CHICAGO — The Chicago Infrastructure Trust is soliciting help from the private sector as it takes the first steps toward a public-private partnership to upgrade the city and Chicago Park District public lighting systems.
The trust has issued a
The city and trust hope to update their electric lighting infrastructure, including a transition to LED technology, with the goal of cutting energy costs.
The city and park district maintain about 348,500 outdoor lights including street, alley, viaduct, pathway, and lakefront lights. The city and district would continue to own and operate the lights.
“Modernizing our lighting system would be a meaningful investment in a core element of our city's infrastructure and has the potential to enhance public safety in every community across Chicago, which must always be our top priority,” the trust board’s new chairman, Kurt Summers, said in a statement.
Like its previous energy efficiency project, the trust wants to leverage the energy savings to finance the upgrades but is potentially looking at “new revenue sources that do not include additional taxpayer funds.” Those potential sources were not named in a joint statement from the city and trust.
The request for information says the trust is looking at a public-private partnership that allows for “appropriate risk sharing” and assumes all project costs would be fully funded from energy and operational savings as well as generated revenue.
“Risk associated with generating revenue or savings should be borne by the providing entity or otherwise guaranteed,” the RFI says. “Interested financiers are encouraged to respond with a list of their transaction history, funding capacity, and financing structure recommendations appropriate for this type of transaction.”
The city and parks will not issue general obligation debt to finance the project but the RFI informs potential partners that the trust is a not-for-profit that could serve as a conduit issuer on tax-exempt borrowing. The debt would sit “on the balance sheet of the trust, not the city or parks, and does not affect the credit of the city or parks.”
The upgrades could also involve creating a centralized lighting management system and using the system to expand the city’s fiber optic network allowing for the modernization of streetlight controls and expansion of other digital technologies. The trust also is asking for ideas on leveraging the streetlight network as a platform for additional services.
No contract or agreement will be entered into as a result of the RFI process but the trust does hope to use the responses to launch a formal procurement effort.
If the project proceeds, it would mark the first undertaking by an overhauled board led by city Treasurer Kurt Summers and the trust’s new executive director. Leslie Darling, although the prior trust leadership had begun exploring the project earlier this year.
Mayor Rahm Emanuel recently announced the board and leadership changes as the city was frustrated with the slow pace of accomplishments. Emanuel launched the trust as a new financing arm with grand plans that it would undertake “transformative” infrastructure projects without burdening the city's balance sheet and tax base.
The trust last year closed on a $13 million private placement, off the city's balance sheet, to fund energy retrofits for 60 city buildings. The trust was forced to scale back the deal's size by more than half and alter other terms to reduce investors' risks. The trust first talked about doing $200 million in retrofit projects in various stages.
The trust also brokered a $32.5 million deal that closed earlier this year with four telecommunications companies to finance the upgrade of wireless phone service in the Chicago Transit Authority's subway system to a 4G network.
