HomeMy WebLinkAboutItem 06 Approval of Resolution Allowing Commercial Property Assessed Clean Energy (CPACE) to Operate within the City and Authorize the City to Enter into Agreements to Provide C-Pace Financing ProgramsMeeting Date: July 18, 2023
Item #: 6
Contact Name: Ginger Corless Department Director: Michael Rumer
Contact Number: Ext. 1028 City Manager: Robert Frank
Background Summary: Property Assessed Clean Energy (PACE) was established by Florida Statute
163.08 as a financing mechanism that enables low-cost, long-term funding for energy efficiency, renewable
energy, and wind hardening improvements to real property. It is funded by private capital and is repaid as a
non -ad valorem assessment on the property's annual tax bill. The assessment can be amortized over a
period of five to thirty years, depending on the effective useful life of the Qualifying Improvement installed. The
PACE financing stays with the property, which allows the assessment to transfer when a home or building is
sold.
Many government agencies have allowed only Commercial Property Assessed Clean Energy (C-PACE) to be
offered within their jurisdiction, such as Orange County and the City of Winter Garden.
Currently, there are three PACE Districts or local governments created, pursuant to Florida Statute 189.012,
which offer C-PACE financing and are requesting consideration by the Ocoee City Commission:
• Florida Resiliency Energy District
• Florida Green Finance Authority
• Green Corridor Property Assessment Clean Energy District
If the City elects to allow this economic development tool to be offered within the City, the Commission must
adopt a resolution giving PACE District(s) (PACE Local Governments) permission to provide C-PACE
financing within the jurisdictional limits of the City. If a project is approved by a PACE District, the PACE
District works with the Orange County Property Appraiser and Tax Collector to place the assessments on the
commercial property owner's tax bills. Multifamily developments would qualify for C-PACE Financing. It is
important to note that there are no costs or administrative requirements for the City of Ocoee.
Benefits of allowing the C-PACE program to be offered within the jurisdictional limits include:
a. Becomes another economic tool that may be offered within the City to stimulate quality commercial
development.
b. Improves property values.
c. Can aid in local job creation.
d. Promotes the City's goals of increasing the use of renewable energy and improving energy efficiency.
City of Ocoee - 1 N. Bluford Avenue - Ocoee, Florida 34761
Phone: (407) 905-3100 - www.ocoee.org
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e. Funding can be applied towards new development and/or for upgrading older commercial building
stock within the city.
Benefits to Commercial Property Owners
1. The cost of financing, and the benefits generated, can be shared with tenants.
2. 100% of project costs, including soft costs such as development fees, can be financed.
3. Allows terms up to 30 years, which can generate increased net operating income, allowing for shorter
payback periods.
4. Property -based financing that requires no personal or corporate guarantees.
5. The obligation is transferable to the new owner upon the sale of the property.
Central Florida government agencies that have adopted C-PACE Financing Program Ordinances/Resolutions
include the City of Winter Garden, City of Leesburg, and Orange County.
Developers within the City of Ocoee are asking that a C-Pace Program be allowed within the City. These
include Cottages of Ocoee, West Orange Surgery Center, Ocoee Animal Hospital, the Boyer Building and City
Center West Orange.
As stated earlier in this report, the City is not party to any financing agreement with commercial property
owners nor would the City be responsible for administering, marketing, or managing the C-PACE program.
The City may choose to add information about C-PACE under the Economic Development page of the City's
and the CRA's websites. By adopting the resolution before you today, the City only allows the three C-PACE
Districts to offer this financing mechanism to commercial property owners within the City's jurisdictional limits.
Issue:
Should the Honorable Mayor and City Commissioners adopt the C-PACE Financing resolution to allow this
financing mechanism to be offered within the City's jurisdictional limits and should the Commission direct the
City Manager or designee to execute the interlocal agreements with the three PACE financing districts on
behalf of the City Commission?
Recommendations:
Staff recommends adoption of the C-PACE Financing Resolution and requests that the City Manager be
authorized to execute interlocal agreements with the three PACE Districts.
Attachments:
1. Resolution
2. West Orange Surgery Center Letter
3. Cottages of Ocoee Letter
Financial Impacts:
There is no financial impact.
