Airports’ Increasing Interest in Envision

(Image Caption: Nashville International Airport Water Source Geothermal System)

By Carly Shannon, ENV SP, LEED AP BD+C, C&S Companies

On June 15, 2017, nearly 70 airport representatives, consultants, and partners participated in an Envision & Airports webinar hosted by the Airports Council International – North America (ACI-NA) Sustainability Working Group. Organized by the group’s leadership, Brendan Reed of San Diego International Airport and Danielle Bower of Philadelphia International Airport, this was the second of two webinars focused specifically on Envision and its use in the aviation industry. The first provided a general overview, while the more recent event dug into actual application of the rating system to airport projects. Speakers included representatives from Nashville International, Detroit Metropolitan Wayne County, and Portland International airports. Sharing benefits, lessons learned, and key takeaways from their personal experiences, the speakers will help inform other airports as they move toward more sustainable infrastructure.

The variety of projects—a runway reconstruction, water source geothermal system, and a quick-turnaround rental car facility—demonstrate not only the wide-ranging applicability of Envision, but also its flexibility. Each of these diverse projects benefitted from the rating system through cost savings, stakeholder inclusion, reduced environmental impacts, and improvements to the design process. Although there is a learning curve associated with any new guidance or tool, each airport is looking forward to integrating Envision into future efforts.

The level of engagement during the June webinar and the speakers’ positive takeaways made one thing clear—Envision is gaining traction in the airport world.

(Water Source Geothermal at the Nashville International Airport Received Envision Silver Award )

Summary of ISI’s President Congressional Briefing

Throughout the 2016 presidential campaign candidate Donald Trump promised a $1 trillion ten-year plan to modernize infrastructure including roads, wastewater treatment plants, bridges, transit and power systems. Since assuming office, the Trump Administration has been focused on other legislative priorities and sundry investigations into alleged improprieties. Nonetheless, expectations remain high for increased spending on infrastructure that boosts local job creation, improves constituency services and increases tax revenue. While the legislative priorities are health care and then tax reform, Capitol Hill’s focus on infrastructure is increasing daily.

Amid this increasing attention, the Trump Administration unveiled its 2018 budget proposal that, among other things, addresses infrastructure spending. To the great disappointment of many, the proposed budget included the following reductions in accounts that traditionally supported annual infrastructure spending: Corps of Engineers (dredging, port construction) – down 16%; Department of Commerce (manufacturing infrastructure) – down 16%; Department of Transportation (roads, transit) – down 13%; Department of Interior (roads, park facilities) – down 12%, among additional reductions. Ironically, the American Society of Civil Engineers (ASCE) recently released their quadrennial infrastructure report card that called for $4.6 Trillion in increased spending over the next ten years and assigned a poor rating of D+ to our nation’s efforts to provide essential public infrastructure. While the President’s budget represents a wish list, it is merely a starting point for Congressional budget deliberations. Nonetheless, the budget proposal stands in stark contrast to the broad public expectations the President forged on the election trail.

To assist Members of Congress and their staff with greater awareness of infrastructure issues, the Energy and Environment Study Institute (EESI) launched a new guest lecturer series on infrastructure. The first event in the speaker series, Investing in US Infrastructure for Maximum Dividends, was held on May 12. The event featured Tom Smith of ASCE, John Stanton of the Institute for Sustainable Infrastructure (ISI) and Mariana Silva of Infrastructure Planning & Finance, Nathan Associates Inc.   Video, audio, speaker’s slides and presentation abstracts from the event can all be found here: http://www.eesi.org/051217infrastructure

ISI’s President John Stanton presented on upcoming changes to Envision® that will be released in 2018. The next version, Envision 3.0 expands upon 2.0 by adding the construction phase to the planning and design tool. It increases the focus on community resilience, health and safety, and quality of life, as well as adding indicators on economic analysis. Local governments, agencies, and infrastructure owners will find the next version of Envision even more intuitive to implement on projects. With the launch of Envision 3.0 ISI will also implement a credential maintenance program with continuing education for ENV SPs.

