Johnathon Blackburn, managing director of Keeping PACE in Texas, Willacy County Judge Aurelio 'Keter' Guerra, and Ken Jones, executive director of the Lower Rio Grande Valley Development Council.
Johnathon Blackburn, managing director of Keeping PACE in Texas, Willacy County Judge Aurelio ‘Keter’ Guerra, and Ken Jones, executive director of the Lower Rio Grande Valley Development Council.

RAYMONDVILLE, RGV – Willacy County Commissioners Court has approved a Resolution of Intent to participate in the Keeping PACE in Texas program.

Johnathon Blackburn, managing director of Keeping PACE in Texas, was at commissioners’ court on Thursday, along with Ken Jones, executive director of the Lower Rio Grande Valley Development Council. The LRGVDCV is administering the PACE program in Cameron, Hidalgo and Willacy counties.

Terrie Salinas, who handles economic development for the LRGVDC, said the next step will be for the LRGVDC to go back to the commissioners’ court to pass a resolution to implement the program. “If this happens, they will be the second county in Texas to implement PACE. It is a big deal. It will give Willacy County a lot of recognition,” Salinas said.

Original story:

WESLACO, RGV – When a state senator from Dallas passed legislation to help local government entities work with lenders to finance energy-efficient improvements for commercial and industrial properties the Rio Grande Valley paid attention.

The Lower Rio Grande Valley Development Council was the first council of government in Texas to take advantage of Senate Bill 385, authored in 2013 by then-Sen. John Carona, R-Dallas. On Aug. 19-21, LRGVDC and the non-profit group Keeping PACE in Texas are hosting a Building PACE (Property Assessed Clean Energy) conference on South Padre Island to promote the program.

Charlene Heydinger
Charlene Heydinger

“One year ago – August 27, 2014 – the executive board of the Lower Rio Grande Valley Development Council voted to be the first and only Texas Council of Government to administer a PACE program under the new Texas law,” said Charlene Heydinger, executive director of Keeping PACE in Texas.

“We look forward to working with Cameron, Hidalgo and Willacy Counties to establish the PACE in a Box model program so that energy and water saving improvements on commercial, industrial, agricultural and multi-family properties can begin.”

Asked about the upcoming conference, Heydinger said: “We are so grateful for the LRGVDC’s foresight and leadership and for this conference so that property owners, contractors, lenders and manufacturers can learn about and participate in this new economic development opportunity in the Valley. This voluntary program enables property owners to upgrade their properties using savings from their utility bills to pay for the improvements that result in those very savings.”

Heydinger said that by creating this economic development tool, counties will enable businesses to reduce costs and improve their properties without taxpayer dollars or risk to the treasury.  “All the barriers that prevent property owners from improving their property are wiped away with PACE. Company bottom lines improve, buildings and manufacturing facilities improve, lenders make secure and profitable loans, and contractors have new jobs serving the private sector.  Everybody wins,” Heydinger said.

Heydinger told the Rio Grande Guardian that she gets asked a lot, “What’s the catch?” She said she answers them in this way: “There is no catch.  The worst thing that can happen is that nobody takes advantage of the program.  But that won’t happen in the Valley; I know of several big projects – industrial and commercial – that are just waiting for the counties to establish PACE programs.”

Heydinger said her organization created the PACE in a Box model program so that all counties could use the same documents and procedures to serve their constituents with best practices. “Our goal is to have all counties in Texas adopt the PACE in a Box program. It is designed to provide uniform, user-friendly, scalable and sustainable PACE administration. It’s the only PACE program in the country designed by stakeholders and it’s a market-based, efficient program. We are excited that the counties in the Valley will be among the first to create PACE programs and that they will work with the LRGVDC to administer the program uniformly and efficiently throughout the Valley.”

Terrie Salinas
Terrie Salinas

Asked to define PACE, Terrie Salinas, economic development director for LRGVDC, said: “PACE is an innovative financing program that enables owners of commercial and industrial properties to obtain low-cost, long term loans for water conservation, energy-efficient improvements, and renewable retrofits.”

