! ! Executive Summary The 2030 Challenge is an initiative launched in 2006 by the Architecture 2030 organization to drastically reduce energy and water use in the built environment and vehicle emissions in cities across the United States. 2030 Districts® are part of this initiative, developed by Architecture 2030 to address energy, water, and vehicle emissions by the year 2030. Five cities have established 2030 Districts: Seattle, WA; Cleveland, OH, Pittsburgh, PA; Los Angeles, CA and the latest addition is Denver, CO. Additional information on the goals for the 2030 District® and background information is included in this report in the “Existing 2030 Districts®” section. Currently, the cities of Ann Arbor and Detroit are in the process of launching two additional districts to operate in the state of Michigan. The launch is initially planned to occur in the second quarter of 2014. The specific scope for the 2030 District®: Detroit + Ann Arbor MAP project established and agreed upon by the Weekend MBA MAP Team and Clean Energy Coalition, sponsors of the MAP project, is to propose a launch plan with three critical elements: 1. Organizational structure, including governance model; 2. Outreach guidance to engage building owners, professional stakeholders, and respective communities; 3. Exploration of funding options in order to recommend a sustainable funding plan. The research and recommendations presented in this report are the results of primary interviews conducted with various stakeholders including property owners, public officials, financial service providers, higher education, nonprofits and community organizations. Secondary sources examined include journal articles and periodicals. The 2030 District®: Detroit + Ann Arbor project also incorporated themes and business strategies gained through lectures and course load of the Weekend MBA program. The research conducted on the existing districts was imperative to understanding their successes and potential pitfalls. The best practices and lessons learned from this research are outlined in the “Existing 2030 Districts®” section of this report. The MAP team then conducted interviews and attended 2030 District® Exploratory meetings in order to assess the local market and define the local value proposition. The local value proposition has been summarized into four categories: aggregated reporting & analytics, awareness & educational tools, avenue for sharing best practices, and collective voice & purchasing power. The MAP team’s recommendation is to host the District organization as a project under an existing nonprofit. The advantages to this arrangement clearly outweigh the disadvantages. The two factors that carry by far the most weight in this analysis are: • The ability to leverage host resources for both administration and implementation of District tasks • Negative attitudes in both Detroit and Ann Arbor toward creation of a new nonprofit, reflected by advice received on several occasions from stakeholders in both cities Regarding the decision on whether or not to combine the advisory committees for the Ann Arbor and Detroit initiatives, the MAP team recommends starting with a combined committee initially, to minimize overhead and maintain close collaboration. As the Districts evolve and grow, the ! team expects District financial resources and complexity of required tasks to increase. Local variation between the cities will become more important. As these issues become more prevalent, a transition to separate committees is recommended. Each Committee may elect its own Chair, Vice Chair, Secretary and Treasurer positions. 2030 District Staff and the Advisory Committees may establish Task Forces as needed to execute projects related to Grants, Finance, Marketing/Outreach, Research/Sustainability Concepts, Policy and Metrics. The recommended Task Forces are intended to cover the full set of tasks facing the District. Of course, other task forces may be proposed and evaluated at this stage. They may be created incrementally, some may not be needed at all, and others could be combined or decomposed further to meet the needs of the Sister Districts. The recommended organizational structure is a phased approach featuring an initial, interim, and steady state. Theses phases are outlined in the “Organizational Structure” section. How and when the 2030 District should transfer from one state to the next cannot specifically be determined at this time. Business strategy, however, can help guide the 2030 District from one stage to the next and help determine and evaluate milestones. Suggested guidelines around these milestones are also highlighted in this report under the “milestone definition for changing phases” section. As part of the market outreach guidance, the MAP team provided an STP (segmentation, targeting and positioning) analysis. The potential stakeholders were segmented by geographic, partner type and classification attributes. This exercise is important because certain aspects of the local value proposition appeal to each segment and by understanding this, the District can more effectively focus its outreach efforts. The MAP team also recommends developing an strong on- boarding process in order to keep new members engaged and to hold onto early momentum. This report will also focus on the following options for creating a funding model for the 2030 Districts® of Detroit and Ann Arbor: 1. Grants, Sponsorship and Foundational support 2. Fee for service model 3. Membership dues It is recommended that the “Sister Districts” should leverage shared resources, but approach certain fundraising and other actions individually. Through researching, analyzing, and compiling this report, it became very clear that there is a clear need to be addressed in both Detroit and Ann Arbor in regards to organizing and informing business owners, professional stakeholders, and the community around issues of energy efficiency. This report is designed to provide insight and recommendations to address these needs. The next 3-6 months are imperative to the success of this endeavor. The interest and need are present and now is the time to act. Page!2!of!65! ! ! 2030 Districts®: Detroit and Ann Arbor - Final Report 2014 - Weekend MBA MAP Team Abhishek Sinha, Alex Thorpe, Hend Khatib, and Matt Ogdahl Page!3!of!65! ! ! Table of Contents MAP Project Overview&.........................................................................................................................&5! 2030 Background&...............................................................................................................................................&5! Objectives&............................................................................................................................................................&6! Methodology&.......................................................................................................................................................&7! Existing 2030 Districts®&.......................................................................................................................&7! List of Existing and Emerging 2030 Districts®&..........................................................................................&7! Key Findings from current 2030 Districts® operations and best practices&.........................................&7! Existing 2030 District® Business Demographics&.....................................................................................&10! Summary of Best Practices and Lessons Learned&..................................................................................&10! Best Practices!...................................................................................................................................................................!10! Lessons Learned!.............................................................................................................................................................!11! Local Market Evaluation – Detroit and Ann Arbor&....................................................................&11! Expectations of Property Owners&...............................................................................................................&13! Expectations of Professional and Community Stakeholders&................................................................&14! Value from Professional and Community Stakeholders&........................................................................&14! Local Value Proposition&................................................................................................................................&16! Aggregated Reporting & Analytics:!.........................................................................................................................!17! Awareness and Educational Tools:!..........................................................................................................................!17! Avenue for sharing best practices:!............................................................................................................................!18! Collective Voice and Purchasing Power:!...............................................................................................................!18! Launch Plan&..........................................................................................................................................&18! Organizational Structure&..............................................................................................................................&18!