Commercial PACE – Page 4 – Philadelphia C-PACE

December 1, 2020

Energy Efficiency and COVID-19 Safety Measures: Can You Have Both?

Philadelphia Energy Authority – November 10, 2020

By Lennal Kalawa and Lisa Shulock

Philadelphia Energy Authority held a webinar about energy efficiency and COVID-19 mitigation in commercial buildings. The session covered operational adjustments and capital improvements to protect occupants’ health and manage energy use in commercial buildings.

Lisa Shulock from the Philadelphia Energy Authority moderated the panel and she was joined by Dan Kerr, President of Burns Mechanical, a high-performance building service company, Marcelo Rouco, Chairman, Founder and Chief Executive Officer of Ecosave, a supplier of energy efficiency services, and Sam Elbarouki, Senior Vice President, C-PACE Business Development, from Dividend Finance, a C-PACE capital provider.

Shulock kicked off the discussion and provided a high-level description of C-PACE, a financing tool that provides long-term funding for energy efficiency, renewable energy, and water conservation projects. C-PACE financing may be of interest to commercial building owners who want to upgrade their energy systems to achieve high energy performance while also making their buildings more “COVID-safe.”

Kerr shared some tips as to what he has learned as an engineer during the COVID pandemic. He stated that the most important health and safety precaution is for individuals to practice social distancing, wear masks, and practice other personal actions to protect themselves and others. Building operators can also help to keep their occupants safe, but there isn’t one technology or gadget that can be purchased or turned on. Building operators should first make sure their buildings are operating optimally. Kerr noted that approximately 80% of commercial buildings are not operating the way they should. The pandemic is showing that owners who have deferred maintenance have more work to do to get their buildings to safe operating levels. It is now generally accepted that both ventilation and filtration approaches on their own or in combination can reduce the risk of airborne transmission of the novel Corona virus. Achieving the ASHRAE ventilation standard (62.1-2019), maintaining relative humidity between 40-60% and upgrading when possible to MERV 13 rated filters or higher are probably the most important areas to focus on related to HVAC systems operation. Kerr said that Burns has also installed disinfecting UVGI spectrum lights for several of their clients in the HVAC equipment because cooling and heating coils and other equipment inside air handling equipment can become contaminated.

Marcelo Rouco from Ecosave spoke about the reasons you would want to consider implementing energy-saving measures at the same time you are addressing COVID mitigation. He stated that COVID mitigation often increases energy consumption, however, by looking at other energy reduction measures in the building, building owners can achieve the goal of saving energy as well as having COVID mitigation measures in place.

Some of the benefits of a combined approach include:

Maintaining building health standard while reducing energy consumption
There is a cost reduction when COVID mitigation and energy efficiency are combined
COVID mitigation can be funded by C-PACE as long as it is combined with other energy-saving methods.

Sam Elbarouki from Dividend finance, a C-PACE capital provider explained how they help finance building upgrades and new construction. C-PACE can provide financing for up to 100% of the cost of energy efficiency upgrades and there is a lower cost of capital than many alternatives. C-PACE is able to integrate with other economic development initiatives such as Opportunity Zones, Tax Increment Financing (TIFs), Historic Tax Credits (HTCs), and utility incentives.

Capital providers can finance roof replacement, windows and doors, lighting upgrades, HVAC systems, energy storage, solar systems and more. The minimum project size is $100,000 in Philadelphia and $10,000 in other Pennsylvania counties with a repayment term of up to 30 years with a fixed interest rate, generally in the range of 5-7%. There is also the option of retroactively using C-PACE financing with a two-year look back.

Shulock wrapped up the webinar by discussing the first Pennsylvania C-PACE projects. Information on the projects can be found here.

To watch the recording of the webinar, click here. The slides can also be found on the Philadelphia C-PACE program resources page in the Philadelphia C-PACE webinars section.

