California office park gets nation's single largest PACE deal
A four-building, 250,000-square-foot office park in Sacramento, Calif., will get upgrades it needs to qualify for LEED status, thanks to a $3.16 million contract under a local commercial Property Assessed Clean Energy (PACE) program.
The arrangement is being touted by the backers as the nation's single largest PACE deal yet.
The PACE financing model, authorized in 30 states, makes it easier for property owners to finance energy efficiency and renewable energy projects in homes and businesses without prohibitive upfront costs. Instead, projects are paid back through an annual property tax assessment.
The retrofits under this contract, to be performed by Johnson Controls, include replacement of rooftop climate control equipment and installation of a building management system that allows tenants more control over mechanical operations, and interior and exterior lighting.
Overall, the improvements to the Metro Center Corporate Park will save $140,000 on annual utility costs for the building's owner, Seattle-based Metzler Real Estate -- a 27 percent decrease. They will enable the Metro Center to register for LEED status, and will create 50 local jobs during the construction phase.
The retrofit is funded through Clean Energy Sacramento, a PACE program launched by Ygrene Energy Fund in collaboration with the city.
"Metzler Real Estate is setting a new bar for energy efficiency and demonstrating the simplicity and economic benefit of PACE financing for large commercial projects," says Stacey Lawson, CEO of Ygrene Energy Fund.
Ygrene's program has closed $4.2 million in projects in the past 90 days and has received more than $10 million in pre-approved applications. Up to $100 million in funding is being made available for upgrades: The city has committed to retrofitting 12 million square feet under President Obama's Better Buildings Challenge.
"Our program is well on its way to becoming the most successful commercial PACE program in the country," says Sacramento Mayor Kevin Johnson. "Together, we are creating local jobs, reducing emissions and putting Sacramento on the map as a national leader in sustainability."
Sacramento is participating in a massive, multi-jurisdictional residential PACE initiative spanning 14 counties in California.
The CaliforniaFIRST program being run by the California Statewide Communities Development Authority (CSCDA) lets commercial property owners use municipal bonds to pay for energy efficiency, water efficiency and renewable energy upgrades. The program is using private investment for the upfront funding, so as not to burden local budgets, says CSCDA.
Even though the long-term fate of PACE financing was called into question during the mortgage crisis, recent court rulings have encouraged new programs to emerge.
Indeed, the CSCDA has estimated that if all U.S. businesses conducted the sorts of upgrades made possible through these programs, it would reduce their collective energy usage by 25 percent, saving $100 billion.
This article originally appeared at Sustainable Business News.
Building image via Metro Center Office Park.