Press Release (last updated: Thursday, September 4, 2014)
“The opportunity is for Atlantic City’s major property owners to save significant amounts of money on ever-increasing energy costs – while creating jobs and reducing carbon pollution. New Jersey PACE, a 501(c)(3), is bringing one of the most successful innovations in energy efficiency financing to NJ, creating an open Public/Private/Nonprofit implementation platform. Soon, we hope to expand the benefits to financing storm and flood-resiliency, increasing AC’s property values.“
—Jonathan Cloud, Executive Director, New Jersey PACE
The Warwick, a 275-unit luxury condominium on the Boardwalk, is considering the use of New Jersey PACE financing for the replacement of their building energy systems with modern and more efficient units. In addition, under new legislation which is anticipated for approval this fall, the NJPACE program may be able to extend this financing to include major resiliency improvements for the building.
This is just one example of the kind of private investment that NJPACE can bring to Atlantic City.
With the largest concentration of commercial property in the State, Atlantic City is in a unique position to witness a boom in clean energy and resiliency financing over the coming decade, as part of its renaissance and rebranding as the high-end resort destination of the New Jersey Shore. Becoming the first major city in New Jersey to implement PACE could strengthen the City’s historic role in “embracing green initiatives and standing at the forefront of the environmental movement,” to quote the former president of the Atlantic City Convention and Visitors Authority.
PACE could bring about an average 30% savings in energy consumption, and accelerate the region’s conversion to solar, wind, and other forms of renewable energy. And PACE projects create jobs — one for every $67,000 of PACE investment. This is a very efficient economic development driver, particularly since government subsidies and taxpayer funds are not required. NJPACE estimates a potential market size of $500 million in Atlantic City, creating approximately 7,500 local jobs (about the same as the estimated job losses from the recent casino closures). The result, moreover, fulfills a significant public purpose: reducing carbon emissions, and making buildings more energy resilient during extreme weather events. NJPACE is already in discussions with the City’s administration to bring PACE financing to the many buildings that need major energy and resiliency upgrades in the face of climate-driven changes in our environment.
We believe this is a great “good news” story for the City, and the City will be able to take credit for being amongst the first to establish a PACE program for what is anticipated to be hundreds of millions of dollars of new investment, at a time when it is experiencing major economic challenges. Atlantic City would also place itself in the forefront of a new wave of investment — placing a bet on a clean energy future for the state. The result could be not only local jobs for local residents, but indeed state-wide and career advancement opportunities for those working in the City and gaining the early experience of working with specific niche markets, such as condominiums and other multifamily buildings; high-end hotels and resort properties, and enhanced waterfront protection.
New Jersey PACE is a 501(c)(3) nonprofit dedicated to bringing new funding to meet the challenges of climate change in New Jersey in the 21st century, through financing energy efficiency and renewable systems, and while saving property owners costs both now and in the future.
For more information, please see NewJerseyPACE.org and the web site of its parent organization, the Center for Regenerative Community Solutions, at CRCSolutions.org. It is currently conducting its first crowdfunding campaign at NJPACE.CauseVox.com.
Randall Pozdena & Alec Josephson: “Economic Impact Analysis of Property Assessed Clean Energy Programs (PACE),” Research Performed by ECONorthwest for PACENow, April 2011. According to the authors, “If one viewed the PACE program as a jobs stimulus program (akin to those pursued at public expense under American Recovery and Reinvestment Act of 2009), the cost per job at $67,000 is quite modest. In fact, of course, in the PACE program the only significant role of government is to authorize a financing mechanism to overcome what some believe to be non-economic impediments to credit access.“
Postscript: The event at the Warwick featured a number of speakers, including Councilman Tim Mancuso; David Stout of JK Engineering; Martin Gitlin of Structured Finance; and the Executive Team at NJPACE. Some of the talking points:
Interests of Atlantic City/local government, property owners, investors and public are aligned. PACE:
- doesn’t cost the taxpayers
- helps to keep building stock competitive
- makes the community more attractive for retention and attraction of businesses
- improves property values
- secures payment and protects against default
- reduces carbon pollution
PACE saves property owners money on high and ever-escalating energy prices. Data points:
- average 30% reduction in energy consumption and therefore energy costs
- energy savings can be designed to more than pay for the project, making the project cash flow positive from the start
- PACE creates jobs: for every $67,000 spent, 1 job retained or created, (per study done for PACENow, the National Umbrella Nonprofit Organization, by EcoNorthwest in 2011)
- given the $500 Million potential in the Atlantic City market, which has had the highest property value in the state of NJ, new/retained PACE jobs could replace the jobs lost this month from the closure of three casinos
- generates other economic development from contractors working in the city and requiring local materials, including
- lunch counters and take-outs, hotel stays, bars and entertainment
- local business services and materials
- represents significant carbon reduction
- improves air quality for asthma patients and citizens
PACE makes sense for Atlantic City, and it makes sense to be the first, consistent with the city’s other green initiatives. Some key points:
- Collaboration between government, private sector property owners and investors, and a nonprofit, NJPACE, a 501c3 administrator for PACE
- NJPACE has been championing PACE since the law passed in 2012. It’s an open platform that benefits everyone.
