Nov 20 2013 Energize (PACE) Financing


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Presentation on Property Assessed Clean Energy (PACE) Financing for commercial energy efficiency and renewable energy improvements in New York State. Presented at the "Transitioning to a Green Energy Economy" conference, November 20, 2013, Newburgh, NY. Video recording after last slide.

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Nov 20 2013 Energize (PACE) Financing

  1. 1.           Energize  NY  Finance  Program         Mark  Thielking     Chairman,  Energy  Improvement  Corpora7on   Director  of  Energy  Resources,  Town  of  Bedford   1  
  2. 2. Energize  NY  Finance  Program  – Finance  Barriers  to  Energy  Upgrades •  Cost  Recovery  is  of  primary  concern  if  a   sale  of  the  Property  is  contemplated  before   the  loan  is  paid  off   •  Eligibility  determined  by  personal  credit   •  Financing  Terms  too  short   2  
  3. 3. Energize  NY  Finance  Program      Benefits  of  “PACE”  Financing?   •  Financing  is  not  accelerated  upon  property  sale  or  foreclosure   •  Financing  Criteria  based  on  building’s  ability  to  reduce  energy   costs  and  carry  the  tax  charge     •  Long  repayment  terms  (up  to  20yrs)  =  deeper  upgrades   •  Low  unsubsidized  interest  rates     •  ParIcipaIon  is  voluntary   •  Program  alignment  with  Community  goals  of     –  Job  CreaIon   –  Reduce  Energy  imports  -­‐  Keep  $$  in  the  community   –  Lower  Emissions  and  PolluIon       –  Improve  Building  Stock     Energy  Upgrades  are  now  accessible  to  most  Building  Types   3  
  4. 4. Energize  NY  Finance  Program PACE  in  New  York  State   Ø  New  York  State  has  declared  that  “municipaliIes  would  fulfill      an  important  public  purpose  by  providing  financing  to    property  owners  for  the  installaIon  of  renewable  energy      systems  and  energy  efficiency  measures.”*         Ø  Energize  NY  Finance  is  New  York  State’s  PACE  financing  program     Ø  Finance  repayments  are  collected  within  the  municipal  tax  collec5on   process  through  a  property  Tax  Charge  that  has  a  senior  lien  on    .   parity  with  all  property  taxes     *  Ar5cle  5L  of  the  NYS  General  Municipal  Law     4  
  5. 5. Energize  NY  Finance  Program   Property Assessed Clean Energy (PACE).. / April 2013. 29 states, *The Federal Housing Financing Agency (FHFA) issued a statement in July 2010 concerning the senior lien status associated with most PACE programs. In response to the FHFA statement, most local PACE programs have been suspended until further clarification is provided. + Washington DC, authorize PACE (27 states have passed legislation and HI permits it based on existing law). 5  
  6. 6. Energize  NY  Finance  Program                     The  Energy  Improvement  CorporaEon   EIC  is  a  New  York  State,  Not-­‐for-­‐Profit,  Local  Development  Corpora7on       Ø  EIC  was  formed  based  on  ArIcle  5L  of  New  York’s  General  Municipal   Law     Ø  The  mission  of  the  EIC  is  to  increase  demand  for  energy  efficiency    and  renewable  energy  upgrades   Ø  Any  New  York  State  Municipality  with  Tax  Lien  authority  and  at  least    an  “A”  credit  raIng  may  become  a  member  of  EIC*   Ø  EIC  has  won  $2.6  million  in  grants  from  the  United  States    Department  of  Energy  and  NYSERDA  to  build  out  its  programs   Ø  EIC  modeled  aber  the  NYS  Environmental  FaciliIes  CorporaIon,  the   “AAA”  rated  funder  of  Water  and  Sewer  projects  for  New  York  State   municipaliIes   Ø  No  cost  to  Municipality  to  join  EIC     *EIC  is  developing  a  program  that  would  enable  Membership  to  all  MunicipaliIes  regardless  of  Credit  RaIng  
