new railway lines, and often stations, who want to use Tax increment Financing will not be looking
only at Tax increment Financing; they will be exploring multiple sources of solutions.
    However, they cannot wait to exhaust all the others and then look at Tax Incremental Finance. It
is something that has to be done in parallel. Coming back to your point, it is not done in stages; it is
done upfront, exploring all the options. If it is a realistic option, you get the Treasury approval. You
get the political buy-in to increasing property rates in the area. Then you can go through the public
consultation and implementation process.
   I cannot remember how long it took on the Battersea Nine Elms development; it was relatively
short. However, you can look at many of the property developments, even something like
Canary Wharf. It is not in our case study, but if you go back far enough in Canary Wharf’s history, it
used to be a disused seaport, with stock yards. The initial Canadian developer of Canary Wharf
went insolvent.
    It did not go insolvent, because of TIF not working; it went insolvent because it is a
property development, at the end of the day. Property developers all over the world suffer as
property markets go up and down. They were not exploring Tax increment Financing. It was only
when the Canary Wharf Group took them over that they explored the Tax Incremental Finance and
the developer contributions. It is the same thing on the Battersea Nine Elms example; it is the same
thing in the US.
     I have a warning in relation to France in particular. As one gentleman mentioned, you have not
done it before. If you have not done it before, it is going to take a long time to socialise it and to get
it accepted by the various authorities. If you are looking at it for Grand Paris, it is something that you
almost want to start now. You need to develop the idea, because it is going to take some time to get
approved, if it is ever approved.
    La décision de recourir à un TIF est difficile et exige un certain nombre d’exigences pour
surmonter les obstacles politiques à l’hypothèque des revenus. Dans mon expérience, les
développeurs de nouvelles lignes ferroviaires et de nouvelles gares explorent plusieurs pistes. Il est
toutefois très important d’envisager toutes les solutions en amont et de front.
    Je ne me souviens plus exactement du temps nécessaire pour parvenir à la décision sur ligne
Battersea Nine Elms. Il est resté relativement court. Dans l’exemple de Canary Wharf, il s’agissait
d’une zone de docks abandonnée, dont le promoteur initial a fait faillite pour des raisons de
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promotion immobilière à proprement parler. Dans le cas de la France, il est important de lancer les
idées suffisamment en avance pour les faire accepter par l’opinion publique.

    Thierry PONTILLE, Directeur de projets, VINCI Concessions
    L’étude n’a pas abordé les coûts de maintenance et de mise aux normes. Une gare est un
établissement recevant du public, qui exige des réinvestissements réguliers au long de la vie de
l’ouvrage. Les recettes générées par le commerce et les taxes permettent tout juste d’équilibrer les
coûts de maintenance, et donc ne contribuent pas au financement de l’infrastructure.

    Philippe BOZIER
    Le sujet de la maintenance est partiellement couvert dans les exemples de gares à activité
commerciale que nous avons étudiés. On observe généralement une répartition des tâches entre
opérateur ferroviaire et concessionnaire privé. Dans plusieurs exemples de gares italiennes, le
concessionnaire assure la maintenance quotidienne et les petits renouvellements sur l’ensemble de
la gare. Les revenus des activités commerciales peuvent répondre partiellement au problème, mais
ne permettent effectivement pas de mener les grands renouvellements après trente ans.

    Pierre LACOMBE, Directeur stratégie et finances, Gares et Connexions
     Cette étude de comparaison des gares est très intéressante, mais ne porte que sur de grandes
gares avec un potentiel commercial. Or le plus grand projet de renouvellement en France porte sur
l’accessibilité, obligatoire à partir de 2015. Le plus grand projet actuel est de 1,3 milliard d’euros et
concerne 400 gares en Ile-de-France. Le potentiel commercial est inexistant : le financement se fait
en partie sur fonds propres des opérateurs et pour le reste sur fonds publics. Le projet de Juvisy
représente par exemple 100 millions d’euros, dont 15 % à 20 % pour la gare. Les trois quarts de
l’enjeu concerne en effet le rehaussement des quais, et pour le reste, la réalisation des escalators
ou des rampes. Le cas est donc très particulier.
    En Europe continentale, le principal contributeur est l’opérateur ferroviaire, soit en raison d’un
péage spécifique aux gares comme en Espagne, en France ou en Allemagne, soit directement sous
forme de péage aux infrastructures. Or le principal opérateur ferroviaire est souvent l’acteur
historique.
    Une gare peut être considérée, comme cela a été dit, comme un établissement recevant du
public. En Allemagne par exemple, les quais sont financés par le péage, les autres équipements
étant financés par des développements commerciaux. Suivant les pays, la solution passe par des
subventions ou par le financement du gestionnaire de gares. En France, la Ville de Paris et la
Région s’intéressent peu à ces grandes gares. Les opérations de Gare du Nord ou de Saint-Lazare
n’ont donc pas été faites sur deniers publics. Le projet porte essentiellement sur le bâtiment et non
sur les lignes ferroviaires. Le financement est beaucoup plus public ailleurs.

