Since the passage of the Bipartisan Infrastructure Law in 2021, the Biden Administration has championed unprecedented federal investments in infrastructure, clean energy, and advanced manufacturing. While the scale of federal investment has continued to grow, a disconnect between federal organization and local community operation has persisted.
Previously, we defined this fundamental disconnect as part of a structural delivery crisis, where the federal government is characterized by “vertically organized… rigidly balkanized bureaucracies” and local communities by horizontal operations through “networks that weave together disparate investments into a whole that is often greater than the sum of the parts.” The disconnect still exists today, posing a challenge for cities of all sizes trying to determine the best strategy to maximize the potential of this moment. Fortunately, a new organizing tool, an Emerging Projects Agreement, has been deployed by USDOT in California, Austin, and Kansas City, showing a way to bridge the capacity and organizational gaps between federal and local governments to maximize the impact of regional infrastructure investments.
The Emergence of Emerging Projects Agreements
Through implementation of the American Rescue Plan Act, Bipartisan Infrastructure Law, CHIPS and Science Act and the Inflation Reduction Act, cities and project leaders have been creative in how they use innovative capital stacking to leverage as many sources of funds as possible, turning piecemeal grant programs into transformative projects. Emerging Projects Agreements provide a framework by which cities can coalesce individual projects into integrated portfolios of projects, portfolios which have a transformative impact greater than the sum of its parts.
The Fixing America’s Surface Transportation Act (FAST Act), passed in 2015, established the National Surface Transportation and Innovative Finance Bureau, better known today as the Build America Bureau. The Bureau combines administration of low-interest federal transportation financing programs (i.e., Transportation Infrastructure Finance and Innovation Act (TIFIA) and Railroad Rehabilitation and Improvement Financing (RRIF)), Private Activity Bonds (PABs), and USDOT technical assistance all under one roof within the Office of the Undersecretary for Transportation for Policy. The Build America Bureau works with states, municipalities, and project sponsors to leverage federal financial and technical supports in pursuit of the Bureau’s policy goals of enhancing and diversifying the pipeline of nationally and regionally significant infrastructure projects.
Emerging Projects Agreements, initially conceived under the Obama Administration in 2016, provide for formalized strategic partnerships between subnational units, like states and cities, and the Build America Bureau (on behalf of USDOT). The framework of the agreement enables parties to centralize project coordination and leverage federal investments, capacities, and varied strengths for significant portfolios of projects to achieve shared goals through innovative delivery mechanisms and financing, alongside robust technical assistance.
Through Emerging Projects Agreements, the Bureau addresses barriers to increased infrastructure investment and development by providing support early in project lifecycles, helping to navigate federal procedural requirements, cultivating public-private partnerships, and providing technical assistance, creating a path for project sponsors to integrate disparate investments, strengthen their applications and navigate the process for the TIFIA and RRIF programs.
Examples in Action: Existing Emerging Projects Agreements
Earlier this year, the Build America Bulletin newsletter identified Emerging Projects Agreements as a tool that “may be appropriate for communities with billions in project needs, multiple regional partners and complicated portfolio of different improvements that are looking to move projects forward sooner to benefit communities earlier than without financing.” This year, Kansas City and Austin, became the first two cities to sign Emerging Projects Agreements. In both cases, city staff and elected officials took the initiative to identify thematic connections linking individual projects within cohesive portfolios that will have synergistic impacts. Kansas City and Austin leaders invested in strengthening existing relationships with USDOT at large while developing new relationships with the Build America Bureau. The upfront investments from both cities have positioned them to execute monumental strategic partnerships, paving the way to drive their infrastructure projects to the finish line.
The Austin Agreement, signed in March 2023, focuses on the city’s $22B+ “Mobility Program of Projects” designed to improve regional travel and equity. Projects include transit, roadway, and airport infrastructure upgrade projects, and the I-35 cap and stitch program. The I-35 project is planning to reconstruct the 10-mile stretch of I-35 going through Central Austin, which will present an opportunity for 13 acres of cap and stitch projects across 14 locations. The highway reconstruction and potential reconnection projects alone will cost over $5B, with construction slated to begin as early as 2025.
