The Chicago Sovereign Fund is a public investment fund owned by the city, like a sovereign wealth fund at the city level. It takes ownership stakes in the manufacturers Chicago already buys from, such as makers of solar panels, batteries, wind power equipment and transit vehicles, so the city builds wealth for generations instead of only paying their bills.
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PART OF THE NEW BURNHAM PLAN
CONSTRUCT · FOUNDATION
Chicago Sovereign Fund
Chicagoans should get factory jobs, and the city should get an ownership stake in the companies it buys from.
Chicago's plan will buy solar panels, batteries, e-bikes and small electric vehicles for years, so I'd recruit the companies that make them to build here and hire Chicagoans first.
Right now every one of those dollars leaves the city for good. We'd have no stake in those companies, no say when they set prices, and no protection when the supply chain breaks. Meanwhile, the city's own purchasing is billions of dollars in guaranteed demand.
So Chicago recruits manufacturers in solar, battery storage, e-bikes, low-speed vehicles and urban wind. In exchange for land, incentives and guaranteed city purchasing, the city takes an ownership stake. Partners pay a living wage with full benefits, hire Chicago residents first, and buy parts from Chicago first, then Illinois, then the Midwest, then the rest of the U.S. The city gets below-market prices as the main customer the companies can count on, and the e-bikes and small vehicles have to be built for our winters.
Every deal is out in the open. Any company can apply, and every major investment goes to the City Council with all its terms public before the vote. The returns come back to Chicago: first into more investments, then the city budget, then job training.
WHAT IT WON'T DO
It isn't a giveaway. Every incentive comes with terms, and a partner that breaks its commitments pays the incentives back.
It isn't a backroom deal. A board oversees it: the Mayor's Office, the City Council, community members from neighborhoods where plants open, and independent financial experts. Every stake, price agreement and return is public and reported every year.
It won't pay off overnight. Returns build over years, and they come back to Chicago.
How it connects
Nothing in this plan works alone. These are the questions people ask next, and the policies that answer them.
What is the city buying that much of? Chicago Powers Itself puts solar panels on city roofs and a power plant in every new neighborhood plaza, and low-speed vehicles are small electric vehicles for short trips.
Chicago Powers Itself →
Low-Speed Vehicles →
Who gets trained for these jobs? The Chicago Trades Pipeline trains Chicagoans, with the unions, for careers rebuilding the city, with no college debt.
Chicago Trades Pipeline →
Why does the city take a stake at all? The Public Assets Protection Act sets the rule that when city money makes a big project possible, the city takes an ownership stake in it, the way any investor would.
Public Assets Protection Act (PAPA) →
FISCAL IMPACT
Investment Cost
RENOVATION STEP
Construct · Foundation
SHOW THE FULL POLICY DETAILS
01
Where it ranks
OUR PRIORITIES
#27 of 33
SMALLER MOVE
37.5 / 100
Daily life
Long-term future
Reach
Unlocks
PROMISING It is a city wealth fund. Chicago takes ownership stakes in the manufacturers it already buys from, so the city earns from its own spending.
When you'd feel it: Year 5 or later.
See all the priorities
How I set them
02
How it works
The city as an investor
The Chicago Sovereign Fund makes the city a part-owner of the companies it helps bring here. The city puts in land, incentives and a commitment to buy the company's products. In return it takes an ownership stake sized to what it put in.
Five sectors
The Fund invests in five sectors: solar panel manufacturing, battery storage, e-bikes, low-speed vehicles (small street-legal electric vehicles) and urban wind turbines. These are things the city's own plan will buy for years.
Open, competitive deals
The Fund issues a public request for proposals for each sector with the terms published in full. Any company can apply. Finalists negotiate against fixed terms, and every major investment goes to City Council with all terms public before the vote.
Terms every partner accepts
Partners sell to the city at below-market prices, since the city is their anchor customer, the main buyer they can count on. They pay a living-wage floor with full benefits. They hire Chicago residents first. They source parts and supplies from Chicago first, then Illinois, then the Midwest, then the U.S. If a partner breaks its commitments, it pays back the incentives.
Built for Chicago winters
E-bike and low-speed vehicle partners must make a version engineered for cold, wind, snow and salt.
Trained workers
Partners name their workforce needs during bidding. The Chicago Trades Pipeline, the plan's program for training workers in the trades, trains people on the partner's own equipment.
Who oversees it
A board oversees it, made up of the Mayor's Office, City Council, community members from neighborhoods where plants open, and independent financial experts chosen on merit. Every stake, price agreement and return is public and reported every year.
Where returns go
Returns go first into more Fund investments, second into the city's operating budget, and third into workforce training. If a partner fails, the city can lose its stake.
03
What it costs
City contribution
Land, incentives and purchase commitments, deal by deal
Dollar size of the Fund
Not set
The policy doesn't put a dollar figure on the Fund or project its returns. Each major investment goes to City Council with its terms public.
04
What it takes to make it happen
MAYOR AND CORPORATION COUNSEL
Create a Fund planning office by executive order and name a director. The city's lawyers pick the legal structure before the ordinance is drafted.
CITY COUNCIL
Pass the ordinance creating the Fund, then approve each major investment.
SPRINGFIELD
The policy says home rule is enough and no state law is needed. Corporation Counsel, the city's law department, has to confirm that.
VOTERS
No referendum is needed.
05
Timeline
DAY 1 TO MONTH 3
An executive order sets up the planning office. The first request for proposals goes out, for solar manufacturing.
MONTH 6
City Council votes on the ordinance creating the Fund.
MONTH 9
Requests for proposals open for batteries, e-bikes, low-speed vehicles and urban wind turbines.
YEARS 1–2
The first partner agreement is signed in Year 1. The first Chicago-made products are delivered to the city in Year 2.
YEAR 4
The target is a Chicago manufacturing partner in all five sectors.
06
Where it's worked
Chicago
After CTA awarded a $1.3 billion contract for 846 rail cars in 2016, the winning bidder, CRRC Sifang America, spent $100 million on a 380,000-square-foot plant in Hegewisch.
SOURCE: CHICAGO SUN-TIMES, JUNE 30, 2019 ↗
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Chicago
The Chicago Infrastructure Trust, launched in 2012 to finance city projects with private investors, "never really caught fire" and was wound down in 2019.
SOURCE: WTTW, NOVEMBER 18, 2019 ↗
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Singapore
Temasek, Singapore's state investment company, reports a 6.8% compounded yearly return over the 20 years to March 31, 2026.
SOURCE: TEMASEK, PORTFOLIO PERFORMANCE ↗
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Sources
Chicago Sun-Times, June 30, 2019
WTTW, November 18, 2019
Temasek, portfolio performance
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