PACE Financing Presented by, Lean & Green Michigan Ag Agenda - - PowerPoint PPT Presentation

PACE Financing

Presented by, Lean & Green Michigan

Ag Agenda

Intro: What is PACE? What is Lean & Green Michigan? PACE 101 Understanding the PACE Process Case Studies Questions?

Wha What is s Pro roperty Asse ssesse ssed Clean lean Ener nergy gy? ?

• PACE helps property owners finance energy efficiency, water efficiency, and clean energy

upgrades — without incurring upfront costs.

• Upfront, long-term, fixed rate financing = pay as you save and come out cashflow

positive!

• Property owners repay their loans through a special assessment on their property taxes

Ma Map of Part rtici cipating Ju Jurisdict ctions

• Michigan Property Assessed

Clean Energy Act (PA 270, 2010)

• Public-private partnership
• 44 Local Governments
• 71% of state’s population
• Even higher % of the

biz-to-biz economy

Lean & Green Michigan Michigan’s PACE Administrator

• Located in Detroit, MI
• Coordinate the Michigan PACE market
• Help qualify and coordinate potential

projects

• Community engagement
• Perform due diligence for all PACE

projects

• Conducts contractor trainings
• A resource for all things PACE related

More About PACE

• 100% financing
• Loan-to-value ratio (about a quarter’s worth of property value)
• Appraised property value
• As completed property value
• Long-term loans (up to 25 years)
• Guaranteed cashflow positive PACE projects (if financing >$250,000)
• Fixed interest rates
• Non-recourse loans (no personal guarantee)
• Payments can be passed through tenants
• Broad ECM qualification measures

More About PACE

• No use of taxpayer dollars
• An economic development tool
• Helps create and win jobs for local energy contractors
• An open market

Michigan PACE Market Data

States with PACE Legislation

Source: PACENow

pacenation.us

PACE 101

• Buildings generate

nearly 40% of global GHG emissions

• Global building stock

will double in area by 2060

Why PACE? Energy Efficiency Matters!

• On average 30% of

all energy consumed in commercial buildings is wasted

Why PACE? Energy Waste = Capital Waste

Energy Efficient Buildings Makes Sense…But Can Be Hard To Pay For

• Increases property values
• Improves local building stock
• Creates for more comfortable buildings
• Retain tenants
• Reduces energy burdens
• Increases the bottom line
• Reduces GHG emissions and water consumption!

PACE v Traditional Bank Finance

Short-term loan payback PACE payback

The PACE Process

Qu Qualified P Prop

• pert

rties

• Commercial & Industrial:
• hotels, hospitals, restaurants, office buildings & more
• Multifamily housing:
• both market-rate and low-income apartment buildings
• Agricultural:
• farms, wineries, & more
• Nonprofits:
• houses of worship, private schools, cooperatives & more
• New Construction & Energy Refinancing:
• Available for all the above

Qualified Energy Upgrades

• Energy efficiency: lighting, HVAC, windows,

insulation, roofing, caulking & more.

• Water efficiency: stormwater recapture,

low-flow toilets / sinks / showerheads, greywater systems & more.

• Renewables: solar energy, wind energy,

EV charging, geothermal, CHP & more.

Qualified Projects

• Retrofits
• Gut rehabs
• New construction
• Energy refinancing

PACE Express & Standard PACE projects

PACE Project range

• No upper limit financing
• MI’s largest project to date $6.8 M

Project upper limit?

• Depends on capital providers
• PACE Express!
• ~ $100,000 lower limit
• Smallest project to date $117,580

Project lower limit?

PACE in the Capital Stack: Incentives and Rebates

• Utility programs
• Traditional bank finance
• Historic Tax Credits – (515 Ionia case study)
• Brownfield Funding – (515 Ionia case study)
• Solar tax credits
• Match loans
• Other energy upgrade incentives

LAGM Case Studies

LAGM Case Study 513-515 Ionia St.

LAGM Case Study

• St. Clair Inn

LAGM Case Study Detroit Unity Temple

LAGM Case Study Powers Distributing

LAGM Case Study Cambria Hotel

Questions?

Contact: Info@LeanAndGreenMi.com