Smart Cities Really Just Want to Be More Marketable
Louisville, Kentucky
And that means rapidly improving overlooked infrastructure in the urban areas millennials are targeting for relocation.
Sustain Louisville launched in 2013 with the goal of reducing the city’s per capita energy use 25 percent by 2025, a tall task when faced with outdated, high-maintenance building equipment and limited funds.
Becoming a green city is as much about attracting residents as it is about protecting the environment—residents drawn to urban cores where infrastructure has often gone ignored.
In some ways, the smart cities movement is simply the push to improve that infrastructure on a rapid timeline to remain competitive nationally and even internationally.
“Everything needs to go back to helping the cities attract and retain people to work, live and play there,” said Lisa Brown, senior national director of municipal infrastructure and smart cities for Johnson Controls in North America. “We’re finding places that haven’t had investments for many decades are places millennials want to move back into.”
Johnson Controls specializes in smart city solutions and met with Louisville’s mayor, sustainability director and chief financial officer to talk structured finance vehicles. The process is not very different from a city constructing a new stadium or a county adding a correctional facility.
Potential projects are prioritized based on their ability to deliver the biggest impact early on, deals structured, audits conducted and cash flows evaluated. Some cities have their communities approve procurement policies and legislation, and only then can installation begin.
Louisville’s sustainability plan involves $27 million in energy-efficient upgrades across almost 200 buildings from city hall to the city zoo. A projected $56 million in energy cost savings over 25 years means the project pays for itself—no-risk funding ensured through an energy savings performance contract.
Johnson Controls pays the upfront costs, assuming financial liability if savings fall short.
“When you have limited resources it’s important that you get results, and that you’re only paying for success,” said Steve Rowland, the city’s chief financial officer, in a statement.
The contract guarantees $2.7 million in annual energy savings across water conservation efforts, lighting upgrades, solar panel installations, heating and air conditioning, and building management system controls. Additionally, the contract promised metro buildings would use 395,000 fewer gallons of water in under a year.
Resulting projects created 400 jobs and contracts with minority- and women-owned businesses, and officials expect additional economic development will follow.
“We try to understand what their overall priorities are, while helping them curb costs and generally working with other stakeholders—consortiums,” Brown said. “The smart city concept is really one of collaboration.”
Multiple corporate advisors are encouraged, as is the compartmentalization of smart city projects.
Brown sees smart cities as those embracing ever-evolving products and technologies to achieve a distinct set of goals: enhancing public safety; improving mobility; addressing climate change; meeting the needs of the underserved; making infrastructure smarter; increasing connectivity, and achieving resiliency and cost savings. But always, it all comes back to boosting city marketability to citizens.
More objects are connected to the internet than there are people in the world, and city officials want to see return on investment from their tech investments. Smart cities like Louisville show ROI through the customer-driven use of data.
“Data is great,” Brown said. “But if it’s a wave of data, and I’m not able to make it snackable to communicate out to our constituents, then it means nothing.”
Dave Nyczepir is a News Editor at Government Executive’s Route Fifty and is based in Washington, D.C.
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