U.S. Dept. of Agriculture Rural Development State Director for Michigan James J. Turner today announced more than $115,000 in energy efficiency improvements for Cambridge Court Apartments in Greenville through a partnership with Lean & Green Michigan.
The upgrades will be financed through the Property Assessed Clean Energy program, an initiative that allows businesses to upgrade the energy efficiency of their property through a special loan attached to their property tax assessment.
“Energy efficiency improvements carry high up-front costs but pay back their gains over many years, which discourages businesses from adopting them,” Turner said. “By using PACE, the costs are spread out to match the gains from energy savings, making it more feasible.”
Petros PACE Finance provided the funding for the upgrades and USDA Rural Development provided a $7,880 Rural Energy for America Program grant to add solar power to support business operations.
The PACE initiative allows businesses to upgrade the energy efficiency of their property through a special loan attached to their property tax assessment. This allows the loan to be paid back over a longer term than would normally be possible, so that the borrower can offset the loan payment with gains from energy efficiency. This provides a positive cash flow for the property owner, lowers energy costs for tenants, and reduces overall energy use for the community.
As the lien holder of the mortgage on Cambridge Court Apartments, USDA Rural Development had to agree to allow property owner, PK Housing, to participate. Because PACE is paid back through local property tax assessments, it is tied to the property rather than the borrower, limiting risk to the lien holder.
Participation in PACE is subject to the approval of local governments, and currently 25 Michigan communities have chosen to create PACE districts by joining the statewide Lean & Green Michigan PACE program. Cambridge Court Apartments is in Montcalm County’s PACE district. It is the first USDA Rural Development property to use PACE financing.
USDA Rural Development State Director for Michigan James J. Turner was appointed by President Barack Obama in 2009. USDA, through its Rural Development mission area, has a portfolio of programs designed to improve the economic stability of rural communities, businesses, residents, farmers and ranchers and improve the quality of life in rural America. Under the Obama Administration, USDA Rural Development has invested more than $6.5 billion in Michigan projects