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New financing options available for commercial property clean energy projects

Denver now offers Commercial Property Assessed Clean Energy program

Denver City Council last night approved an ordinance to allow the offering of Colorado’s Commercial Property Assessed Clean Energy (C-PACE) program within the City and County of Denver. C-PACE offers finance options for commercial property clean energy projects on both new and rehab construction.

“Commercial building operations account for the majority of our city’s greenhouse gas emissions, so we’re thrilled to offer a new tool that will not only reduce our carbon footprint, but save property owners money,” Denver Mayor Michael B. Hancock said. “Sustainable development is smart development, and we’re now better positioned to encourage a built environment that leads Denver toward a more sustainable future.”

The ordinance approved an intergovernmental agreement between the City and County of Denver and the Colorado New Energy Improvement District, which administers C-PACE. Through C-PACE, city property owners and developers will be able to access a new financing tool to invest in energy efficiency, renewable energy and water conservation improvements. The voluntary program lowers the cost of third-party financing, which is repaid through the property tax assessment process. Participants receive capital to finance eligible improvements, and repayment is collected through the property tax assessment process (a voluntary assessment is placed on the building owner’s property tax bill). The assessment can provide long-term financing of up to 20 years and stays with the property at the time of sale, removing traditional barriers to financing projects with payback cycles longer than two to three years.

C-PACE is available for new construction projects, in addition to traditional retrofits and upgrades to existing buildings. Eligible property types for C-PACE financing include office, multi-family (five units or more), industrial, retail, hotels and agricultural facilities. Eligible project types include heating and ventilation upgrades, lighting, water pumps, insulation and envelope improvements, solar panels, water fixtures and graywater systems, motors and roofs.

“In working with the Colorado Energy Office and multiple city partners, we are excited to add this innovative financing approach to Denver’s sustainable development toolkit,” said Paul Washington, Executive Director of the Denver Office of Economic Development. “As we continue our partnership with private and nonprofit developers, Mayor Hancock and City Council wanted to ensure that we encourage environmentally sustainable projects in Denver.”

New commercial construction projects in Denver that meet building code requirements are eligible for C-PACE at up to 15% of construction costs. The program also makes available an additional 5% of construction costs for new buildings to be financed if project teams improve the performance of their buildings 5% beyond what the code requires. Denver recently upgraded its building code to include the 2015 International Energy Conservation Code which is the C-PACE baseline requirement for new construction projects. Adoption of the new code made it possible for all new commercial construction projects to qualify for C-PACE financing.

“Denver’s implementation of this program, as well as the changes to our building code, will go a long way toward increasing our community’s energy security for generations to come,” said Jerry Tinianow, Denver’s Chief Sustainability Officer. “Efforts to make commercial properties more efficient help the city to achieve its 2020 Sustainability Goals for energy and climate while lowering operating costs and supporting the local economy.”

C-PACE is a program of the statewide New Energy Improvement District, administered by Sustainable Real Estate Solutions (SRS). For more information or to apply for C-PACE financing, visit the Colorado C-PACE website at www.COPACE.com. Building owners and developers can also contact the Denver Office of Economic Development at 720-913-1999 or oed.milehigh@denvergov.org to discuss a Denver-specific project.