Prologis Taps San Francisco’s PACE Financing
The corporate headquarters of Prologis at San Francisco’s Pier 1 will be the first commercial energy efficiency upgrade funded through the city’s GreenFinanceSF program that uses Property-Assessed Clean Energy (PACE) bond financing, according to Johnson Controls, which will design and implement the project.
Johnson Controls expects the retrofit project at Pier 1 to reduce annual energy costs by over $98,000 and reduce purchased energy by 32 percent.
Upgrades include retrofits for 1,500 lighting fixtures, a 200-KW rooftop solar array and improvements to the building’s HVAC systems. The project cost for the retrofit of the 1990’s-era Prologis facility is $1.6 million, of which 90 percent is being funded by PACE bonds. The 20-year, low-interest bonds were purchased by Clean Fund of San Rafael Calif., a specialty PACE finance provider, and the bond will be paid off through a special property tax assessment. With PACE, if the ownership of the building changes, payments get transferred to the new owner.
GreenFinanceSF, the commercial PACE program for San Francisco, helps finance energy upgrades for large commercial buildings. PACE financing helps building owners access capital for a wide range of energy upgrades that can pay for themselves with reduced operating costs. San Francisco established its PACE district in 2010 and was one of the first US cities to launch an “open market” PACE program last year, making $100 million in bonding capacity available to the city’s commercial property owners.
San Francisco recently joined a new statewide alliance among 14 California counties and 126 cities to help attract owners and lenders to take advantage of the PACE benefits.
In other energy-related financing news for California, a new “on-bill repayment” feature will allow commercial property owners to pay for energy upgrades through regular installments on their utility bill. The on-bill repayment program will rely on private third-party financing, and the repayment remains on the property’s utility bill until it’s paid off, even if the property changes ownership.
The Public Utilities Commission has directed the state’s investor-owned utilities – Sempra Energy, Southern California Edison, and Pacific Gas and Electric – to have the on-bill repayment program operating by March 31 of next year.
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