Webinar:Learning to Love LTV: PACE Commercial and Property Values

When: Wed, Nov 19, 2014 3:00 PM – 4:00 PM EST

The Loan to Value [LTV] is a common underwriting risk measure for commercial loans generally and PACE loans in particular. This webinar will take a deep look at how to manage this metric based on established appraisal and banking practices. The speakers will share their decades of experience appraising high-performance “green” commercial property and provide insight to helpRead more

PACE in CA: Three more Fresno County cities join HERO program

Three more Fresno County cities have voted to make the HERO Property Assessed Clean Energy program available to residents who need financial help to pay for home renovation projects that cut down energy costs and help the environment.

Parlier, Kerman and Selma are the latest cities to launch the program. Fresno, Clovis, Kingsburg, Sanger, Reedley and Fresno County have already adopted HERO.

Here’s how it works: local governments pass a resolution making the program available to property owners. Then qualified commercial and residential property owners can apply and choose from a number of projects. Read more.

PACE in MN: Energy finance adviser helps businesses go green

Earlier this year, Crankshaft Supply, a north Minneapolis business that refurbishes parts for diesel engines, invested $180,000 in a rooftop solar array that CEO Jay Miller expects to cut electric consumption for his remanufacturing business by 50 percent and pay for itself within 10 years.

But this small business, even though it has rebounded strongly from the recession, couldn’t finance the investment internally or through a bank. So Miller turned to a four-year-old Minneapolis company called Eutectics that has put together nearly $40 million worth of energy-finance deals and helped building owners like Miller take advantage of energy loan and grant programs around the country.

Eutectics CEO Jeremy Kalin is a former Minnesota legislator who saw a need for a focused, streamlined energy-finance process for small businesses. He talked about how it works with the Star Tribune.

Q: What is Eutectics and why was it needed?

A: Eutectics is an energy-finance adviser. We connect small businesses or big businesses doing energy-technology upgrades such as LED lighting and solar with committed capital that understands the technology and process. Too often, energy efficiency, solar and water-saving projects require too much time, effort and fees for lenders or investors to understand. Eutectics’ lean model connects prequalified energy projects with our committed capital partners, in a way that no one had been doing in the energy-financing marketplace. We’ve built new financing tools to get deals done quickly, and at moderate cost. And larger lenders and investors increasingly rely on Eutectics to build large portfolios of similar projects, to bring capital at scale to these previously underserved sectors. Read more.

PACE in New Hampshire

The Jordan Institute, a Concord-based non-profit organization focused on promoting energy-efficiency and renewable energy projects, is teaming with Trumbull, Conn.-based Sustainable Real Estate Solutions, to develop and administer New Hampshire’s new Property Assessed Clean Energy for Commercial program, or C-PACE, which is expected to be launched in 2015.

According to Laura Richardson, executive director of The Jordan Institute, C-PACE financing is an innovative tool that, similar to a sewer assessment, connects loan repayments for energy-efficiency and renewable energy projects to the commercial building, and not the building’s owner.

She said it is an entirely voluntary opt-in program for municipalities, capital providers, contractors, existing mortgage holders and building owners. In fact, before the financing can be accessed, municipalities must adopt the program prior first.

Through the NH C-PACE program, Jordan Institute and SRS will connect municipalities, capital providers, commercial building owners, architects, engineers, builders, contractors and installers via a streamlined process to provide financing for “well-designed” projects, Richardson said.

A “well-designed” project is defined as having projected energy cost savings exceeding the cost to install the measures and repay the private capital loan. Read more.

Fighting climate change: Ann Arbor taking steps to advance Climate Action Plan goals

Ann Arbor is moving forward on programs to further its Climate Action Plan goals, which include reducing community greenhouse gas emissions by 90 percent by 2050.

The City Council voted unanimously Monday night to approve an $85,000 contract with the nonprofit Clean Energy Coalition for community climate and energy program work.

The “community” part denotes that the city is moving beyond its own municipal walls and trying to encourage sustainable behavior in the broader community, including in the areas of energy efficiency and renewable energy.

Nate Geisler, the city’s energy programs analyst, and Matt Naud, the city’s environmental coordinator, indicated in a memo to council that the CEC will provide support to continue projects that were initiated using federal funds that have since expired, as well as other emerging initiatives aimed at keeping the city at the forefront of innovation in sustainability at the municipal and community levels.

That includes promoting energy efficiency in the city’s commercial and multi-family building stock — the thinking being that money residents and businesses save will stay in the local economy, providing both economic and environmental benefits.

The council’s resolution mentions plans to continue efforts related to “greening” rental housing in Ann Arbor.

The CEC also will continue community solar work and develop a model for expanding private investment in solar power for those residents and businesses that might not be able to install the technology on their own properties. Read more.

PACE in NH: Jordan Institute and SRS partner up to run NH C-PACE program

Concord, NH: The Jordan Institute, a Concord-based non-profit organization focused on innovative solutions to reducing energy consumption and promoting the benefits of energy efficiency and renewable energy (EE/RE) projects, is teaming with Sustainable Real Estate Solutions (SRS), to develop and administer New Hampshire’s new C-PACE program which is expected to “go live” in 2015.
Short for Property Assessed Clean Energy for Commercial buildings, C-PACE financing is an innovative tool that, similar to a sewer assessment, connects loan repayments for EE/RE projects to the commercial building and not the building’s owner. Municipalities must adopt this program prior to building owners using this financing tool. It is an entirely voluntary, opt-in program for municipalities, capital providers, contractors, existing mortgage holders, and building owners. Read more.

