Portfolio Company Spotlight
A feature on a Closed Loop Partners investment
Building Infrastructure and Enabling Recycling
When the Infinitus MRF in Montgomery, Alabama suddenly closed, the Emerald Coast Utilities Authority (ECUA) and its neighbors were left without another sortation facility within a five-hour drive.
Rather than wait for another privately-owned MRF to enter the market, the utility decided to build its own single stream facility. A loan from CLIF provided about 30% of the required capital for the new facility, which opened in September 2016.
Since our funding, the ECUA MRF has become a regional asset for a region that had not previously had a long-term or reliable solution for processing recyclables. Escambia County has continued to expand its own collections and has entered into collection contracts with 11 municipalities in Florida and Alabama and three private haulers.
Impact Highlights
From January 2017 through September 2018, the facility processed more than 68,000 tons of materials, and grew the share of materials coming from nearby municipalities.
1,100,000 metric tons of GHG emissions avoided by 2026.
From January 2017 through September 2018, the facility generated $4.2 million in economic benefits and is expected to reach $20 million by 2026.
The Process
The facility has a processing capacity of 25 tons an hour, or 45,000 tons annually, to allow for 100% growth in ECUA’s collection stream.
The facility accepts paper, metal, glass and plastic, and equipment includes a Nihot glass cleaning system and a machine with bagripping teeth to release bagged materials. Both technologies are designed to maximize materials recovery and increase profitability in the commodities market.
As of September 2018, ECUA has generated $1.9 million in revenue, operating at a profit margin of 16% over the lifetime of the facility. Additionally, it has averaged a $30 per ton positive cash flow and if similar economics continue, ECUA would repay its debt and investment in the project in under 10 years.
The Results
Since its inception, the ECUA MRF is processing close to 39,000 tons a year, and in doing so, has generated three types of economic benefits:
- Savings to ECUA, in the form of avoided tipping fees. ECUA has avoided $2.3 million in tipping fees and generated $1.9 million in revenue, for an average total economic benefit of $96 per ton;
- Tipping fees collected from other municipalities and haulers;
- Revenues from commodity sales.
For more information about Emerald Coast Utilities Authority, please visit their website.
Portfolio Company Spotlight
A feature on a Closed Loop Partners investment
Creating a Campaign and Improving Infrastructure
With financing from the Closed Loop Infrastructure Fund, the Waste Commission of Scott County will increase participation and diversion with a new single-stream collection program for 48,500 households and an upgraded MRF, with more than double capacity to serve the Quad Cities region.
When the Scott Area Recycling Center’s aging recycling equipment needed to be replaced, the Waste Commission of Scott County and its intergovernmental partners, the cities of Davenport and Bettendorf, pursued the change from dual- to single-stream recycling. The change allows for the preservation of space at the Commission’s Scott Area Landfill, saves natural resources and allows for safer and more efficient collection by member cities’ public works departments. The Commission and its partners invested in larger capacity carts for curbside recycling, a redesigned single-stream MRF, and an extensive education campaign to increase diversion and participation in recycling.
Waste Commission of Scott County is a 28E, inter-governmental agency that was established in 1972 and reorganized in 1990. Our members include 17 communities and Scott County.
Impact Highlights
88,000 tons of recyclables diverted by 2025
$2.5M economic benefit to municipalities
248,000 metrics tons of CO2 emissions avoided by 2025
The Results
In its first months of operations in 2016, the upgraded MRF has seen a 61% increase in volumes over the same months last year. Davenport has seen a 77% increase in recycling volumes. Bettendorf, which previously had dual-stream carts, has seen a 36% increase. This is a model of how mid-sized communities can finance the deployment of a comprehensive recycling program that is profitable for the participating communities.
As more municipalities consider privatizing recycling operations, Scott County is a model for how public management can succeed.
What to look for:
- Committed and aligned public officials: The Scott County Board of Supervisors and Bettendorf and Davenport city leaders were instrumental in guiding the Commission’s transition to single-stream recycling, and supporting the bond measure for this project;
- Vertically integrated operations: The Commission manages sortation, as well as markets its commodities throughout the area. It also coordinates closely with intergovernmental partners, who manage collections;
- Solutions for a wide range of accepted materials: The Commission operates programs for household hazardous waste, e-waste, and appliances, in addition to the recycling center and landfill, which means cross-contamination has a greater chance of being handled appropriately;
- Sufficient volumes in the County with additional regional opportunities: With the upgraded MRF, the Commission is well-positioned to support the recycling needs of not only all residents of the County, but also those of the greater Quad Cities region and western Illinois.
Closed Loop Infrastructure Fund’s loan was a godsend. [The cities of] Davenport and Bettendorf, and the Waste Commission [of Scott County] had been talking about moving to single-stream for 10 years. As budgets were tightening, it wouldn’t have been possible to do this project without the Closed Loop Infrastructure Fund’s help.
Todd Jones, Superintendent of Services, City of Davenport, Iowa
For more information about Waste Commission of Scott County, please visit their website.
Portfolio Company Spotlight
A feature on a Closed Loop Partners investment
From 20 Tons Per Day to 20 Tons Per Hour
Lakeshore has the long-term contract to process residential and commercial recycling in the City of Chicago and surrounding areas.
The Closed Loop Infrastructure Fund participated in the financing of Lakeshore’s MRF, to increase profitability through an innovative business model that increased throughput from 20 tons per day to 20 tons per hour, with increased revenue opportunities and savings.
Since opening, Heartland, Lakeshore’s MRF, has been generating nearly $100 per ton in revenues from commodity sales. Operating costs per ton (including disposal of residue) are approximately $50 per ton, making Lakeshore’s net operating profit at Heartland nearly $50 per ton. In addition, the broader operations benefit from transportation and tip fee savings.
For nearly 20 years, Lakeshore Recycling Systems has provided recycling and 100% waste diversion programs to businesses and homeowners.
Impact Highlights
Heartland is projected to divert more than 110,000 tons of recyclables per year. By 2025, that will mean more than 1 million tons out of landfills.
3,030,000 metrics tons of GHG emissions avoided by 2025
The opening of the Heartland single-stream facility has created over 100 Cook County jobs
Lakeshore is continuously optimizing the Heartland MRF to recycle all that it can, which means that the team must regularly scrutinize the inbound materials mix coming from third-party sources and outbound commodities pricing.
As of August 2016, they’ve been able to maintain average revenue of approximately $100 per ton on outbound sales of commodities, with 92% of inbound material being single-stream. Unlike other facilities around the country, they are keeping glass in the single-stream mix, which they are able to sell to a nearby glass processor.
The Results
Lakeshore is a best-in-class operator with a relatively atypical model that serves as a strong example:
- Established success with pure play model: Lakeshore’s model is predicated on not having a landfill, and is therefore not “conflicted” over inexpensive disposal costs. The company has successfully managed other MRFs in the area prior to the Heartland facility.
- Integrated operations: Lakeshore operates residential and commercial hauling services, MRFs, C&D recycling and an organics program, creating leverage across businesses and greater opportunity for diversion. Heartland is co-located with the C&D operation, providing additional leverage.
- Significant market share: Lakeshore controls nearly one-third of the region’s material, ensuring sufficient volumes.
- “Good Neighbor” to local operators: Lakeshore attributes its success, in part, to its ability to maintain excellent working relationships with local private operators and municipalities alike; most are located within 20 miles of its facility