Vermilion Is Contemplating PACE Funding Alternatives – The Morning Journal

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The City of Vermilion was given the opportunity to participate in Clean Energy Real Estate Financing (PACE) through the Lorain Port and Finance Authority.

Tiffany McClelland, Director of Economic Development for the Port Authority, presented the funding option to Vermilion City Council at its recent Finance Committee meeting.

Lorain, Elyria Township and the City of Elyria recently jumped on board with initial assessments from PACE funding, and McClelland said she saw an opportunity for Vermilion to participate as well.

She said the funding opportunity came to Ohio about a decade ago when Lorain County was putting funding on commercial buildings such as commercial, nonprofit, and government buildings.

“We're not currently servicing the existing PACE residential real estate financing, which is relatively new to the state of Ohio,” said McClelland.

She said that after a special energy improvement district is created, PACE acts as an energy audit process, encouraging companies to either renovate or come to the area to improve the energy efficient business.

These improvements can include improvements to equipment, lighting, heating, ventilation and air conditioning, insulation, windows, doors, roofs, electrical and mechanical improvements, and geothermal and solar energy.

McClelland says new companies that are in the process of building new buildings can also use PACE.

“This puts you in a unique position to offer this type of funding to attract individuals to your community while helping you with current business,” she said.

The assessment must first be approved and collected by the city council.

A special appraisal of the project and property is then made and the company is linked through a lender, which depends on the scope of the project.

Banks are often a lender to the funds, with other options being offered through the government's PACE program, private placements, bonds, or NOPEC, according to McClelland.

The assessment then takes place via property taxes, which go back to the district, then to the city and then back to the owner.

By installing energy-efficient enhancements, McClelland was able to nearly offset the savings and valuation costs.

“This puts the company in a very good position as the savings are similar to paying for the valuation,” she said.

She said the first town in the county to use PACE was Lorain, which used a PACE private placement for the restoration and opening of Ariel on Broadway in downtown Lorain.

In September, Elyria Township approved a minor $ 500 valuation for improvements to the town hall building, and Elyria Town council approved a similar valuation for retrofitted city hall lighting.

According to McClelland, establishing the district can cost a town around $ 2,500 in legal fees. If you are doing a project with a private lender, the project can pay the fees itself through PACE.

City officials said they plan to speak to neighboring parishes that recently adopted PACE to further consider the funding district.


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