Chicago’s ‘Mayor for Life’ Talks About Life After City Hall

National Journal

July 30, 2013

Richard M. Daley is learning from his mistakes – and successes – to help other cities innovate for the future.

Richard M. Daley, who served six terms as mayor of Chicago from 1989 to 2011, was one of the first big-city mayors to focus on sustainable development. Some of his projects, such as the development of Millennium Park, flourished. Others are more likely to be remembered as flops—Chicago taxpayers may lose money on a solar-power deal Daley negotiated, and his administration spent millions of dollars on recycling initiatives that went nowhere.

Two years after leaving office, the longtime mayor is using his hard-won experience to head up a new company—launched by his investment firm, Tur Partners—that will help cities pursue money-saving infrastructure investments. Cities that agree to join The Sustainability Exchange, or TSE, will get a free analysis of their assets and potential projects, and will share information with other member cities. TSE will alert vendors when a city is planning a request for a proposal. And because the company is low-profit instead of nonprofit, when a city or region decides to go ahead with a project, TSE will take a cut of the savings the city realizes over time.

Five cities have already signed up to join the fledgling exchange, including South Bend, Indiana; Parma, Ohio; and New Orleans. National Journal‘s Sophie Quinton recently spoke with Daley and Lori Healey, his former chief of staff and now TSE vice chairwoman, about how their idea is taking shape. Edited excerpts follow.

Why is there a need for something like The Sustainability Exchange?

Daley: Everybody has problems with infrastructure. Whether it’s a port, rail, water, lighting, waste—this is part of the sustainability effort that we’re looking at. We’re looking at working with groups of cities to identify the project, raise the capital from the private sector as well as the public, and document the results.

Healey: Most cities are not New York or Chicago or Los Angeles. They don’t have either the technical or financial resources to plan out and implement these kinds of projects. The Sustainability Exchange creates a platform that allows cities to come together to access national expertise in these areas—at no cost to them—with the goal of executing a transaction in a much compressed time frame.

Is it fair to say that the exchange is focused on changes that will save municipalities money over the long term?

Daley: That’s right. The areas we’re looking at are energy efficiency, water treatment, waste management, and transportation.

What’s going on here other than the collection and sharing of data about city assets?

Healey: We’ve started to bring together expert resources—including at Harvard and Arizona State University—to take that raw data and enhance it. So what you’re putting out to the private sector is so much better than a typical city RFP [request for proposal]: Here are my buildings, they have lights, tell me what I should do. It’s a much more specific RFP developed as a result of identification of needs.

Daley: I think a lot of cities are afraid to invest. You spend a huge amount on the project, and then four or five years later, there’s a whole new project out there that’s going to save more money.

Healey: Is it the best, most current of the technologies in the marketplace? We had one mayor recently tell us that he was on his third consultant for looking at a streetlight project—all private consultants for LED companies—and he had gotten three different recommendations.

What’s an example of a project that the exchange could make possible?

Healey: There are a couple of real-life examples. One is the purchase of LED street lighting. It would make sense for cities to work together within the same footprint of a utility company. That’s something that we help them with, to understand the regulatory environment. And then we bring cities together to take a look at separate transactions that, jointly, price like one.

Another example happened just recently. In a morning meeting in Newton, Massachusetts, the mayor says, “We’re interested in anaerobic digestion; we want to do something in our community to recycle food waste.” We had the same meeting 30 minutes later in another suburb. Why would you do two or three anaerobic digestion plants when it would make sense to do one, with a documented feedstock from three separate communities? It becomes much more financeable and efficient.

Daley: Nobody has really gone to the mayors and said, “Let’s all work together across a huge metropolitan area.”

Will requests for proposal be broadcast through The Sustainability Exchange? Or will cities handle the solicitation process on their own?

Healey: A combination of both. You have to incorporate and respect a city’s own requirements for procuring things. But you can also broaden the footprint for that solicitation. That’s the goal: to provide a bigger platform, on a national market, with independent expertise, to enhance their own capabilities.

Will cities be able to finance these projects on their own? Or will there need to be public-private partnerships?

Daley: It’s very hard for cities to self-finance. If it’s not a federal or state project, and you want to do it, you can receive a lot of private money.

Healey: There is significant private capital committed to sustainability. But right now the market doesn’t have scale enough for them to be very involved at the municipal level.

TSE is structured as a low-profit, limited-liability company, which allows it to accept investments from foundations and other private nonprofits. Why?