Additional reading and resources:

https://www.aceee.org/blog-post/2020/10/reducing-covid-19-risks-commercial-buildings-without-wasting-energy

https://enverid.com/blog/the-enverid-covid-19-energy-estimator-revealing-the-full-costs-of-hvac-strategies/

November 23, 2020

Iconic Philly Met Uses C-PACE for Retroactive Financing of $6 Million for Energy Efficiency Investments in Philadelphia

PHILADELPHIA ENERGY AUTHORITY
FOR IMMEDIATE RELEASE
DATE: NOVEMBER 23, 2020

CONTACT:
Lisa Shulock, Philadelphia Energy Authority
215-880-8298 (cell)
Lshulock@philaenergy.org

Iconic Philly Met Uses C-PACE for Retroactive Financing of $6 Million for Energy Efficiency Investments in Philadelphia

Philadelphia, November 23, 2020 –

The Philadelphia Energy Authority, Enhanced Capital and EB Realty Management (“EBRM”), owners of The Met, announced today the financial close of the first project in Pennsylvania to retroactively use Commercial Property-Assessed Clean Energy (C-PACE) financing. EBRM is borrowing $6,000,000 in C-PACE financing from Enhanced Capital to pay for energy efficiency upgrades for the former Philadelphia Metropolitan Opera House, renovated in 2018.

Until the pandemic hit, “the reopening of The Met has provided an economic boost to the North Broad Street corridor, particularly neighboring restaurants, hotels and businesses,” said Ian McCulley, Director at Enhanced Capital. “Using retroactive C-PACE was a great solution to strengthen the capital stack and repay some higher cost debt. Philadelphia allows retroactive financing up to two years after project completion, and it can be a useful tool for building owners looking to transition from construction to permanent financing.”

“These are not easy times for any of us, especially for cultural institutions,” said Emily Schapira, Executive Director of the Philadelphia Energy Authority, which administers the Philadelphia C-PACE program. “We are proud to provide a tool like C-PACE that can improve liquidity and reduce costs for commercial properties during this pandemic. C-PACE allowed The Met to pull even more value out of their energy efficient retrofit.”

With this PACE financing, “we are one step closer to curating the North Broad Corridor of Philadelphia into a global example of successful impact development,” said Christopher Cordaro, Vice President at EBRM.

In C-PACE lending in Pennsylvania, existing mortgage holders must consent to the C-PACE financing. In this case, both PIDC and Fulton Financial provided consent. Sue Lonergan, Fulton Bank’s regional president for Southeastern Pennsylvania, said of the consent, “Fulton Bank has been a proud supporter of The Met project, and we’ve seen the positive impact this historic gem has had on the local economy and the community in general. It made sense to use C-PACE to help reduce the owner’s monthly payments to get through this extraordinarily difficult time.”

Philadelphia City Council President Darrell Clarke represents the 5^th District, which includes the stretch of North Broad Street where The Met is located. “We are delighted to see that C-PACE not only facilitates investment in energy efficiency, but also as in this case, has helped strengthen an institution that has been a key part of the North Broad Street revitalization.”

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About the Philadelphia Energy Authority

The Philadelphia Energy Authority (PEA) is an independent municipal authority created in 2010 to advance energy affordability and sustainability for the City. PEA has facilitated over $136 million in clean energy projects in Philadelphia since launching the Philadelphia Energy Campaign in 2016, creating more than 1,300 jobs. As Program Administrator, PEA reviews and approves applications, manages the billing and lien processes, engages in market education and supports the growth of the Philadelphia C-PACE program. For details, visit www.PhiladelphiaCPACE.org.

About Metropolitan Opera House/EBRM:

EBRM is the owner of the Philly Met, a performance venue managed by Live Nation. The Met is located on North Broad Street, just minutes from downtown Philadelphia.

About Enhanced Capital:

Enhanced Capital, with offices in New York City and New Orleans, is a diversified private investment firm focused on financing small and mid-sized companies overlooked by traditional sources of capital. Founded in 1999, many of Enhanced Capital’s funds are backed by institutional capital and finance businesses across targeted investment, asset management and tax credit platforms. In addition, the firm participates in a variety of state and federal public-private investment programs, including the federal SBIC program. For more information, visit www.enhancedcapital.com.

November 20, 2020

Philly’s “Building Tune-Up” Mandate – Using C-PACE to Achieve Compliance

By Lennal Kalawa and Lisa Shulock

Philadelphia Energy Authority held a webinar on November 5, 2020 about Philadelphia’s Building Energy Performance Policy, commonly known as Building Tune-Up, and how C-PACE can be used to achieve compliance. The final Building Tune-Up regulations were issued in October 2020. The law was motivated by the need to reduce the carbon footprint of commercial buildings. The law mandates that all large buildings must submit a certification of high energy performance to the city’s Office of Sustainability or conduct tune-ups.

