Monthly Archives: October 2012

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San Diego Becomes First Municipality in California to Introduce Multiple PACE Options to Help Commercial Property Owners Make Buildings More Efficient, Create Jobs, Slash Utility Bills & Stimulate Cash Flow Using Zero Public Monies.

San Diego, CA (PRWEB) October 29, 2012

California’s legendary entrepreneurial spirit is inspiring a trend that emphasizes competition in commercial and residential PACE (Property Assessed Clean Energy) markets to accelerate PACE adoption and spur local economic development.

California’s number one solar city – San Diego — is leading the trend with its unanimous approval of the city’s second commercial PACE provider, San Diego-based FIGTREE Energy Financing.

PACE is an economic development tool that empowers local property owners to improve property values, stimulate cash-flow, create local jobs and reduce emissions using no public dollars,” said San Diego Mayor Jerry Sanders. “Our role is to maximize financing options for property owners and to create a robust, competitive marketplace to drive innovation and help reduce capital costs.”

PACE is a municipal funding mechanism that provides commercial and residential property owners with 100% up-front, long-term financing to improve their properties with cost-cutting energy efficiency, renewable energy and water conservation upgrades. Financing can be provided for up to 10% of an assessed property’s value; in some instances, double that.

Competitive PACE Environment a Smart Economic Driver in California

By Gurbax Sahota, CEO, California Association for Local Economic Development

Help is on the horizon for some of the hardest hit in California’s downturn economy. And while it involves no public monies, this help was inspired by local government — the City Council in California’s top solar city – San Diego. On October 23, 2012, San Diego became the first municipality in the state to introduce a competitive PACE environment for contractors and property owners by introducing FIGTREE PACE to the mix of commercial PACE providers.

PACE (Property Assessed Clean Energy) financing is a municipal funding mechanism that provides up-front financing for commercial and residential property owners to improve their property values and realize the money-saving benefits of energy efficiency, renewable energy and water conservation upgrades utilizing no public dollars. What a concept!

So how does this new PACE phenomenon work and why is a competitive PACE marketplace important?

PACE funding can put cost-cutting, property-improving energy and water upgrades within reach of most any property owner. PACE requires no minimum FICO score for property owners and no money down. Financing is based strictly on property values. And PACE provides for attractive off balance sheet financing that can be amortized for periods of up to 20 years via property tax bills.

PACE improvement financings can provide for up to 100% cash-up-front financing for property-improvements of all scope and scale — from water conservation improvements to solar PV, solar hot water, and electric vehicle charging stations.

Financing terms are based on the warrantees commensurate with the type of improvement a property owner wishes to incorporate, i.e. 10 years for HVAC upgrades or 20 years for solar PV. PACE also provides commercial property owners with a useful vehicle to address the provisions of California Assembly Bill 1103, which requires benchmarking and disclosure of energy usage for nonresidential buildings (over 5,000 sq. ft.) involved in financial transactions, i.e. those being leased or sold.

PACE does not encumber a property owner’s ability to borrow from conventional sources. Projects can be funded for up to 10% of an assessed property value — in FIGTREE’s case, up to 20% (though at a higher interest rate). This inspires new projects and gives contractors a unique funding vehicle to jumpstart projects that may have stalled because of a property owner’s aversion to additional debt or a credit rating concern. Johnson Controls’ Institute for Building Efficiency Report suggests that five direct jobs, five indirect jobs, and ten induced jobs are created for every million dollars invested in PACE projects.

While the residential market was the initial focus of many PACE programs (including San Diego’s) the Federal Housing Finance Agency’s (FHFA) view that their liens would be subordinated with PACE liens have stalled programs in that sector.

Thus, San Diego’s immediate opportunity is with the commercial sector, although there are myriad initiatives being considered to revive residential PACE for San Diegans.

Note: Municipalities, trade organizations, environmental groups and businesses (including California’s Attorney General) are contesting the FHFA’s view with proof that PACE improves property values and benefits the primary lien-holder’s position; there is optimism residential PACE — perhaps a model similar to what Riverside County is using — can return to San Diego (and additional markets) in 2013.

When administered properly, PACE can be a terrific economic development tool.

PACE projects can improve property values, help property owners slash energy costs, put contractors back to work, increase local cash flow and help cities meet their AB 32 emissions goals. But not all PACE programs are created equal. Some require property owners to sell the concept of PACE to lenders and bring their own funding to the table. Others use private sources of capital. Others use a lender-notification type of program that doesn’t require consent for the primary mortgage holder, something that has created a stir among primary mortgage holders and could possibly put property owners in default of their mortgage covenants.

The seeds of incorporation for San Diego-based FIGTREE PACE were sown when markets with the property-owner arranged brand of financing (markets like Los Angeles and San Francisco) weren’t financing deals. FIGTREE arranges financing (and lender consent) for property owners by aggregating and selling the projects as municipal bonds. FIGTREE was the first in California to successfully initiate this new mode of financing in multiple markets. The next bond issue is slated for early December 2012.

Adhering to the principle that competition drives excellence, the City of San Diego — known for its successful Managed Competition Program — has opted to avoid the pitfalls encountered in Los Angeles and San Francisco by going with a menu of PACE options so property owners can select the program that meets their needs.