Type of Item: Regular
City of • •e- a • Avenue Ocoee, .a 34761
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RESOLUTION NO.2023-
A RESOLUTION OF THE CITY OF OCOEE, FLORIDA, ALLOWING
COMMERICAL PROPERTY ASSESSED CLEAN ENERGY
PROGRAMS(S) TO OPERATE WITHIN THE CITY OF OCOEE,
FLORIDA, (THE "CITY"); PERMITTING PROPERTY ASSESSED
COMMERCIAL CLEAN ENERGY ("C-PACE") PROGRAMS WITHIN
THE CORPORATE LIMITS OF THE CITY; APPROVING AGREEMENTS
WITH THE FLORIDA RESILIENCY ENERGY DISTRICT, FLORIDA
GREEN FINANCE AUTHORITY, AND THE GREEN CORRIDOR
PROPERTY ASSESSMENT CLEAN ENERGY DISTRICT; UTILIZING
VOLUNTARY NON -AD VALOREM ASSESSMENTS TO FINANCE
QUALIFING COMMERICAL DEVELOPMENT IMPROVEMENTS;
AUTHORIZING THE CITY MANAGER OR DESIGNEE TO EXECUTE
SAID AGREEMENTS; AND PROVIDING FOR IMPLEMENTING
ADMINISTRATIVE ACTIONS, SCRIVENER'S ERRORS, CONFLICTS,
SEVERABILITY, AND EFFECTIVE DATE.
WHEREAS, Section 163.08, Florida Statutes (the 'PACE Act"), authorizes counties,
municipalities and certain separate local government ("Local Government") entities to establish
and administer financing programs for energy conservation and efficiency, renewable energy and
wind resistance improvements("Qualifying Improvements") that can reduce property repair and
insurance costs, the burdens of fossil fuel energy production, and the burdens of high wind storms
and hurricanes; and
WHEREAS, the PACE Act provides for said funding to be repaid by the property owners
through non -ad valorem assessments levied upon their properties pursuant to financing agreements
entered into between commercial property owners and the local governments establishing and
administering the C-PACE programs; and
WHEREAS, several separate legal entities have been created in the State of Florida
pursuant to the PACE Act and Section 163.01, Florida Statutes to provide PACE qualifying
improvement programs to property owners financed by levying non -ad valorem assessments on
participating properties; and
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WHEREAS, the Florida Green Finance Authority, the Green Corridor PACE District, and
the Florida Resiliency Energy District (individually the "Agency", collectively the "Agencies")
are currently three (3) separate legal entities and units of local government within the State of
Florida which were established by separate interlocal agreements for the express purpose of
providing a scalable platform to facilitate the financing of Qualifying Improvements throughout
Florida; and
WHEREAS, pursuant to law, local governments may enter into agreements with other
local governments for the purpose of providing and financing Qualifying Improvements; and
WHEREAS, existing financing options may be insufficient for commercial property
owners to access cost-effective financing for energy -saving or wind -resistance property
improvements due to requirements associated with traditional debt or equity financing options;
and
WHEREAS, the Agencies have created a turn -key solution for the financing, levy and
collection process to implement C-PACE Programs without cost to or assumption of liability by,
or demand upon the credit of the CITY; and
WHEREAS, the CITY is presently without adequate, currently available and recurring
funds to establish a program similar to the Agencies programs and recognizes that initiation of its
own program requires a commitment of significant time, staffing and monetary resources derived
from all taxpayers; however as an alternative or supplement to any other program or approach
chosen by the CITY, the CITY can concurrently authorize and approve a non-exclusive
arrangement with each Agency to make funding for C-PACE Qualified Improvements
immediately available to support property owners and the local economy; and
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WHEREAS, the CITY Commission deems it to be in the best interest of the citizens and
businesses of the CITY to authorize the City Manager or designee to execute agreements with the
Agencies in an effort to provide an alternative, supplemental and nonexclusive means to achieve,
inter alia, immediate and careful local economic development, commerce and job creation, as well
compelling state interest and public purposes described in the Supplemental Act.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF
OCOEE, FLORIDA, AS FOLLOWS:
SECTION 1. LEGISLATIVE FINDINGS AND INTENT. The CITY hereby
adopts and incorporates into this Resolution the CITY's staff report as attached hereto and
incorporated herein in Exhibit A. The forgoing recitals are incorporated in this Resolution as if
fully set forth herein and are approved and adopted. The CITY has complied with all requirements
and procedures of Florida law in processing and noticing this Resolution.