Stanton also addressed requests from New York:

(http://sustainableinfrastructure.org/envision/project-awards/26th-ward-wastewater-treatment-plant/ ), Los Angeles ( http://sustainableinfrastructure.org/envision/project-awards/south-la-wetland-park/ ) and other C40 cities, that ISI innovate upon the existing Envision individual-project platform to expand infrastructure planning to a citywide portfolio-level approach. Using New York and Los Angeles as case studies, ISI seeks to demonstrate that sustainable infrastructure approaches can efficiently apply across an entire suite of city infrastructure investments. Best practices learned will create a prototype system for adoption by any city to track and benchmark sustainability and resilience performance across all infrastructure systems.

The goal is a streamlined, holistic planning tool that empowers city resiliency officers to coordinate, integrate and compare citywide infrastructure efforts and collectively benchmark them. Success means increased understanding and integration of infrastructure development across departments and construction schedules, improved communication through a single framework, and enhanced interagency cooperation.

Resilient cities start with smarter, sustainable infrastructure, and the Institute for Sustainable Infrastructure is a recognized leader in this field. Our portfolio-wide management tool will empower resiliency officers to catalyze coordination of infrastructure investment around their sustainability and climate goals. We will leverage investment in cities by providing sustainability officers with a tool to amplify their effectiveness in delivering superior social, environmental and economic infrastructure outcomes.

Book Launch and Conference for Planning Sustainable Cities

The Zofnass Program for Sustainable Infrastructure at Harvard University has published a book on how Envision can be used to make better informed decisions at the urban scale.

To learn more about the event go to: http://research.gsd.harvard.edu/zofnass/menu/events/forthcoming/

To register for the event go to: http://www.eventbrite.com/e/planning-sustainable-cities-conference-registration-26849540699?aff=PSC

Sustainability Crosses All Sectors

The projects submitted for the Envision verification and award program cross all infrastructure sectors. While there are projects in the solid waste, energy, and land development sectors, the majority of projects are related to water and transportation infrastructure.

 

type

There are a wide variety of transportation projects in the award program. Currently only one transportation project has been recognized (the Low Level Road), but there are several streetcar, bridge, rail, airport, and additional rail projects in the program. The majority of projects in the award program are in the water sector. This includes wastewater collection and treatment, water treatment and distribution, and stormwater projects.

water  transpo

The Potential of Crowdfunding for Public-Private Partnerships

Alternative delivery methods like design-build and public-private partnerships (P3s) tend to promote more sustainable outcomes by including key project team members in multiple phases of a project’s life cycle. In addition, P3s have the opportunity to expand the stakeholder list by incorporating alternative funding resources. Guest blogger Brian Ross from InfraShares discusses how crowdfunding can promote community support for infrastructure projects.

Around the world, Public-Private Partnerships (P3s) play an increasingly critical role in meeting the need for investment in public infrastructure. However, P3s in the United States often fail to succeed due to political opposition, lack of transparency, and public resistance to private control of critical infrastructure assets. Moreover, direct investment in infrastructure P3s is typically limited to institutional investors, creating limited markets for capital and reducing the economic impact of infrastructure investment to the local community.

However, recent changes to securities legislation under the 2012 Jumpstart Our Business Start-Ups (JOBS) Act have removed restrictions on general solicitation of securities to the public, allowing for “crowdfunding” of equity and debt investment in new projects (referred to in this article as “investment crowdfunding”). Investment crowdfunding is a way to source money for a project by asking a large number of backers to each invest a relatively small amount and receive equity shares, or debt, of the project. Because the “special purpose entity” established by the P3 developer is a new venture, it is able to take advantage of the new investment crowdfunding regulations.

The new legislation has fueled a growing investment crowdfunding industry. Forbes reported in March, 2015 that crowdfunding investors injected $1 billion into the U.S. real estate market last year. Similar to commercial real estate projects, investment crowdfunding allows infrastructure developers to raise equity from local individual investors, which benefits a P3 in many ways including: Increased public and political support; increased transparency; and promotion of locally-serving projects with funding from multiple sources. As an indication of the potential for crowdfunding investment in P3s, the Virginia DOT’s Office of P3 (VAP3) recently included crowd-financing in their 2015 P3 Project Pipeline Report citing an enhanced P3 model that “can provide another level of competition for those who wish to invest in P3 projects at the equity level, open the door for public involvement, especially local communities as an equity partner in the P3 model, and create opportunities for risk sharing, idea exchange, additional transparency, and enhanced public engagement.”

