Updated at 10:20 p.m. Aug. 20 to include the City Council's decision to delay its vote
Businesses in Fairview Heights may soon find private investors to help them make their buildings more energy efficient.
The Fairview Heights City Council is considering a proposal to establish a Property Assessed Clean Energy financing program in the city. The council had scheduled a vote for Tuesday, but delayed it until its Sept. 3 meeting to give the public an opportunity to see recent changes state legislators made to the law.
The PACE program gives commercial property owners access to long-term loans for efficiency upgrades. It would help new and existing businesses invest in their properties, said Paul Ellis, the city’s director of economic development.
“We’ve largely developed over the past 50 years,” Ellis said. “We’re now looking for ways to redevelop properties.”
City officials are considering PACE because it could make larger redevelopment projects possible, he said.
He said renewal projects often stall because business owners cannot find financing for every improvement they want to make.
“The heating, ventilation and cooling systems are generally something that need to be replaced, and they’re very difficult to finance,” Ellis said. “That often is a stumbling block that prevents a project from seeing the light of day.”
He said PACE could help spur redevelopment by providing funding for different kinds of improvements, from big-ticket items like solar panels to smaller upgrades in lighting or insulation.
Many states, including Missouri, have used similar programs in the past decade to help finance commercial and residential projects.
But PACE is new for Illinois. The state Legislature passed a bill authorizing it for commercial properties in 2017, and Fairview Heights will be the first downstate community to have one.
Under PACE, cities and counties work with a program administrator to attract private investors who can finance the work. The funding is private, but businesses repay the loans through a special county or municipal assessment.
PACE allows commercial property owners to secure loans that are two to four times longer than typical commercial loans from banks, said C.J. DeSantis, co-founder and head of government relations at Counterpointe Energy Solutions, which is based in Florida.
“Their sweet spot is five years; they’ll go out to seven years. Only for their best clients, they’ll begrudgingly lend for 10 years,” said DeSantis, whose company is the program administrator for thousands of PACE programs across the U.S. But many efficiency upgrades, like solar panels, can last for 20 or 30 years.
PACE financing lets businesses pay off their loans over the lifetime of an energy efficiency upgrade, DeSantis said. That allows commercial property owners to make investments that help their companies and also are good for the environment.
“It encourages developers and facility managers to look at the building more holistically,” said Tom Appelbaum, president of Sustainable Solutions Funding of St. Louis. “A significant amount of greenhouse gases come from buildings, and a lot of people don’t think about that — they think about cars.”
Appelbaum will be the program administrator for Fairview Heights if they establish the program.
Eric Schmid covers the Metro East for St. Louis Public Radio as part of the journalism grant program Report for America, an initiative of The GroundTruth Project. Follow Eric on Twitter: @EricDSchmid
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