Chicago's City Council on Tuesday approved plans to create a $1.7 billion infrastructure trust that will rely on private investment and bank loans to fund hundreds of millions of dollars in energy and transportation projects.
The initiative is part of a larger plan by Chicago Mayor Rahm Emanuel to invest $7.2 billion in the city's aging subways, sewers and schools, including $1 billion to upgrade more than 100 city rail stations and $1.4 billion to expand capacity at O'Hare International Airport.
“I won't tie the city to [Washington's] dysfunction,” Emanuel said on Tuesday. “Working together, we have a tool here take some of the pressure off of our taxpayers.”
The trust, a non-profit corporation, will pool private investment to fund city projects, then repay investors with user fees, energy savings and cost-cutting measures.
Emanuel has said the trust will fund “transformative” projects the city could not afford to bankroll on its own. Estimates indicate the projects will create 30,000 jobs in the next three years.
An initial project calls for investing $225 million in city buildings to make them more energy efficient, then repaying investors with resulting savings, about $20 million per year, according to estimates.
Plans also call for creating a rapid-bus system that would charge passengers a higher fare for faster rides, creating additional revenue to repay investors. Likewise, distance-based fares would fund the extension of an elevated rail line to points further south of the city's Loop.
In March, Emanuel identified five potential investors that have agreed to consider projects, including Citibank; Citi Infrastructure Investors; Macquarie Infrastructure and Real Assets Inc.; J.P. Morgan Asset Management Infrastructure Investment Corp; and Ullico.