Chicago PACE makes it possible for owners and developers of commercial properties to obtain low-cost, 100% financing for 20+ years for energy efficiency, sustainability and renewable energy infrastructure deployed in new or existing buildings. There are many financial and operational benefits that Chicago PACE provides to building owners, especially compared to traditional debt financing.
Chicago PACE is the latest and potentially largest in a growing number of state and municipal based C-PACE programs across the country which have combined to fund 2,000 energy efficiency, renewables and resiliency projects. PACE is private capital and stands for Property Assessed Clean Energy – the “C” denotes the commercial program.
Currently active in 22 states, C-PACE is a unique form of funding repaid through a beneficial assessment which becomes an attachment to the building and added to the owner’s property tax bill. The program is established at the state level by statute and is adopted by legislation sponsored by the local taxing authority.
A C-PACE lender’s approach to credit is quite different from that of a traditional debt provider. Since the assessment is an attachment to the building which survives changes in ownership, the C-PACE lender is most concerned with whether any owner would value the usefulness and location of the building. This is in stark contrast to the traditional approach of senior and mezzanine debt providers who rely on a number of protections which often tie the hands of building owners.
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