  7. 7. Energize  NY  Finance  Program                       The  Energy  Improvement  CorporaEon   EIC  provides  services  through  the  Energize  NY  brand:     Ø Energize  NY  ResidenEal  and  Energize  NY   Commercial  Programs  provide  innovaIve   community-­‐based  marke5ng  and  outreach  links  to   encourage  and  assist  property  owners  at  the  local   level    to  take  advantage  of  NYSERDA  +  U5lity  upgrade   programs   Ø Energize  NY  Finance  Program  offers  financing  for   eligible  energy  upgrades  to  qualified  real  property    7  
  8. 8. How  do  other  public  benefits  get   financed?    e.g.  Sewers   Benefit to homeowners in district Sewer plant Sewer district boundaries Sewer Tax Charges $ $ Plant maintenance & upgrades Municipal Tax Receiver $ septic no district = no Pledged Municipal Payments Sewer Services Entity benefit = no charge Bond payments septic Allows  for  lower  cost  of  capital   Bond funds $ Capital markets 8  
  9. 9. How  does  Energize  NY  Finance  Work?     Municipal Boundaries Energize NY “PACE” Financing offered to property within the Municipal boundary $ $ $ Special Tax “Charge” payments …………………………..   Municipal Tax Receiver did not opt in did not opt in no opt in = no benefit = no Charge Pledged Municipal Payments Allows  for  lower  cost  of  capital       $ EIC Bank Trustee Bond payments $ Bond funds $ Capital   markets   9  
  10. 10. Energize  NY  Finance  -­‐    Program   AdministraEon   EIC  Administers  Program  for  Municipal  Members     –  Qualifies  ProperIes:  24  QualificaIon  Criteria  Checks   –  EIC  raises  capital   –  Manages  applicaIons  and  documentaIon:  On-­‐Line  Energize   Finance  Handbook,  Pre  ApplicaIon,  ApplicaIon  Process  and   Finance  Agreements   •  EIC’s  Trustee  distributes  funds  for  upgrades,  receives   Municipal  Payments  and  pays  creditors   •  •  Municipality  collects  Tax  Charge  as  part  of  regular  tax   collecIon  process  and  pledges  payments  to  EIC  Trustee   regardless  of  7mely  payment  by  Property  Owner       •  Municipality  has  access  to  EIC  Reserves  to  compensate  for   uncollectable  Tax  Charge.  (“Permanent  Loss”)   10  
  11. 11. Energize  NY  Finance  Program   Financing  Criteria     þ EsImated   energy   cost   savings   from   improvements   must   be    greater  than  the  annual  finance  payments   þ Improvements  must  have  a  Savings-­‐to-­‐Investment  raIo  >1   þ Property’s  exisIng  Loan-­‐to-­‐Value  is  no  greater  than  80%   þ Financing  up  to  10%  of  the  value  of  the  benefiqed  property   þ No  bankruptcy  within  last  7  years     þ At  least  3  year  history  of  Imely  property  tax  payments     þ ExisIng  lender  consent  required     þ Maximum  15  year  financing  terms   þ Commercially  owned  property  only   Energize   NY   Finance   qualifica7ons   are   based   on   a   property’s   poten7al  to  improve  energy  performance,  not  on  credit.  
