On April 24, 2012, the Chicago City Council, by a vote of 41-7, established the Chicago Infrastructure Trust, an innovative approach proposed by Mayor Rahm Emanuel to leverage private investment for transformative infrastructure projects. The Trust was created in concert with the private sector, non-profit organizations and union leadership. The Trust will develop a customized financing structure for each project it finances, using taxable or tax-exempt debt, equity investments and other forms of support. Each project will be coordinated with the City of Chicago and its sister agencies’ long-term plans for transformational infrastructure investments. The Trust represents a significant initiative by the City to leverage private investment for legacy municipal infrastructure projects. Mayor Emanuel announced the Trust on March 1, 2012, at an event in which he was joined by former President Bill Clinton.
The Trust will be established as a not-for-profit corporation under Illinois law. It will be governed by a Board of Directors of five voting members appointed by the Mayor with advice and consent of the City Council and serving staggered three-year terms. Four members will have expertise in financing and development of infrastructure, in capital markets and in municipal finance. One of the five members will be a member of the City Council. In addition, the Trust may have up to three non-voting advisory members appointed by the Mayor from executive leadership of the City and its sister agencies, and up to three advisory members appointed by the Board of Directors for a term of two years. The Chair of the Board will be appointed by the Mayor from among the voting members.
Retrofit Chicago, a new program to support energy efficiency in facilities owned by local government, will be the first series of investments made by the Trust, pending approval by the City Council. By aggregating energy efficiency projects across the City and its sister agencies and tapping into private investment, the Trust will accelerate retrofit projects that would otherwise not have been possible. Retrofit Chicago is expected to reduce energy costs by more than $20 million annually and create nearly 2,000 construction jobs. Additional infrastructure projects will be developed and considered for participation and financing by the Trust.
Initial funding for the Trust will be provided by the City of Chicago for up to $200,000 for professional services and up to $2,500,000 as initial capital for funding infrastructure projects. Additional funding for the Trust will be provided by private and not-for-profit investors. Prior approval of the City Council shall be required for all projects to be undertaken by the Trust. Projects financed by the Trust will not secured by the City’s full faith and credit and general taxing power.