Can Green Financing Be The Future of Development?


ATLANTA – Monte Hilleman’s past and present interests include – in no particular order – music, competitive skateboarding and event promotion. He’s also a sustainability guy at heart, and that passion has served him well in his professional career.

Hilleman, a record label owner and former competitive “vert” skateboarder, started his current daytime gig with the Sustainable Investment Group about five months ago. As leader of SIG’s Climate Solutions department, he oversees “market-based strategies” to finance decarbonization initiatives, according to his corporate bio.

Previously, for nearly two decades, he oversaw brownfield redevelopment and other complex projects at the Saint Paul Port Authority. His work with the Port Authority included The Heights, a green redevelopment that will create 1 million square feet of light industrial space and more than 1,000 units of housing on the 112-acre former Hillcrest Golf Course in St. Paul.

In the following interview, Hilleman talks about his work with SIG, green financing, past projects with the Saint Paul Port Authority and more. The interview has been edited for length and clarity.

Q: Talk a little bit about the Sustainable Investment Group and your role in the organization.

A: I was a client of theirs, actually, and historically knew them as a LEED consultant, a green building consultant, that specializes in getting buildings certified. I was on the board of the U.S. Green Building Council with Asa Posner from SIG for a number of years, got to know him well, and brought him on to be our LEED consultant to certify the Port Authority’s new headquarters space.

So, I knew these folks as a sustainability consultant, a LEED consultant, and started talking to Asa several months ago. And he said, ‘Our ESG and our decarbonization team could probably use some help.’ And I was like, ‘What do you mean? ESG team? Decarbonization team? How did I not know these things existed?’

We do have a fairly large ESG team. We serve as the back office ESG staff for some of the largest portfolios in the country. Hines, Rockefeller Group, SL Green, the largest landlord in New York City. We do all the reporting to the international ESG frameworks. We have an engineering team that does energy modeling, energy audits, commissioning, retro commissioning, all this sort of green engineering stuff.

I spent my first three or four months at SIG with my head down, building, and now have a net zero pro forma that we share and use with our clients. I have what we call an after-tax discounted cash flow valuation model that allows us to show the inflation Reduction Act tax benefits above the line, if you will, in key financial ratios — internal rate of return, yield on cost, cash on cash, etc. The kinds of things that players in the marketplace need to see in order to believe in the impact of these tools.

And the impact is staggering. Once you add up four or five, six of these green financing techniques, the impact is really going to revolutionize how we build buildings and finance buildings.

Q: How long have you been with SIG now?

A: I’ve been there five months. A lot of plant visits, a lot of travel the first two, three months just getting to meet some of our more established clients. And a lot of presentations on what these tools are — I think maybe five panels in the last two weeks here.

Q: We’re seeing some real challenges in the capital markets right now. Amid that environment, are you seeing more interest in green financing?

A: Absolutely. There’s a whole universe of factors that are pushing us toward decarbonization as an economy, as a society. And green finance is how we implement decarbonization in the built environment.

We’re seeing popular sentiment at all-time highs to do something about climate change. The Pew Research poll that came out around Earth Day, the number that stuck out at me was 71% of respondents across the political spectrum agreed that we need to do something about climate change. What we do, and how we do it, and who pays for it? I’m sure there are a lot of different opinions. But popular sentiment is there. The climate science is so clear, we understand it very well, what’s happening with the ice and the water and the atmosphere. Environmental and racial justice is pushing us to decarbonize as we realize, more and more, that those who probably have had the least hand in creating climate change are most impacted by it.

Q: Talk about the challenge of overseeing big redevelopment projects like The Heights (A contaminated 112-acre golf course in St. Paul, Minn., transformed into a net zero community)

A: It was about all I could do. I mean, you can really only run one of those at a time. You’ve got to be on top of everything from the environmental engineering to the traffic to the parks, to the geologic and biologic features. I mean, it really is staggering.

I had a great team at the Port Authority; some of the brightest economic development thinkers in the state, if not the country, some great finance people. I really got the chance to stand on the shoulders of giants and those that came before me. You’ve got 85 years of history in that organization of trying to figure out how to take down some of the most distressed real estate, and turn it into something of value for the community. That’s a pretty good head start.

I was on the board of governors of several joint ventures with private sector developers. I learned a lot from them. I was a sustainability guy that kind of bumbled my way into commercial real estate, finance and brokerage. I’m a licensed broker here in Minnesota. You couldn’t have written a story that got me to this sort of unicorn status today, with so many different pieces just having to sort of fall in place.

[With The Heights], the challenge was out there: You should do this net zero [redevelopment with] 112 acres, 1,000 housing units, 1,000 living wage jobs and a million square feet of industrial. How would you do it? And we looked around the world and realized there wasn’t a great playbook for doing this at scale. Rick Carter from LHB, one of my mentors, said to me after they had done this sort of feasibility look-see — looked at maybe 100 projects around the world that were claiming to do this — he said, ‘Bad news and good news. The bad news is no one else has done this before. And the good news is, no one else has done this before we get to be the first.’

Q: I noticed on your bio that you’ve been involved in the local music community. And while most people settle for golf for pickleball, you were a Top 10 in the nation amateur “vert” skateboarder. Tell me about that.

A: Yeah, 17, 18 years old. I think I retired [from skateboarding] by the time I was 19. My knees and ankles were just shot. But I competed nationally. You have to qualify locally, then regionally make it to nationals. I was eighth one year and 10th another year.

My current colleagues know all this. There’s that cameo service where you can pay to get a celebrity to do a cameo. So on one of our all-staff meetings, they had paid for Tony Hawk to come onto our cameo and shout me out by name, which — having skated with him 25 years ago — was really cool.

And yes, I do own a record label, I DJ, I produce. We still do a monthly house music event in northeast Minneapolis, first Friday of every month. We’re going on 12, almost 13 years now. When we all used to wear suits and ties, I used to say that’s what allowed me to wear a suit and tie five days a week, was knowing that I could go listen to some loud music and see all my friends.

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