Community investment and increased transparency: One common complaint about P3s from elected officials and community members is concern over private ownership of critical infrastructure assets. However, allowing for public investment in a P3 through investment

crowdfunding, especially from those served by the project, allows for some portion of local ownership of the project. Investment crowdfunding will also provide the opportunity to keep some of a P3 project’s investment returns within the community served by the project; thereby increasing the economic impact of the infrastructure development.

Having public investment also increases P3 transparency. Information related to the risks of investing in the P3 would be disclosed publicly, as required by the SEC, to interested investors performing their due diligence. Disclosure documents that would be publicly accessible on the crowdfunding platform for interested investors may include: the project risk register; all publicly available procurement documents; any available Public Offering Statement or Official Statement for bonds; contract agreement documents; and project studies, such as ridership or traffic and revenue studies. After an investment is made, updated documents, audited financial statements, quarterly progress reports or any other relevant documentation would also be provided to investors to give them necessary information to evaluate the performance of their investment.

Most importantly, crowdfunding investment for a P3 can help promote sustainable infrastructure projects. Investors who support sustainable infrastructure can vote with their dollars and choose to invest in projects that have demonstrated a commitment to sustainability by being Envision rated. If sustainable infrastructure projects are shown to be preferred by investors over non-sustainable projects, then infrastructure planners will be motivated to ensure sustainability in order to increase their competitiveness in the capital markets. Furthermore, if project sponsors can demonstrate a social return associated with the sustainability of their project, investors may accept a lower financial return, thereby decreasing the cost of capital, and increasing the economic viability of project.

How does it work? Once the P3 project is awarded, the private developer works with a platform like InfraShares to develop and run an investment crowdfunding campaign. The developer will define the amount and type of securities, provide offering memos, and determine the duration of the campaign. For 506(c) offerings the amount that can be raised is unlimited but investors must be accredited; for Regulation A+ offerings the current limit is $50 million from unaccredited investors but audited financials are required; and for Title III CF offerings capital raises of up to $1 million from un-accredited investors are allowed with reduced reporting requirements. The type of capital is very flexible and can be equity, preferred equity, mezzanine debt, convertible notes and corporate notes.

The investment crowdfunding campaign itself is run very similar to the model used by commercial real estate investment crowdfunding sites such as Fundrise, RealtyShares and RealtyMogul. Project information is posted on the site that can be viewed by potential investors that includes commercial terms, pro-forma financial models and a video describing the project (an NDA can be required if desired by the developer). Investors visiting the site can

browse by project type, geography, security type, internal rate of return, etc. to find an offering that fits their investment objectives. If the investor can post questions to the developer or the investment community in general in order to aid with performing due diligence. The site will also offer comparison and analysis tools to help investors determine which projects are right for them.

Following investment, InfraShares acts as an ongoing engagement tool for the investors. The platform would distribute all financial statements, disclosures and construction/O&M updates issued by the SPE. InfraShares also facilitates all disbursements of returns to investors and allows investors to track the performance of their individual investments or portfolio of projects. Any secondary market for existing securities would also be facilitated by InfraShares, allowing investors to buy and sell securities as their individual liquidity needs require.

Summary: The goal of the crowd-financed P3 model is to facilitate involvement of the public, especially local community members, as a major partner in the current P3 model. Investment crowdfunding is a proven model for increasing public engagement and transparency in sophisticated development projects and new ventures. In addition, aligning the interests of the P3 developer, public agency and the crowd-financed investors, can act as a catalyst to facilitate smoother delivery of the project during construction and O&M.

These benefits can be achieved with little cost to the developer because of the technology and expertise leveraged by the InfraShares team. For more information, visit Infrashares.com or contact Brian Ross (embed: brianross@infrashares.com).

Alternative delivery methods like design-build and public-private partnerships (P3s) tend to promote more sustainable outcomes by including key project team members in multiple phases of a project’s life cycle. In addition, P3s have the opportunity to expand the stakeholder list by incorporating alternative funding resources. Guest blogger Brian Ross from InfraShares discusses how crowdfunding can promote community support for infrastructure projects.

