State, county to help with energy projects
For business owners who want to make their facilities more energy efficient but couldn’t quite swing the upfront costs, now there is a program that can help.
Tuesday morning, Becker County entered into a joint powers agreement with the St. Paul Port Authority for the statewide Property Assessed Clean Energy program.
When the state received stimulus funds, the Port Authority recognized that there were no organized state programs to help commercial and industrial buildings become more energy efficient.
So PACE was created, a statewide program that cities and counties can be a part of, keeping the energy-efficiency loans all under one umbrella. The Port Authority has provided $10 million in funding for PACE loans.
PACE loans allow business owners to make improvements without the upfront money that some owners could never afford. Once that business is approved, the entity that has entered into the joint powers agreement – Becker County in this case – then assesses the business to repay the loan.
“This can fill the niches for energy projects,” PACE Administrator Peter Klein said. “It’s not going to the answer to all (situations) though.
“The niches I see PACE can fill are renewable projects like solar, geothermal, possibly wind,” he added.
He said there would be no financial risk to the county by entering into the agreement. If the business should close and default before paying back the loan, the Port Authority would handle the assessment. And once the property was resold, the assessment would go with the property to be paid since it was an improvement to that property.
Commissioner Larry Knutson, who ultimately voted against the joint powers agreement, said there is always a risk to the county if a business forecloses because the county isn’t getting the tax base from that business then.
“I don’t see the financers putting their neck out that far,” Commissioner Ben Grimsley said of funding shaky businesses that may foreclose.
Klein said that in his 18 years with the Port Authority and giving out loans, he’s not had to pay a dime yet on defaulted debts.
“It’s an incentive for smaller or older businesses who can’t afford these improvements,” acting auditor-treasurer Mary Hendrickson said. “It’s an option (for them).”
The Detroit Lakes Development Authority and the Becker County EDA both wrote letters of support for the program.
The county board passed the motion to enter into a joint powers agreement with the St. Paul Port Authority for the purpose of distributing PACE funds for energy efficient commercial properties.
Follow Pippi Mayfield on Twitter at @PippiMayfield.