C-PACE financing comes to Oregon
It's another first for Oregon. Prosper Portland, Multnomah County and the Energy Trust of Oregon have partnered to introduce PropertyFit, Oregon's first Commercial Property Assessed Clean Energy (C-PACE) program.
C-PACE is a tool being used all around the country, and Prosper Portland branded Oregon's first as PropertyFit.
The financing tool is now available to commercial, industrial and multi-family property owners in Multnomah County undertaking energy efficiency, renewable energy, water conservation and seismic retrofit projects.
PropertyFit offers up to 100 percent long-term, fully amortized financing for eligible projects. Up-front investment—a common barrier to projects moving forward—is not required from the owner. The financing can take what was once a capital expenditure and turn it into a cash flow-positive investment that lowers operating costs, increases asset value and improves building performance.
Amy Nagy, Prosper Portland's project lead for the PropertyFit program, said applications need to be a commercial building to be eligible — office, industrial or multi-family (five units or more).
"The building owner must be the applicant into the financing," Nagy told the Business Tribune. "They need to own their own building, then they can go on PropertyFit and either talk with us first, or fill out an application online and submit it to us."
Prosper Portland is the program administrator, and it's available to owners in Multnomah County.
"We've been working on this for about two years," Nagy said. "We've been doing some pretty heavy program development and then just starting to test it out as a pilot, and now we're opening it up county-wide."
"It was something we were looking into a couple of years ago, and we were hearing from a lot of building owners that they were looking for some other financing tool on the market," Nagy said. "There's a tremendous amount of knowledge around sustainable building design, but we weren't seeing those energy efficiency projects turn over as quickly or as deeply — owners would do ones that have a shorter payback period instead of being able to bundle those to get an energy efficiency movement."
The PropertyFit program is available for both new construction and existing buildings. The financing is secured by a benefit assessment lien on the property which automatically transfers upon sale. It is repaid in annual assessments which are often covered by the energy and water cost savings generated by an efficiency project.
"The most interesting part is honestly that the partnership right now that we've got with Multnomah County as well as the Energy Trust of Oregon," Nagy said. "A big piece of what we're trying to do here, the goal is not to reinvent the wheel, but leverage the players and expertise that everybody brings into making the most of it."
It's Multnomah County's legal authority that allows this funding to happen.
"Multnomah County was also looking into setting up a C-PACE program (back when we started)," Nagy said. "We decided to partner."
The Energy Trust provides the technical assistance with its expansive network and programs already offered to community building owners that include building studies, project development, project undertaking and incentive programs.
"We're looking to compliment those with some of their guidelines and incentives around cost-effectiveness," Nagy said. "We're really leveraging that, and whatever can't be covered under Energy Trust."
Prosper Portland worked closely with Building Owners and Managers Association (BOMA Oregon) on this, as well.
"PropertyFit is a valuable tool for building owners and facilities managers as they evaluate capital investment projects, especially as we near release of the City of Portland's commercial building energy performance data," said Susan Steward, BOMA executive director. "The financing can be tailored to the owner's needs and specifically help smaller building owners finance measures such as lighting and boilers to help improve their Energy Star Score. We welcome this program into the marketplace to assist our members in achieving their desired level of building performance."
PropertyFit is also an excellent resource for contractors to close more deals and secure larger, more comprehensive jobs. Building owners no longer have to patch together old equipment that is too expensive to replace or prioritize which fix is more important.
"It can apply to a whole bunch of different projects," Nagy said. "It applies to existing building-type scenarios: you've got the owner trying to replace a piece of equipment or has been putting off a renovation project. Then you've got even some new construction, and those looking to leverage that opportunity as high-performing energy-efficient buildings can use this as well."
With PropertyFit, contractors can present a scope that enables owners to upgrade their buildings without compromising other capital investment projects.
"This is a really good opportunity for contractors," Nagy said. "They're the ones who know the building owners, understand how these buildings work, it's a great opportunity for them to really present a scope as well as a solution to pay for that scope."
There's no set amount of available capital, and it's awarded on a case-by-case basis — but for the most part, it is intended to finance an entire energy-efficiency project.
"URMs (unreinforced masonry buildings), we're already hearing from some folks ... it's something we as part of this program are starting to build out," Nagy said. "It would be a similar instance where they'd go ahead and have the scope for a project, look at a project's costs against some building financials, and finance it through the length of those measures. Lots of times that financing is great because it's long-term, it could be out 20-25 years."
There are a few different options for the financing.
"Prosper Portland itself could finance because we do have that lending arm," Nagy said. "We do have a couple of private capital providers who have enrolled, you can check them out on the website. At this point, folks have a variety of capital."
Prosper Portland executive director Kimberly Branam said the PropertyFit tool helps meet Portland and Multnomah County's joint Climate Action Plan carbon reduction goals through improved building performance.
"PropertyFit is a win for all. It gives property owners a tool to finance equipment upgrades and other projects they've been forced to put off due to capital constraints (and) it's a great option for contractors to close a project," said Branam. "In addition, we're learning how it can help developers achieve greater efficiencies in new buildings."
With the pilot program recently wrapping up and applications recently opened to all owners in Multnomah County, Prosper Portland is looking forward to seeing where it will be implemented to create a cleaner city in the near future.
"We're interested in the seismic, we're really interested to see what segments of the market are going to pick this up," Nagy said.
PropertyFit plans to host a network event and training series this fall to introduce contractors to the program and additional resources will be available to support project development.
By Jules Rogers
Reporter, The Business Tribune
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