In effort to encourage environmentally friendly business practices throughout, Sterling Heights joined forces with Lean & Green Michigan (LAGM) to roll out PACE program to commercial, industrial, multifamily, agricultural and non-profit properties.
PACE is a long-term financing tool available to commercial property owners to pay for energy and water efficiency and renewable energy upgrades. LAGM is the statewide administrator for PACE financing that local governments can join for free, creating one uniform and efficient PACE market. No city funds are used for PACE financing. The capital comes from private lenders specializing in PACE financing.
Buildings consume 43% of energy in the United States, and 30% of this consumption is wasted due to inefficiency. Many businesses do not invest in renewable energy measures because it takes too long to see any payback benefits. City leadership is hopeful the PACE program will help change that and encourage more commercial property owners to invest in renewable energy measures.
Through PACE, property owners receive 100% pre-funding for energy saving upgrades on their facilities and pay the PACE loan back through a special assessment on their property taxes. Financing is up to 25 years or the useful life of the project, there is no upfront cost and the interest rate is fixed. The property owner sees immediate positive cash flow, and the financing runs with the land, transferring to subsequent owners upon sale of the property.
“We are joining 42 other local governments who have joined LAGM to complete $26 million worth of commercial PACE projects in Michigan to date,” said Sterling Heights Mayor Michael Taylor. “With all the commercial and industrial properties we have throughout the city, we can have a significant positive impact on the environment by encouraging property owners to take advantage of the PACE program. PACE will also help property owners save on their utility bills for years to come. It’s a win-win.”
Qualifying upgrades can include energy efficiency like lighting and HVAC, water efficiency like low-flow toilets and stormwater recapture, and renewables like solar/wind energy and geothermal. These upgrades can be part of projects including retrofits, gut rehabs, new construction or even refinancing of any of those. There are no formal limits, but PACE projects are generally larger than $100,000.
Properties valued at more than $400,000 with utility bills greater than $20,000 annually are most likely a good PACE candidate. PACE can have implications for how a project is designed and financed, so interested property owners are encouraged to start a PACE conversation as early in the process as possible. To start a conversation, contact LAGM at 313-444-1474 or email email@example.com.
For further information, contact Sterling Heights Community Relations Director Melanie Davis at (586) 446-2471 (o) or (586) 303-0923 (m) or firstname.lastname@example.org.