CHICAGO – The Chicago Infrastructure Trust board approved the addition of six advisory members Thursday as gears up to solicit private market interest in funding energy efficiency upgrades to city facilities and public schools.
If a financing comes to fruition as city officials hope, it would mark the first undertaking by the trust, created last year by Chicago Mayor Rahm Emanuel with City Council support to tap private investment in the funding of infrastructure development.
The board’s advisors along with the city’s advisors are putting the finishing to touches on a request for qualifications document and it is expected to be completed by next week. A formal release date has not been finalized, a city spokeswoman said.
The aim of the RFQ process is to identify a pool of potential financial partners. The questions would seek to gauge the interest of banks, pension funds, union-friendly investors, and community reinvestment act funds. The RFQ would describe the trust and proposed projects, outline the city’s and trust’s policies and financial objectives, gauge investor interest, seek compliance with city economic disclosure rules, and include a preliminary term sheet.
The city’s goal is to raise financing this year on an initial tranche of projects of at least $50 million.
The six non-voting advisory members were installed on the board Thursday. Three of the advisory members were chosen by Emanuel and are associated with the city or its sister agencies which is required under the city ordinance establishing the trust. The other three were selected by the voting members.
The six are charged with assisting the five voting members with reviewing and oversight of projects. The five voting members appointed by Emanuel last year include board chairman James Bell who is a retired business executive, lawyer and former city inspector general David Hoffman, former city schools chief financial officer Diana Ferguson, Alderman John Pope, and labor leader Jorge Ramirez.
The six advisory members announced Thursday are MarySue Barrett, president of the Metropolitan Planning Council; David A. Dohnalek, treasurer at Boeing Inc.; Chicago Treasurer Stephanie D. Neely; Damon Silvers, policy director and special counsel for the AFL-CIO; Alderman Latasha Thomas; and Tom Villanova, president of Chicago and Cook County Building and Construction Trades Council.
“The experience and guidance of these individuals will be an asset as the trust moves forward with its projects, including Retrofit Chicago,” Bell said.
Retrofit Chicago will seek a total of $200 million for energy upgrades to public facilities with the savings - $20 million annually - or some portion of it going to repay private investors. The overall program will be financed in tranches. The city envisions seeking a minimum $50 million investment in the first tranche. The pledged source of repayment would be limited to the energy savings and some operating and maintenance savings.
If after a review the city and trust view the responses favorably the trust would then move forward with a formal bidding process. The city entities would continue to own, operate, and maintain the assets and the financing and actual work would be completed by separate entities.
Chicago has nonbinding agreements from Citibank NA, Citi Infrastructure Investors, Macquarie Infrastructure and Real Assets Inc., JPMorgan Asset Management Infrastructure Group and Ullico to consider investing up to $1.7 billion.
The city’s pursuit of private financing for the energy upgrades through the trust is proceeding in tandem with the city’s exploration of a lease of Midway International Airport to private operators which was announced late last year.