Around the world, Public-Private Partnerships (P3s) play an increasingly critical role in meeting the need for investment in public infrastructure. However, P3s in the United States often fail to succeed due to political opposition, lack of transparency, and public resistance to private control of critical infrastructure assets. Moreover, direct investment in infrastructure P3s is typically limited to institutional investors, creating limited markets for capital and reducing the economic impact of infrastructure investment to the local community.

However, recent changes to securities legislation under the 2012 Jumpstart Our Business Start-Ups (JOBS) Act have removed restrictions on general solicitation of securities to the public, allowing for “crowdfunding” of equity and debt investment in new projects (referred to in this article as “investment crowdfunding”). Investment crowdfunding is a way to source money for a project by asking a large number of backers to each invest a relatively small amount and receive equity shares, or debt, of the project. Because the “special purpose entity” established by the P3 developer is a new venture, it is able to take advantage of the new investment crowdfunding regulations.

The new legislation has fueled a growing investment crowdfunding industry. Forbes reported in March, 2015 that crowdfunding investors injected $1 billion into the U.S. real estate market last year. Similar to commercial real estate projects, investment crowdfunding allows infrastructure developers to raise equity from local individual investors, which benefits a P3 in many ways including: Increased public and political support; increased transparency; and promotion of locally-serving projects with funding from multiple sources. As an indication of the potential for crowdfunding investment in P3s, the Virginia DOT’s Office of P3 (VAP3) recently included crowd-financing in their 2015 P3 Project Pipeline Report citing an enhanced P3 model that “can provide another level of competition for those who wish to invest in P3 projects at the equity level, open the door for public involvement, especially local communities as an equity partner in the P3 model, and create opportunities for risk sharing, idea exchange, additional transparency, and enhanced public engagement.”

Community investment and increased transparency: One common complaint about P3s from elected officials and community members is concern over private ownership of critical infrastructure assets. However, allowing for public investment in a P3 through investment

crowdfunding, especially from those served by the project, allows for some portion of local ownership of the project. Investment crowdfunding will also provide the opportunity to keep some of a P3 project’s investment returns within the community served by the project; thereby increasing the economic impact of the infrastructure development.

Having public investment also increases P3 transparency. Information related to the risks of investing in the P3 would be disclosed publicly, as required by the SEC, to interested investors performing their due diligence. Disclosure documents that would be publicly accessible on the crowdfunding platform for interested investors may include: the project risk register; all publicly available procurement documents; any available Public Offering Statement or Official Statement for bonds; contract agreement documents; and project studies, such as ridership or traffic and revenue studies. After an investment is made, updated documents, audited financial statements, quarterly progress reports or any other relevant documentation would also be provided to investors to give them necessary information to evaluate the performance of their investment.

Most importantly, crowdfunding investment for a P3 can help promote sustainable infrastructure projects. Investors who support sustainable infrastructure can vote with their dollars and choose to invest in projects that have demonstrated a commitment to sustainability by being Envision rated. If sustainable infrastructure projects are shown to be preferred by investors over non-sustainable projects, then infrastructure planners will be motivated to ensure sustainability in order to increase their competitiveness in the capital markets. Furthermore, if project sponsors can demonstrate a social return associated with the sustainability of their project, investors may accept a lower financial return, thereby decreasing the cost of capital, and increasing the economic viability of project.

How does it work? Once the P3 project is awarded, the private developer works with a platform like InfraShares to develop and run an investment crowdfunding campaign. The developer will define the amount and type of securities, provide offering memos, and determine the duration of the campaign. For 506(c) offerings the amount that can be raised is unlimited but investors must be accredited; for Regulation A+ offerings the current limit is $50 million from unaccredited investors but audited financials are required; and for Title III CF offerings capital raises of up to $1 million from un-accredited investors are allowed with reduced reporting requirements. The type of capital is very flexible and can be equity, preferred equity, mezzanine debt, convertible notes and corporate notes.