Lisa Shulock from the Philadelphia Energy Authority moderated the panel and she was joined by Zach Greene from the City of Philadelphia’s Office of Sustainability, the City agency responsible for overseeing Building Tune-Up, Dave Ferro from Pennoni, an engineering firm, and Stephen Bevilacqua from REVL Capital Group, a C-PACE capital provider.

C-PACE is a financing tool that provides long-term funding for energy efficiency, renewable energy, and water conservation projects. C-PACE financing may be of interest to commercial building owners who want to upgrade their energy systems to achieve high energy performance as an alternative to conducting regular tune-ups.

This bill is directed at all non-residential buildings with indoor floor space of at least 50,000 sq. ft. This includes office buildings, retail stores, municipal buildings, hospitals, schools/universities, and more.

Greene explained that the first compliance deadline is September 30, 2021 for buildings larger than 200,000 Sq. Ft. However, they are granting 6-month extensions due to COVID. The last group of buildings which are between 50,000 and 70,000 Sq. Ft. will need to comply by September 30, 2024.

The first way to comply with this new requirement is to conduct a tune-up every five years. Tune-ups must address base building systems including:

Building System Maintenance & Repairs
HVAC Operations and Controls
Lighting System Assessment
Domestic Hot Water and Water Usage
Building Envelope

The tune-ups must be overseen by a “Qualified tune-up specialist” – defined as a licensed Professional Engineer or Certified Energy Manager with at least 7 years of experience. The specialist must be a third-party to the building, unless it is within a large portfolio.

The second pathway is through several high-performance compliance options including ENERGY STAR certification, gold rating or higher for USGBC LEED Operations and Maintenance v4, net zero certification, and many others.

Greene wrapped up by sharing key takeaways: the policy is focused on the operations and maintenance of a building and its existing systems, it does not require capital improvements, it does not require buildings to meet specific levels of efficiency, and the policy aims to increase tenant comfort and decrease energy costs and carbon emissions.

Dave Ferro from Pennoni stated that tune-ups “are all about an effort to control costs, improve occupant comfort, reduce wasted energy and, in many cases, improve cash flow.” Ferro stated that when evaluating a building, they like to start with an ASHRAE level 1 walk-through. “As an engineer, you should be able to walk into a level 1 building and find all the low hanging fruit.” Once you get the level 1 understanding, you can proceed to level 2 and identify no-cost/low-cost energy efficiency measures that can provide payback. One thing that certain engineering companies offer including Pennoni is ongoing monitoring of energy usage and identification of potential problems as an additional way to manage energy use.

If buildings have not yet achieved any of the qualifying high-performance standards, owners and managers have the option of investing in systems to attain one of the compliance options and use C-PACE as the financing tool. Bevilaqua noted the key features of C-PACE include the term of the loan can be up to the maximum useful life of the equipment up to 30 years; the first payment can be delayed two years; the lien stays with the property, not the building owner; financing rates are in the “high 4’s” to 7%; the long term assessment allows for deeper investments in energy efficiency and/or reduces monthly payments for borrowers; and PACE requires no upfront cash and can be treated as an off-balance sheet item. Bevilaqua stated that C-PACE typically will cover up to 30% of a project’s hard cost for new construction and up to 100% of the costs of energy upgrades.

To obtain an energy survey to develop the C-PACE financing package, building owners can reach out to Qualified Engineers listed on the Philadelphia C-PACE website. The owner also needs to select a Capital Provider to provide a term sheet and work with the owner throughout the process of obtaining C-PACE financing.

To qualify for C-PACE in Philadelphia the project must be a commercial or industrial property. C-PACE can be used for upgrades to existing buildings or for gut rehab and new construction projects. The minimum financing amount for a C-PACE project in Philadelphia is $100,000. There is a maximum 95% Lien-to-Value limit and up to a 30-year financing term. There is also the option of retroactively using C-PACE financing with a two year look back.

Shulock wrapped up the webinar by discussing the first two Pennsylvania C-PACE projects which are located in Philadelphia. The first was J-Centrel in which Twain Financial provided $1,500,000 in financing to Shift Capital for a gut rehab project. The Olde City Day School obtained $519,000 in C-PACE financing from Greenworks Lending to install rooftop solar. It was the first solar project in Pennsylvania to use C-PACE financing.

The Building Tune-Up website can be found here. To watch the recording of the webinar, click here. The slides can also be found on the Philadelphia C-PACE program resources page in the Philadelphia C-PACE webinars section.

