Improve Profits With Renovation, Redevelopment and New Construction
By Bob Mattler Managing Director, Pace Equity | January 15, 2017
There is a new innovative way to pay for hospitality construction projects: Property Assessed Clean Energy (PACE) financing. PACE, adopted as enabling legislation in 32 states and with active programs in about half of them, is gaining momentum as a flexible, available and creative tool in which to finance almost any technology that saves energy and/ or water. PACE can take the place of expensive loans or additional owner equity to finance construction projects that can be repaid long term from those very same energy and water savings.
This article will explain Property Assessed Clean Energy, who pays for PACE, some common building systems ripe for PACE financing, who is using PACE and why. We'll take a closer look through some case studies how hospitality developers and owners are already taking advantage of this new economic development tool.
What is Property Assessed Clean Energy (PACE)?
PACE offers an innovative, affordable method to help solve the challenges today's building owners & developers face. PACE uses the financial power of long term energy/water savings to make improvements possible today, while spreading out the costs over a long period, in many instances up to 20-25 years. PACE outperforms traditional forms of financing in many ways:
- Borrowing is available through non-recourse financing
- Replaces more expensive cost of capital
- Boosts property value without negatively impacting the balance sheet
- Preserves borrowing capacity for other projects or more essential business plan goals
- Obligations pass to new owners seamlessly when the property is sold
- No upfront cash requirements in most circumstances and no out of pocket
PACE is a financing mechanism providing the power for building owners to recapture wasted energy and water today. PACE also allows developers to obtain low cost capital for their projects resulting in more efficient buildings, lower operating expenses and a more valuable building.