A competitive PACE marketplace also allows more businesses and property owners to participate in the program. FIGTREE finances projects ranging from $5000 to those in the millions of dollars (all contingent upon qualified property values). Others have a minimum $50,000 threshold or restrict the kinds of projects they choose to fund.

We commend Mayor Sanders and the San Diego City Council for bringing this unique, privately-funded economic development tool to the San Diego marketplace — and for inspiring the principle that a competitive PACE marketplace will drive more adoption, create more jobs, lessen risk and provide property owners and quality contractors with funding options to spur economic development. All this using no public financing? Now that’s the kind of government action municipalities from California to Connecticut should embrace.

Read about us on RenewableEnergyWorld.com

FOR IMMEDIATE RELEASE

October 24, 2012

Contact: Cord Bailey Phone: (619) 990-8235

 

MAYOR JERRY SANDERS

CITY PROVIDES PROPERTY OWNERS MORE OPTIONS TO FINANCE ENERGY AND WATER UPGRADES

City Council unanimously approved a resolution put forth by Mayor Sanders yesterday to expand financing options available for property owners to invest in energy efficiency, renewable energy, and water conservation upgrades to commercial buildings.

The Property Assessed Clean Energy (PACE) program is a financing mechanism that allows property owners use of municipal bonds to finance energy and water upgrades – which the owners repay through a special assessment on their annual property tax bill. Private financing is used to supply the upfront capital for the work so that local government budgets are not burdened.

“Our role is to maximize financing options for property owners,” said Mayor Sanders. “By growing the program, we are creating a more robust and competitive marketplace, driving innovation and specialization, and helping to drive down costs associated with these financing products.”

Common projects eligible for financing include improvements to windows and doors, lighting, refrigeration, bathrooms, solar photovoltaic and water, HVAC, and electric vehicle charging stations.

Benefits for property owners include no up-front costs for improvements, increased building values and efficiencies, and reduced energy costs.

Mayor Sanders sponsored the resolution to join the FIGTREE program, the only commercial PACE provider that has funded commercial deals using private sector money and to have issued multi-jurisdictional bonds to fund PACE programs.

FIGTREE is the second program the city has brought on-line to help property owners overcome some of the financial hurdles associated with investing in energy and water upgrades. Last month, the City Council approved a resolution to opt into the CaliforniaFIRST program, the largest unified PACE program nationwide. Yesterday’s action provides property owners with greater access to capital and will help stimulate economic growth and job creation, reduce air pollution and greenhouse emissions, and lessen local dependence on fossil fuels and external water sources.

“Competition fosters innovation, even in programs as new as PACE,” noted FIGTREE CEO Mahesh Shah. “Adding FIGTREE to the mix of San Diego PACE models immediately helps small businesses fund money-saving PACE improvements by dropping the minimum project threshold from $50,000 to $5,000. We enthusiastically support San Diego’s competitive orientation to PACE and believe it is the best possible way to help property owners get deals funded and put contractors large and small back to work,” said Shah.

The California PACE program is operated by the California Enterprise Development Authority (CEDA) Joint Power Authority (JPA) and is administered by FIGTREE Energy Resources Company. Under the program, property owners enter into an assessment contract with CEDA to finance the installation of eligible clean energy projects. The program allows property owners to choose among multiple lenders to obtain the best financing terms and use the contractor of their choice. California PACE is available to California jurisdictions to participate at no cost or administrative burden. Further, there is no cost or administrative burden associated with joining CEDA as an Associate Member.

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FIGTREE PACE’s Vice President of Municipal Finance Joe Flores is joining Chevron Energy Solutions’ Director of Project Finance John Bergwell, Southern California Gas Company’s Energy Efficiency Partnerships Manager Frank Spasaro, the Program Manager for the Western Riverside Council of Governments (WRCOG) residential PACE program Barbara Spoonhour and Warren B. Diven, partner of Best, Best & Kreiger for a panel discussion on Financing Energy Efficiency and Renewable Energy projects at the SoCal Clean Energy Summit in sun-drenched Palm Springs Oct. 4 at 3:50 pm at the Palm Springs Convention Center.  Keith Goff, Rabobank’s Regional President of Coachella and Imperial Valley will moderate. The panel will share insights on a variety of successful solutions for financing and completing energy efficiency and renewable energy projects for homes, businesses and municipalities.  Learn more at http://socalenergysummit.org/.

 

ABOUT FIGTREE:  FIGTREE is a San Diego-based clean energy finance company providing breakthrough Property Assessed Clean Energy (PACE) funding that puts money-saving energy efficiency, renewable energy and water conservation upgrades within reach of virtually any property owner.  Requiring no money down and no minimum  FICO score, FIGTREE’s full-service brand of PACE financing gives commercial property owners the freedom to benefit from a multiple lender-program that amortizes payments for a period of up to 20 years via their property tax bills.  FIGTREE is the first company in the U.S. to successfully raise private capital for PACE projects via a multi-jurisdictional bond issue.  FIGTREE’s work with property owners – and water and energy contractors — provides cities and counties with turnkey economic development solutions that  create jobs, improve property values, generate positive cash flow and help communities meet their clean energy and carbon reduction objectives utilizing no public funds.  Learn more by calling 1-877-577-7373.