October 28, 2020

Harrowgate Project From Shift Capital Showcases Versatility Of C-PACE Financing

Repost from BisNow – October 25, 2020 Matthew Rothstein, Bisnow East Coast

A new development and its use of a new financing tool have the potential to be a template for introducing more environmentally sustainable elements to nearly all forms of commercial real estate.

Shift Capital last year announced the beginning of its J-centrel project in the Harrowgate neighborhood, on the opposite side of Kensington from Fishtown. Like all of Shift’s projects to date, J-centrel is the redevelopment of a historic but rundown factory building into a mixed-use project with multiple features designed to proactively benefit local residents.

Shift realized upon gaining access to the building to begin work that it would require more time and money than initially estimated, Shift Vice President of Development Maria Sourbeer said at Bisnow’s Philadelphia C-PACE: How To Close A Deal webinar on Thursday. Meanwhile, Philadelphia City Council had recently passed legislation allowing the use of C-PACE, or commercial property-assessed clean energy, financing. Sourbeer sensed an opportunity.

“Coming from a nonprofit background, I’m used to having my ear to the ground for different financing [opportunities],” Sourbeer said.

C-PACE, the commercial-specific form of the more general PACE program, is a funding idea generated at the national level that requires statewide legislation to enact and local governments to execute. C-PACE passed Pennsylvania’s Legislature in 2018 and Philadelphia City Council last year, and J-centrel is the first project in the city to take advantage of it.

C-PACE loans are available to banks and other private lenders, which would pay all of the hard and soft costs associated with improving a commercial building’s environmental sustainability. The borrower pays back the cost through an additional assessment similar to what determines a property tax, which is passed back to the lender. The sum that a project can be loaned through C-PACE is determined by an auditor hired by the borrower, which panelists agreed is a relatively painless process.

“We worked hard with our general contractor to see what would qualify in the energy audit, and we worked through that before we even brought in the auditor,” Sourbeer said. “So when we hired the auditor, we were able to hand them our analysis.”

The term of a C-PACE loan is as long as the improvements remain in place and operational for up to 30 years, in accordance with Philadelphia’s iteration of the program.

Twain Financial Partners had already purchased historic preservation tax credits to help finance J-centrel and agreed to add C-PACE to its agreement with Shift. Since the assessment portion of C-PACE loans occupy the same part of the capital stack as property taxes and do not accelerate in the case of non-payment, senior lender Fulton Financial was comfortable including the new loan despite its technical position in front of the senior mortgage lender in the capital stack, Twain Business Development Officer Paul Thompson said. Functionally, C-PACE repayments occupy a similar place to a mezzanine loan in the repayment order.

“[J-centrel had] some cost overruns, understandably so because it’s an adaptive project,” Thompson said. “So how do you cover that gap while still keeping your senior lender happy? C-PACE makes a lot of sense in that situation because it’s used in qualifying costs that help improve the efficiency of the building.”

J-centrel is the redevelopment of a two-warehouse complex with connecting walkways on J Street, a block away from the Tioga station on the Market-Frankford Line. Three floors of apartments totaling 116 units will sit atop 30K SF of ground-floor commercial space, including retail and a local business accelerator. Two of the apartments will be reserved for those making 40% of the area median income, and 31 will be priced for 70% AMI.

The residential portion doesn’t qualify for C-PACE under Pennsylvania’s version of the program, which meant Shift was forced to split J-centrel into a commercial condo and a residential one. The Philadelphia Energy Authority, the local agency administering the program, is lobbying the state government to add multifamily to the list of qualified projects, PEA Program Manager Lisa Shulock said.

Shift pursued C-PACE financing to shore up a capital shortfall when costs on J-centrel went up, but a building owner can apply at any phase of a project’s life, from design to two years after completion of construction. Even a long-completed building renovating any qualifying building systems can qualify within two years of the process.

Fulton’s traditional senior loan to Shift for J-centrel was for $14.5M, and Twain purchased $2.5M in historic preservation tax credits. By incorporating the $1.5M C-PACE loan into the operating expenses portion of its balance sheet, Shift was able to take on the loan with a 25-year repayment period and not stress its loan-to-value ratio, Fulton Vice President of Commercial Community Development Jeanne Fields said.

