America is facing enormous social, economic and environmental costs associated with the 20 million vacant housing units and commercial space that is dragging down the national economy. These nonproductive real estate assets (liabilities) burden neighborhoods, local businesses and responsible homeowners. They also represent very real municipal operating costs plus opportunity costs (loss of tax revenues, decline in surrounding land values).
In Michigan, the two Cities of Flint and Detroit are ground zero for this type of problem. It is estimated that Flint now has over 20,000 abandoned homes along with thousands of additional empty buildings. In Detroit, Mayor Bing is now using 70,000 as his estimate of the number of abandoned residential structures plus many empty commercial buildings.
Detroit (DWSD) also is the greatest source of pollution in the entire Great Lakes basin. Every year during heavy rain events, billions of gallons (CSOs-Combined Sewer Overflow) of raw untreated sewerage are deposited directly into Lake Erie via the Rouge River. DWSD now is saying it would like to demolish abandoned houses and install “green infrastructure” to address its problems.
Establishing eco-districts within Flint and Detroit could help enhance the narrative and help us make a better argument for additional funding from private and public sources. The purpose of Project Green House (“PGH”) is to re-invent the process of demolition and disposal of the many thousands of residential and light commercial buildings in the Cities of Detroit and Flint to make it a model for other hard hit communities. PGH will build and operate a highly engineered Advanced Material Recovery Facility (AMRF). The AMRF will utilize state of the art material handling and recovery technology that recycles up to 95% of abandoned homes and other light commercial buildings. PGH’s goal as a market-driven business is to become the lowest cost provider of green remediation services and improve the process and velocity in preparing lands for reuse.
This innovative start-up social enterprise will be structured as a hybrid 501(c) 3 to facilitate partnering at the City, County, and State and Federal levels. PGH is presently finalizing its Public Private Partnership (P3) incorporating a volume driven rebate will lower the cost of demolition for the target communities of Detroit and Flint. This project is expected to generate significant economic activity and a high number of jobs (see table) in its host communities. AMRF operations together with the marketing and sales of recycled feed stocks are expected to create significant operating leverage. PGH expects to expand in Detroit and Flint and iterate in other hard hit communities to grow its businesses.
Initial PGH funding is through an innovative Public Private Partnership Agreement (“P3”) between the host community and a coalition of public and private sources. Follow on funding will be secured from a variety of sources including: staged lease financing, sale of New Market Tax Credits, and other subsidized lending sources focused on the host communities (Flint, Detroit). Additionally, PGH will also seek Federal grants for job training and other related programs to fund expansion of its work force and expand into strategically related commercial activities.
PGH is presently in late stage discussions with a number of leading philanthropic institutions who have committed significant dollars and resources to date. These institutions are focused on addressing Detroit and other post industrial urban areas. PGH is “managed” and organized by Steve Hamp who functions as informal Chairman, John Langs and Lindsay Aspegren.
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