    Yves-Thibault de SILGUY, Vice-président du conseil d'administration et administrateur
référent, VINCI
   Les gares appartiennent pourtant à la SNCF en France. Est-ce le cas dans les autres pays ?
Cela ne complique-t-il pas les problèmes de financement ? Si il y a qu’un seul propriétaire, la SNCF,
pourquoi mobiliser les autres potentiels financiers ?

    Pierre LACOMBE
    Les gares appartiennent à plusieurs propriétaires en France. Les quais longitudinaux et les
équipements connexes (passerelles et souterrains) appartiennent à RFF et l’ensemble du bâtiment
à la SNCF. Le foncier de la gare est donc éclaté et tout projet donne lieu à de longs débats sur la
responsabilité de la maîtrise d’ouvrage.

    Yves-Thibault de SILGUY, Vice-président du conseil d'administration et administrateur
référent, VINCI
    Cela ne change rien, car RFF est un démembrement de la SNCF.
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Pierre LACOMBE
    Cela change en réalité beaucoup de choses. L’extérieur est tout aussi éclaté, or l’essentiel de la
valorisation dans un projet, comme à Lyon Part-Dieu, se fait à l’extérieur de la gare, zone qui
appartient souvent à la ville et non à la SNCF ou à RFF. La question est comment on fait rentrer cet
argent dans ce projet de gare ?

   Louis-Roch BURGARD
   La dépense par passager est beaucoup plus élevée dans les aéroports que dans les gares.
Comment l’expliquez-vous ? Comment augmenter la recette par passager ?
    Deuxièmement, y a-t-il un exemple en France de projet parvenu à créer une unité dans et autour
de la gare pour générer de la recette additionnelle ? On peut investir sur la rénovation d’une gare, et
voir les profits, aller aux habitants alentour et la ville, qui n’ont pourtant pas contribué.

   Richard ABADIE
   I will deal with the first question, because the second question is not for me. It is interesting. I
have got to travel back to London now through Gare du Nord and it is not a particularly pleasant
experience as a traveller. I know there are retail facilities, but they are away from the area you
would normally walk through. However, you arrive at St Pancras on the Eurostar on the other side.
    What I was just saying is that I have now got to go back to London through Gare du Nord and
through St Pancras. As we all know, St Pancras has been heavily redeveloped. The one thing
about St Pancras is that you have to walk past the retail facilities; you cannot avoid them. You may
want to avoid them, but they are going to be there. One of the reasons for that is that the station
refurbishment was designed along that basis; you cannot avoid them. I do not think that when Gare
du Nord was redesigned, it was designed on that basis; I doubt it.
    There are lessons that have been drawn. I like your comparison to airports. The concept that is
increasingly being talked about in the airport sector is airport cities. The airport is a hub for
passengers flying around the world or wherever they are going. However, more importantly, it is
meant to be a city in its own right. It is going to have hotels; you can sleep there, you can shop
there. You can do everything.
    The difference between an airport and a railway station is that normally the commuters at railway
stations are commuting relatively short distances. They are normally in a hurry to get to the office or
to get home. They do not stay at the station purely for the sake of the station; it is normally a path
through. Now, the closest I have seen recently to an airport city in a railway station is the Stratford
Station next to the Olympic Village in London. I do not know which of you has been through there. I
think it has the largest shopping mall, at least in the UK. It is called Westfield; the property
developer built a very big shopping centre.
    It is the same thing; you come out of the Stratford station; you have to walk through the shopping
centre. Some people will say that is a bad idea; they would much rather not walk through the
shopping centre. However, the interesting thing is that it is a partnership between the property
developer and the railway station. The benefit to the property developer is that people going home
in the evening are doing the shopping on their way to the train. Clearly, they do not want to be
carrying big bags. However, they may want to buy a new shirt or a light dinner for the evening.
They may have forgotten to do some of some of their grocery or retail shopping because they were
working during the day.
    There are brand-new station developments which are big hubs: not the small stations as you are
re going through the suburbs, but the big new stations. These are going to have to adopt those
models in the future. They have to be integrated places that people will go to and stop over.
    You may be meeting a client before you go home for the evening, I know people who travel
through Stratford will meet in the shopping centre, because the railway station is two minutes away.
You do not have to worry about catching a taxi to the railway station. It is becoming a centre where
people will go, not necessarily to end or start their journey; there will be other activities that take

