Wisconsin's largest commercial property assessed clean energy (PACE) project to date, the renovation of the historic Hotel Northland in Green Bay, recently closed using $8.8 million of financing provided through PACE Wisconsin and a taxable revenue bond issue by the Public Finance Authority. von Briesen served as Bond Counsel for the transaction, which provided the hotel facility energy efficiency improvements, including LED lighting, roof and wall insulation, an improved HVAC system, and water saving fixtures. The energy and water efficiency upgrades are projected to save $12.7 million on energy bills over the 20-year life of the Bonds.
PACE financing can be cheaper than other forms of debt, and reduces the cost of doing business by cutting energy costs.
With PACE financing, commercial building owners can finance energy saving upgrades and renewable energy installations, typically with little or no money down, and structured to guarantee that the energy cost savings realized over the life of the loan exceed required debt service. Thus, PACE financing more than pays for itself and the energy cost savings continue after the debt is retired. PACE Loans are repaid through a special charge added to the building's property tax bill as authorized by Section 66.0627(8) of the Wisconsin statutes, so the obligation transfers to the new owner if the building is sold. Under Wisconsin law, the special charge has priority over ad valorem property taxes and other lenders' security interests (although not mandated by law, PACE Wisconsin requires consent of any existing lien holders before it will agree to impose the special charge).
In addition to building owners, PACE financing helps commercial tenants share in the benefits of energy efficiency upgrades through the reduction of energy costs under a triple-net lease arrangement. PACE financing can also be used for energy efficient equipment or onsite renewable energy installations in new construction.
In the Hotel Northland transaction, the statutory special charge was levied by PACE Wisconsin, a joint powers commission comprising a consortium of Wisconsin counties. Along with the Wisconsin Counties Association and other partners, von Briesen held a leadership role in creating PACE Wisconsin. von Briesen's vision of a uniform PACE program throughout the state was implemented through creation of a joint powers commission open to any county that wishes to participate. PACE is now available in 34 Wisconsin counties, and the Hotel Northland project was the first PACE project in Brown County. More information about PACE Wisconsin can be found on its website, www.pacewi.org.
The Public Finance Authority is also a joint powers commission created by the Wisconsin legislature in 2010 for the specific purpose of issuing conduit revenue bonds and other debt obligations to finance projects in Wisconsin and throughout the country. Since 2010, the Authority has financed over 200 projects in 43 states and issued more than $10 billion in revenue bonds and other obligations. The Northland Hotel PACE financing was the Authority's first PACE transaction in Wisconsin, and its fifth overall. More information about the Public Finance Authority can be found on its website, www.pfauthorioty.org.
von Briesen's team of attorneys has a demonstrated record of success in all aspects of PACE development, including finance, real estate, land use, and government relations. We are proud to serve as general counsel to PACE Wisconsin and as general counsel and primary transaction counsel to the Public Finance Authority.
von Briesen & Roper Legal Update is a periodic publication of von Briesen & Roper, s.c. It is intended for general information purposes for the community and highlights recent changes and developments in the legal area. This publication does not constitute legal advice, and the reader should consult legal counsel to determine how this information applies to any specific situation.