Douglas Co. opts out of program

Commissioner says government doesn’t need to be involved

The future of at least one big Castle Rock project is murkier today after the Douglas County commissioners voted not to participate in a program that connects commercial property owners with loans for energy and utility efficiency work and upgrades.

Thirty Colorado counties are part of the Colorado Commercial Property Assessed Clean Energy, or C-PACE program, and more than a dozen others are in discussions to join, according to the program’s website. Douglas County was in the “in discussion” group until Tuesday when county commissioners Roger Partridge and Lora Thomas voted to rescind a resolution that said the county would participate. Commissioner Abe Laydon voted against leaving the program.

“I think this puts a government entity smack dab in the middle between two private entities that are creating a commercial contract, so it does involve government where the government doesn’t belong,” Thomas said.

C-PACE is Colorado’s version of a program that exists in more than 30 states. It was created through a bill passed through the statehouse in 2015, said Tracy Phillips, who oversees the state’s program. C-PACE allows commercial property owners to tap into private loans for up to 100% of the cost of work that upgrades their building’s energy efficiency, water conservation, renewable energy use and other eligible work. For new projects, loans can account for up to 20% of the financing.

While the program is overseen by Phillips and the Colorado New Energy Improvement District office, counties must opt in. Participating counties collect loan repayments through special property tax assessments. This allows CPACE debt to be attached to buildings, not their owners, so it can be transferred in a sale. Counties are compensated through a fee of up to 1% on the debt they collect, Phillips said.

Developer Shawn Temple didn’t tune in or attend Tuesday’s meeting but he has been keeping a close eye on the discussion. His company, P3 Advisors, is working on redeveloping a former dump in the middle of Castle Rock into a 65-acre, mixed-use development. The first project planned for the site is a 359-room hotel and resort with up to 40,000 square feet of

meeting and event space. Temple intended to pursue some financing through CPACE.

“We think it’s a shortsighted decision that will affect a lot of good projects in Douglas County that are new construction,” Temple said of Tuesday’s vote. “With hospitality being the hardest hit (industry) in the pandemic this obviously could affect the future plans of the resort.”

He said the project would create at least 200 permanent jobs in Castle Rock.

Thomas’ opposition was largely ideological and driven by a desire to limit the size of county government. She pointed out that Weld County, another Front Range jurisdiction known for conservative politics, also backed out of the program.

For Laydon the issue boiled down to risk and the need for more investment options at a time when the country is entering a recession. He noted that of the roughly 2,400 properties that have tapped into CPACE loans across the country so far, just two have gone into foreclosure.

“I think it would be unwise to not approve C-PACE in normal circumstances,” Laydon said, “but when businesses are failing, when the economy is failing, I think it is absolutely critical that the county engages in active discussion with the community where there is no risk to the county.”

The term-limited Partridge sided with county treasurer David Gill, who at the beginning of the meeting recommended the county not join C-PACE because they viewed the risks as too great. Partridge and Gill noted that one C-PACE project that has gone into foreclosure is in Colorado’s Fremont County and now has additional debt attached to it, something that could hamper a sale. Without an assurance that the county would not lose out on any property taxes if something similar were to happen in

Douglas County, Partridge said he could not support the program. With assurances, he said he would “reconsider a resolution at another date.”