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Published on July 31st, 2013 | by Guest Contributor

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Commercial PACE Provider FIGTREE Contemplating Expansion Into Texas & Florida

July 31st, 2013 by  


This article originally published on San Diego Loves Green
by Roy L. Hales

The future looks promising, for San Diego based FIGTREE Energy Financing. In the last two years their operations have spread from six markets to 35 in California and now they are contemplating opportunities to expand into Texas and Florida.

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Work has already begun to improve this class A building, one of three Fresno, California cool roof projects being financed via FIGTREE’s recent private placement bond. (Credit: Fryer Roofing)

“FIGTREE has also received our state-wide Judicial Validation, which will give municipalities (and their counsel) a high degree of confidence in the risk-free nature of FIGTREE’s operational policies and financing procedures,“ said Terri Steele, Figtree’s Vice President of Media and Public Affairs. “Some say Judicial Validation is superfluous given our due diligence in passing muster with our bond counsel, JPA and the detail-oriented SEC for our bond financings, but we wanted to add that extra layer of security to our program to reinforce municipalities’ level of comfort with our program.”

A little over a week ago, FIGTREE became the first and only commercial PACE provider in California to fund multiple project rounds that create contractor jobs iusing no public monies. They are financing seven energy projects, in Fresno and Palm Springs, with a  $809,900 bond. These include solar, cool roof and lighting improvements at three offices in Fresno; the first hybrid solar PV system at a Palm Springs hotel; and a more efficient HVAC system for a residential desert property.

“We have been approved in Bakersfield, Butte County, Chico and (yes) Paradise,” said Terri Steele

FIGTREE PACE has also been making inroads into San Diego County.

Last January, FIGTREE PACE became the first commercial PACE provider in the City of San Diego to receive the Mayor’s signature to start funding deals in America’s #1 Solar City.

FIGTREE’s agreements with some of the county’s other cities have been the fruit of a unique partnership, in which FIGTREE and HERO, from Riverside county, have been promoting the no-cost benefits of a competitive PACE marketplace.  The city councils of Oceanside, Vista, San Marcos have approved this approach and FIGTREE is currently accepting applications within their jurisdictions.

Santee has approved a single PACE program, FIGTREE, and is also accepting applications.

At the moment, with the exception of HERO in Riverside and Sonoma counties, PACE programs have primarily operated in the commercial sector.

A residential application of PACE has largely been stalled since 2010, when the Federal Housing Finance Agency (FHFA) ordered the government-sponsored enterprises to not underwrite mortgages for homes with PACE loans. The FHFA was concerned because in the unlikely occurrence of default, PACE liens are considered senior to primary mortgages and, in the advent of a foreclosure, PACE lenders would be paid ahead of the mortgaging institution.

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The California Solar Initiative is offering cash rebates of up to $500,000 per project to help apartment owners (of 5+ units) slash water heating costs – with solar. (Encanto Apartments, Photo courtesy of SunUp Energy Systems.)

The state of California sued the FHFA to reconsider it decision, but the judge ruled in the FHFA’s favor.

“We share the disappointment of the contractors, property owners, municipal officials and environmental advocates working so hard to employ residential PACEsaid FIGTREE’s CEO, Mahesh Shah. “We as a commercial PACE provider see the enthusiasm for residential PACE and are constantly being asked when we are going to be in the market offering this valuable job-creating program. Over the past twelve months, nearly 50,000 individuals have voiced their opposition to the FHFA’s ruling against residential PACE as part of the ruling’s litigation process.

“The FHFA ruling has no direct impact on FIGTREE’s commercial PACE program, however we see the negative media attention surrounding residential PACE spilling into the commercial aspects of our business and confusing the marketplace. It’s holding some people back,” said Shah.

On August 6, the San Diego County Board of Supervisors will also be reconsidering the possibility of adopting a variety of PACE program options. The Board of Supervisors voted in June to direct staff to evaluate the pros and cons of the myriad PACE providers interested in offering their unique brands of financing to property owners in the unincorporated areas of the County.  CaliforniaFirst is currently operating in San Diego County, but no improvements have been funded to date.

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Renewable energy, energy efficiency and water conservation improvements like solar PV, solar water heating, wind, HVAC, lighting upgrades, water fixtures and a variety of additional improvements can all be financed with PACE. (Photo Credit: Catherine Chapin, FIGTREE)

“We must find ways to work within the Federal Housing Financing Authority’s regulations — even if it means launching PACE only to those properties that are free of existing loans,” County Supervisor Dave Roberts subsequently wrote his constituents. “Vice Chairwoman Jacob and I hope to enable all homeowners who wish to put solar their roofs to be able to do so.”

“We are very impressed with the efforts of Supervisors Dianne Jacob and Dave Roberts (and their staffs) who’ve worked diligently to scrutinize not just the claims, but the real-world successes of PACE providers looking to do business in San Diego County,” said Steele.

“Even in a market this young, not all PACE providers are created equal.  We’re working right alongside the Supervisors, staff, and the myriad contracting, building and environmental communities who see the benefit of our program to demonstrate to the remaining Supervisors the job-creating, property-improving characteristics of PACE, not to mention how it helps increase local cash-flow, create a hedge against rising energy costs and create a more sustainable community.  It’s rare you see a program that can be a catalyst for all this using no public money!  And with energy costs spiking in September, PACE couldn’t be approved at a more opportune time!”

“FIGTREE, for instance, can fund commercial PACE deals as small as $5,000 to those in the millions of dollars, a boon for San Diego’s robust small business community.   The County’s current PACE provider has a minimum $50,000 threshold (and they’ve yet to fund a deal anywhere in the state). We also provide crucial mortgage lender consent to ensure commercial property owners are protected from being in breach of their mortgage covenants. And, where other PACE providers ask those qualifying for PACE to find their own financing, FIGTREE saves property owners that step, getting more deals funded (and more contractors’ boots on the roof sooner!)

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FIGTREE PACE provides 100% up-front financing for a wide array of solar, energy efficiency and water conservation solutions to cut energy costs, improve property values and attract and retain tenants. Financing is repaid over periods of up to 20 years via voluntary assessments on property tax bills. (El Dorado Tierrasanta – photo courtesy SunUp Energy Systems).

“We also don’t demand exclusivity in markets.  We, like a majority of the Supervisors in San Diego, believe the government should provide property owners freedom of choice when it comes to what projects they wish to finance to improve their businesses and how they should be financed.  Monopolies just don’t work in our free market system.

“Finally, because San Diego is such a strong military town, we’ve also stepped up to partner with a terrific new organization known as Empower America, who helps transition American service veterans from combat boots to solid boots-on-the-roof jobs – with solar!”

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Energy-intensive businesses like hotels, restaurants and hospitals can slash energy costs by tens of thousands of dollars each year with PACE-financed solar solutions. (Stone Brewing – Photo courtesy of Borrego Solar Systems, Inc.)


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