Waterbury Launches Commercial and Industrial Clean Energy Financing Program
New Program to Support Businesses and Promote Job Growth in Waterbury
Businesses in Waterbury can now get 100% upfront, low-cost, and long-term financing to make clean energy improvements to their buildings. Waterbury has opted into a state-wide program called Commercial and Industrial Property Assessed Clean Energy (C-PACE), which allows commercial, industrial and multi-family property owners to access upfront funding for all energy improvement costs and to repay that investment through a benefit assessment charge on their property tax bill. The Board of Alderman approved a resolution to do so May 7, 2013. Benefit assessments are a safe and familiar tool used by municipalities to finance projects including street paving, water and sewer systems, and street lighting. The repayment obligation transfers automatically to the next owner if the property is sold. Similar to a sewer tax assessment, capital provided under the C-PACE program is secured by a lien on the property, so low-interest capital can be raised from the private sector.
C-PACE is administered by the Clean Energy Finance and Investment Authority (CEFIA) as part of the State’s Energize Connecticut initiative, which is intended to help consumers save money and use clean energy. Mayor Neil M. O’Leary sees this as a fantastic economic development tool and a tremendous opportunity for Waterbury businesses.
BUILDING OWNERS: C-PACE provides 100% upfront, fixed rate, long-term financing to property owners for qualified energy upgrades. Game-changing benefits for owners are:
- C-PACE assessments may qualify as an operating expense. This means owners can finance improvements without incurring additional debt and preserve capital and credit lines for core business investments. Also, under typical leases, payments – as well as energy savings – can be passed along to tenants.
- The tax obligation (which is attached to the property) transfers upon sale to the new owner. Unlike other lending options, payments do not accelerate in case of default.
- The C-PACE program requires projects to be cash flow-positive from project completion. Financing is structured so that energy savings must more than offset the additional property tax assessment.
- Deeper energy upgrades are possible because the term of the assessment is up to 20 years and stays with the property rather than the owner.
- Owners achieve lower operating costs due to increased energy efficiency, improved asset value from new equipment, and a better indoor air quality and comfort for tenants.
Please contact the Office of the Mayor, at 203-574-6712 for further information.
What Types of Buildings are Eligible?
Ownership: The applicant is the legal owner of the property and all the legal owners of such property agree to participate.
Property Type: C-PACE offers financing to commercial, industrial or multifamily (defined as 5 or more dwelling units) property owners that pay property taxes or have a property tax ID. Residential properties with fewer than 5 dwelling units are not eligible.
Building Financials: The property must be current on property tax and assessment payments. The property owner must not have any involuntary liens, defaults, or judgments applicable to the subject property.
Lender Consent: The property owner must provide evidence that the mortgage holder(s) on the property consents to the PACE assessment, if applicable.
What Types of Upgrades are Eligible? Eligible upgrades are any energy efficiency or renewable energy measure that:
- Results in an energy savings-to-investment ratio greater than 1 over the lifetime of the assessment term.
- Is permanently affixed to the building or property.
- Although there is no financing minimum, C-PACE is best suited for capital improvements above $150,000.
Typical eligible measures include:
- High efficiency lighting
Heating ventilation air conditioning (HVAC) upgrades and controls
High efficiency chillers, boilers, furnaces and water heating systems
Building enclosure/envelope improvements
- Building automation (energy management) systems