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Renewables, Energy Efficiency and Sustainable Development Consulting

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Beacon Housing Authority Renewable & EE Project

The greening of development, consideration of sustainable development principles and incorporating strategies and devising subsidized funding structures for incorporation of renewable energy sources and energy efficiency measures in commercial and residential building development and retrofitting is a growing part of MDRA’s business orientation.

From site and structures development perspectives, building and materials choices, mechanical and structural systems, infra-structure options and financing considerations and sources of assistance, MDRA adds a new level of sophistication to its real estate development, planning and environmental resource consulting practice. Greening marketing considerations, community acceptance, and U.S. Green Building Council LEED certifications are becoming factors in development choices.

MDRA will:

  • Research available Federal, State and Utility Company incentive programs
  • Prepare funding applications
  • Identify and manage energy technical service providers
  • Plan and Manage energy audits and desired work scope preparation
  • Plan and manage procurement of construction services and construction
  • Plan and manage post work energy performance diagnostics and commissioning
  • Develop marketing strategies, and devise and implement tenant and building O&M orientation programs

New Potential Green Funding Source

PACE Bonds

November, 2009 - NYS joins a list of approximately 15 other States which have adopted PACE Bonds enabling legislation. PACE Bonds are Property Assessed Clean Energy Bonds which enable local governments to borrow funds through the issuance of PACE Bonds. The bonds establish a new asset class whose funds are loaned to residential and commercial tax paying property owners for Energy Conserving Improvements. Debt service for say the 15-20 year loan is assessed to the property tax bill carrying the tax "super-lien status for securing the credit and easing the payback cost to the property owner. It is expected that this revenue mechanism can greatly stimulate the weatherization and energy conservation equipment and construction industries and save substantial levels of energy.

As of a FHFA statement of July 6th, 2010 letter residential property oriented PACE programs were put “On-ice” because of a perceived minimal theoretical risk to lending institutions who were in the situation of having some portion of their first mortgage portfolio “super-liened by a PACE loan “risk”.

PACE supporters quickly rallied its supporters and initiated the introduction of Federal Legislation which proposed the means by which the perceived risk could be ameliorated and the banks would release their grip and allow the potentially $ billions to flow into job producing and energy saving energy retro fit projects nation-wide.


The following is a summary of this PACE situation as of Fall, 2010.


PACE Finance Summary Sheet

Energy Efficiency & Renewable Energy Financing for Property Owners


What is PACE?

Property Assessed Clean Energy (PACE) is a local government program that allows property owners to finance energy efficiency and renewable energy improvements using low‐interest bonds that generally have no recourse to the municipality. Interested residential and commercial property owners opt‐in to receive long term financing (up to 20 years) for these improvements, which is repaid through an assessment on their property taxes. This arrangement spreads the cost of clean energy improvements – such as energy efficient boilers, upgraded insulation, new windows, solar installations, etc – over the expected life of the measure and allows for the repayment obligation to automatically transfer to the next property owner if the property is sold.   

Why is PACE so innovative?

High upfront cost is the single largest barrier to increased adoption of energy efficiency and small‐scale renewable energy. The second barrier is the uncertainty as to whether property buyers will pay more for efficiency improved properties. PACE removes the upfront cost barrier and removes the uncertainty barrier as the new buyer inherits the annual tax surcharges.

Historical precedent

PACE is a type of land‐secured financing district, which has a 100+ year history in the U.S. to pay for improvements in the public interest. Over 37,000 land secured districts already exist and are a familiar tool of municipal finance. They are used to finance projects which serve a public purpose, including street paving, parks, open space, water and sewer systems, street lighting, and seismic strengthening, among others. Link: Paul Hastings legal opinion.

Benefits to Existing Lenders

Lower Default Risk – Owner’s cash flow position is improved as PACE programs are designed to have annual energy savings exceed the annual PACE assessment payments. Owner is now in a better position to make mortgage payments.

Better Loan-to-Value Ratio – Since PACE improvements have a positive net present value, they increase the lender’s collateral which improves the loan‐to‐value ratio.

Best Practice Framework Adopted - The White House PACE Best Practice Framework and the Department of Energy Guidelines are now being incorporated into PACE programs nationwide to help ensure that PACE programs benefit existing lenders.

PACE Senior lien status is immaterial (less than $200 per home) & more than offset by value enhancement – PACE assessments are treated as senior liens which is critical for the success of the programs but the seniority amount is immaterial due to the per property size limits of PACE finance and other best practice measures (Link to NY Times Article & PACE Lien Immateriality).


What are the benefits to participating property owners?