- Stay tuned as we begin the process, starting with the Mayor’s support and the Council passing an ordinance.
For New Jersey PACE:
- It’s a win all around — all stakeholders: owners, contractors/business, jobs, climate, community, govenrment
- Original PACE legislation
- Since it’s a Public benefit, clean air, Legislation allows municipality to be used. Applies a special assessment on property, which is secure for investors, and allows a steady payback over a much longer period than typical financing solutions (5-7, maybe 10 vs. up to 20 years). Requires partnership of local government to enable special assessment
- No taxpayer costs (all municipal costs are remibursed)
- Aligned with Governor’s agenda to move from subsidies to loan programs
- Proposed amending for resiliency is in the works
- Why PACE is needed:
- PACE addresses the impediments to building owners making the needed improvements to become energy efficient and replace fossil fuel based energy with renewables, meeting NJ carbon reduction standards and Renewable Portfolio Standards for the decade.
- Most buildings in Atlantic City are aging, as is true across New Jersey. They desperately need to replace heating and cooling equipment which is prone to breakdown and not energy efficient, leading to high energy costs.
- Even with generous subsidies and grants from the state’s Clean Energy Program up to 70% off the costs, owners won’t fund the difference.
- Many buildings have delayed doing maintenance over the recession for lack of capital.
- Many owners can’t get financing for various reasons: credit score, balance sheet, nonprofits
- Of those that could get financing, many don’t want traditional debt, which shows up on the balance sheet, constraining their use of whatever cash or credit they have for their business operations.
- They may not know how long they will own the property, so they don’t want to incur debt and have to repay that if they sell the property.
- PACE is the solution. It addresses all the impediments to doing energy efficiency retrofits and installing renewable energy–without having tax-payers pay for what private property owners do. A win all around.
- Saves money on energy from day 1, cash flow positive design of project (self-financing with energy savings)
- 100% financing, 0% down
- Hard and soft costs attached to property as special assessment and paid over the period of the useful life of the improvements, as an operating expense
- Off balance sheet, allowing the property owner to use cash and credit for other business purposes
- transferable to future owners if the property is sold
- improves property value and Net operating income
- improves asset value and property owner’s ability to pay the mortgage, given it’s cash flow positive, so mortgage lenders approve
- Again, advocacy for amendment to PACE legislation, resiliency and water conservation, paid for the same way. Benefits are clear in supporting the community given sea level rise predictions and actuality of flooding even now
For the energy services contractor:
- Experience of what’s needed throughout Atlantic City
- Experience in Connecticut as a contractor, growing businesses, creating jobs
- The process
- starts with an audit
- then design of the solution that complies with engineering standards
- cash flow analysis
- Requires both client approval and city/town approvals
- Resiliency issues contractors are finding at the shore, possibility of amendment to PACE legislation which NJPACE will cover.
For the capital provider:
- Why investors are interested and how they benefit the community and property owners
- What’s being done across the country
- The future of PACE
The following components make up the Media Kit:
NJPACE-MediaKit-9-4-14f (overview, press release, organizational profile, executive team bios, references)
Downloadable information sheets: