From left: Cassie Green, Said Al-Hallaj, Elise Zelechowski, Brian Levin, and Deborah Sawyer
Over the past decade, economists and scientists alike have championed green entrepreneurship for its potential to create jobs, cut down on waste, and slow the pace of global warming. But environmentally conscious goods and services often carry a premium price—which can be a tough sell to consumers when the economy heads south. There’s no comprehensive data to show how the downturn that began in 2007 affected green businesses, but anecdotally, some sectors of the clean economy retracted—retail, building—while innovative segments such as wind and solar energy soared.
Undeterred by the volatility around them, five Chicago entrepreneurs are forging ahead with ideas that make our Earth a better place to live and that make good business sense. The winners of our 2012 Green Awards are a woman who has reinvented the timeless concept of the neighborhood grocery, a professor blazing a trail within the alternative energy market, an engineer who is helping Chicago redevelop unusable land, a socially minded retailer who sees resale potential in salvaged building materials, and a transportation advocate who believes that in the future drivers will find an electric vehicle charging station on every city block.
All together, our honorees prove that, yes, you can be business minded and environmentally oriented. Chicago assembled the group for a roundtable discussion about running a sustainable enterprise. An edited excerpt of the conversation follows.
CHICAGO: Why did you start a green business?
BRIAN LEVIN: I come from the commercial real-estate world, and in 2007, when real estate started to collapse, I needed to reinvent myself. There are going to be more electric vehicles on the road five to ten years from now—that seemed like a sure bet. The mixture of real estate and green led me to electric vehicle charging stations and the idea of putting charging stations in shopping malls, movie theatres, office buildings, and eventually working with utility companies, government projects, you name it.
DEBORAH SAWYER: Before, I mainly cleaned up hazardous waste sites. Now we clean up those sites—but we make the projects greener. What made me do it? It’s just been a natural progression. The world is getting greener. There’s technology and there’s creativity in what you can do. For example, we design permeable pavement lots and collect the graywater [wastewater] so it can be used for watering the grass.
ELISE ZELECHOWSKI: Working through the Delta Institute [a nonprofit environmental group that promotes economic development] and doing market analysis in partnership with the University of Illinois, I found that 40 percent of what ends up in landfills is from construction and demolition projects. Most folks don’t know that Cook County only has one remaining landfill, with about seven years of capacity on it. So we’re dealing with a huge resource issue, and the cost for landfilling is going to go up.
I wanted to create a new market for the diversion of these materials. How can they be diverted in a way that’s economical for people? How do you create a retail environment where people can go in and make a purchase?
So what we have now is an operation that diverts those materials and resells them to the public at a fraction of the cost of new. We also train ex-offenders to do the deconstruction, providing them new skills in an emerging green-collar job industry. So a lot of the people who come looking for materials for their rehab or remodeling project feel good about how they spend their money.
How did you finance your venture?
CASSIE GREEN: We opened our store in 2008, and we funded it with personal funds, as well as through a Small Business Administration [SBA]–backed loan through a bank.
SAWYER: This was 21 years ago. My mom gave me $20,000. I also went to 23 banks and nobody would give me a loan. So I did some research and found one of three female loan officers in the whole city at Harris Bank. She approved my stuff on the spot and I had my money—$50,000— three days later. I have traditional financing now: SBA loans and traditional bank financing.
SAID AL-HALLAJ: In the past few years, we have hooked up with Heartland Angels, a local venture group. We have raised over $2 million from them. Then, last year, we received a stimulus grant from the State of Illinois that allowed us to finish a $1 million expansion for production.
ZELECHOWSKI: We started with $100,000 through the Chicago Community Trust [cct.org] and a lot of sweat equity.
LEVIN: The company was basically founded with a $50,000 check cut by one of our two partners. We’ve been able to pay that back.
Were there any secrets or unusual funding sources that other entrepreneurs shared with you?
GREEN: There’s a fantastic free program through the SBA called SCORE, which stands for Service Corps of Retired Executives [score.org]. I was partnered up with a former CFO of a Fortune 500 company and a guy who had run 12 successful retail stores in Chicago. Together the pair were so helpful. They helped me with my business plan. I needed a plan to get funding. You can’t just walk into the bank with a smile.
ZELECHOWSKI: Organizations or businesses like ours [nonprofits that generate revenue] can access funds called program-related investments, or PRIs [a direct investment, typically given by foundations and pioneered by the Ford Foundation; for more info, go to fordfoundation.org].
SAWYER: I actually have a mentor, and I believe a mentor is invaluable. Most of us know our technical area well, but we may not know about the business part. I was adopted by Gerald Fogelson [the businessman behind Central Station, a mixed-use development in the South Loop]. I meet with him about once a quarter. He gives me great ideas, and he looks through my financials.
What role do you think the government should play, if any, in encouraging green business formation?