No Upfront Cost – Removes the upfront cost barrier of energy efficiency and renewable energy improvements. Most programs only charge a small fee to property owners.

Improved Cash Flow – Owner’s cash flow position is improved as PACE programs are designed to have annual energy savings exceed the annual PACE assessment payments.

Less Investment Risk ‐ Removes the uncertainty of recovering the cost of improvements if the property is sold, because the financing runs with the property via the tax assessment.


Benefits to Municipalities

Local Job Growth – PACE has the ability to stimulate local job creation through the installation of efficiency and energy improvements. It is estimated that for every $1mm spent on clean energy improvements, 10 jobs are created. For every 100,000 homes that are retrofitted, with an average expenditure of $10,000, more than 10,000 jobs would be created.

No Credit or General Obligation Risk – PACE bonds are typically not general obligation or appropriation bonds, so the municipality’s credit is not placed on the line. The obligation resides exclusively with the property owner.

Opt‐in Assessments – The assessments are only placed on those properties where the owner voluntarily “opts‐in” to the financing program.

Meet Carbon Reduction Goals – Counties, Cities, Towns and Villages can use this tool to move quickly toward achieving their carbon reduction and energy independence goals.


(Click here for responses to regulator claims &


The following is a proposed letters of support for PACE Federal Legislation


(PRINT ON YOUR ORG’S LETTERHEAD–please send a copy of all letters to


July X, 2010


(your senator – please fill in)                                                                          (your local congressman – please fill in)


Dear members of Congress:


I am [We are] writing as a constituent of ___________ [city, state in XXth Congressional District] to ask you to support legislation that guarantees local government the right to establish clean energy programs, known as Property Assessed Clean Energy (PACE).  PACE is a local government solution that helps home and building owners finance energy efficiency and renewable energy improvements and is supported by a century of legal and historical precedent for special assessment districts, including more than 37,000 districts that have been used to finance sewers, sidewalks, and other projects that serve a public purpose.   

We strongly believe that recent actions by federal regulators infringe upon state’s rights to utilize assessment districts and that PACE is good for our nation’s housing industry and mortgage investors.  The regulators disagree.  We must protect our state’s rights and let the facts and data from our nation’s PACE pilot programs determine who is correct.   We urge you to support federal legislation -- H.R.5766 (Rep. Thompson) known as the PACE Assessment Protection Act of 2010 and similar legislation in the senate -- so our nation’s PACE pilot programs can proceed. 

In just the past two years, twenty-two states have passed laws enabling local governments to develop PACE programs (CA, CO, FL, GA, IL, LA, ME, MD, MN, MO, NV, NH, NM, NY, NC, OH, OK, OR, TX, VT, VA, WI) State and local governments have embraced PACE because of its tremendous potential to cut energy bills, increase homeowner cash flow for mortgage payments, reduce mortgage default risk, create tens of thousands of local jobs and dramatically reduce greenhouse gas emissions by spurring investment in clean energy improvements.  PACE has received strong bipartisan support nationwide – in red states and blue states – because creating jobs, saving energy and reducing utility bills for families and businesses is important to all Americans.  Our nation’s PACE programs were set to launch a 24 month pilot period this summer, funded by $150 million in grants from the Department of Energy, incorporating safety and soundness consumer and lender protections that were developed by a White House led inter-agency working group consisting of HUD, NEC, OMB, CEQ and DOE. 

Unfortunately, despite PACE’s great promise, the Federal Housing Finance Agency (FHFA) and the Office of the Comptroller of the Currency (OCC, collectively the “Regulators”) issued recent statements blocking our nation’s PACE pilot programs.  The Regulators action is a direct challenge to state’s rights to levy tax assessments for a public purpose and wrongly asserts that the consumer and lender protections were not sufficient. The DOE funded PACE programs have been specifically designed to help the mortgage market yet the Regulators statements simply rehashed old concerns that were cured (See PACE response to the Regulators concerns).  Because of FHFA’s oversight of Fannie Mae and Freddie Mac, and OCC’s influence over our nation’s banks, the statements forced existing PACE programs to halt and froze the ability to launch PACE programs already under development nationwide.  

Congress, which chartered Fannie Mae and Freddie Mac, and which established FHFA & OCC, must quickly intervene to pass legislation that guarantees the right of state and local government to form special assessment districts to promote clean energy programs and restore the promise of PACE.  



[Your Name]

[Your Organization]


cc:  Ben Bernanke, Chairman, US Federal Reserve; Ed DeMarco, Acting Director, FHFA; Tim Geithner, Secretary of the Treasury, US Treasury Department; Sheila C. Bair, Chairman, FDIC; John C. Dugan, Comptroller of the Currency, OCC


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