David Brain has a new green-energy gig and high expectations for it
By Rob Roberts – Reporter, Kansas City Business Journal
Jan 25, 2018, 2:31pm
Now, there’s an answer.
Brain, who co-founded EPR (NYSE: EPR) in 1997 and was CEO of the entertainment-focused real estate investment trust from 1999 until 2015, is now co-founder and CEO of Enfinite Capital.
The Kansas City startup has partnered with Black & Veatch, a global engineering and construction firm based in Overland Park, to provide turnkey green-energy solutions for commercial and industrial firms with facilities that consume substantial amounts of power.
“The focus is very much solar,” Brain said of his new enterprise, “and it’ll be global.”
Lots of potential power
The plan, he said, is for Enfinite Capital to develop, finance and lease solar panel farms of close to 1,000 acres to produce something on the order of 100 megawatts for clients’ facilities.
To give an idea of how much electricity that is, 100 megawatts is enough to power 16,400 homes. But Brain isn’t focusing on residential rooftops.
“The genesis of this is really to respond to a highly articulated need of commercial and industrial companies for a turnkey solution for green energy initiatives,” he said. “There are a number of people addressing the residential market, and there are a number of people addressing what’s considered the utility-scale market.
“But there aren’t a lot of people addressing the commercial and industrial need from the client perspective by going to the client and finding out what they need and when, and then being a build-to-suit developer with financing on a turnkey basis for those clients.”
Enfinite Capital will develop solar farms within 15 miles of client facilities, Brain said, and clients will enter into 15- to 20-year power purchase agreements, tantamount to long-term leases, with Enfinite.
“We’re not retrofitting buildings,” Brain said. “We’re just changing the power supply to the buildings. We’re not taking them off the grid entirely. We’re just developing a private supplementary power system that is long-term cost controlled, strategically controlled, and is of high interest to these customers because they’ve generally made commitments to go green, to shift to renewable energy.
“Most of these companies that have made those commitments, however, don’t have a clear, easy path to do that. So we’re helping them construct that path.”
A key alliance
Brain said his new firm has formed a strategic alliance with Black & Veatch.
“They have all the capabilities of delivering every element of these facilities — engineering, construction management, operations and maintenance,” Brian said. “But Black & Veatch is not capitalized to be a lessor developer, to be an owner during the (power purchase agreement) period. So that’s what we’re doing.
“It’s very much equivalent to the way EPR Properties was set up as an off-balance-sheet financing vehicle for AMC Entertainment, which was a first-party user of the (theater) facilities we developed and leased to them.”
By the time Brain left EPR, which grew to specialize in entertainment, recreational and educational assets, the firm had a market capitalization of more than $5 billion and total investment in excess of $4 billion. But in announcing his retirement, Brain said “sometimes it’s good to do something new.”
Unlike EPR, his new venture cannot be a REIT because its green-energy projects will be considered personal property, not real property.
“But it might become more equivalent to a master limited partnership,” Brain said of Enfinite, “so it could be similar to a REIT.”
Asked whether it could grow into a public company on the order of EPR, Brain added that “it could.”
“I don’t want to have expectations at this time,” he said, “but the opportunity set is arguably substantially bigger than it was for EPR at the beginning.”
Looking to the future
Brain said he didn’t want to reveal revenue projections until Enfinite announces its first projects. But that shouldn't be far off, he added, because Enfinite already is working with several clients nationally and internationally that have identified facilities they want the firm to develop turnkey green-energy solutions for.
Assisting Brain as Enfinite’s COO is Shane Spencer, an independent fund manager and capital formation consultant who manages four area funds: The Collective Funds, Angel Capital Group | Kansas City, Green REIT and Petro Royalty Partners.
“I originally met Shane back in his days in graduate school at UMKC, where I’ve been involved in the mentoring program,” Brain said.
Brain, Spencer and a couple of contract employees are working out of coworking space that Enfinite has leased at the Westport Commons location for Plexpod, a Kansas City-area coworking space provider that Brain recently joined as a partner.
Brain also is a member of Sustainable Development Partners LLC, which bought the two former school properties that make up Westport Commons — Westport High and Westport Middle School — which it is turning into the world’s largest coworking facility, larger office space and apartments via a $50 million-plus redevelopment project.
In addition, Brain serves on the board of Maxus Realty Trust Inc., a locally based REIT that has been making headlines with its recent apartment acquisition spree.
But make no mistake, Brain said, his new gig at Enfinite will be taking up the lion’s share of his time and energy as he focuses on creating another roaring success in the Kansas City business community.