A four-building, 250,000-square-foot office park in
Sacramento, Calif., will get upgrades it needs to qualify for LEED status,
thanks to a $3.16 million contract under a local commercial Property Assessed
Clean Energy (PACE) program.
The arrangement is being touted by the backers as the
nation’s single largest PACE deal yet.
The PACE financing model, authorized in 30 states, makes
it easier for property owners to finance energy efficiency and renewable energy
projects in homes and businesses without prohibitive upfront costs. Instead,
projects are paid back through an annual property tax assessment.
The retrofits under this contract, to be performed by
Johnson Controls, include replacement of rooftop climate control equipment and
installation of a building management system that allows tenants more control
over mechanical operations, and interior and exterior lighting.
Overall, the improvements to the Metro Center Corporate
Park will save $140,000 on annual utility costs for the building’s owner,
Seattle-based Metzler Real Estate — a 27% decrease. They will enable the Metro
Center to register for LEED status, and will create 50 local jobs during the
construction phase.
The retrofit is funded through Clean Energy Sacramento, a
PACE program launched by Ygrene Energy Fund in collaboration with the city.
"Metzler Real Estate is setting a new bar for energy efficiency and
demonstrating the simplicity and economic benefit of PACE financing for large
commercial projects," says Stacey Lawson, CEO of Ygrene Energy Fund.
Ygrene’s program has closed $4.2 million in projects in
the past 90 days and has received more than $10 million in pre-approved
applications. Up to $100 million in funding is being made available for
upgrades: the city has committed to retrofitting 12 million square feet under
President Obama’s Better Buildings Challenge.
"Our program is well on its way to becoming the most
successful commercial PACE program in the country," says Sacramento Mayor
Kevin Johnson. "Together, we are creating local jobs, reducing emissions
and putting Sacramento on the map as a national leader in sustainability."
Sacramento is participating in a massive, multi-jurisdictional residential PACE
initiative spanning 14 counties in in California.
The CaliforniaFIRST program being run by the California
Statewide Communities Development Authority (CSCDA) lets commercial property
owners use municipal bonds to pay for energy efficiency, water efficiency and
renewable energy upgrades. The program is using private investment for the
upfront funding, so as not to burden local budgets, says CSCDA.
Even though the long-term fate of PACE financing was
called into question during the mortgage crisis, recent court rulings have encouraged
new programs to emerge.
Indeed, the CSCDA has estimated that if all US
businesses conducted the sorts of upgrades made possible through these
programs, it would reduce their collective energy usage by 25% – saving $100
billion.
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