While the live Southeast Michigan Property Assessed Clean Energy (PACE) Summit event scheduled for April was postponed for a virtual event that occurred on June 30th, most attendees received the information and messages they were going to hear last Spring. Similar information was provided as planned, but the overall message was slightly different in a Post Covid-19 world. More on that later.
The Virtual Southeast Michigan PACE Summit included presentations on Michigan based PACE Projects, panel discussions on PACE Financing, Ann Arbor’s efforts to become carbon neutral, as well as other updates on current southeast Michigan efforts in the local, sustainable building scene.
Bali Kumar, CEO of Lean & Green Michigan, the state’s PACE administrator, welcomed attendees to the event. Bali explored the building blocks of a statutorily successful PACE project in Michigan. He also went through some early case studies. Of course, an event such as this one cannot be successful without the efforts of a lot of people and sponsors, who were graciously commended for their involvement and support of this superb learning event.
Subject Matter Of The Virtual Summit
Todd Williams, senior counsel at Lean & Green Michigan, moderated a panel with Rafi Golberstein, President of PACE Loan Group and Sonya Delley, Michigan Managing Director for PACE Equity. They discussed contrasts and comparisons of these two financing companies regarding underwriting PACE transactions.
Ann Arbor was well represented with two sessions on the push for sustainable buildings and the new net-zero city initiative. The first panel discussed economic development support of PACE financing at the local level. It included a lively discussion from Paula Holtz, Leader of Region 9 Community Assistance Team (CAT) at the MEDC, Phil Santer, VP Business Development and Chief of Staff at Ann Arbor Spark, along with Mike Shesterkin, Executive Director, Southeast Michigan Sustainable Business Forum. Ann Arbor is striving to lead the state in sustainability goals for its building stock.
Jan Culbertson, Senior Principal at AC3 Architecture Collaborative, led off discussions on the priority and initiative Ann Arbor has taken to become community-wide carbon neutral by 2030. Missy Stults, Sustainability and Innovation Manager from the City of Ann Arbor, delved deep into the city’s efforts and initiatives to help educational institutions, businesses, developers and non-profits become carbon neutral with local government assistance as an essential partner in this unprecedented undertaking. Another panel spoke about the versatility of PACE financing assisting a 65 year old Detroit church with major infrastructure upgrades.
The Detroit Unity Temple PACE project was another interesting case study. Chris Ellis, business development director for the Midwest at Greenworks Lending, Jason Beale, owner of Wright Energy Solutions and I discussed the first PACE Express project in Wayne County, as well as the first Church to use PACE financing in Michigan. PACE Express was designed by Lean & Green Michigan to allow building owners with projects under $250,000 to take advantage of the new statute. PACE Express is a less expensive, faster, and easier model in which to complete a transaction than a standard PACE project. Lean & Green expects to see more PACE Express projects coming to fruition in the near future.
Virtual Breakout Sessions A Creative Method For One-On-One Conversations
Most participants had never been involved in virtual breakout sessions before, but they were beautifully prepared and executed by the team at Lean and Green Michigan. The morning breakout session featured PACE lender breakout rooms for participants to speak with lenders from: PACE Loan Group, PACE Equity, Greenworks Lending, Twain Financial Partners, PACE Funding, and Petros PACE Finance. Having attended several of these sessions, they were both lively and informative. Both ideas and contact information were shared between attendees and lenders.
The afternoon session featured breakout sessions from energy contractors, including: G-Energy, Plug Smart, and Edison Energy. Again, much information was shared with attendees, who gained a better grasp of the quality of contractors in Michigan able to provide energy audits, a variety of energy engineering work, contractor proposals, and other tasks necessary to successful PACE projects.
From the comments of attendees during the breakout sessions, most were extremely satisfied with the information delivered at the Virtual Southeast Michigan PACE Summit. While a zoom webinar is not as valuable as a live event, modern technology has closed the gap and such virtual events provide a great resource during the current Pandemic. Such information is critical for coming out of this crisis in a better place than before.
Earlier I described how the post Covid-19 message was different. Many in society are looking for ways to close the inequity gap between different segments in our community. It’s no secret investment in lower socio-economic communities lags behind others. However, PACE is an excellent remedy for this inequity.
The PACE statute on financing doesn’t discriminate based on skin color, gender, religion, sexual orientation or disabilities. In addition, one’s credit score, the strength of a personal guarantee/covenants, or other usual underwriting criteria are not essential criteria for a standard PACE transaction. Location is the main factor driving a PACE project. Therefore, PACE financing should be considered an indispensable tool for economic development in ANY Michigan community, as long as the local jurisdiction has “opted in” to make this tool available in their community. Finally, non-profits, foundations, and NGO’s should all be learning how to advance their agendas through the use of the PACE statute.
The Michigan PACE market is an open market for using this powerful economic development tool. The only negative is the lack of community awareness and knowledge. PACE can and should be used as a tool for environmental justice and change in our communities. No time to wait!
Robert Mattler, JD LLM LEED AP BD&C, is Sr. Editor for Greening Michigan.com. As a sustainable financing specialist, Bob consults with developers, redevelopers and building owners on financing upgrades to all asset classes of non-residential real estate for resiliency and sustainability. A former Board Member of USGBC Detroit Chapter and current Ambassador for Detroit’s 2030 District, Robert employs public-private financing law – Property Assessed Clean Energy (PACE) and other financial structures, allowing building owners to lower operating costs, increase building value without changing the owners’ goals of maximizing investment returns. Robert can be reached at: email@example.com or 248-762-4370 (cell).