Saving by updating
Program can help make buildings energy-efficient
The Jewish Community Center wanted to update its 50-year-old building, which still functions with original energy-guzzling mechanical and electrical equipment. But the project’s multimilliondollar price tag would leave less money available to serve the group’s core mission, said Joel Dinkin, executive vice president of the center.
Now, the 200,000-squarefoot building on South Braeswood plans to be one of the first to take advantage of a new program in Houston designed to ease the way for a long-term loan to pay for energy-efficient heating and electrical systems, lighting and a new roof. The community center’s leaders believe it will reduce energy bills and free up money for the services it provides, from early childhood development, senior care and support for arts and culture.
“This is attractive for nonprofits, like us, without the resources for capital improvements, to get resources and use our own resources to support our mission,” Dinkin said. “We are running on old, original equipment. It’s certainly not energy-efficient.”
The Houston City Council passed the measure last week that would enact a Property Assessed Clean Energy, or PACE, program in Texas. Houston is the first city to create its own program, following Travis County earlier this year. A measure is also under consideration in Dallas.
The program allows owners of commercial, industrial and residential properties with five or more units to obtain low-cost, long-term loans for water conservation, energyefficiency and renewable retrofits. The voluntary program requires the local government to place an assessment secured with a senior lien on the property until it is paid in full, in exchange for the funds provided by a private lender to pay for the improvement.
“This is a win-win-win-win situation,” Councilman Jack Christie said.
The effort to build and renovate commercial buildings across Houston, from strip centers to skyscrapers, with energy-efficient materials is a key focus in the growing conservation movement because, as the U.S. Department of Energy reports, buildings account for roughly 40 percent of the nation’s energy use.
It’s been a particular focus in Houston.
Mayor Annise Parker has announced a goal to reduce greenhouse gases. Houston was also one of the first cities in the world targeted by the Geneva-based World Business Council for Sustainable Development and the U.S. Business Council for Sustainable Development to study how to remove barriers to energy conservation.
Environmental groups have lauded the PACE program.
Otherwise, lenders tend to give high-interest rates for loans that could pay for expensive heating, ventilation air conditioning systems, new lighting or water-conservation equipment.
“People don’t spend money on their buildings today. It’s just bad business,” said Charlene Heydinger, executive director of Keeping PACE in Texas.
Smaller business owners, in particularly, may not see that it would be worth the cost to try to make their building more energy-efficient, said Heydinger, who led the effort to bring PACE to cities in Texas. Under the PACE program, the lender has more security because the loan is tied to the land, rather than the property owner.
The Legislature passed legislation during the 2013 session to enable cities and counties to create their own program.
“At the end of the day, it’s a more affordable and easier way for commercial property owners to get low-cost, long-term loans,” said Laura Spanjian, the city’s director of the Office of Sustainability.
“The idea behind it is the energy reduction and water will go to pay off the loan. We anticipate these loans being cash-positive for the owners,” she said.
The program will be run by the nonprofit Texas PACE Authority and there is no cost to the city of Houston. Since PACE loans pay for themselves over time, property owners are not only using less resources and improving public health, they are saving money, Spanjian said.
“It’s saving money to use less resources and helping us and the environment,” Spanjian said. “It’s a win for the environment, as well as the economy, local governments, property owners and lenders.”