“It’s an easy way to bring some additional capital into the project,” Fields said. “We knew the project that needed to be completed, and we were happy that it was able to cover the cost of completion without requiring more money from us.”

Because repayment is based on a tax assessment rather than something more prone to fluctuation, the funds are held in escrow, which takes away from the building’s cash flow, Fields mentioned as a caution to prospective users of the program. Otherwise, C-PACE provided a means to avoid the type of pitfalls common with social impact-focused projects that operate with thin margins.

C-PACE is structured similarly to tax increment financing packages, only with the beneficiary of repayment being a private lender rather than the state or local tax rolls, Thompson said. He believes the familiarity much of the development community has with TIF will help accelerate the adoption of this program.

“[It’s] a TIF structure with a fancy new name, but it will quickly become ubiquitous, not just in Philadelphia but across the country,” Thompson said.

CORRECTION, NOV. 5, 3:45 P.M.: A previous version of this article misstated C-PACE loans’ place in the capital stack. This article has been updated. Contact Matthew Rothstein at matt.rothstein@bisnow.com

Original article: https://www.bisnow.com/philadelphia/news/sustainability/new-green-financing-program-c-pace-shift-capital-106452?utm_source=outbound_pub_20&utm_campaign=outbound_issue_43446&utm_content=outbound_link_11&utm_medium=email

Click here & log-in to Bisnow to view the Philly C-PACE: How to Close a Deal Webinar from October 22, 2020.

August 18, 2020

First Solar Project to Use C-PACE in Pennsylvania Closes in Philadelphia

FOR IMMEDIATE RELEASE:
Tuesday, August 18, 2020

CONTACT:
Maryrose Myrtetus, Philadelphia Energy Authority
215-431-5641 (cell)
mmyrtetus@philaenergy.org

Philadelphia, PA – The Philadelphia Energy Authority, Greenworks Lending, and the Capers Company LLC announced today the financial close of the first project in Pennsylvania to use Commercial Property-Assessed Clean Energy (C-PACE) financing for a renewable energy project as part of a series of announcements being released during Philadelphia Solar Week. Capers Company LLC is borrowing $519,020 in C-PACE financing from Greenworks Lending to install a 212-kilowatt solar system on a building in the Germantown neighborhood of Philadelphia. K.E.S. LLC is the solar developer. The solar array is projected to generate 266,673 kWh in its first year of operation, meeting nearly 100% of the electricity needs of the building’s tenants. By using solar energy, the building will reduce its carbon footprint by 6,900 metric tons of CO2e emissions over the life of the project.

Under the leadership of Councilmember Derek S. Green (At Large), Philadelphia City Council passed legislation enabling C-PACE financing in Philadelphia in June 2019. “We saw C-PACE as a tool to open up new markets for clean energy investments in our City,” said Green. “This solar project proves that C-PACE does just that.”

William Capers, Principal of the Capers Company, says, “We feel it is most suitable and fitting that this project benefits a building that caters to the care of children, supporting them now and with the goal of leaving a better earth for them. I am happy to be a part of a project that will help decrease a necessary cost associated with operating a childcare center.”

Jessica Bailey, Greenworks CEO and Co-Founder, stated that “Solar can immediately help decrease a building’s operating expenses while lowering its carbon footprint and has been a key piece of the Greenworks story since we started. C-PACE finance offers a powerful solution to build these projects where they might not otherwise have made fiscal sense. We are proud to expand our offering into Pennsylvania and provide financing for the first C-PACE-financed solar project in the Commonwealth.”

“This is the second C-PACE financing to close in Philadelphia this summer, showing the breadth of projects that C-PACE enables,” noted Maryrose Myrtetus, the Philadelphia Energy Authority’s Program Manager overseeing the Philadelphia C-PACE program. “The first financing covered energy and water efficiency improvements in a new mixed-use gut-rehab project in Kensington. It is notable as well that this solar project pencils out without grants, simply utilizing the energy savings, C-PACE financing structure, tax benefits and anticipated Solar Renewable Energy Credits (SRECs) revenue.”

The line-up of virtual events for Philadelphia’s second annual Solar Week includes a webinar on Thursday, August 20th titled Good for Business: Trailblazing Commercial Solar Projects, which will include information on C-PACE and another commercial solar project announcement. Find details about all Solar Week events at solarizephilly.org.