Healey: We wanted, first of all, to be able to assure cities that this isn’t just another business that’s looking to make money. It allows us to accept PRI [program-related investments] income from foundations around data enhancement and data enrichment. And because it’s low-profit, any percent savings that comes back to the Exchange goes back into building the library of best practices.

Will there be adjustments to the TSE model as more cities get involved?

Daley: I think we’re still in the process, trying to figure out what works and doesn’t work. As we talk to mayors and the research people and universities, they’ll see things. It’s a learning experience for us. We don’t have all the answers, and that’s why we’re meeting with quite a number of people to really solidify the whole idea of this exchange.

Healey: We’ve had inquiries from over 50 municipalities at this point. We’re in heavy discussions with 12 to finalize the relationship with them. I anticipate that we’re going to have more.

Original story can be found online

Pictures: 10 Green-tech city solutions for beating the heat

National Geographic

July 26, 2013

 A barge with a greenhouse on the Hudson River in New York City

Floating Food, New York

Photograph by Tyrone Turner, National Geographic

The Science Barge is a floating environmental education classroom and greenhouse on the Hudson River in New York.

Fueled by solar power, wind, and biofuels, the barge, which was built in 2007, has zero net carbon emissions.

Vegetables are grown hydroponically—with plants getting all of their necessary nutrients from water instead of soil—in an effort to preserve natural resources and adapt to urban environments, where healthy soil, or soil at all, is hard to come by. Rainwater and treated river water are used for irrigation, and pesticides are prohibited.

The original owner of the barge—New York Sun Works—designed it as a prototype for closed-loop and self-sufficient rooftop gardens in urban areas.

(See more pictures of urban agriculture in “Urban Farming Is Growing a Green Future.”)

Thousands of schoolchildren and adults have visited the barge, which is now operated by Groundwork Hudson Valley and docked in Yonkers, just north of New York City.

Complete listing of 10 green-tech city solutions can be found online

Building sustainable cities

Harvard Business Review

July – August 2013

By 2050 the number of people living in cities will have nearly doubled, from 3.6 billion in 2011 to more than 6 billion. Yet the world’s urban areas are already overcrowded and, particularly in developing countries, suffer from shortages of clean water, electricity, and other resources essential to the support of their exploding populations and fragile economies.

The problems created by rampant urbanization are among the most important challenges of our time. They also represent one of the greatest opportunities—and responsibilities—for the private sector. Business is uniquely positioned to shape the sustainable, economically competitive cities of the future.

Many corporations and investors assume that fixing cities is the purview of government, and that government will act. But governments around the world are stuck—financially, politically, or both. They can’t be relied on to single-handedly address the problems of urbanization or to conceive solutions, such as efficient electrification and reliable public transit, that will drive economic growth. Implementing those solutions requires large amounts of capital, exceptional managerial skill, and significant alignment of interests—all of which are often in short supply in city governments but abound in the private sector.

In my research and in consulting engagements with municipal governments, urban planners, corporations, and entrepreneurs in the United States, Europe, Latin America, and Asia, I have seen many different business strategies for addressing the challenges posed by rapid urbanization and scarce resources. Often they center on expanding supply—providing more water, more electricity, more roads, more vehicles. But increasingly businesses are discovering how to create and claim value by improving resource efficiency—through energy-performance contracting, for example, and other strategies that overcome business barriers, reduce waste, and stretch resources. This article provides a framework for identifying and pursuing such opportunities.

The framework rests on three pillars: new business models that generate profits by optimizing the use of resources; financial engineering that encourages investments in efficiency (see the sidebar “What Is Financial Engineering?”); and careful selection of markets. Although any given company’s approach will depend on its capabilities and objectives and the market it is entering, the broad strategies provided here are relevant both to obvious players such as infrastructure companies and vendors of turbines, trains, and other equipment, and to companies in larger sectors such as information technology, financial services, and building products. Whatever the industry, strategic investments in resource efficiency as cities are being built or rebuilt can generate value for companies over the long term while enhancing the cities’ competitiveness, livability, and environmental performance.

A company or an investor could target an array of resource-management initiatives. Of these, I argue, water, electricity, and transit projects deserve the greatest focus. Businesses that have water to process food and materials, whose lights and computers are reliably powered, and whose goods can get to market and employees can get to work quickly and efficiently are clearly at an advantage. Similarly, citizens with ready access to clean water, whose children have light by which to read and study, and who can commute efficiently and affordably have a foundation on which to thrive. All the other services a competitive city provides—functional housing, schools, hospitals, stores, police and fire departments, heating, cooling, waste management, and so on—depend on a reliable water, electricity, and transit infrastructure.

