A high-powered investment coalition assembled by Richard Branson, the eccentric British billionaire, is offering Sacramento a shot at hundreds of jobs through a $100 million energy-efficiency program.
Sacramento is one of two cities chosen by Branson's nonprofit Carbon War Room group for a privately financed effort to retrofit office buildings and other commercial properties. The other city is Miami; the program would total $650 million.
Announced late Monday, the deal could mean jobs for hundreds if not thousands of Sacramento construction workers. They would install double-pane windows, solar panels and the like on buildings throughout the city.
"This has the potential to be a huge economic boost for Sacramento," said Mayor Kevin Johnson in a prepared statement. "It represents real jobs, right now, and a chance to be a showcase."
If the deal is approved by the City Council next Tuesday, a Santa Rosa company called Ygrene Energy Fund would oversee the program and provide low-cost retrofitting loans to property owners. Ygrene is part of Branson's consortium and was chosen by city officials over two other bidders.
Consortium officials said they were impressed with Sacramento's commitment to green buildings.
"Sacramento seemed very receptive," said Murat Armbruster, a Bay Area hedge-fund manager and Carbon War Room senior adviser. "A lot of cities in California are going to watch what happens there."
Ygrene arranged a line of credit from Barclays Capital, the banking giant, to fund the loans. As buildings are approved for retrofits, Barclays will bundle loans together from Sacramento, Miami and possibly elsewhere, and sell them to investors as bonds, said Alan Strachan, government liaison at Ygrene.
Building owners would repay the loans through special property-tax assessments, which participating governments would pass through to investors. The idea is, their energy savings would more than pay for the retrofits. A private insurer will guarantee the savings will materialize.
"Every project has to save more than it costs," said Yvette Rincon, the city of Sacramento's sustainability program manager.
Local contractors would be enlisted for many of the projects, although aerospace contractor Lockheed Martin would be involved on the bigger jobs, Strachan said.
The Branson announcement was hailed by the area's hard-hit construction unions. Bob Williams, assistant business manager at Local 340 of the International Brotherhood of Electrical Workers, said his local's 25 percent unemployment could be cut in half.
The city believes the program could yield 230 jobs a year, Rincon said. Ygrene is projecting 1,500 jobs, although that estimate isn't pegged to a particular time frame.
Either way, it could bridge a financing gap that has hindered the growth of the green-building movement.
California is one of 26 states that allow cities and counties to loan money for retrofits through a system called PACE, or Property Assessed Clean Energy. But most municipalities don't have the funds to loan.
The deal brokered by Carbon War Room would bring private capital into the picture. "The municipality has zero risk, financial or otherwise," Strachan said. A similar program in Sonoma County generated $55 million in retrofits, he said, while the work in Sacramento could surpass $100 million.
Branson, 61, is a high school dropout who founded the Virgin conglomerate, a global empire that includes an airline, record label, cellphone business and more.
Ever the showman, Branson led a London-style double-decker bus tour through Sacramento to celebrate the opening of Virgin music's store on Arden Way in 1994. "I love new challenges," he said during his visit. "I'm scribbling notes all the time with ideas."
The store closed in 2005, a rare failure for Branson. Forbes says he's the world's 254th wealthiest man, with a net worth of $4.2 billion.
Knighted by Queen Elizabeth II in 1999, Branson is known for his transoceanic hot-air balloon trips and speed boat crossings. One of his newest ventures, Virgin Galactic, would charge passengers $200,000 a pop for a trip to outer space. Virgin is building a spaceship factory in the Mojave Desert.
He also has had an interest in global warming. His goal in the Carbon War Room is to bring market forces to bear on climate change. Announcing the Sacramento and Miami efforts, he called the deal "the missing piece in the jigsaw puzzle for cities looking to implement green plans."
Sacramento's green-building industry welcomed it. "There will be all kinds of companies lining up to be retrofitted," said Ray Kapahi of GHG Climate Team consulting in Sacramento.
It would be particularly helpful to building owners trying to rent space to the area's biggest office tenant, the state, said Rick Cull of RetroCom Energy Strategies in Elk Grove. The state has special green standards for its buildings.
Craig Sheehy of Envision Realty Services consulting said a client of his is struggling to find $200,000 to bring his building up to the state's standard.
"This is where it's really going to help," he said. "It's a huge shot in the arm."