Ribbon cutting ceremony unveils renovated 1920’s era apartments
The United States has over six million commercial buildings – more than half are over 50 years old. These building are especially costly to operate, expensive to maintain and often uncomfortable to occupy. With Property Assessed Clean Energy (PACE), an innovative energy efficiency financing mechanism, renovating these buildings represents an economic development opportunity requiring zero taxpayer funding!
A ribbon cutting ceremony hosted by the Saginaw County Chamber of Commerce and Saginaw Future Inc. highlighted the benefits of renovating this type of building. The recently upgraded New Amadore Apartments was The Energy Alliance Group of Michigan’s latest energy efficiency project using this funding option.
Originally constructed in the 1920’s, the renovation of the historical building is expected to save more than $600,000 in utility and maintenance costs over the 20 year life of the financing. While that statistic is impressive, the economic development opportunities of renovations was the focus of the gathered dignitaries speaking at the ribbon cutting ceremony.
The apartment complex is Saginaw county’s first property to take advantage of PACE. The County joined the Lean & Green Michigan statewide PACE program in September 2013 through a vote by the Saginaw County Board of Commissioners.
Andy Levin, president of Lean & Green Michigan, provided the opening comments at the ribbon cutting event and also introduced the dignitaries. In his opening remarks, Levin noted how PACE financing makes it easier for owners of commercial, industrial, multi-family and non-profit properties reduce wasted energy, upgrade to energy efficient technologies and convert to renewable sources of energy.
Levin described how PACE encourages private lenders to provide the capital that solves energy inefficiency problems in older, energy-wasting buildings. The local government, in this case Saginaw county, secures the private financing by facilitating a property tax special assessment on the building. No taxpayer funds are used – it is a private arrangement between the property owner, the lender and the contractor. “It’s a great American story about using the market to fix problems!” stated Levin.
Levin’s next comment quantified the economic development potential of PACE:
“Every pace project in America reduces our carbon footprint and puts skilled trades people to work…to date there’s been over 300 million dollars of commercial pace projects completed!”
Tim Novak, Saginaw County treasurer, discussed how “The county firmly believes that its role is to set the table for private investment and private development that is sustainable long term. We think pace is a tool in the tool box for these types of development opportunities.”
JoAnn Crary, President of Saginaw Future, described PACE as “an innovative mechanism for financing energy efficiency and renewable energy improvements on private property”, and how Saginaw Future was “pleased to be part of the New Amadore Apartment project, and looks forward to working with other companies considering this type of financing.”
Kyle Peczynski of Petros PACE finance, noted the New Amador Apartment project was a win for the building’s owner as well as the tenants and the community. Petros financed the upgrade to the property owned by Maroo Nahikian. The financing paid for the replacement of 353 original single pane windows installed when the building was first constructed in 1929.
According to Carl Nerio, a long time resident of New Amadore, “During the winter, no matter how warm it was inside the building you wouldn’t sit anywhere near the windows because of the drafts and ice build up. The new windows don’t let in any drafts and the tinted glass really cuts down on the heat build up when the sun is shining.”
EAG’s President, Scott Ringlein described the financing challenges Maroo faced when he purchased the building which were hardly unique: “Virtually every community has an inventory of underutilized builds in need of upgrades. When building owners are unable to access appropriate financing, economic development opportunities are lost.”
Nahikian was not only able to secure the much needed capital to replace the outdated and inefficient windows, but because of PACE, he did so without incurring any out of pocket costs.
“Outdated lending practices with unrealistic terms and payback hurdles, have resulted in an inventory of buildings in our country that are costly to operate, expensive to maintain, and just plain uncomfortable to be in because upgrades are unaffordable!” Scott Ringlein, CEO
A growing interest in the economic development potential building renovations represent resulted in EAG’s CEO, Scott Ringle, invited to present the details of PACE to the Economic Development Committee of the Great Lakes Bay Region. The committee includes representatives from eight counties in the thumb region of Michigan.
Ringlein will describe how, in conjunction with an educational program for building owners to learn how PACE can be used, any community with commercial, industrial, multifamily and non-profit properties in need of renovations can facilitate these upgrade projects with the adoption of PACE,
As access to Property Assessed Clean Energy increases across the country, the economic development potential of renovating outdated buildings is financially viable. With PACE, the energy savings and the reduction in annual maintenance cost results in annual savings in excess of the required assessment – it actually costs a building owner to doing nothing than reduce the cumulative waste associated with older technologies.
As Scott Ringlein noted when he summed up his comments:
“I encourage all building owners to take charge of their energy challenges and look to programs like PACE to develop solutions rather than accepting the challenges as the status quo.”