Salinas said SB 385 authorizes municipalities and counties in Texas to work with private sector lenders and property owners to finance qualified improvements using contractual assessments voluntarily imposed on the property by the owner.

“The term of a PACE loan may extend up to 20 years, resulting in utility cost savings that exceed the amount of the assessment payment. As a result, improvements financed through PACE generate a positive cash flow upon completion, with no up-front, out-of-pocket cost to the property owner,” Salinas said.

“With PACE, property owners overcome market barriers, such as limited payback periods and lack of access to capital that discourage investment in real property. PACE provides property owners with upfront financing for 100 percent of the cost of a qualified improvement, and allows property owners to amortize the debt over the useful life of the improvement.”

Salinas said that if a property is sold before the full amount of the PACE loan is repaid, the repayment obligation automatically transfers to the next owner because the lien securing the PACE assessment follows title to the property.

Asked what the benefits of PACE are, Keep PACE’s Heydinger said: “The benefits are multi-faceted, leading to a win-win scenario for virtually all stakeholders. Improvements financed with PACE loans will enable commercial and industrial properties to achieve energy efficiency and help conserve the state’s water resources.”

Heydinger provided the Rio Grande Guardian with a list of the benefits:

For Local Governments
•    Improving property on the tax rolls creates jobs, increases property value and sales tax revenue, and encourages business retention and expansion.
•    Updated buildings have increased occupancy, rental rates and net operating income.
•    Risk of obsolescence of an aging building stock is reduced.
•    The community’s “clean city” reputation is improved, attracting workers and families.
•    There is no burden on the community’s general fund or borrowing capacity—private sector PACE financing is tax neutral.
For the Economy
•    PACE unlocks opportunities for contractors, manufacturers and engineering firms.
•    PACE retrofits improve the efficiency and competitiveness of existing building stock.

For Owners of Commercial, Industrial, and Large Multi-Family Properties
•    Money once spent on utilities can now be capitalized and used to pay for infrastructure upgrades, resulting in bottom-line savings.
•    Extended payback periods afford an immediate cost benefit. Assessments can be spread over multiple years, and the assessment remains with the property, allowing the utility savings to exceed the cost of the property assessment.
•    Businesses can utilize utility savings and hedge against increased costs.
•    With the application of power generation technologies, properties and operations can be protected from power blackouts or brownouts.

For Lenders
•    Because a PACE loan is secured by the assessment, lenders can leverage its value to better serve clients with property in need of infrastructure improvements.
•    PACE offers a new avenue for moving an influx of capital into the marketplace.
•    Lenders are protected because those with mortgages on existing property must give written consent before that property is eligible for a PACE assessment.
•    Local lending allows current mortgage holders an option to make the PACE loan.
For Our Water Resources and the Environment
•    Water- and energy-efficient buildings reduce stress on community resources, particularly the state’s water supply.
•    Energy-efficient buildings help communities meet clean air goals and requirements and provide healthier environments for their occupants.

Heydinger added that PACE is tax neutral and does not impose a burden on the local government’s general fund. In the aggregate, she said, PACE improvements will promote long-term economic development in Texas by helping the state obtain energy and water security.

The Building PACE Conference takes place at the Isla Grand Beach Resort on South Padre Island from Aug. 19 to 21. On Aug. 19 it runs from 1 to 5 p.m. with a reception from 5:30 to 7:30 p.m. On Aug. 20 it runs from 9 a.m. to 4:30 p.m. And on Aug. 21 it runs from 9 a.m. to 12:30 p.m. The regular registration fee is $75 if the payment is made by Aug. 14. The rate is $100 at the door.

Editor’s Note: For more information about PACE in the Rio Grande Valley and about the Building PACE Conference call or email Terrie Salinas at the Lower Rio Grande Valley Development Council. Her telephone number is (956) 682-3481. Her email is [email protected]