  12. 12. Energize  NY  Finance  Program     Mid  Hudson  Region  -­‐  Impact     Mid  Hudson  Region:     37,500  MulI  Family  Buildings   25,000  Commercial/Indstrl  buildings     $2.71  Billion*  =  Energy  $$  spent  in  Buildings  in  Mid   Hudson  Region     $813mm  =  30%  reduc5on  of  energy  spending         $1.25  Billion**  =  value  of  poten5al  upgrade  work  needed   in  Mid  Hudson  Region  will  create  11,000  jobs      *Mid  Hudson  Region  Sustainability  Plan   **Average  NYSERDA  Commercial  Upgrade  =  $51,000  X  25,000  Commercial   Buildings  in  Region     12  
  13. 13. Energize  NY  Finance  Program     Municipal  Membership         Three  Step  process  to  enable  your  municipality  to  offer   Energize  NY  Financing     ü  County  or  City  passes  the  Local  Law  establishing  the  Program   within  the  Municipal  borders     ü  County  or  City  signs  the  Energy  Improvement  CorporaIon/ Municipal  Agreement  that  codifies  that  the  Tax  Charge  is  to  be   transferred  to  the  EIC  upon  collecIon     ü  County  or  City  sends  a  leqer  to  EIC’s  board  asking  to  join  as  a   Member  and  includes  a  signed  Municipal  Agreement  and   documentaIon  regarding  the  enactment  of  the  Local  Law              
  14. 14. The  Energize  NY  Programs         The  Energize  NY  Stakeholders  are  the  Difference     Ø     Trusted  local  leadership   Ø     Local  government  in  the  community   Ø     Business  leaders  in  counIes,  ciIes  &  towns   Ø     Chambers  of  Commerce   Ø     Economic  Development  Zones   Ø     Business  Improvement  Districts   Ø       Professional  OrganizaIons   ü Trust  that  the  improvements  will  work     ü Access  to  financing  for  most  buildings  
  15. 15. The  Energize  NY  –  “hyper  local”   15  
  16. 16. Energize  NY  ResidenEal  Program     Annual  NYSERDA  Residen5al  Upgrade   Produc5on  (%  of  total  homes,  2001-­‐13)   0.7% NY State (HU 6,893,031) 0.6% Mid-Hudson Region (7 counties) (HU 904,818) Energize Munis Launched to date (2 munis) (HU 10,614) 0.5% 0.4% 0.3% 0.2% 0.1% 0.0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012*
  17. 17. Energize  NY  ResidenEal  Program     Energize  generates  4%  of  all  NYS  Projects*   7.0000%   NWEAC  Projects  /  NYS  Projects  (%)   6.0000%   5.0000%   4.0000%   3.0000%   2.0000%   1.0000%   0.0000%   Jan   Mar  May   Jul   Sep   Nov   Jan   Mar  May   Jul   Sep   Nov   Jan   Mar  May   Jul   Sep   Nov   Jan   Mar  May   Jul   Sep   Nov   Jan   Mar  May   Jul   Sep   2009   2010   2011   *NWEAC  has  1.4%  of  NYS  1-­‐4  family  homes   2012   2013  
  18. 18. The  Energize  NY  Commercial:     Services  to  Benefit  all  Property  Classes     Housing  Stock  in  Westchester  County         Other   19%   Owner   Occupied   42%   Rental  Units   39%       The  energy  burden  for  low  income   households  in  the  Northeast  is   29%,  compared  to  3%  for  middle-­‐ to-­‐higher-­‐income   households.  **NYSERDA     83%  of  the  rental  units  in   Westchester  were  built  before   1980  and  59%  use  Oil  or  Electric   Heat  when  Natural  Gas  is   available  at  lower  cost   18  
  19. 19. Energize  NY  Commercial   Project  Pipeline           MULTIFAMILY  PROP.  APPLYING  FOR  ENERGIZE  NY  FINANCING   Ø    Housing  authoriIes  in  Westchester  County  municipaliIes   Ø    48  unit  cooperaIve  apartment  complex  in  Lewisboro   Ø     17  unit  rental  apartment  building  in  Bedford   Ø    5  building  rental  apartment  complex  in  Mount  Vernon   Ø    20,000  sf  rental  apartment  building  in  Mount  Vernon   Ø    CooperaIve  apartment  building  in  New  Rochelle   Ø     CooperaIve  apartment  complex  in  Orange  County             COMMERCIAL  PROP.  APPLYING  FOR  ENERGIZE  NY  FINANCING   Ø     Large  Retail  Buildings:  White  Plains,  Orange  County   Ø     Historic  3  story  building  w/  Commercial  Store  Front:  Mount  Kisco   Ø   Industrial  Facility:  Orange  County   35+  PROPERTIES  EXPLORING  UPGRADES  THANKS  TO  ENERGIZE   NY    