The investment crowdfunding campaign itself is run very similar to the model used by commercial real estate investment crowdfunding sites such as Fundrise, RealtyShares and RealtyMogul. Project information is posted on the site that can be viewed by potential investors that includes commercial terms, pro-forma financial models and a video describing the project (an NDA can be required if desired by the developer). Investors visiting the site can

browse by project type, geography, security type, internal rate of return, etc. to find an offering that fits their investment objectives. If the investor can post questions to the developer or the investment community in general in order to aid with performing due diligence. The site will also offer comparison and analysis tools to help investors determine which projects are right for them.

Following investment, InfraShares acts as an ongoing engagement tool for the investors. The platform would distribute all financial statements, disclosures and construction/O&M updates issued by the SPE. InfraShares also facilitates all disbursements of returns to investors and allows investors to track the performance of their individual investments or portfolio of projects. Any secondary market for existing securities would also be facilitated by InfraShares, allowing investors to buy and sell securities as their individual liquidity needs require.

Summary: The goal of the crowd-financed P3 model is to facilitate involvement of the public, especially local community members, as a major partner in the current P3 model. Investment crowdfunding is a proven model for increasing public engagement and transparency in sophisticated development projects and new ventures. In addition, aligning the interests of the P3 developer, public agency and the crowd-financed investors, can act as a catalyst to facilitate smoother delivery of the project during construction and O&M.

These benefits can be achieved with little cost to the developer because of the technology and expertise leveraged by the InfraShares team. For more information, visit Infrashares.com or contact Brian Ross.

Envision Awards in the US and Canada

By the end of 2015, nine projects earned Envision awards. These projects represent a variety of infrastructure types across the US and Canada.

Water pipes, wastewater treatment plants, stormwater systems, roads, energy generation, and more. Nine projects have completed third-party verification and received awards across the US and Canada as shown in the illustration.

These projects are:

  1. The William Jack Hernandez Sport Fish Hatchery, Anchorage, Alaska, received an Envision Gold award in July 2013. This brownfield redevelopment incorporated sophisticated recirculation technology that reduced the water and energy normally used by conventional hatcheries by 95 percent while supporting sport fishing industry. The project restored and improved a public park-like setting and viewing areas with trails, boardwalk, and educational signs while protecting the on-site stream.
  2. The Snow Creek Stream Environment Zone Restoration, Placer County, California, earned an Envision Platinum award in November 2013. Another brownfield restoration, this project also restored historic wetlands and the stream environment zone by removing fill and debris and reestablishing vegetation and wildlife habitats. This project also created a public park with walking paths.
  3. The South Los Angeles Wetland Park in the city of Los Angeles, California, earned an Envision Platinum award in January 2014. The purpose of the wetland was to enhance the quality of stormwater runoff by treating runoff from a 525-acre contributing watershed and create a new public park in a community with little green space.
  4. The Sun Valley Watershed Multi-benefit Project in Los Angeles County, California, earned an Envision Platinum award in August 2014. The project consists of several improvements in the watershed to manage stormwater runoff, provide flood protection, improve watershed health, increase open space and recreational opportunities, and increase wildlife habitat.
  5. The Line J, Section 1 Pipeline in the Tarrant Regional Water District (TRWD) of north central Texas earned an Envision Silver award in October 2014. This two mile, 108-inch diameter pipeline delivers water from reservoir for use to meet potable demand. The project improves the ability to meet growing water demands and future projections.
  6. The Grand Bend Area Wastewater Treatment Facility in Ontario, Canada, on the shoreline of Lake Huron, earned an Envision Platinum award in February 2015. The project expanded the capacity of the facility by converting an existing lagoon into an extended aeration mechanical treatment facility and wetland nature reserve.
  7. 26th Ward Wastewater Treatment Plant in New York City, New York, earned an Envision Silver award in August 2015. The project added setting tank and pumps to expand treatment capacity as well as incorporated other upgrades to improve resilience at the existing treatment plant.
  8. Low Level Road in Vancouver, Canada, earned an Envision Platinum award in September 2015. The project involved the realignment and elevation of approximately 2.6 kilometers of road providing space for two new rail tracks and eliminating three existing road and rail crossings to provide direct access to major port terminals.
  9. Tucannon River Wind Farm in Columbia County, Washington, earned an Envision Gold award in November 2015. The wind farm includes 116 turbines atop 80-meter tubular steel towers and produces an average of around 101 MW.