The Efficiency Opportunity

To understand where the opportunity lies, consider how resource-efficiency initiatives measure up on both technological and financial sophistication. The products and services that new cities will require, and that provide the return investors and entrepreneurs need, optimize both. A company’s offerings can be positioned according to these characteristics on an “efficiency matrix.” Technological sophistication increases from left to right, while financial sophistication increases from bottom to top. Low-tech commodity solutions, such as the purchase of insulation in a simple transaction between buyer and seller, would inhabit the bottom left quadrant; sophisticated programs such as demand-response optimization in electricity would inhabit the top right.

The matrix is useful for determining the current strategic position of a company’s products, services, and investments, but it’s most valuable for envisioning where the company might profitably head. New value can be created and captured by moving either horizontally or vertically within any quadrant. However, companies that shift their business models and offerings into the upper right quadrant stand to gain the most—and will also have the greatest impact on the resource needs of the world’s burgeoning cities. Often that means playing the role of coordinator or figuring out how to finance a service—something the individual players cannot do on their own. It is in that quadrant that a company’s offerings are more differentiated, favor multiparty solutions, and are likeliest to create value for all the participants.
Original article can be found online

Bi-national cooperation helps save the Great Lakes

The Huffington Post

July 9, 2013

2013-07-08-MayorDaleyGLSCLI.jpg
Co-Founder of the Great Lakes and St Lawrence Cities Initiative, former Mayor Richard M. Daley of Chicago, addresses attendees at the initiative’s tenth annual meeting. (image credit: Superior Watershed Partnership and Land Trust / Carl Lindquist)

 

Recently at Shedd Aquarium, world-renowned Canadian astronaut Julie Payette shared views of the Great Lakes from her former vantage point in space, in honor of our new At Home on the Great Lakes exhibit opening.

As she scrolled through sky-high images of Chicago, Green Bay, Toronto, Rochester, one thing became clear. Even from thousands of miles above the atmosphere, the satellite pictures reflected the uniqueness of each city along the Great Lakes, revealing the distinct ways that the lakes shaped the evolution of every community on their shorelines — and the ways our cities shape the lakes in turn.

The nuances of our geographical landscapes are mirrored up-close by how our Great Lakes communities understand conservation issues. Last week marked Independence Day in two countries that have cooperatively maintained our border for more than a century — which may help explain why, when it comes to the Great Lakes, we’re united in our efforts to save them despite so many diverse demands on the basin. One example? This June marked the 10th anniversary of the Great Lakes and St. Lawrence Cities Initiative (GLSLCI). Founded by Mayor of Chicago Richard M. Daley in 2003 and led by Executive Director David Ullrich, the bi-national initiative has grown into the leading municipal voice for protection, restoration and celebration of the Great Lakes and Saint Lawrence River.

This bi-national leadership is critical because, as Payette noted during her talk, watersheds do not conform to political or municipal boundaries. As a result, GLSLCI continues to demonstrate that when it comes to getting Great Lakes restoration done, cities are often where the rubber meets the road. Together, the 103 mayors speak for the unique identities, needs and priorities of the more than 16 million people they represent, in order to develop solutions for Great Lakes issues that integrate the entire basin’s environmental, economic and social concerns.

At this June’s GLSLCI annual meeting in Marquette, Mich., the mayors shared their cities’ unique perspectives on the Great Lakes’ most pressing issues, including climate change adaptation, the coastal impacts of historically low water levels, mining and economic development. While extremely necessary, this work isn’t always easy. After all, we have to establish common ground between eight states, two provinces, countless communities and federal, state, provincial and tribal and First Nations governments. Fortunately, there are many cross-border organizations working to reflect these stakeholders’ diverse perspectives, including the GLSLCI, Great Lakes CommissionInternational Joint Commission and Council of Great Lakes Governors.

While these groups continue their efforts, we also need you. Saving our Great Lakes can only happen if all points of view are considered, and your voice matters. In every Great Lakes community, there are opportunities to get involved with the lakes. Whether you attend a city shoreline planning meeting or volunteer for a beach restoration day, you’ll be adding your energy to a bi-national conservation effort.

No matter what you do, do something: Now is your chance to share your thoughts on the next five-year plan for the Great Lakes Restoration Initiative. Public comments are due July 12; click here to submit yours or click here to send an email.

Original article can be found online