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place in addition to it. This is because you have got retail, food courts, restaurants and everything
else.
    I tell people around the world that if you are looking for big new stations in the UK, it is how
major train stations are going to be developed in future. It is a combination; it is a railway city, if we
want to draw the comparison to the airport cities. The key difference between an airport city and a
station city is the amount of time passengers at the airport will spend at the airport. In a railway
station, a large number of people are just passing through.
    They may stop. I will give a little example. I do not know what it is like in Paris, but if you go to
most big railway stations that have been redeveloped, there are no seats. If you go to some
stations, you can sit, but these days you do not have seats. Why is that? It is not because the
developer does not want you to be comfortable; what they want you to do is to shop. They want
you to walk in; you cannot sit, so you will walk in and buy a newspaper, a drink or something else.
   The way the stations are being configured is around the retail experience, to try to
maximise revenues. As a customer, it is quite convenient for me, if I am heading home in the
evening, to be able to do some of that. When I came here, I did not bring a tie with me, so when I
was at St Pancras, I quickly popped into the tie shop to buy myself a tie. That is the type of
convenience I need, rather than going somewhere else to try and buy that stuff.
     Les aéroports sont conçus comme des villes en soi : on peut y passer la nuit, s’y restaurer ou y
faire du shopping. En revanche, les gares ferroviaires sont des lieux de transit.
    La gare de Stratford, à proximité du village olympique de Londres, est le plus vaste centre
commercial britannique. En arrivant à la gare, on passe devant les commerces pour parvenir aux
quais. Inversement, les voyageurs font leurs courses au centre commercial avant de prendre le train
pour rentrer chez eux. L’avenir des gares passe probablement par ce modèle : elles doivent être des
centres intégrés, un peu comme les aéroports, sauf que les voyageurs passent beaucoup moins de
temps dans les gares que dans les aéroports. Dans beaucoup de gares britanniques, on ne peut
pas s’asseoir, par exemple : il ne s’agit pas d’empêcher les personnes d’être confortables, mais de
les pousser à passer du temps dans les espaces commerciaux.

    Francesco GARGANI, Executive Director, Government Services, PwC Italie
     I just have one or two words to say. The stations are places where people start their journeys.
These days, the station managers are actually designing their stations to force people to go through
specific parts of the station. They have to make sure that they get to the windows and that the flows
in the stations are good for the passenger movements, but also for the shops.
   There is one example of a big station capturing the value from the area surrounding the station.
People are attracted by the station, not just because they go there to travel, but also because they
can do the shopping. We are seeing a lot of these facilities most of the time, from my personal
experience these days, working in Eastern Europe, which have huge potential for commercial
development inside. However, all the revenues were captured just outside the stations.
     In some cases, there would be a big McDonald’s just next to the station and these are some of
the most profitable McDonald’s in Europe. They are able to position themselves in a cheap way,
because there is availability of commercial space just outside the station. People use the station just
for travelling, but not really for shopping.
    I think that the key for a station manager in developing a station is to integrate such concepts
within the station, to maximise the space per square metre. It is feasible, because it is possible to
attract people from outside. A dialogue has to happen between the station manager, all the people
participating in the project and the local authorities. It is important that concessions or agreements
are given for re-allocating space from the outside of the station to the inside.
     Les gares sont des lieux où le public commence sa journée. Elles sont dessinées pour canaliser
le flux des passagers à travers différentes zones à l’intérieur de la gare. Les gares peuvent alors
devenir des zones commerciales. Beaucoup de gares en Europe de l’Est ont un potentiel important,
mais il est exploité dans la zone immédiatement adjacente. Les McDonald’s européens les plus

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profitables sont par exemple situés immédiatement à l’extérieur des gares. Il est donc important pour
le gestionnaire de la gare d’intégrer les concepts pour maximiser le revenu par m².

