The State of Maryland enacted a revolutionary public/private financing program in 2014 known as the Commercial Property Assessed Clean Energy (C-PACE) Program. Since then, 12 counties in Maryland have adopted the legislation, including Montgomery, Howard, Anne Arundel and Baltimore Counties along with several other counties and Baltimore City.
The program allows a commercial property owner to obtain a low-interest loan for 100% of both hard and soft costs of financing improvements, upgrades, deferred capital items or new construction that address energy efficiency, water conservation or renewable energy (i.e. HVAC system upgrades, photovoltaic system installations, replacement cool roofs, etc.). The financing is fixed for up to 20 years and is rolled into the tax bill for the property. The underwriting for such loan is tied solely to the property and improvements and not the owner’s individual creditworthiness. No personal or corporate guaranty is required for the loan. Best of all, in many instances, the cost of the improvements may actually be passed along to the tenants as part of their monthly rent.
The owner of the Comfort Inn Hotel in Gaithersburg, Maryland recently needed to replace the aging heating and cooling systems, install energy efficient LED lighting systems and replace the existing roof. The cost to do the work was $1.4 million. The owner was able to use the C-PACE program to complete the improvements without spending any of the owner’s funds or even guarantying the loan. The owner reports that the improvements have freed up $475,000 in cash flow over the next 20 years as well as increased the property value by $1.7 million.
It’s not too good to be true. It’s real. Feel free to call Kirk Halpin of The Law Offices of Kirk Halpin & Associates, P.A. at 410.531.1700 or email him at email@example.com to learn more about this program and see if it is the right fit for your need. An initial loan application can be completed online by visiting http://www.cflawgroup.com/