What will you do withYour Reen Savings?Introducing PACE Financing for energy upgradesIn these times of soaring energy costs and new environmental regulations, it’s time to protect your finances. Property Assessed CleanEnergy (PACE) financing from Figtree Energy Resource Company can help you turn your energy and water bills into thousands ofdollars in savings each year through easy-to-implement energy efficiency, renewable energy, and water conservation upgrades.It’s a timely opportunity that can save you money and preserve precious natural resources.As a California commercial property owner, you are prequalified for upfront PACE financing. This unique program has been adoptedby numerous California cities, which enables Figtree to offer financing based on property value. Qualifying for PACE financingrequires no minimum credit score, no income hurdles, and no personal guarantee. Additionally, the balance can transfer to thenext owner if you sell the property – you pay for only the benefits you receive. Payments are made as assessment installations onyour property’s tax bill, but participation is completely voluntary and the program does not rely on public funds. “In these times of soaring energy costs and new environmental regulations, it’s time to protect your finances.”Hundreds of Ways to Save Better than Conventional Loans Heating & Air Conditioning Solar thermal water heaters Boilers & Chillers Pool equipment No-money-down Lighting Programmable thermostats Simple qualification process Energy management systems Solar photovoltaic systems No personal guarantee Windows & Exterior doors Solar reflective roofing Lien transfers upon sale Occupancy sensors Water-efficient plumbing fixtures Fixed rate Electric vehicle charging stations And many more Longer termsAbout Figtree Energy Resource CompanyFigtree Energy Resource Company is committed to making financial sense of the clean energy movement. Our extensive backgroundin finance and built environments enabled us to develop Figtrees unique PACE program, a privately-financed municipal program thataddresses a gap in traditional financing to bring energy and water efficiency property improvements within reach for virtually anycommercial property owner.Www.FigtreeCompany.com — 877.577.7373
Financial PlanningConsiderationsFull service, Free Market Financing ModelFull Service: Figtree manages the financing process from application through disbursement of funds.Free Market: Figtree funds projects through various sources to provide the best available rate and terms.Maximum FinancingThe maximum amount of PACE financing available to any property owner is determined by the Total Property Value or Net TaxableValue of the property as recorded by the County Assessor. The maximum financeable amount is calculated as:10% x Net Taxable Value = Maximum PACE Financing at Lowest Available Rate20% x Net Taxable Value = Maximum PACE Financing at Tier 1 RateMinimum financing is $5,000.Interest RateMarket Rate: The interest rate for each financing is set by the current market for PACE bonds. Our multiple funding sources ensurethat your rate is the best available.Fixed Rate: PACE financings feature a fixed interest rate for up to 20 years (determined by useful life of improvements).Target Rates as of May 2012: Lowest Available Rate: 7.99% Tier 1 Rate: 8.99%Accounting Treatment Depreciation Tax Benefits: Certain improvements will qualify for accelerated depreciation. Investment Tax Credits: Many energy efficiency and renewable energy measures qualify for investment tax credits, which require sufficient tax liability for eligibility. Rebates: Income from rebates issued by utilities, state agencies, and others is typically taxable. Interest Deduction: A schedule of payments allocated between principal and interest will be provided by Figtree at disbursement. Helpful Tip: See Title 26, United States Code, section 164(c) Deduction denied in case of certain taxes. “No deduction shall be allowed for the following taxes: (1) Taxes assessed against local benefits of a kind tending to increase the value of the property assessed; but this paragraph shall not prevent the deduction of so much of such taxes as is properly allocable to maintenance or interest charges.” Figtree cannot provide official accounting guidance. Please consult your Certified Public Accountant or tax advisor.Cash Flow DecisionPACE financing changes the investment decision frompayback to cash flow because the financing is providedupfront with no-money-down.From the onset, energy and water efficiency upgradescan create positive cash flow as savings fully offset thecost of financing. Cash flow typically grows over time asenergy rates rise and, when the PACE assessment ispaid off, well-maintained equipment can continue toproduce savings for years to come.
