Monthly Archives: July 2014

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By Tom Lotshaw
Tahoe Daily Tribune

A new program in South Lake Tahoe lets people improve the energy and water efficiency of their commercial properties and then finance the improvements with an assessment lien and additional property tax payments.

South Lake Tahoe City Council approved the Property Assessed Clean Energy program this week and is partnering with Figtree Financial, a San Diego-based firm that will market the program and offer private funding to pay for the property improvements.

The California Legislature authorized the Property Assessed Clean Energy program in 2010 and Figtree offers the program in dozens of cities and several counties in the state.

The program lets property owners finance 100 percent of the cost of eligible improvements. It will pay for solar energy systems, energy efficient windows, doors, roofing, insulation, lighting and heating and air conditioning, as well as low-flow bathroom fixtures, toilets and irrigation controls.

Improvements must be permanently fixed to the property to be eligible for the financing.

Repayment is tied to the property. If the property is sold or transferred the new owner assumes an obligation to repay the remaining balance through the property taxes.

Financing terms can range from five to 20 years and are based on the expected life of the improvements.

Figtree Financial is offering the program to commercial properties in South Lake Tahoe, not to residential properties, though the City Council authorized it to serve both types of property.

“There’s no impact to the city, no responsibility for repayment for the city,” said Mark Carlson, administrative services director for South Lake Tahoe. “The only thing we’re getting out of this is a great opportunity for citizens to improve their properties.”

PACENow’s Kristina Klimovich talks with Mahesh Shah, CEO of Figtree Financing

 

June 25, 2014

 

Kristina Klimovich:  Mahesh, how did you get involved with PACE and Figtree?

Mahesh Shah: I got a glimpse at the PACE financing opportunity in 2009 when I helped friends and colleagues develop a business model for Figtree. They started the company and I joined in October of 2011, first as an advisor and then quickly I became the CEO and investor in the company.

Prior to Figtree, I was not involved in sustainability ventures. PACE financing initially piqued my interest because of its unique and innovative structure along with its potential to stimulate energy efficiency and renewable energy projects on a large scale.   These projects in turn spur economic growth, create jobs and reduce the carbon footprint.   To me it was not just a business idea, but an opportunity to help cities and counties meet their sustainability goals while providing capital to the property owners.

 

KK:  Figtree is a specialty finance company offering PACE funding to commercial property owners in California. Tell me a little bit more about your model. What sets Figtree apart?

MS: Figtree Financing is a San Diego based clean energy financing company providing innovative programs to enable capital for environmentally focused products and services. We designed the best of class Figtree PACE program to provide a turnkey, zero-cost and no-risk solution for cities and counties across California offering residential and commercial PACE financing.  In order to keep the Figtree model scalable, we partnered with California Enterprise Development Authority, a statewide joint powers authority that can provide the legal authority and infrastructure needed for the PACE structure. The majority of cities and counties lack the resources required to launch PACE financing programs, so our primary goal is to offer a turnkey solution to municipalities that would like to provide PACE financing in their community.  Part of our turnkey offering includes a very effective outreach and marketing campaign to promote PACE within a municipality.  Additionally, we provide a range of services to our stakeholders including building owners, mortgage lien holders, and contractors. It’s a new financing product; and therefore, many questions arise about the PACE lien, repayment structure and project economics. To address the market needs, we provide comprehensive marketing materials, a white paper for mortgage lien holders, and specific project financial analysis. My background as a Chartered Accountant and a licensed CPA certainly helps me in running a specialty finance company.  Our management team’s expertise spans energy efficiency, renewable energy, project financing, municipal relations and capital markets transactions, allowing us to address all the stakeholders’ needs and add value. Our financial team is up to speed on the available rebates, tax incentives, utility rates, and other project benefits which we factor in to demonstrate net-present-value (NPV) and savings to investment ratio (SIR) for each project. Additionally, Figtree is committed to educating the mortgage lender community about the benefits of the PACE financed improvements.  We can demonstrate that PACE is a tool to improve mortgage lenders’ portfolios by helping their customers achieve positive cash flow. We are the first private company to undertake an extensive lender engagement effort and obtain consent from eighteen different institutions.

Figtree does not shy away from smaller projects. We believe that to create a solution for a city or a county, we need to be able to take on projects from five thousand dollars. In fact, the smallest PACE project Figtree financed was seven thousand dollars.

 

KK: You’ve expanded on your outreach to lenders and building owners. What about the contractors?

MS: We identify and partner with contractors in this space and have conducted both webinars and in-person lunch-and-learn sessions to educate them about PACE and Figtree. In addition, we provide online tools that help contractors conduct a property check, estimate PACE payments and identify eligible PACE improvements. In many instances we work directly with contractors to help them sell a project.