In Kansas City, the Emerging Projects agreement, signed in October 2023, includes a $15B network of projects to improve mobility, connectivity, safety, and equity in the region. Major projects include a fixed, 21-mile rail line from the airport to connect travelers, visitors, and employees to downtown Kansas City and the core of the city’s transportation systems ($10.5 billion); a Bi-State Streetcar Expansion connecting underserved communities with healthcare, jobs, and to the heart of the city; two major studies to address the community disruptions caused by the I-71 and I-35 corridors in neighborhoods within the city; and environmental safety and connectivity improvements along the Blue River Watershed and adjacent Industrial Corridor.
Kansas City Mayor Quinton Lucas and his team led the development of the city’s Emerging Projects Agreement – bringing together a portfolio of projects that could be fully developed and completed within short-, medium-, and long-term time frames. While the Mayor and his team led the negotiations for the Agreement – working with finance, public works, and the city manager’s office – they also engaged with local transportation stakeholders including MODOT, Kansas City’s Transit Authority, and the Mid-America Regional Council, a stellar Metropolitan Planning Organization. Then, in August, they hosted members of the Build America Bureau for a site visit to review the proposed portfolio of projects with local stakeholders. In the following weeks and months, due diligence work and negotiations for the Agreement continued as the project list was finalized ahead of the signing in October 2023.
In addition to Kansas City and Austin, California’s State Transportation Administration (CalSTA) has an active Emerging Projects Agreement, signed in October 2021, which forms a partnership with the Build America Bureau for California’s Supply Chain Resilience Program of Projects. The agreement provides for heightened technical assistance, coordination, and collaboration between the Bureau’s project development and outreach teams and CalSTA for construction of critical infrastructure projects across Southern California, including in the San Pedro Bay Area and Inland Empire.
The CA Emerging Projects Agreement project list amounts to $8B+ in projects across Southern California, including high priority projects at the ports of Los Angeles, Long Beach, San Diego, and Hueneme; intermodal rail yard expansion and electrification; highway interchange, auxiliary lane and truck climbing lane improvements; grade separations at rail crossings and rail capacity expansion; as well as inland port projects. These projects are all eligible for TIFIA or RRIF, and most were identified on California’s statewide Freight Mobility Plan; at the time of the agreement, most were expected to be shovel ready within 3-4 years.
Lessons from First-Movers
In Kansas City, Austin, and California, the development of portfolios of projects spurred local and state leaders to consider how various regional infrastructure projects fit together to enhance collective impact and fully leverage available resources. What could have been disparate regional mobility projects in California, became a cohesive portfolio of projects that is now being developed in coordination with federal and regional partners, to strengthen infrastructure and increase the safety, reliability, and capacity of a critical supply chain corridor. In Kansas City and Austin, localized mobility and community connectivity projects have been reformulated into portfolios of projects that will have a broader effect in improving equity, safety, and efficiency for regionally and nationally significant transportation corridors in growing metropolitan areas.
Broadly speaking, the Emerging Projects Agreement itself yields great benefits, both direct and indirect, for projects of regional and national significance, including:
- Heightened technical assistance for the development of projects;
- Pathways to accessing finance options; and
- Coordination with USDOT and the Build America Bureau through a single point of contact.
While the formal agreement and partnership does not guarantee financing, the Emerging Projects Agreement provides an avenue by which the Build America Bureau will assist project developers in preparing projects and requisite applications for TIFIA and RRIF, both of which the Bureau administers. Furthermore, the financing programs can be used to finance complementary investments beyond traditional roads, transit, and rail infrastructure, such as housing, community improvements, multimodal facilities, and more. These low-interest financing programs are becoming a more important tool amidst high interest rates. By providing accessible financing for project developers, TIFIA and RRIF can level up the impact of projects on the receiving end.
Who Should Consider an Emerging Projects Agreement and Why?