  20. 20. Energize  NY  Commercial   PACE  in  AcEon      
  21. 21. Energize  NY  Finance  Program     MulEfamily  Handbook     Energize  NY  Finance   Program  Handbooks     outline  the  steps  to     secure  financing  for     energy  improvements     The  Energize  NY  Finance     Program  Handbooks     and  the  Pre-­‐ApplicaEon     are  available  online  at        
  22. 22. Energize  NY  Finance  Program     Municipal  Membership         MUNICIPALITIES  ENABLED  &  CURRENTLY  ELIGIBLE  TO  OFFER  ENERGIZE  NY  FINANCE          Town  of  Bedford    Town  of  Greenburgh  Town  of  North  Salem  City  of  Peekskill    City  of  White  Plains    Orange  County                        Village  of  Croton-­‐On-­‐Hudson    Town  of  Lewisboro          Town  of  Ossining          Town  of  Somers    Town  of  Yorktown   95%  COMPLETED  (LOCAL  LAW  ACTIVE)    City  of  New  Rochelle        Town  of  Pound  Ridge         NEXT  UP?          Town  of  Mamaroneck  Village  of  Port  Chester  Dutchess  County    Niagara  County    Putnam  County    City  of  Syracuse                            City  of  Mount  Vernon    City  Of  Yonkers    Erie  County    Onondaga  County    Suffolk  County    Ulster  County  &  Others….  
  23. 23. Energize  NY  Finance  Program   Community  Benefits       Energize   NY   Finance   brings   important   benefits   to   parIcipaIng   counIes,    ciIes  and  towns  throughout  New  York  State     Ø  Lower  energy  expenses   Ø Put  more  dollars  back  into  the  local  economy   Ø  More  projects  with  deeper  upgrades       Ø Drive  greater  economic  compeIIveness  that  aqracts  new   employers  and  new  property  owners   Ø Produce  more  local  construcIon  jobs   Ø  NYSERDA  requirements  for  quality  and  cost  effecEveness   Ø Improve  the  value  of  the  exisIng  building  stock   Ø  Environmental  gains   Ø Result   in   lowered   emissions   and   reduced   polluIon   that   aligns   with  State  and  Local  sustainability  goals  
  24. 24. Mark  F.  Thielking   Chairman  –  Energy  Improvement  Corpora5on;     (914)  302-­‐7300  (o)   (914)  960-­‐9838  (m)     24  
  25. 25. Energize  NY  ResidenEal  Program  -­‐   InnovaEons   •  Hyper-­‐local  marke7ng  &   •  Energize  Comfort  Corps   outreach   +  Contractor  RaIngs   Index   •  Rollout  &  launch  process   •  Leader  tes7monials   •  Energized  Home  Brand   •  Case  studies   •  Online  homeowner   dashboard   •  Community  partners   •  Walk  in  office  hours   •  Energy  Coach  for   •  Library  project   homeowners       •  Energize  condo  project       25  
  26. 26. Energy  Improvement  Corpora5on  -­‐  Staff     Energize  NY  Program     Thomas  Bregman    -­‐      Energize  NY  Director   Daniel  Kilourhy    -­‐  EIC  Comptroller   Heather  Flournoy   -­‐  Community  Outreach  Director              &  Media  Contact   Bobby  Veit   -­‐  Office  Manager     Energize  NY  ResidenEal  Program   Elyssa  Rothe            -­‐  Educa5on  and  Support  Coordinator Dick  Kornbluth           -­‐  Senior  Advising  Energy  Coach   Norm  Jen   -­‐  Energy  Coach   Flo  Brodley   -­‐  Energize  Ambassador   Tyler  David    -­‐  Energize  Intern         Energize  NY  Finance  Program       Joseph  Del  Sindaco    -­‐  Treasurer   Jim  Liao    -­‐  Director  of  Porlolio   Administra5on  and  Underwri5ng                   Energize  NY  Commercial  Program      Joe  Del  Sindaco      -­‐  Managing  Director    Robert  Fischman        Director  of  Programs    .   26  