SECTION 2. C-PACE DEFINITIONS AND PROGRAM STANDARDS. This
Resolution provides minimum standards and limitations for the operation of non-exclusive C-
PACE programs within the City of Ocoee jurisdictional boundary.
(a). Definition of an Eligible Participant. Must be the legal owner(s) of the commercial
property subject to the C-PACE Assessment and must have the authority to contract for and
approve Qualifying Improvements. All property taxes and any other assessments must have been
paid and have not been delinquent in the preceding three (3) years. Eligible Participant must be
current on any mortgage payment. There should not be any liens on the Commercial Building
(b) Definition of a Commercial Building. Commercial Buildings shall mean
nonresidential properties including the nonresidential portion(s) of agricultural properties and
planned developments, as well as, multifamily apartment buildings with five or more leased
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apartment units owned by an entity legally authorized to enter into a contract. The Commercial
Building must be located within the jurisdiction of the City of Ocoee.
(b). Definition of Qualifying Improvements. C-PACE Local Governments shall
only finance Qualifying Improvements and their ancillary improvements required as part of the
installation. Qualifying Improvements must comply with the standards contained in the PACE Act
and this Section including, but not limited to, the following:
(1) Qualifying Improvements must be properly permitted, as applicable, and
must comply with all state and local codes;
(2) Qualifying Improvements must be, as applicable, (i) at least as energy
efficient as the rating of the existing product; (ii) ENERGY STAR compliant or meet current
national efficiency standards; and (iii) sized appropriately;
(3) Qualifying Improvements shall be affixed to a building or facility that is
part of the commercial property and shall constitute an improvement to the building or facility or
a fixture attached to the building or facility.
(c) Contractors.
(1) Any work requiring a license under any applicable law to make a Qualifying
Improvement under a C-PACE Program shall be performed by a contractor properly licensed,
certified, or registered pursuant to state or local law.
(2) Contractors performing work under a C-PACE program shall comply with
each of the following conditions: (i) be licensed and insured pursuant to the applicable statutory
requirements; (ii) agree to comply with all applicable provisions of this section including, but not
limited to, the C-PACE Program Standards; and (iii) act in good faith to timely resolve complaints
from eligible participants.
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(3) C-PACE Programs shall have and shall strictly enforce anti -kickback
policies and procedures that prohibit direct financial or other monetary incentives between C-
PACE local Governments, C-PACE Administrators, and contractors in exchange for being
awarded a project or work under a C-PACE Program. This paragraph does not prohibit payment
for a contractor's installation of Qualifying Improvements.
(d) Materials and Improvements. Materials and Qualifying Improvement products
must be compliant with the Florida Building Code, local codes, and use efficiency standards
established by the U.S. Department of Energy, the U.S. Environmental Protection Agency, State
of Florida agencies, or independent third -party ratings or certification entities, as applicable.
Equipment must be sized appropriately based on nationally accepted codes and standards.
(e) Data Security and Consumer Privacy. C-PACE Local Governments, C-PACE
Administrators, and any other entity collecting or maintaining C-PACE Program data or
information shall take security measures to protect the security and confidentiality of commercial
property owner records and information to the extent permitted or mandated by law and, in
particular, shall provide a commercial property owner's information shared with third parties,
except where expressly permitted by state and federal law.
