This $1.6 million project has the distinction of being the first PACE-financed project completed in the city of San Francisco, where, according to city officials, buildings contribute more than 53 percent of greenhouse-gas emissions. It has also been a job creator and its success has provided a model for other building owners and lenders in the city.
A little northeast of San Francisco, in the state’s capital, Sacramento’s Metro Center Corporate Park is another good example of an energy-upgrade project financed using PACE. The 250,000-square-foot office park spread over four buildings is owned by Seattle-based Metzler Real Estate and managed by Colliers International, Seattle.
Sacramento has committed to retrofitting 12 million square feet of commercial property as part of the White House’s Better Buildings Challenge and has also partnered with Ygrene Energy Fund on Clean Energy Sacramento to make available $100 million of PACE funding for property owners looking to make energy upgrades. Sacramento Mayor Kevin Johnson has said he is looking to transform the area into the “Emerald Valley,” to become the greenest region in the country and a hub for clean technology.
When it was announced last July, the $3.16 million Metro Center Corporate park upgrade was touted as the largest PACE contract of its kind. The energy-efficiency upgrades will reduce annual utility costs by $140,000, a 27 percent decrease, and create nearly 50 local jobs during the construction phase. The project includes the replacement of rooftop units with high-efficiency equipment and the installation of a building-management system to control the mechanical equipment and interior and exterior lighting. The retrofit will allow Metro Center to register for LEED certification from the U.S. Green Building Council, Washington.
According to Mayor Johnson, the PACE program is allowing the city to create local jobs and reduce emissions while putting Sacramento on the map as a national leader in sustainability.
Working Together
Both of these projects are excellent examples of how innovative financing can help commercial building owners make upgrades and undertake retrofits that will ultimately save energy and money, improve working environments and property values, and create local jobs. What they have in common is a working partnership between a government entity, building owners and/or tenants, lenders and an experienced ESCO. It takes this type of buyin from all of the players to move these projects forward and come up with a win-win situation for everyone.
Looking at 2014, many experts in the real-estate and energy-efficiency industries are predicting solid growth in PACE-financed retrofits and upgrades for commercial properties. Energy prices, government policies and reporting requirements are pushing more property owners to look seriously at energy efficiency. That means programs like PACE will become more popular and important. And success stories, such as the two mentioned in this article, make PACE even more attractive.
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