A $100 million fund created by Mayor Rahm Emanuel to bridge the “funding gap” outside Chicago’s thriving downtown will be invested in neighborhoods truly in need, aldermen were assured Thursday.

Emanuel calls it the “Catalyst Fund.” City Treasurer Kurt Summers, who sold the idea to the mayor who appointed him, calls it “Fund 77” because that’s how many neighborhoods Chicago has and that’s where the need is.

“It’s not that there’s additional real risk. It’s perceived risk. There is a perception issue that, in certain communities, to make an investment is a riskier investment … [and] you need to be compensated more for that,” Summers told aldermen.

“The reality is, if you look at just the sale of the Mariano’s in Bronzeville [this week] at 39th and King Drive — the liquidity that created for those developers who took the `additional risk’ of developing in that marketplace and then immediately sold it — that tells you that, when you have the courage to see through what is a traditional underwriting [and] investment bias in those communities, you can be rewarded.”

On the hot seat at City Council budget hearings, Summers assured aldermen that the city’s $100 million in seed money would be matched by “three times” that much in outside capital. No more than 20 percent would go to any one project.

A seven-member board that includes the treasurer would select private managers who would be required to invest the money in low-income neighborhoods and census tracts covered by the Community Reinvestment Act.

“We have a great deal, unfortunately, on the South and West Sides. Those are where some of our largest pockets of need are. But, it’s not limited to those. If you look at areas like Uptown or in Clearing, Garfield Ridge and Archer Heights approaching Midway, there are qualified census tracts all over the city,” he said.

Ald. Ricardo Munoz (22nd) was reassured, but only to a point. He wants to see it in writing.

“You’ve used the word `focus.’ You’ve used the word `priority.’ But, in my book, unless it’s codified that they’ve got to go these census tracts that are most in need — either a number, a percentage or the whole thing — it won’t happen,” Munoz said.

“The problem with these most in-need neighborhoods is that for banks, for regular investors, that rate of return isn’t always there. The risk level is higher. … I would urge you to make sure as you’re drafting the language … that there is some finite language that says this has to happen.”

Under questioning from aldermen, Summers described the differences between the new so-called “fund of funds” administered by outside money managers who make investment decisions and the Infrastructure Trust he chairs that has been slow to get off the ground.

The Catalyst Fund would have its own capital, with the city contributing $35 million both this year and next and $30 million in 2018. It would invest in taxable private projects with a mandate to turn a profit.

The Infrastructure Trust depends on tax-exempt deals and is limited to government-related projects. Under Summers’ leadership, the Trust is about to embark on “the biggest lighting program in North America, after what he calls a “three-year slow start.”

“Large ideas should go through the Infrastructure Trust. But, when there’s infrastructure tied to a development or tied to a specific revenue opportunity — or if it’s of a size that may be too small for the trust to take on — this [Catalyst Fund] would be a great opportunity,” he said.

The $100 million in seed money would come from funds generated by the treasurers’ ability to double returns on the city’s $7 billion investment portfolio. But there’s a familiar fall-back: money generated by former Mayor Richard M. Daley’s decision to sell off city assets.

“We have an additional back-stop of potential monies from the Skyway and parking meters that were never invested in human and neighborhood infrastructure as they were intended. We can use that, if for some reason we don’t continue to exceed returns,” Summers said.

If the Catalyst Fund works, it could help Emanuel conquer his image as “Mayor 1 percent” with downtown-centric development that has left neighborhoods behind.

Ald. Brian Hopkins (2nd) has little doubt that the “creative” plan will succeed if properly marketed to the private sector.

“You’re eventually going to see significant returns. You’re going to see jobs created. You’re going to see communities transformed. You’re gonna have some success stories,” Hopkins said.

Summers said he has a “prospect list of local corporations, banks, insurance companies, institutional investors, Taft-Hartley funds, union funds and local pension plans.”

But it’s likely to take “the better part of a year” to attract funding and start investing, he said.

“No private investor wants to have a blind investment in something that’s viewed as a political fund or a pool of capital that’s controlled by politicians,” Summers said. “They have to see that this is real … and that they’ll have an ability to get real market opportunities and returns.”