Maryland PACE, a statewide partnership anchored by the Maryland Clean Energy Center to promote the finance of energy saving projects for commercial properties, announced today that the first C-PACE (Commercial Property Assessed Clean Energy) financed project in Kent County has been approved. State-wide, the approval marks the third in the nascent program’s history and the first for a ‘main street’ retail business.
The Finishing Touch, a custom frame and print boutique in downtown Chestertown, owned by Robert Ramsey, will utilize the commercial PACE (C-PACE) program to finance $134,438 in energy savings improvements including new windows and a full HVAC system upgrade.
The program is not a grant as private capital is provided, in this instance by Greenworks Lending, a specialty C-PACE lender. Rather than a traditional working capital loan or cash-out from a commercial mortgage refinance, Ramsey will repay his investment in reduced operating expenses via a special tax assessment with a term of 20 years.
“One of the key advantages of the MD-PACE program is that it allows the commercial property owner to match the financing term to the useful life of the investment,” said Gerard Neely, MD-PACE program manager. “For The Finishing Touch and Robert Ramsey, this gives them the ability make a long-term investment in energy savings, comfort and efficiency while realizing positive cash flow from the onset.”
The project at 309 and 311 High St. in Chestertown will replace air conditioners and windows that date back to 1978. Pinder and Blue Heron Contracting, top providers of energy efficiency projects on the Eastern Shore, will develop and install the upgrades. The HVAC upgrades are projected to save $6,420/year in energy expenses while more than 1,000 sq.ft. of low R-value glass will be replaced, improving the building’s overall energy efficiency year-round.
“ We are so pleased to see the MDPACE program at work, especially since with this project, it is being used to finance a project on the main street in a classic Maryland small town,” said Kathy Magruder, Executive Director of the Maryland Clean Energy Center. “This financing model makes it so much more workable for a variety of small and large scale businesses to fund energy measures and free up their own operating capital in a very advantageous way.”
“This project is a perfect fit for the MD C-PACE program. The property is in a Maryland designated Arts & Entertainment District, a Historical District, and on a Maryland Main Street. Mr. Ramsey, a Downtown Chestertown business owner for almost 40 years, will be able to upgrade his commercial property and take immediate advantage of decreased operating costs, while increasing energy efficiency”, said Kent County Commissioner William Short. “The work is being done by local contractors and adds to the enthusiasm of the project. Kent County has been hard at work identifying, implementing, and promoting incentives for businesses to grow, locate, and prosper here. The expertise and professionalism provided by the Maryland Commercial PACE team have been a great asset to economic development in our community.”
MD C-PACE is an innovative and affordable way for commercial, industrial and nonprofit building owners to pay for green energy upgrades. The program provides 100% up front financing that is repaid over long terms (often 20+ years) via a property-tax surcharge. The structure allows owners to replace end-of-life equipment with no upfront capital outlay and to see immediate net operating income (NOI) improvement when upgrading a wide variety of equipment including HVAC, lighting, roof, envelope, solar, and cogeneration.
Maryland passed policy enabling C-PACE in May 2014 and Kent County passed an ordinance establishing its program in September 2016. Kent County became one of the first counties on the Eastern Shore to enable C-PACE financing for its business community.
MD-PACE is a statewide partnership between PACE Financial Servicing and the Maryland Clean Energy Center to build a statewide commercial Property Assessed Clean Energy (C-PACE) program.