There are two dimensions to the considerations around Emerging Projects Agreements – regional economic development strategies and planned investments to operationalize those strategies. Within the industrial transition, cities can choose how to leverage and maintain natural or man-made regional assets. While the IIJA, IRA, and CHIPS acts provide resources for cities to use in leveraging those assets, they do not provide a tool for organizing component parts of a broader strategy (like stakeholders, resources, and planned projects); these components can be split across vertical silos and metropolitan networks. Emerging Projects Agreements can be the tool for cities with a strategic vision but lack the organizational and technical capacity to fully leverage all available resources to achieve their vision.
As for project selection, Emerging Project Agreements are best used for sets of projects with individual impacts whose effects would be compounded if developed in coordination. The underlying concept of the Agreement creates a path by which a city can approach and invest in the portfolio of projects more efficiently, rather than taking a disjointed, incremental approach.
As soon as a city has a strategy for coalescing projects into a cohesive portfolio that will advance regional growth and vitality, they should reach out to initiate the process for creating an Emerging Projects Agreement. Local leaders should not wait to reach the limits of their organizational, technical, or financial capacity; by then they will have missed the moment. In addition to strengthening a portfolio of projects in development, the agreements demonstrate a shared commitment to investing in regional infrastructure assets — attracting private investments while strengthening supply chains and the country’s industrial base.
A Template for Adoption
Emerging Projects Agreements are an innovative solution to an age-old challenge in intergovernmental work: facilitating collaboration and coordination between federal partners and local communities. Local leaders know the needs of their communities best – but struggle to consolidate funding opportunities across the federal government into singular projects, a challenge that only compounds with the integration of several projects. Emerging Projects Agreements provide an easily replicable framework for this challenge and should be routinized. To do so, local leaders must convene regional partners in the public and private sector to take stock of local capacities, needs, and regionally significant projects in the pipeline. Through this exercise, they can develop a portfolio of projects with thematic connections that becomes the constituent parts of an Emerging Projects Agreement.
Kansas City and Austin are not the only cities with billions in project needs, multiple regional partners, and a complicated portfolio of projects of regional significance – almost every major city fits the bill here. Metropolitan regions across the board have infrastructure, energy, and industrial projects that can realize a greater impact when developed in coordination with each other through strategic partnerships to leverage federal and local strengths and capacities.
Going Beyond Transportation to Economic Development and Energy
The framework for city-federal partnerships exemplified in Emerging Projects Agreements should be replicated by other cabinet level agencies, beyond USDOT, to enable cities and regions to fully leverage the federal funding and financing opportunities in BIL, CHIPS, and IRA. The Departments of Commerce and Energy, alongside USDOT, need to provide enhanced support to cities and regions to ensure that implementation of new and rejuvenated programs is coordinated at local and federal levels to maximize impacts.
To leverage the model for a city-federal partnership – in any case – local players need to take a whole-of-ecosystem approach, bringing together local stakeholders and investment opportunities. Some cities like Buffalo, NY, Erie, PA, Philadelphia, PA and San Bernadino, CA have already begun to do this by developing Investment Playbooks to coordinate disparate projects in sub-geographies like commercial corridors and greater downtowns. Meanwhile, at the federal level, agency leaders need to open the door for new city-federal partnerships, as the Build America Bureau did in 2016.
Replicating the Emerging Projects Agreement framework beyond the Build America Bureau provides a means by which community and federal strengths can be fully leveraged to overcome the fundamental disconnect. This is not meant to reinvent the wheel; it’s meant to realize what’s possible when you connect the wheels.
When more cities and regional entities begin to develop these partnerships, we won’t be talking about a disjointed and fragmented bureaucracy, but rather an effective and efficient federal partner for communities across the country, delivering on the full potential of its investments.
Bruce Katz is the Founding Director of the Nowak Metro Finance Lab at Drexel University. Benjamin Weiser is a Research Analyst at the Nowak Lab. AJ Herrmann is the Director for Policy and Program Innovation at Accelerator for America. Ross van Dongen is the Director for Infrastructure and Intergovernmental Affairs at Accelerator for America.