Pulaski County’s brand- new energy efficiency program has reeled in its first participant since it began accepting applicants last summer.
A 50-unit multifamily apartment complex in west Little Rock — The Preserve at Aldersgate — has received a $650,000 loan from the county’s Property Assessed Clean Energy program, or PACE. According to project developers, the loan will fund “green” improvements such as insulated roofing, LED lighting, water conservation fixtures and an energy-efficient cooling and heating system.
The developers are expected to pay back the loan over 20 years through a property tax lien collected by the county’s tax collector. During that same payback period the upgrades are expected to save more than $1.6 million in utility and operating costs.
“It’s kind of like gap financing where you can put extra materials into your budget that you normally wouldn’t,” said Adron Gilbert, one of the development’s Little Rock partners. “There’s a lot of different little things you can use to increase value.”
Any upgrade that would have an impact on utility bills — from low-flow shower heads to solar panels — is eligible under the program.
Gilbert’s project is expected to break ground this year and be completed by November 2017.
Originally conceptualized in California, PACE programs have been proliferating in cities and counties across the nation.
Fayetteville became the first jurisdiction in Arkansas to adopt the program in 2014 after PACE won legislative approval in Arkansas four years ago. Little Rock also has established its own PACE improvement district.
The Preserve at Aldersgate, however, will receive the largest PACE loan in the state so far. According to County Judge Barry Hyde, “it will be the first new-construction PACE project in the United States.”
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Jordan Haas, of the Little Rock-based real estate company Jordan Inc., is one of the three third-party companies selected by the county to administer the program.
Haas has been working to get to this point for more than a year, and reached out to Gilbert about six months ago to begin to put the program into action.
“There’s a high amount of interest from local developers because it saves money, period,” Haas said.
“And the way the program works and the way that we can f inance it, there’s really no upfront cost to a developer. We get in there and we do the engineering and things like that — it’s only cost saving.”
Although the Aldersgate apartment complex is a brand new development, Haas stressed that the program is designed especially for preexisting commercial buildings.
Business owners are encouraged to connect with the county to determine what energy efficiency upgrades can be applied to their buildings, he said.
Haas said he has about $4 million worth of projects in the works right now, and he expects another $10 million to be deployed in 2017.
“It’s an easy sell to a developer,” he said.
The state’s first business to enter into the program was the Fayetteville-based nonprofit Communities Unlimited in 2015.
After $27,000 in energy improvements on its buildings — which included replacing all fluorescent lighting with LED lights and planting trees against the building for shade — the nonprofit is projected to save $5,370 per year in utility costs.
“It’s my hope that the success of this venture serves as a launching point for future clean energy projects,” Hyde said.
“My vision and reasoning for creating the Pulaski County PACE was so that projects like this could be realized. We’re creating an opportunity for developers to access innovative financing for their projects.”