Innovative financing opens up a new market for solar and efficiency in affordable housing
June 27, 2013/PRNewswire/ — Urban Atlantic announced today that its affiliate company Urban Energy Advisors, the Program Manager for the Washington, DC PACE Commercial Program, has completed the Property Assessed Clean Energy (PACE) financing for an affordable 139-unit multifamily building in the District of Columbia. This is the nation’s first PACE-financed affordable housing endeavor. The total amount of the project is $340,000.
“This is a game changer for saving money and conserving energy in the affordable housing industry. By allowing property owners to finance green building upgrades with no out-of-pocket payments, repaid through a special tax assessment, we reduced the risk of lending and improved operating incomes on day one. This project has cracked the code for using PACE financing in affordable housing and multi-family apartment buildings, where the need for new investment is high but capital can often be constrained. This approach has huge potential to be replicated nationwide,” said Bracken Hendricks, Managing Director of Urban Energy Advisors.
Urban Energy Advisors was selected through a competitive bid process to design and manage the District of Columbia’s Property Assessed Clean Energy (PACE) program for energy upgrades in commercial, institutional, and multifamily buildings, with authority to issue $250 million dollars in revenue bonds. The District Department of the Environment (DDOE) oversees the administration of the program on behalf of the Government of the District of Columbia.
The project is located at 400 M Street in southeast DC and is part of the Capper Carrollsburg HOPE VI redevelopment. The upgrades included lighting, low flow water fixtures, and a 37-kilowatt rooftop solar array, designed to provide more than $40,000 in annual benefits from avoided costs and tax credits. Purchased energy has been reduced by more than 15%.
Urban Energy Advisors successfully attained lender consent for this transaction, an important hurdle to ensure that all previous investors in the property approve of the additional debt. “Many in the affordable housing industry have seen this type of financing as too hard or too complex. But the market has changed and both owners and lenders are increasingly realizing the long-term value of PACE for the economy, the environment and their bottom line,” added Hendricks.
Vicki Davis, President of Urban Atlantic Development remarked, “We commend Mayor Vincent C. Gray for his vision to reduce energy use and greenhouse gas emission in the District through the Sustainable DC Initiative, including PACE Commercial. We are honored to be part of the team that is shaping the future of redevelopment to be both cost effective and energy efficient.”
About Urban Atlantic:
Headquartered in Bethesda, Maryland, Urban Atlantic is a real estate development and investment company specializing in smart solutions for urban development. Founded in 1998, Urban Atlantic has completed more than $1.1 billion in real estate developments and placed more than $1.3 billion in real estate investments. Combining development expertise with financial sophistication is core to Urban Atlantic’s ability to turn visionary development ideas into performing assets. More information can be found by visiting the company’s website: www.urban-atlantic.com or by calling 301.280.6600.
About the DC PACE Commercial Program:
DC PACE is a District of Columbia program that provides affordable financing to commercial property owners to fund energy efficiency improvements. PACE financing is repaid over a period of up to 20 years through a special tax assessment on the property. The program, enacted as part of the Energy Efficiency Financing Act of 2010, was officially launched in April 2012. For more information visit www.dcpace.com