About the Philadelphia Energy Authority

About Philadelphia C-PACE

Commercial Property-Assessed Clean Energy (C-PACE) financing allows commercial property owners to borrow money for energy efficiency, renewable energy, and water conservation projects. Repayments are made via a special assessment similar to a property tax assessment. Key features include: 100% of project costs can be financed; repayment terms are up to 30 years; the special assessment stays with the property in the event of a sale.

For more information, visit www.philadelphiacpace.org.

About Greenworks Lending

Greenworks Lending is the largest provider of Commercial Property Assessed Clean Energy (C-PACE) financing in the country. Led by several of the industry’s founding policy developers and standard-setters, Greenworks Lending is a private capital provider uniquely dedicated to funding commercial real estate through C-PACE. Greenworks has provided financing to hundreds of commercial properties in more than a dozen states. Greenworks Lending’s C-PACE financing makes clean energy a smart financial decision for commercial property owners.

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July 17, 2020

First Pennsylvania C-PACE Deal Inked: $1.5 Million of Energy and Water Efficiency Investments in Philadelphia

PHILADELPHIA ENERGY AUTHORITY

FOR IMMEDIATE RELEASE

DATE: JULY 17, 2020

CONTACT: Maryrose Myrtetus, Philadelphia Energy Authority, 215-431-5641 (cell), mmyrtetus@philaenergy.org

Philadelphia, July 17, 2020 –

The Philadelphia Energy Authority, Twain Financial Partners and SHIFT Capital announced today the financial close of the first project in Pennsylvania to use Commercial Property-Assessed Clean Energy (C-PACE) financing. SHIFT Capital is borrowing $1,500,000 in C-PACE financing from Twain Financial to pay for energy and water efficiency upgrades to a new mixed-use development in the Kensington-Harrowgate neighborhood of Philadelphia.

SHIFT Capital’s project, J-centrel, is key to the company’s unique approach to urban development. J-centrel provides 30,000 square feet of ground floor commercial space, including retail storefronts, spaces for entrepreneurs and artists, and an accelerator for local businesses. It also features 116 converted loft-style apartments. The C-PACE financing is being used to pay for measures that will reduce the operating costs in the commercial spaces, including LED lighting, window replacements with insulation and low-e glazing, energy recovery units, variable refrigerant flow heat pumps, and low-flow plumbing. Together, the measures are expected to reduce the building’s total carbon footprint by 2,700 metric tons of CO2 equivalent.

Under the leadership of Councilmember Derek S. Green (At Large), Philadelphia City Council passed legislation enabling C-PACE financing in Philadelphia in June 2019. “I am so proud to see the state’s first C-PACE deal close in Philadelphia. C-PACE is a game-changing tool that brings private sector investment to our city to create jobs, fight climate change, improve public health and help businesses save money,” said Green. “I’m proud to have led the charge to establish this important initiative in partnership with the Philadelphia Energy Authority and I look forward to more C-PACE projects to come.”

C-PACE was enabled in Pennsylvania in 2018 through legislation sponsored by State Senator John Blake (D-Lackawanna County). “We worked for years in Harrisburg to finally get C-PACE across the finish line because we understood the economic and environmental benefits of this creative, market-driven funding mechanism to enable businesses to make important water conservation and energy efficiency upgrades,” Sen. Blake said. “I hope and expect that this $1.5 million investment is the first of many impactful C-PACE projects across the Commonwealth. I applaud the work of the Philadelphia Energy Authority for initiating the first C-PACE project in Pennsylvania.”

“SHIFT Capital is excited to use C-PACE for our J-centrel project. C-PACE was a key tool for rounding out our capital stack, reducing ongoing operating costs, and making our building more green,” said Brian Murray, CEO and Founder of Shift Capital, the developer of J-centrel. “C-PACE provided us with competitively-priced financing and a long-term repayment schedule to allow the energy efficiency improvements for the commercial portion of the project to be cash flow positive right away.”

“Twain Financial is thrilled to be the capital provider for the first-ever Pennsylvania C-PACE project,” said Paul Thompson, Business Development Officer at Twain Financial. “Bringing C-PACE to a new state creates an opportunity for additional developers to see the positive impact these projects will have on their communities. As a PACE investor in other markets since 2016, we have seen how C-PACE allows projects to overcome challenges that have hindered adoption of energy efficiency and related projects in commercial buildings.”