    Pierre LACOMBE
     Les aéroports de Paris drainent 80 millions de passagers par an, contre 130 millions pour la
gare Saint-Lazare. Le potentiel est donc considérable. Le fast food de Montparnasse fait le même
chiffre d’affaires que celui des Champs-Elysées. Le jour de l’ouverture, les revenus au m² à Saint-
Lazare étaient plus élevés que dans les grands magasins voisins.
   Sur le deuxième point, la réforme du ferroviaire est peut-être l’occasion de travailler sur la
réunification du foncier entre les différents opérateurs.

    Amélie FIGEAC, Directrice administrative et financière, EPA-ORSA
    L’aménagement par les rentrées fiscales est un enjeu majeur. Nous travaillons sur d’anciennes
zones industrielles où le foncier reste très élevé, au point qu’il est difficile d’équilibrer l’opération
d’aménagement si l’on y inclut la gare. Ensuite, la fiscalité sert à financer le fonctionnement courant
de la ville. Capter les retombées fiscales pose donc un problème d’équilibre des comptes locaux.
    Nous sommes un établissement public d’Etat. Notre mission est d’accroître l’offre de logements,
mais les collectivités avec qui nous travaillons veulent des activités et des bureaux pour des raisons
fiscales : elles ne peuvent pas fonctionner uniquement sur des rentrées fiscales de logements. Cela
suppose un marché de bureaux alentour, alors que celui-ci est très déprimé à l’heure actuelle.

    Christophe GARAT, Directeur délégué à la refonte du système ferroviaire, SNCF
    Je travaille sur la réforme ferroviaire. Nous réfléchissons avec RFF sur la possibilité de mieux
valoriser le potentiel foncier qui est très important, et pour l’instant, éclaté selon des règles
totalement incompréhensibles. Nous sommes convaincus que le potentiel est très important sur des
zones encore classées en activité ferroviaire mais qui n’ont plus réellement d’utilité aujourd’hui.
Nous voulons les rendre à nouveau exploitables. A ce sujet, le premier problème est de parvenir à
une unité juridique pour la propriété. Nous espérons que la réforme permettra de mettre en place un
système foncier plus raisonnable qu’à l’heure actuelle.

    Eric VEILLARD, Chef du service, Gares de voyageurs, Direction du Foncier et de
l'Immobilier, RFF
     Le sujet foncier entre les deux établissements publics ferroviaires est complexe. Au-delà de
l’intérêt urbain de ces emprises se jouent également des enjeux ferroviaires. Une grande difficulté
est de préserver les emprises foncières. Il est important de pouvoir réserver des capacités sur des
échelles de temps très longues : une fois que le foncier est vendu, il est impossible d’y revenir. Le
problème se pose de manière cruciale par exemple à Saint-Lazare, où il est impossible d’allonger et
d’élargir les quais.
    Nous essayons de mutualiser nos emprises et d’avoir des approches globales vis-à-vis de la
collectivité. La difficulté est de rendre mutables les terrains, c’est-à-dire d’identifier des terrains
pouvant servir du giron ferroviaire, tout en préservant les activités : Paris-Gare de Lyon a par
exemple des problèmes de remisage d’exploitation. Par ailleurs, les valorisations foncières ne sont
pas réinjectées sur les sites en raison des règles de péréquation nationale. Nous le faisons dans le
locatif, car la loi nous impose de reverser, dans le péage, 50 % des recettes de valorisations
locatives des gares. Les valorisations foncières sont en revanche « fléchées » vers l’aménagement
des réseaux.

    Philippe BOZIER
   Le problème de l’éclatement ne touche pas seulement RFF et la SNCF. A New York par
exemple, la municipalité s’est approprié les prérogatives de la MTA et de l’Etat de New York pour
avoir un contrôle absolu sur le projet et le faire avancer.

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