Originally published on the ECOreport.
Michigan passed the legislation for a Commercial PACE (Property Assessed Clean Energy) program in 2010. Businesses and commercial properties in participating municipalties can retrofit their buildings with renewable energy and energy efficient systems by borrowing money from a private lender, and repay the loan via a special assessment on their local property tax. It has taken longer for municipalities to opt in, and consequently, the state’s PACE programs didn’t really get started until 2016. Tommy Deavenport, Chief Operating Officer of Petros PACE Finance, explained how commercial PACE came to Michigan.
How Commercial PACE Came To Michigan
According to the press release:
“Petros PACE Finance, LLC has completed a $718,000 Property Assessed Clean Energy (PACE) transaction with a Michigan property owner that will fund significant energy efficiency upgrades to a 36-year-old commercial facility.
Property owner Delta Business Center, LLC plans to install a new HVAC system, LED lighting, high-efficiency fans, modern building automation system and skylights in its Delta Business Center, a 93,000 square foot light industrial building that previously housed the Lansing State Journal printing and distribution facility.
The investment is expected generate more than $1.8 million in energy savings over the 20-year life of the loan. The project will be financed without any out-of-pocket expense to Delta Business Center, LLC through the Lean & Green Michigan PACE program.”
Deavenport added, “A total of six projects have been funded in Michigan to date, with five of those funded in 2016 by Petros PACE Finance. We believe the number of projects funded by Michigan’s PACE program is going to grow rapidly in in 2017 and beyond. Our pipeline certainly continues to grow.”
This Emerging Market
He speaks with the authority of over 30 years in the financial services sector. Deavenport was on the founding team and a Managing Director of Square 1 Bank (acquired by Pacific Western Bank). He has also been a Senior Vice President at Imperial Bank and a co-founder of VCFO, a leading fractional accounting firm headquartered in Austin.
Deavenport explained his decision to get involved with PACE in terms of the tremendous opportunities in this emerging market.
“So many commercial property owners want to improve the energy efficiency of their buildings because they know it saves money in the long run, but traditional financing programs made that difficult. PACE is a unique solution because it allows property owners to borrow from private lenders and pay the loan back over a long period of time through an assessment on the property. This means that a significant investment in increased energy efficiency or alternative energy is cash flow positive to the property owner from day one, and it doesn’t impact their ability to sell the property because the assessment remains with the building. It’s a win-win for everyone including the property owners, their tenants who also benefit from lower utility bills, and the surrounding community, which benefits from additional job creation and sustainability.”
Petros PACE Financing
Petros PACE Financing started funding projects in 2016 and has closed 22 transactions in 6 states since May 2016.
“We were the first private lender to close transactions in Texas, Michigan, Minnesota and Colorado,” he said.
(PACE financing is currently available in 32 states and Washington, D.C.)
Asked what the difference was between Petros and commercial PACE programs like Figtree PACE in California, Deavenport explained:
“It’s important to distinguish between “program” and “lender.” Petros PACE Finance functions solely as a private lender, not a program or program administrator. Therefore, we can provide PACE financing in any state that has established a PACE program. So far we have done deals in Michigan, Minnesota, Texas, California, Missouri, and Colorado.
“We’ve differentiated ourselves by getting involved early in several state programs to help officials structure documents and processes in a more efficient and useable way. Additionally, we’ve experienced very rapid growth in a short period of time, and have proven to market participants that we can close transactions on a timely and cost effective basis.”
- The old lights at the Delta Business Center project in Delta Township near Lansing – Courtesy Petros PACE Finance, LLC
- Lights taken down at the Delta Business Center project in Delta Township near Lansing – Courtesy Petros PACE Finance, LLC
- Tommy Deavenport, COO of Petros PACE Finance
- Front of the New Amadore Apartments in Saginaw, Michigan, where Petros is providing the funding to Niche Properties plans to replace all 281 original single pane windows in the 63-unit apartment building – Courtesy Petros PACE Finance, LLC
Don't want to miss a cleantech story? Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!
Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.