Emily Schapira, Executive Director of the Philadelphia Energy Authority, the Philadelphia C-PACE Program Administrator, said, “With this project, Pennsylvania C-PACE is open for business. Philadelphia is leading the charge in building a robust, equitable clean energy economy, and we are proud to be home to the state’s first C-PACE deal.”

Today, PEA also announced the launch of a new website for the Philadelphia C-PACE program, PhiladelphiaCPACE.org.

About the Philadelphia Energy Authority

About Philadelphia C-PACE

For more information, visit www.philadelphiacpace.org.

About SHIFT Capital

SHIFT Capital is a solutions-based neighborhood investment group who takes an integrated approach to developing equitable inclusive communities that thrive. SHIFT is a Certified B Corporation® who deploys development strategies in underserved neighborhoods that align patient capital with long-term community success to help catalyze shared prosperity, build wealth for the existing community, and strategically preserve affordability and minimize displacement.

About Twain Financial

Twain Financial Partners is an investment management firm located in St. Louis, Missouri with over $4 billion in assets under management within the public-private partnership sector. The firm works with a wide variety of investment types, specializing in tax credit, structured debt and real estate transactions. Twain works closely with financial institutions, corporations and high-net-worth individuals to structure and manage investments that offer both attractive economic return and social benefits.

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June 30, 2020

Roof Project? C-PACE Can Help With That.

Roof improvements are critical to building health and efficiency. But they can also be expensive. Fortunately, C-PACE can finance roof improvements made in tandem with ongoing building improvements, roof work on new construction projects, and rooftop projects like solar and green roofs.

There are a variety of roof improvement projects that can increase a building’s energy efficiency or renewable power generation, thereby making them eligible for C-PACE financing. These projects include:

High-efficiency membranes and coatings
Sealing and other building envelope improvements
Increased insulation
Green roofs
Solar panels
Ancillary costs – Additional structural or electrical work needed to accommodate a solar or other clean energy generation project

In general, roof improvements must fall in-line with the definitions of an Energy Efficient Improvement or Renewable Energy Project, per the C-PACE Program Guidelines. However, if you are considering a roof improvement not listed above and not included in the Program Guidelines, PEA will review proposed measures on a case-by-case basis.

What if you want to do a roof project on a mixed-use building with commercial spaces on the ground floor and residential units on the higher floors? Under current law, residential and multifamily properties are not eligible for C-PACE financing, which means using C-PACE on mixed-use developments requires a few additional steps. If the commercial entity in a mixed-use building wants to use C-PACE to finance an energy-efficient roof project (including a replacement, green roof, updated insulation, etc.) but the commercial entity is not directly connected to the roof itself (e.g. the residential floors are above the commercial floors), the commercial and residential portions of the building must be separately titled. This could be accomplished by a subdivision of the building or creation of a condo. C-PACE financing may then be applied to the commercial portion of the building. If the roof is titled in the commercial portion of the building, C-PACE financing may be used for roof projects.

For solar projects only, the property owner may choose to separately title the commercial and residential portions of the building as described above. Or they may have the commercial portion of the building enter into an appurtenant easement agreement (that runs with the title of the commercial portion) with the residential portion of the building giving the commercial portion full rights and access to the roof, preferably for the life of the building, or in any event at least the useful life of the equipment, and for no shorter than the term of the C-PACE financing.

Are you managing a building in Philadelphia and thinking about making roof improvements?

Contact us at CPACE@philaenergy.org to see if C-PACE is a good fit for you!

April 20, 2020

Using C-PACE to Free Up Capital and Reduce Costs in the Covid-19 Economy

As individuals and businesses across the country continue to navigate the difficult Covid-19 situation, the Philadelphia Energy Authority continues to operate the Philadelphia Commercial Property-Assessed Clean Energy (C-PACE) program to help commercial building owners reduce their carbon footprints while improving their financial health.

C-PACE provides long-term, fixed-rate and low-cost capital to commercial property owners for energy efficiency, water conservation and clean energy projects, and can be used to retroactively finance or refinance energy efficient construction already completed.

Many businesses are facing unprecedented challenges right now. Though energy efficiency projects may not be top of mind, C-PACE provides a useful opportunity to leverage inexpensive, long-term capital to create cost savings, provide liquidity, and improve public health – all of which strengthen businesses for the long term.

