In a unanimous vote, the Grand Traverse County Board of Commissioners approved a resolution on April 30 that will help local businesses immediately boost their cash flow when they invest in energy-saving efficiency projects.
Grand Traverse County is now one of just seven counties and two cities in Michigan to adopt the local resolution, known as Property Assessed Clean Energy. PACE allows local governments to place private business efficiency loans on local tax rolls, collect repayment via special assessments on property tax bills, and foreclose on properties that default.
“It’s great to see Grand Traverse County taking a market approach to help business owners make energy improvements,” said John Sych, Grand Traverse County planner. “Just by using the special assessment tool, businesses have significantly expanded funding opportunities for these improvements. And because the program is a partnership with Lean & Green Michigan, it’s a service with no cost to taxpayers.”
Lean & Green Michigan—a public-private partnership that brings private capital to help companies solve energy problems—will provide PACE support and bring private financing at no cost to the county.
Andy Levin, of Levin Energy Partners LLC, which manages Lean & Green Michigan, praised the commission’s vote.
“This puts Grand Traverse County at an economic advantage by opening up a pathway for businesses to invest wisely in energy savings and increase the value of their properties," he said.
By state law, PACE loans must provide an immediate positive cash flow for businesses. The savings from the energy improvements must be equal to or greater than the cost of the loan. Businesses can then invest in their growth using those savings. In addition, private investors are more willing to provide larger, longer-term loans since they will be backed by the county’s tax collection enforcement.
“PACE is an important tool for economic development because it helps businesses acquire financing on big energy projects that have longer term paybacks, like replacing outdated HVAC systems,” said Mike Powers, field energy advisor with KEEN Technical Solutions in Traverse City. “This new tool will help us serve our clients in Grand Traverse County and ultimately save businesses money and help create jobs in the region.”
PACE offers additional community benefits: Some of the energy savings show up as additional cash circulating in the local economy; some is re-invested in the business, leading to more jobs; and the projects themselves employ skilled contractors installing insulation, windows, HVAC systems, high-efficiency lighting, pumps, and even renewable energy sources like solar panels and geothermal heating systems.
Levin said that the statewide PACE district he’s building—it currently includes Washtenaw, Wayne, Macomb, Ingham, Saginaw, and Huron Counties, as well as Rochester Hills and Southfield—will concentrate, at least in its early stages, on large-scale projects where the financing, overhead, and payback numbers work best.
Earlier this month, Levin’s company announced its first project; half of the $1 million project at the 1-800-Law Firm building in Southfield will be PACE-financed using Comerica Bank capital. The building’s owners plan to install more efficiency measures, add solar and wind power and electric vehicle charging stations—all projects that qualify for PACE financing.
In March, business owners gathered at a forum in Traverse City to discuss how PACE can help commercial properties invest in energy efficiency measures and renewable energy. The meeting, hosted by EPI Inc., was well attended with more than 40 business representatives—including E3, a local energy contracting firm that has clients ready to take advantage of the program now that it is available.
It was strong support from the business community that encouraged passage of the resolution. Before the vote, commissioners expressed that PACE is a good way for the county to support the private sector. Commissioner Charlie Renny said he was 100 percent behind the resolution because it will encourage business investment.
With approval of the countywide PACE ordinance, local clean energy advocates say the Traverse City area is reinforcing its reputation as an energy efficiency leader.
“PACE is the perfect complement to our residential energy efficiency program, TC Saves, which offers assistance to homeowners looking to improve their home’s energy performance,” said Brian Beauchamp, Clean Energy policy specialist with the Michigan Land Use Institute. “It’s great to see our community taking real proactive steps to become a leader in clean energy economics. We’re optimistic that the rest of the region can benefit from these programs, too.”
► Can Grand Traverse County Set the PACE? (August 22, 2013)
► Andy Levin: ‘Lean & Green’ Can Help Efficiency, Clean Energy Soar (July 2, 2013)