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Keywords: Chicago City Council, infrastructure
trust, private investment, not-for-profit
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.
Mayer Brown advised the City on the establishment of the Chicago
Infrastructure Trust.
Mayer Brown is a global legal services provider
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Mayer Brown LLP and Mayer Brown Europe – Brussels LLP,
both limited liability partnerships established in Illinois USA;
Mayer Brown International LLP, a limited liability partnership
incorporated in England and Wales (authorized and regulated by the
Solicitors Regulation Authority and registered in England and Wales
number OC 303359); Mayer Brown, a SELAS established in France;
Mayer Brown JSM, a Hong Kong partnership and its associated
entities in Asia; and Tauil & Chequer Advogados, a Brazilian
law partnership with which Mayer Brown is associated. "Mayer
Brown" and the Mayer Brown logo are the trademarks of the
Mayer Brown Practices in their respective
jurisdictions.
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Mayer Brown article provides information and comments on legal
issues and developments of interest. The foregoing is not a
comprehensive treatment of the subject matter covered and is not
intended to provide legal advice. Readers should seek specific
legal advice before taking any action with respect to the matters
discussed herein.
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