How Arlington C-PACE works for you
Arlington C-PACE for Developers
What if, when you were developing your next property, you could:
- Significantly reduce your owner-equity contribution or your need for other types of high-cost financing
- Get capital over and above what banks provide
- Fill gaps in your capital stack with non-recourse financing
- Build a more valuable and competitive building
- Reduce your building’s energy use and cost?
It’s possible, thanks to a new county-sponsored program called Arlington C-PACE.
What is Arlington C-PACE for new construction?
Arlington commercial property assessed clean energy (C-PACE) for new construction is an innovative new financing mechanism that allows commercial real estate developers to access affordable financing for the installation of energy efficiency, water efficiency, and renewable energy measures in new buildings. You can access the financing for up to 20 percent of your building’s total eligible construction cost (TECC) if you design your building to exceed the current energy code.
C-PACE is attractive to developers for two primary reasons: 1) it provides affordable, long-term, non-recourse financing that can reduce your owner equity contribution or the need for other types of high-cost capital, and, 2) it enables you to achieve superior building performance by financing improvements that are often value-engineered out of a project.
The financing, which you can access for up to 20 percent of your project’s total eligible construction cost, is provided by private capital providers in an open-market to enable favorable rates and terms, and is repaid through a voluntary special assessment that is recorded on the property (similar to a sewer assessment).
You can use C-PACE if you design your building to exceed Arlington’s current energy code by at least 15 percent. Repayment terms extend up to 25 years, and you can transfer the assessment to a new owner if you sell the property.
Today, thanks to Arlington C-PACE, you can build a sustainable, high-performing building right from the start.
How Does It Work?
Applicants are required to provide total project construction cost by trade component so that the Arlington C-PACE program administrator can evaluate the total eligible construction cost. Applicants are also required to confirm that the building will be designed to exceed the current energy code, i.e., IECC 2012/ASHRAE 90.1-2010, using modeling such as EnergyPlus™.
The C-PACE finance amount will depend upon whether IECC 2012/ASHRAE 90.1-2010 is exceeded by at least 15 percent. The new construction project will be eligible for C-PACE financing: (1) at 15 percent of the TECC if the code is exceeded by 15 percent, or (2) at 20 percent of the TECC if the code is exceeded by 20 percent or more.
The maximum C-PACE finance amount will not exceed 20 percent of the TECC.
Once we receive your application, the Arlington C-PACE program administrator will coordinate with the project developer, property owner, utility, engineering/construction firm and/or energy modeling firm, depending on how the particular project will proceed. The purpose of this coordination is to understand the project, review C-PACE requirements (particularly with respect to building energy simulation modeling), and ensure consistency with potential utility incentives.
If the design is to include a renewable energy system such as solar PV, its impact on building energy performance is excluded from the energy savings analysis. Such systems will be evaluated separately by the program administrator and the total installed cost added to the eligible C-PACE financing amount determined solely by reviewing performance against IECC 2012/ASHRAE 90.1-2010.
The program administrator will determine the maximum C-PACE finance amount for each project.
Contact us today to learn how we can help you finance your next development project.