Community andEnvironmental BenefitsEconomic GrowthWhy keep spending excessive utility rates when improving your property’s energy efficiency and even installing arenewable energy system is economical and easy to do? Energy efficiency and renewable energy projects areproven ways to put money back into your community with cash savings, new jobs, better-performing businesses,and improved property values. Study finds that “tenants in green buildings experience increased productivity and fewer sick days, and that green buildings have lower vacancy and higher rental rates.” CB Richard Ellis, 2009Cleaner AirEnergy efficiency and renewable energy upgrades reduce your dependence onconventional fuels that produce greenhouse gases and particulates, whichcontribute to environmental damage. By updating your property or installing arenewable energy generator like solar photovoltaic panels, you’re doing your partto clean up the environment. And PACE financing can help you or your businesssave loads of money in the process.Regulatory CompliancePACE financing can help you get ahead of the curve as the State of California and local government agencies tighten environmentalpolicies. Commercial and industrial property owners may face higher energy rates and penalties for emissions, which can be avoidedby a variety of easy-to-implement improvement projects. Current regulations under AB-32 require a reductions in emissions and 30%of energy to be supplied by renewable sources by 2020. Additionally, under AB-1103, commercial property owners are required todisclose the energy efficiency of their buildings upon sale or leasing. Figtree can help you make sure your properties are protected.PACE Helps Property Owners: Create and Retain Jobs Attract New Customers Increase Productivity Increase Property Value Improve Tenant Retention Reduce Operating Expenses
Special ConsiderationsFor Tenant-OccupiedPropertiesThe “Split Incentive”The Problem:Energy-efficiency upgrades require building owners to bear a project’s expense while tenants receive financial benefits throughreduced building operating expenses. This “Split Incentive” disincentivizes many property owners from doing efficiency upgrades.The Solution: Energy Aligned Lease ProvisionA study commissioned by the Mayor of New York City Office of Long Term Planning and Sustainability (OLTPS) indicates that pass-through lease structures can make energy efficiency upgrades net present value (NPV) positive for both owners and tenants. Even ifthe improvements substantially underperform expectations, the downside risk to both parties is considered to be nominal incomparison to the cost of owning, occupying, and operating a commercial building.The OLTPS RecommendationThe study produced a consensus that energy efficiency savings are typically within +/- 20% of predicted savings (as variations occurdue to external variables and occupants’ energy-use habits). The capital expense pass-through model in the study was based onlimiting the pass-through to 80% of predicted savings annually. In turn, tenants were buffered from underperformance and benefittedwhen the improvements performed as expected. Property owners benefitted from recovering the cost of improvements while makingneeded upgrades to their real estate assets.Why Energy Aligned Lease Provisions Work Support for Energy Aligned Lease Provisions Language can be inserted into typical commercial leases US Green Building Council Both parties save money Real Estate Board of New York 20% buffer protects tenants from underperformance Cushman & Wakefield Owners recover their costs and improve their properties Ernst & YoungFor more information visit: http://www.nyc.gov/html/planyc2030/downloads/pdf/energy_aligned_lease_official_packet.pdf
Participating CitiesAnd CountiesActive Figtree PACE Programs as of May 31, 2012 County of Alameda (unincorporated areas) Kerman County of Kern (unincorporated areas) Palm Springs County of Lake (unincorporated areas) Pittsburg Adelanto Rancho Cordova Calipatria Redlands Clovis Sanger Dublin South San Francisco Exeter Vacaville Farmersville Woodlake FresnoFuture Growth Goals County of Alameda (incorporated areas) County of Santa Clara (incorporated areas) Berkeley Cupertino Fremont Milpitas Hayward Palo Alto Oakland San Jose Union City Sunnyvale County of Los Angeles (selected areas) County of Sacramento (selected areas) Commerce Citrus Heights Industry Elk Grove County of Kern (incorporated areas) Folsom Bakersfield
Is PACE FinancingFor You?Self-Qualification Questionnaire1. Do you own a commercial property (i.e., residential properties Yes No with more than 4 units and all other properties)?2. Is maintaining your cash reserves and/or credit capacity a Yes No priority?3. Do equity requirements make it difficult to find bank financing for Yes No improvement projects?4. Is improving cash flow an important investment criterion? Yes No5. Do you value the option to transfer the outstanding balance of Yes No financing for property improvements to the next owner if you sell your property before the financing is fully paid-off?6. Do you have an appetite for investment tax credits and Yes No depreciation tax benefits?7. Are the mechanical systems (e.g. HVAC, water heating), lighting Yes No systems, and/or plumbing fixtures in your building(s) over 10 years old?8. Does your property have deferred maintenance issues? Yes No9. Do you avoid investing in energy-efficiency upgrades because Yes No your property is tenanted?10. If you were to install solar panels, would you prefer to own them Yes No (as compared to leasing) in order to take advantage of tax credits and depreciation tax benefits? If you answered “yes” to the majority of these questions, Figtree PACE is your best financing option!Contact a Participating Contractor or Figtree Energy Resource Company for resources to help you reach your energy-savings goals. Www.FigtreeCompany.com — 877.577.7373
How to Apply forPACE FinancingInformation You’ll Need Assessor’s Parcel Number (APN) Can be found on a prior property tax statement Current Mortgage Balance (if applicable) Original Mortgage Balance (if applicable) Check for payment of Application Fee of $395 Please submit by mail upon completing application online A copy of your property tax statement will help you complete the application. Supporting Documents Listed in Application Form (e.g. Organizational Documents if not owned by an individual)Apply Online How to Apply 1. Visit www.FigtreeCompany.com 2. Click “Apply for Financing” (circled at left) 3. Choose the “Commercial” option 4. Proceed with instructions on the Application Form 5. Mail your Application Fee and Supporting DocumentsApply by MailIf you prefer to fill out a paper application to submit by mail, please download the form fromwww.figtreecompany.com/pdf/pace-application-commercial.pdf or contact a Figtree Representative at 877.577.7373.