LEVIN: A lot of times a municipality or company might not have a budget for electric vehicle charging stations—or any up-and-coming green technology—and they need [federal] smart-grid grants or block grants. They can’t get our stuff if they don’t have the money or knowledge to do so.
SAWYER: You are so right. The government is going to have to step in and provide funding for putting your charging stations in dramatically underserved areas.
For other projects, the government is going to have to subsidize alternative energy systems because, let’s face it, coal is the cheapest thing out there and, after that, gas. We know those aren’t great [for the environment]. So if we want to start moving toward wind and solar, we’re going to have to have government money for the future.
AL-HALLAJ: If you just hand money out, it’s not going to sustain itself, unfortunately. I hate to say that. When the government handed out $2 billion two years ago for lithium battery manufacturing, the money was not distributed equally among the states. It was highly centralized in three states—Michigan, Indiana, California—and those companies who received the funds are competitors. It was not intended to hurt us, but as a startup company, we cannot compete in our own backyard with these companies that have received all of these federal subsidies.
ZELECHOWSKI: I think there are a lot of places where the government needs to stop subsidizing bad behavior and start subsidizing good behavior. We need to start thinking about how all these perverse incentives that we’ve created through policy are affecting a lot of the industries that we work in.
We’re not really looking at the whole picture. It’s just too cheap to throw things away. We don’t understand, for example, the real cost of landfilling.
AL-HALLAJ: We cannot continue to think that we can throw some money here or there and fix these issues. If you really want to look at green business as a whole, you have to start with a plan [from the federal government]. Everything else follows.
A few years ago, Chicago was said to be at the forefront of the green movement. Is it still true? If not, what can the city do?
LEVIN: I think Chicago has done a wonderful job, and I’m proud to live here. But I think there are growing issues that the professionals at this table are facing. Maybe the city should pick our brains a little bit? We can help you.
GREEN: I think there’s some great press out there. I think there are things within Chicago that could happen. As I understand it, there are not rewards for making choices that are more environmentally conscious and kind in your business. As a small business, that would be a huge incentive.
AL-HALLAJ: I served on Daley’s Climate Change Task Force. [City officials] have their heart in the right place, but I am an engineer. We’re suckers for numbers. You have to put out a plan that shows your targets and how you’re going to meet them, and you have to show that they are sustainable.
Chicago doesn’t have anything like that. I think we have incredible people and the right intention, but I would like to see more quantifiable results.
ZELECHOWSKI: Do people know that there’s a Chicago Climate Action Plan? [The plan is a citywide task force whose aim is to significantly reduce greenhouse gas emissions by 2020. The group agreed that the public doesn’t know much about it, and that’s a problem.] As much as it’s a gut response for the government to do all types of work around policy and incentives, there’s not enough focus around marketing and communication and education.
SAWYER: Something else Chicago can do, especially in underserved areas, is work within TIF districts in Chicago. [TIF stands for tax increment financing, which is used as a funding measure for redevelopment. A TIF borrows against future tax increases.] If you want TIF money or want to build in a TIF district, the city should demand that your project is green—or is as green as it can be—for whatever enterprise is going to go there.
Are you profitable? If not, when do you project that you will become profitable?
LEVIN: We’ve been profitable for almost two years.
SAWYER: We are profitable as well, but we’re 21 years old. We’ve had good years and bad years. When you’re a little company, what would be a ripple to a big company is always a tsunami to us. You have to be able to reinvent yourself [to stay profitable].
ZELECHOWSKI: As a social venture, the ReBuilding Exchange receives grant funding and earns income from sales and public workshops. It’s our goal to operate only off earned income—we just reached that on our core operations in December; our work training program is still funded by grants. Our first year, 2009, we did about $60,000 in sales. We’re projecting $400,000 this year, so we’re really excited.
AL-HALLAJ: We’re not yet profitable. Right now we’re going for traditional [venture capital sources] and looking at raising $5 to $10 million.
It’s never-ending when you have a business like ours, technology. You guys are lucky [to have had significant revenues in the first year]. It took us ten years to get the first product out, so we’re celebrating now.
In a down economy, what strategies do you use to convince customers that green is worth paying for?
GREEN: I think the best thing is to latch on to the people who are curious. Ten percent is the passionate minority, and then there’s the other 90 percent.
I started to realize there are people who have curiosity, and we need to take advantage of that—have conversations, direct them to websites. Some people care, some people don’t. At a very basic level, it’s not about numbers, it’s not about anything concrete. It’s about, What would my grandma say? She’d say, Well, don’t waste that.
Photograph: Taylor Castle; stools: Greta de Parry/courtesy of The Haymaker Shop; Hair and Makeup: Rommy Najor; Wardrobe: Agga B. Raya; Clothing: courtesy of Bloomingdale’s
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