(f) C-PACE Financing Agreement. After complying with all other mandated steps
provided by Section 163.08(13), Florida Statutes, the C-PACE Local Government shall enter into
a written C-PACE Financing Agreement with each Eligible Participant that is voluntarily
participating in the C-PACE Program. C-PACE Financing Agreements must include, at a
minimum, the following information:
Assessment;
(1) The full legal description of the commercial property subject to the C-Pace
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(2) The Total amount of funding secured by a C-PACE Assessment to be
provided to the Eligible Participant for the construction or installation of Qualifying
Improvement(s);
(3) A provision stating that the Eligible Participant is expressively and
voluntarily consenting to accept the non -ad valorem assessment collection process as set forth in
Section 197.3632, Florida Statutes;
(4) The length of time for the Eligible Participant to pay out the C-PACE
Assessment, which shall not exceed the expected useful life of the costliest Qualifying
Improvements) funded by the C-PACE Program, or thirty (30) days, whichever is less;
(5) A statement must be provided stating the Eligible Participant is responsible
for verifying that the Qualifying Improvements are completed as reflected in the approved
application documents. The Eligible Participant shall also consent to providing access to the C-
PACE Local Government or its agent to the commercial property to verify that the Qualifying
Improvements have been completed as proposed in the application;
(6) A provision stating that at or before the execution of a contract for the sale
and purchase of any commercial property for which a C-PACE Assessment has been levied and
has an unpaid balance due, the seller will disclose the lien to the prospective purchaser in
accordance with Section 163.08(14), Florida Statutes;
(7) The risks associated with participating in the C-PACE Program. The risks
shall be clearly disclosed in plain language in the written C-PACE Financing Agreement and shall
include, but are not limited to, the risks related to the Eligible Participant not being able to
refinance or sell the commercial property unless the C-PACE Assessment is first paid off in full,
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and the risks associated with the issuance of a tax certificate and loss of the commercial property
pursuant to Chapter 197, Florida Statutes;
(8) A description of the Qualifying Improvements financed, their costs, and
estimated completion date;
(9) Notice that the C-PACE Assessment shall be recorded in the public records
for the commercial property;
(10) Clear disclosure of the interest rate to be charged, points and any and all
fees or penalties that may be separately charged to the Eligible Participant including, but not
limited to, potential late fees, early termination fees, and any other fees related to participation in
the C-PACE Program. The subsequent charging or collecting of any additional fees that were not
specifically disclosed in the written C-PACE Financing Agreement with the Eligible Participant
is prohibited.
(g) Recording. The C-PACE Local Government shall record, or cause to be recorded,
the following notice in the public records of the commercial property within (5) days after
execution of the C-PACE Financing Agreement, along with appropriate C-PACE Local
Government contact information for commercial property owner inquires:
QUALIFYING IMPROVEMENTS FOR ENERGY EFFICIENCY,
RENEWABLE ENERGY, OR WIND RESISTANCE. This property is located within the
jurisdiction of a C-PACE Local Government that has placed an assessment of the property relating
to energy efficiency, renewable energy, or wind resistance and is not based on the values of the
property. You are encouraged to contact the county property appraiser's office to learn more about
this and other assessments that may be provided by law.
(h) Lender Notification and Consent.
ii
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(1) Notification. At least thirty (30) days before entering into a C-PACE
Financing Agreement, the C-PACE Local Government shall verify that the Eligible Participant
has provided written notice of the Eligible Participant's intent to enter into a C-PACE Financing
Agreement to the holders or loan services of any existing mortgages encumbered or otherwise
secured by the commercial property. With an Eligible Participant's approval, C-PACE Local
Governments may provide this notification on behalf of an Eligible Participant. The notice must
comply with and, at a minimum of such notice, satisfy the requirements of the PACE Act
including, but not limited to, the maximum principal amount to be financed and the maximum
annual assessment necessary to repay that amount. A verified copy or other proof of such notice
must be provided to and maintained by the C-PACE Local Government.
(2) Consent. Prior to entering into a C-PACE Financing Agreement with an
Eligible Participant, C-PACE Local Government shall verify that holders or loan servicers of any
mortgage or lien encumbered or otherwise secured by the Commercial Property have signed
written consents consenting to the C-PACE Assessment considered for the commercial property
pursuant to the C-PACE Financing Agreement. A verified copy or other proof of such consent
must be provided to and maintained by the C-PACE Local Government.
(i) Marketing and Communications.
(1) Marketing practices for providers of C-PACE Programs, including C-PACE
Local Governments and C-PACE Administrators, that are unfair, deceptive, abusive, or
misleading, or that violate applicable laws or regulations or that are inappropriate, incomplete, or
inconsistent with a C-PACE Local Government's purpose, are prohibited.
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(2) Providers of C-PACE Programs, including C-PACE Local Governments,
C-PACE Administrators, and contractors, may not use facsimiles or logos of the CITY, Orange
County Tax Collector, or the Orange County Property Appraiser.