  27. 27. Energy  Improvement  Corpora5on  (“EIC”)  –   Board  of  Directors   CHAIRMAN:  MARK  F  THIELKING   •  NEIL  J.  ALEXANDER     •  ANDREW  CHINTZ     •  DAVID  CHURCH   •  OLIVIA  FARR     •  MIKE  GORDON     •  KATHRYN  HOENIG     •  MARY  BETH  KASS     •  THOMAS  J.  KELLY     •  LEE  V.A.  ROBERTS       •  LEO  WIEGMAN        .     27  
  28. 28. Energize  NY  Finance  Program       4  steps  to  Financing  your  Upgrade     PRE-QUALIFY PROPERTY OWNER Submits a Pre-Application ASSESS STEP ENERGY IMPROVEMENT CORPORATION (EIC) Completes a Qualified Energy Assessment and/or Renewable Energy System Feasibility Study. Identifies Eligible Improvements for Financing leading to a final Scope of Work 1 2 PreApplication Upon approval, issues a Conditional Reservation Number (Form 1) Conditional Reservation # Application Appraisal Mortgage Documents 3 APPLY Organizational Documents $100 to $1000 Application Fee to EIC* Lender Consent (Form 2) Upon approval, returns Finance Agreement and Disclosure for signature Scope of Work Agreement Documents Upon receipt of Financing Documents, issues Notice to Proceed Signed Agreement Documents 4 IMPROVE Notice to Proceed Contractor completes Improvements. Submits NYSERDA Certificate of Completion or equivalent proof of completion** Pays Contractor. Annual Payment to property tax bill to repay Financing NYSERDA Certificate of Completion or equivalent proof of completion ** Disbursement Amount $ Congratulations! Now enjoy the comfort and savings of your building. *Program fees may be included in the requested financing amount to EIC ** Equivalent proof of completion must be from a New York State Qualified Energy Program. Upon review of Certificate, releases Disbursement Amount   1)  Pre-­‐Qualify   2)  Assess  your   building’s   poten7al  to   improve   3)  Applica7on   and  confirm   terms     4)  Improve  your   building        
  29. 29. Energy  Improvement  Corpora5on  (“EIC”)  –   Strategic  Partners   New  York  State  Energy  Research  and  Development  Authority   U.S.  Dept  of  Energy   Northern  Westchester  Energy  Ac7on  Consor7um  (NWEAC)   •  •  •  •  •  •  •  •  •  •  •  •  •  •  •  •  •  •  •  Town  of  Bedford     Bedford  2020     Town  of  Cortlandt     Cortlandt  Green  Team     Town  of  Lewisboro     Sustainability  Commiqee  Village  of  Mount  Kisco     Energy  Advisory  Panel     Town  of  New  Castle     Sustainability  Advisory  Board     Town  of  North  Castle     Sustainable  North  Castle     Town  of  Ossining     Village  of  Ossining     Town  of  Peekskill  ConservaIon  Advisory  Council     Town  of  Pound  Ridge  Sustainability  Task  Force     Town  of  Somers  Energy  &  Environment  Commiqee     Energy  Advisory  Panel  Town  of  North  Salem     Sustainability  Commiqee  Village  of  Croton   Village  of  Croton      .   29  
  30. 30. The  Energize  NY  ResidenEal  Program       The  Energize  NY  ResidenEal  Program  provides  innovaEve  community-­‐based  markeEng  and   outreach  services  to  scale  up  NYSERDA  programs  at  the  local  level.     •  Supported  by  &  linked  to  local  leaders   •  Aligned  with  community  goals   •  Embedded  within  community  orgs  &  muni  commimees   •  Trusted  by  building  owners   •  Sustainable  &  self  perpetua7ng   •  Requires  less  outreach  &  markeIng  over  Ime     ENY  provides  a  brand  and  local  status  that  provides  entry  into  mulEple  levels  of   community  support  and  creaEng  the  “social  norm”  of  reducing  energy   waste   30