After reading about some of the challenges and issues addressed in Emily Badger’s Atlantic City piece, I thought about the Denver non-profit, Living City Block. The folks at Living City Block are also trying to navigate the tangled finance, legal, and governance structure, with the specific goal of enticing mid-size commercial businesses to be more energy efficient. The idea is based on the premise that for most small buildings rarely have the resources to do a serious retrofit and the idea is “cost-prohibitive.” Also, 5 percent of commercial building owners in the U.S. own small to mid-size properties, take up 45 percent of all the commercial square footage in the country, and consume an equally large share of America’s annual commercial energy use. But they have developed a system in which small business/buildings could combine with similar buildings/business with the idea that if all of those building owners got together to order pay for efficiency measures in bulk (buy high-efficiency water heaters in bulk or to collectively replace one-thousand windows) they could achieve the kind of economies of larger buildings. Basically, it’s a building association of neighbors, with a common goal. Living City Block acquires the financing, and also pay for and coordinate all the retrofit work and the owners won’t pay for any of the retrofits. They’ll instead turn over their utilities to Living City Block. So, for example, if a business was paying $100 a month to the electric company, they would instead be paying $90 to Living City Block. Once the utility bill falls, both amounts would drop. In return for the deal however, the building owner is loosing some control over their building. The real challenge is in coordinating the building owners, utility providers, and interactions between the buildings, Living City Block, banks, and the City government. Obviously there are still many questions with this model, Exactly how long will the contracts last? What happens if a property owner sells? What about buying out? Can individual improvements still be made apart from the Living City Block improvements? And how can Living City Block accommodate these concerns while still meeting the requirement of the banks that are supposed to be doing most of the financing?
But it does offer an interesting model for grass-roots financing and for local business owners to instigate changes that may otherwise be out of their reach. Especially if the model could be expanded to other localized improvements, and some of the uncertainties were answered.