(Photo via Grand Central Tech)
Earlier this week, The Hub @ Grand Central Tech — which, as its name implies, is right across the street from Grand Central Terminal — officially launched with a ribbon-cutting ceremony. The incubator, which offers office space at “well-below market rates,” is the software-focused counterpart to the Urban Tech Hub at the Navy Yard’s New Lab. It’s also backed, in part, by the New York City Economic Development Corporation (NYCEDC) and has a focus on “smart city” startups, continuing a theme that’s become quite prominent in the Brooklyn tech scene these days.
Normally, Grand Central Tech, which is based in Manhattan, would be outside our wheelhouse here at Technical.ly Brooklyn. But, as it turns out, the most prominent company out of the 11 current members of the incubator has a strong Brooklyn origin story. That’d be BlocPower, whom Hub@GCT executive director Robinson Hernandez championed as the most mature company of the bunch, with a flashy investor (Andreessen Horowitz) to boot. CEO Donnel Baird gave a demo at the Hub’s launch. The company’s mission is to make buildings in low-income neighborhoods greener while creating jobs in those communities.
That goal hits home for Baird, who grew up in Bed-Stuy. After graduating from Duke in 2003, he returned to Brooklyn to work as a community organizer in Brownsville. It struck him from the beginning that one way to address the myriad issues he saw firsthand — failing schools, high incarceration rates — was to find better jobs for the neighborhood’s residents. One thing Baird noticed: the buildings, including within public housing, were in need of repair.
“One way to turn all that around is to create jobs,” he said, quickly adding, “Not to sound like a Black Republican.”
(For more of Baird’s backstory, read our recap of his presentation at the 5×10 Talks in February.)
Green jobs have long been touted as a potential economic engine for low-income communities, as seen in the work of Majora Carter and Van Jones. But that promise hasn’t quite panned out, and in recent years, as the tech scene has gotten frothier, the focus has shifted to training in software development, through programs such as Jones’s #YesWeCode. Baird says, though, that he believes now’s a good time to turn focus back to creating those green jobs, as the underpinning technology has matured and dropped in cost.
Baird founded BlocPower in 2013 to take advantage of that shift. The company now has 30 employees and has cracked the $1 million mark in revenue. (Baird wouldn’t disclose the exact number, but says it’s “seven figures.”) It has raised pre-seed funding, whose amount Baird also declined to disclose, from marquee Bay Area investment firms Andreessen Horowitz and Kapor Capital, as well as Manhattan-based Progress Real Estate Partners and Urban.us, an online-based investor collective focused on urban innovation. Baird plans to raise a seed fund soon.
Based in Manhattan but greening Brooklyn
Baird was drawn to Grand Central Tech for its partnerships with companies and organization such as Microsoft and NYCEDC. He’s also looking forward, he said, to collaborating with the incubator’s other members.
And, yes, for some folks, Manhattan is still a draw: BlocPower’s employees live throughout the New York City metro area, including in Connecticut and Westchester County, so the location is ideal for them, Baird said.
“It’s a huge benefit for quality of life,” Baird, who lives in Ditmas Park, said. (Even VC-backed founders, it turns out, can get priced out of Bed-Stuy — or should we say Stuyvesant Heights?)
So far, BlocPower has signed on to help renovate 500 properties through a contract with the city’s Office of Sustainability. Baird said he is striving to ramp up that number to 2,000. Many of those properties are in Brooklyn neighborhoods: Fort Greene, Prospect Heights, Crown Heights, Bed-Stuy, East New York, and Brownsville. In addition, he said, he’s received interest from Queens borough president Melinda Katz in expanding the company’s work to Ridgewood.
There’s a particularly critical demand for these projects in New York City, especially in low-income areas, Baird said. The demand for electricity is close to outstripping the resources of the power grid, and it’s unlikely that there will be additional nuclear power plants built to accommodate that increased demand. While it may be instinctive to blame the luxury apartments fast rising up in Brooklyn for this development, the bigger culprit is actually buildings in low-income neighborhoods, which often aren’t well maintained —and certainly aren’t equipped to LEED standards, he said.
“We either green those buildings or we have rolling blackouts,” Baird said.
The vast majority of BlocPower’s projects are in New York, though the company also has a few high profile projects elsewhere: namely, Ebenezer Baptist Church in Atlanta, famous as the church where Martin Luther King, Jr. preached, and Trinity United Church of Christ in Chicago, renowned as the church President Barack Obama and his family once attended. The focus on churches is deliberate, Baird said. They’re important centers of activity in many neighborhoods and hence ideal entry points into new markets.
How BlocPower works
The company takes a three-stage approach to greening neighborhoods.
First, it uses city data to project the energy efficiency of a given building through a 3D thermodynamic model, which it developed with technical support from IBM. Building owners and managers interested in optimizing their property’s efficiency then verify the data through BlocPower’s app. The company also sends out qualified engineers to those properties to ensure that its predictive model has accurate inputs. Once the data is confirmed, BlocPower makes a list of recommendations for improving energy efficiency: say, installing new windows. The company charges a fee for developing these green projects. In addition to cities and individual property owners, Baird sees utilities as a promising customer base.
The next step is financing those suggested improvements. BlocPower runs a platform that enables building owners to raise funds for renovations.
“It’s like a Kickstarter for clean energy in poor neighborhoods,” Baird said.
It’s an inexact analogy: property owners aren’t offering rewards to backers. Right now, the funding comes in the form of no-interest, peer-to-peer loans. Baird plans to register BlocPower with the SEC, so that it can offer loans with low interest, at 1 or 2 percent, so that funders can make earnings from their investment.
Are green loans for low-income neighborhoods an attractive investment? For now, it’s really about a sense of altruism more than a chance at a big payoff, and according to Baird, that goodwill is indeed there to be found. He cited a Yale study showing that 18 percent of people in the U.S. are “alarmed” by climate change. That’s not a large percentage, but it’s still a substantial number of people. Whether those people will open their wallets, though, is another question.
Baird is certainly hopeful. Once a project is financed, the third stage of BlocPower’s strategy kicks in — perhaps the one he’s most excited about. That is, hiring people to carry out the renovation work, preferably other residents in the neighborhood. Baird sees it as fulfilling the mission he set out to accomplish as a community organizer.
“It circles back to those families I was trying to help 10 years ago,” he said.