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The Opacity of Emanuel’s Infrastructure Bank Isn't Clear

by Aimee Keane
Aug 27, 2014

Mike Archey should be Rahm Emanuel’s best friend.

His firm, GTM Strategies LLC, develops the infrastructure for alternative vehicle fuel projects, the very conversion the mayor’s Chicago Infrastructure Trust is trying to build and finance for the city’s fleet. Yet despite Archey’s persistent phone calls and e-mails to the trust’s staff this past spring, he can’t seem to engage the trust in the kind of idea exchange he thinks could lead to a lucrative opportunity for both the city and private sector.

Archey started GTM Strategies in Chicago three years ago after putting in 20 years in roles at General Electric Co. and GE Capital. With a background in big-brand finance, he’s now the sole employee of his new operation.

“If I still had a GE business card,” Archey said in a phone interview, “maybe I’d get a few calls returned.”

With former President Bill Clinton at his side, Mayor Emanuel announced the creation of the Chicago Infrastructure Trust in March 2012. The trust was formed to find private sources of capital to finance public infrastructure projects. Emanuel called city retrofitting the “sixth energy source” because of the job creation and energy savings it produces. After some resistance from the city council concerning financial transparency, an ordinance to create the trust passed. Since then, the trust has secured financing and construction partners for a municipal building retrofit project and is in the process of doing so for a city pool project.

“The infrastructure trust was created to do new and innovative things,” said Don Haider, professor of management and strategy at Northwestern University’s Kellogg School of Business and former budget director for the city of Chicago. “State and local governments find themselves trying to figure out the best way to maintain and generate their infrastructure in the least costly way, in an era where they can’t depend on Washington.”

Emanuel’s infrastructure outfit appears to be trying to do just that, while developing opportunities for private sector benefit. According to a press release issued by the mayor’s office at the launch of the Trust, the city plans to reduce energy costs by more than $20 million annually through the trust’s projects and will share the cost savings with project investors, portioning off a percentage fee for the trust itself. “We’re essentially a finance organization,” said Claire Tramm, energy director for the trust.

Archey said he sees an opportunity for the trust to engage small businesses in developing ideas for infrastructure projects, but he’s not prepared to disclose his business strategies via the trust’s unsolicited proposal process. Otherwise, he says his ideas won’t be protected. As a public entity, the Chicago Infrastructure Trust is held to the same transparency standards of other government organizations, including Freedom of Information Act requests.

“My experience with trying to engage the CIT is more akin to the typical government commodity procurement process,” he said to a room of trust staff, its board of directors and advisers, and members of the public at an April board meeting.

The trust’s chairman, James Bell, former executive vice president and chief financial officer for The Boeing Company, asked for Archey’s patience.

“We don’t want to take your treasure without giving you fair value,” Bell said. “But we’re not far enough along yet to I think encourage a partnership…don’t go away. We’ll get there some day.”

“I can seek assets that the city has,” Archey later said in an interview, “that with a little investment and collaboration with the city, could reduce costs for the [city’s fuel buy] and provide a financing structure that could create a stream of revenue down the road.”

Archey said he has shared his concerns again with Bell and David Hoffman, a member of the board of directors and former inspector general for Chicago. The trust’s spokeswoman did not respond to questions on this matter.

“You can only move so fast doing smart projects and making the right transactions,” said Tramm, speaking generally about criticisms of its operations.