Here are three ways C-PACE can benefit your business:

1. Energy efficiency projects financed with C-PACE can generate annual savings: C-PACE energy efficiency and water conservation projects must result in cost savings. Often, the annual C-PACE repayment is less than the cost savings per year, creating positive net operating income. Property owners can use C-PACE to cover 100% of hard and soft project costs. During difficult economic times, zero dollars out of pocket combined with recurring cost savings can help commercial property owners boost their financial health.

2. Retroactive financing can reduce debt service payments or free up cash for businesses: Commercial property owners that completed an eligible project in the past two years may be able to retroactively finance their projects with C-PACE. Retroactive financing allows property owners to replace more expensive debt with C-PACE’s low-rate, long-term financing. If there isn’t a previous financing to replace, retroactive C-PACE financing can provide a cash infusion, bolstering the business’ cash on hand.

3. Addressing Philadelphia’s carbon footprint creates a more resilient city: Seventy percent of Philadelphia’s carbon footprint comes from buildings and industry. Energy efficiency and clean energy projects reduce Philly’s carbon emissions, which is more important than ever during the Covid-19 pandemic. Studies show that populations with high levels of air pollution are hit harder by Covid-19, so every step we take to reduce emissions will affect the health of all Philadelphians. Most C-PACE projects reduce emissions, which helps fight climate change and results in cleaner air, healthier people and a more resilient workforce.

During this uncertain time, C-PACE is a flexible tool that can help commercial property owners weather this storm and strengthen their businesses in the long term.

For more information or to discuss a specific project, email CPACE@philaenergy.org.

October 23, 2019

PEA Launches Philadelphia C-PACE Program to Spur Commercial Solar and Energy Efficiency Market in Philadelphia

For immediate release: October 23, 2019
Contact: Maryrose Myrtetus, mmyrtetus@philaenergy.org, 215-686-4483

Philadelphia, October 23, 2019 – Council President Darrell L. Clarke (5th District), Councilmember Derek S. Green (At Large) and the Philadelphia Energy Authority (PEA) announced the launch today of Philadelphia’s Commercial Property Assessed Clean Energy (C-PACE) program. C-PACE lets commercial and industrial building owners finance energy and water efficiency improvements and renewable energy installations through a special assessment similar to a property tax assessment. C-PACE will help kickstart the commercial solar market in Philadelphia and support both new construction and retrofit projects to install more energy efficient equipment.

C-PACE will help the City meet its carbon reduction goals, create jobs, and provide significant utility savings for participating buildings. The voluntary program allows property owners to access long-term financing that matches the useful life of the installed improvements generally at lower costs. Participating projects must be located within the boundaries of Philadelphia and engage in eligible energy and/or water savings projects or renewable energy projects.

“C-PACE is another example of how the Philadelphia Energy Authority works with different stakeholders to drive private investment in Philadelphia that creates the jobs of the future and opportunities for our young people, all while creating cost savings and carbon savings for the city,” Council President Clarke said. “C-PACE is good for business and good for the environment – it’s a win-win.”

“C-PACE is a game-changing initiative for our City,” said Councilmember Green. “Philadelphia now has a new financing tool to build a robust clean energy economy that will fight climate change, improve public health and well-being, and save our commercial sector money. I’m proud to have led the charge to establish this important initiative.”

PEA is the Program Administrator for Philadelphia’s C-PACE Program. It has been engaged in a yearlong statewide stakeholder process to facilitate feedback and ideas from residents, lenders, commercial property owners, other government entities and others. As Program Administrator in Philadelphia, PEA will review and approve applications, manage billing, file liens, and perform other general administrative duties.

“Philadelphia is once again showing its leadership in the green economy,” said Emily Schapira, Executive Director of PEA. “Over $1 billion in C-PACE deals have been executed nationwide, and we are proud to join our peers in enabling this important tool.”

Pennsylvania was the 36^th state to authorize the creation of C-PACE financing when Governor Tom Wolf signed it into law on June 12, 2018. With the leadership of Councilmember Green, Philadelphia City Council authorized C-PACE for the City of Philadelphia on July 20, 2019 and assigned PEA as Program Administrator. The bill was signed into law by Mayor Kenney on August 14, 2019.

PEA will host a webinar on October 30, 2019, at 1pm ET to review the program guidelines. For more information on the webinar and the Philadelphia C-PACE program in general, visit cpacephiladelphia.org.

The Philadelphia Energy Authority was formed in 2010 to support the city on energy affordability and sustainability, including developing long-term energy programs and policies. Visit philaenergy.org for more information.