Chicago Infrastructure Trust

The Municipal Buildings Retrofit initiative upgrades City-owned and operated buildings without using taxpayer dollars or City bond capacity, leaving the City’s credit rating unaffected. Through an innovative, tax-exempt Energy Services Agreement (ESA) structure, 60 City buildings – including libraries, police stations, and health care facilities – across 36 Wards are undergoing 114 energy upgrades at no up-front cost, agreeing to share the realized electricity and natural gas savings. Unlike typical capital upgrades done using bonds, this initiative creates no economic risk for the City; if the City does not see any energy savings from the upgrades, it pays nothing.

The project will create 108 jobs and reduce annual energy usage in these buildings by 18%, helping to achieve Mayor Emmanuel’s 2015 Sustainability Goal to improve overall energy efficiency in municipal buildings by 10%. In addition to providing modern control systems, these important capital upgrades will also greatly enhance the lighting, comfort, indoor air quality, and safety of the buildings.

Harold Washington Library – Before

Harold Washington Library – After

An Investment Grade Audit was managed by the Public Building Commission in 2012 in conjunction with three Energy Service Companies: Ameresco, Inc., Noresco, LLC, and Schneider Electric Buildings Americas, Inc.

The Chicago Infrastructure Trust joined the retrofit project in 2013 and issued an RFQ for next-phase project participation on January 30 of that year; it had received 13 responses by March 6, 2013. After structuring the transaction as a tax-exempt ESA and receiving approval from its Board on July 19, 2013, the Trust released an RFP for a Placement Agent on August 12, 2013 and received 13 responses by August 20, 2013. Piper Jaffray was selected as the Trust’s placement agent, after which $12.2M of tax-exempt, 15-year debt was placed with Bank of America at 4.95% and three Guaranteed Energy Performance Contracts (GEPCs) were entered into between the Trust and the three ESCOs. Investment Grade Audit and GEPC costs were rolled into the overall project cost, ensuring the entire project was completely self-financing. Financing for the Trust’s first project – an Energy Services Agreement (ESA) – officially closed on April 10, 2014.

Click on diagram for larger view.

The installations of Energy Conservation Measures (ECMs) began in 60 City libraries and other buildings in end-July 2014. Currently, 61 out of 114 projects are underway; a more specific progress report is available here.  The project remains on budget and on schedule for completion by April 2015.