Kroll Bond Rating Agency Assigns Preliminary Ratings to HERO Funding Trust 2014-2 Class A Notes

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns a preliminary rating of AA(sf) to HERO Funding Trust 2014-2 Class A Notes (HERO 2014-2). The notes are newly issued asset-backed securities backed by a portfolio of Property Assessed Clean Energy (PACE) bonds.

The notes are secured by 261 limited obligation improvement bonds, issued by Western Riverside Council of Governments (WRCOG) and San Bernardino Associated Governments (SANBAG). The PACE bond portfolio is secured by 6,858 PACE assessments levied against 6,666 residential properties located in eleven California counties. The average PACE assessment is $19,414 with an average annual payment of $2,499. The transaction benefits from credit enhancement in the form of excess spread, overcollateralization, and a liquidity reserve.

KBRA analyzed HERO 2014-2 using the General Rating Methodology for Asset-Backed Securities published on July 30, 2012. PACE assessments fall within Category 1: Financial Assets. The key determinants considered in the rating outcome are: a structural and legal analysis of the transaction; the treatment of PACE assessments as senior tax liens; and the creditworthiness of the Counties acting as servicer. Read more.

Unique Opportunities in Property Assessed Clean Energy (PACE) Financing

The Wisconsin-based Public Finance Authority (the “Authority”) recently completed a first-of-its kind bond transaction that securitizes up to $30 million of commercial property assessed clean energy (“PACE”) loans originated by the Connecticut Clean Energy and Finance Investment Authority (“CEFIA”).1 This Update discusses the legal context for PACE financing, and addresses special considerations for lenders and building owners involved in PACE financing transactions.

Under the Connecticut PACE Program (“C-PACE”), CEFIA made loans of up to $2.5 million to commercial property owners in Connecticut to fund renewable energy and energy efficiency improvements on their properties (such as new HVAC and solar photovoltaic systems). The C-PACE loans are secured by “benefit assessment liens” on the improved commercial properties that, under the Connecticut enabling legislation, are superior to all other liens on the property except tax liens. CEFIA has the authority to enforce a benefit assessment lien if a borrower defaults. Read more.

Property Assessed Clean Energy (PACE) financing proves to be a success across the nation

President Clinton helped launch Property Assessed Clean Energy or PACE at the 2009 meeting of the Clinton Global Initiative. The progress PACE programs have made over the last five years was recognized at this year’s 10th anniversary meeting of Clinton Global Initiative in New York.

PACE is an innovative financing mechanism that makes it easier for property owners to complete energy efficiency upgrades and renewable energy projects that make buildings more valuable and sustainable. PACE allows property owners to finance 100% of a project’s costs and eligible measures include, lighting, windows, heating, cooling, ventilation equipment, solar panels, water pumps, and many more. Also, PACE works for just about any building and it has been used on office, retail, multi-family, single family, agricultural, hotel, government, and industrial properties.

David Gabrielson, Executive Director of PACENow, notes: “State and local government sponsored PACE programs are driving economic activity, creating local jobs, and helping achieve carbon reduction and other environmental goals.”

At the Clinton Global annual meeting, a number of PACE milestones were recognized. PACE has enjoyed a steady bipartisan support over the years. In fact, 13 Republican and 18 Democratic Governors have signed PACE enabling legislation, making PACE a truly bipartisan approach to energy conservation. New legislative efforts are underway in Indiana, Kentucky, Massachusetts, and Pennsylvania.

“PACE is a voluntary, market-based economic development program that does not burden government resources,” says Charlene Heydinger, Executive Director of Keeping PACE in Texas, a non-profit association. “PACE legislation passed the House and Senate on consent calendars and was quickly signed by Governor Perry. Our business community has been actively supportive throughout and helped design “PACE in a Box,” a uniform, user-friendly, sustainable and scalable administrative model that we are giving to all of our counties and municipalities.”

Today, over 80 percent of the US population lives in PACE enabled states and PACE is now available in more than 800 municipalities. Twenty five commercial and seven residential PACE programs are accepting applications and funding projects in CA, CT, DC, FL, MI, MN, MO, NY, OH, and WI, with 14 additional commercial programs near launch. Read more.

South Coast Air Quality Management District honors HERO PACE financing program with Clean Air Award

Los Angeles, Calif.  – The South Coast Air Quality Management District (SCAQMD) honored the HERO PACE financing program, the Western Riverside Council of Governments and San Bernardino Associated Governments as its Clean Air Award Winner for 2014 in the category of Model Community. SCAQMD is the air pollution control agency for all Orange County and the urban portions of Los Angeles, Riverside and San Bernardino Counties.

 

According to the SCAQMD, the Clean Air Award “honors the visionaries in our region who have helped in the fight for clean air through innovation, leadership and exemplary service.”

 

HERO is a Property Assessed Clean Energy (PACE) financing program. It allows homeowners to finance energy- and water-efficiency improvements through their property tax payments. Homeowners can choose the term of their loan (5-20 years), and interest on the payments is tax deductible. Additionally, PACE assessments transfer to the new owner when the home is sold in most cases.

 

HERO launched in Western Riverside County in 2011 and was made available to San Bernardino County homeowners shortly thereafter. To date, 192 cities and counties, representing 16 million people, have made HERO available to their residents.  HERO has funded improvements which will reduce greenhouse gas emissions by more than 568,000 tons, the equivalent of removing 300,000 passenger vehicles from the road for one year.  HERO has also created more than 2,600 local jobs in California. Read more.

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