(3) Marketing materials are prohibited from making the following claims
about a C-PACE Program:
Participant; or
i. That C-PACE is a free program;
ii. That C-PACE is a CITY Program;
in. That C-PACE does not involve a financial obligation by the Eligible
iv. The C-PACE is a form of public assistance.
0) Protected Classes, C-PACE Local Governments, C-PACE Administrators, and
contractors are prohibited from discriminating against individuals on the basis of race, color,
ancestry, disability, national origin, religion, age, familial status, marital status, sex, gender, sexual
orientation, gender identity and expression, or generic information.
(k) Metrics Reporting. C-PACE Local Governments shall track C-PACE Program
metrics and report those metrics to the CITY with the first report due no later than one (1) year
after the execution of the C-PACE Interlocal Agreement. Following the submission of the first
metrics report, each subsequent metrics report must be submitted electronically to the CITY on a
quarterly basis. Metrics reports must include, at a minimum, the following information:
(1) Dates of the reporting period;
(2) Name of the C-PACE Administrator;
(3) Number of signed term sheets;
(4) Number of executed C-PACE Agreements;
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(5) Number of projects completed;
(6) Estimated number of jobs created;
(7) Project closing date and completion date;
(8) Project building type (e.g. retail, office, multifamily, industrial);
(9) Project construction type (e.g. New, retrofit, rehabilitation);
(10) Amount financed for each project;
(11) Interest rates charged and the repayment terms in months for each project;
(12) Types of improvements financed;
(13) Data estimating the project's impact on energy and resiliency;
(14) Whether an energy audit was completed for each project;
(15) Number of formal complaints received;
(16) Number of defaults of C-PACE payments; and,
(17) Number of tax sale certificates and tax deeds issued, sold, and granted.
(1) Amendments. The City reserves the right to amend these standards.
(m) Reporting. The C-PACE Local Governments shall respond to the City's request
for information, as permissible by law.
SECTION 3. PERMITTING OF C-PACE PROGRAMS. The CITY hereby
authorizes the availability of PACE programs for commercial properties within the limits of the
CITY.
IF
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SECTION 4. APPROVAL OF C-PACE DISTRICTS; AUTHORIZATION TO
EXECUTE, ETC.
(a). The CITY approves the following PACE Districts (local governments) to operate
within the jurisdictional limits of the City of Ocoee in order to offer C-PACE Programs:
(1). Florida Green Finance Authority
(2). Florida Resiliency Energy District
(3). Green Corridor PACE District
(b). The CITY hereby authorizes the City Manager or designee to execute the
agreements with the aforementioned PACE Districts.
SECTION 5. IMPLEMENTING ADMINISTRATIVE ACTIONS. The City Manager
is hereby authorized and directed to take such actions as he/she may deem necessary and
appropriate in order to implement the provisions of this Resolution. The City Manager may, as
deemed appropriate, necessary and convenient, delegate the powers of implementation as herein
set forth to such City employees as deemed effectual and prudent.
SECTION 6. SCRIVENER'S ERRORS. Typographical errors and other matters of a
similar nature that do not affect the intent of this Resolution, as determined by the City Clerk and
City Attorney, may be corrected.
SECTION 6. CONFLICTS. All Resolutions or parts of Resolutions in conflict with any
of the provisions of this Resolution are hereby repealed.
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SECTION 7. SEVERABILITY. If any Section or portion of a Section of this Resolution
proves to be invalid, unlawful, or unconstitutional, it shall not be held to invalidate or impair the
validity, force, or effect of any other Section or part of this Resolution.
SECTION S. EFFECTIVE DATE. This Resolution shall become effective immediately
upon its passage and adoption.
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PASSED AND ADOPTED this
ATTEST:
Melanie Sibbitt, City Clerk
(SEAL)
FOR USE AND RELIANCE ONLY BY
THE CITY OF OCOEE, FLORIDA;
APPROVED AS TO FORM AND
LEGALITY THIS DAY OF
,2023.
day of , 2023.
SHUFFIELD, LOWMAN & WILSON, P.A.
im.
City Attorney
APPROVED:
CITY OF OCOEE, FLORIDA
Rusty Johnson, Mayor
APPROVED BY THE OCOEE CITY
COMMISSION AT A MEETING HELD
ON 2023,
UNDER AGENDA ITEM NO.
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