Josh Campbell, JD What is PACE? PACE is Property Assessed Clean Energy. PACE is an innovative way for commercial property owners to pay for energy projects they might not be able to afford otherwise.

2 Why PACE? Economic Development tool Lowers cost of doing business in your community Directly impacts bottom line of local enterprises Workforce development impact on creating jobs Old building stock is maintained and upgraded Cleaner and healthier air quality in your community Positive impact on environment

Eligible projects 3  Projects must be energy-efficient, use renewable energy or conserve water.  Expected energy savings from the project must be greater than the loan.  Property must be located in a participating municipality.  Improvements must be affixed to the property. Commercial, industrial, agricultural, nonprofit and government buildings are all eligible. Currently there is no residential PACE, but that is expected to come to Missouri later this year.

4 1. Property owner submits initial interest form to Show Me PACE 2. If property owner is not working with a PACE funder, Show Me PACE forwards the project to the approved lenders. 3. Working with the lender of their choice, the property owner submits a project application to Show Me PACE for review and approval. 4. After approval of the project and closing of the PACE loan, the property owner authorizes disbursement of PACE funds to their contractors who then begin their work. 5. At the end of the year, when the property owner pays their property taxes, they also pay an annual assessment toward their PACE loan 6. Payment is then passed on to the funding provider How the Show Me PACE process works

PACE adds value 5 Property owners use PACE because it saves them money and makes their buildings more valuable.  PACE pays for 100% of a project’s costs - up to 30% of a building’s value for retrofit and 15% for a new facility.  The money is repaid for up to 20 years with an assessment added to the property tax bill.  PACE financing stays with the building upon sale  PACE assessments are easy to share with tenants. Local communities participate in PACE to create jobs, promote economic development, and save energy.

6 Benefits to property owners No personal guarantees No out-of-pocket costs of equity investment required on PACE funding Annual savings exceed annual assessment = increases cash flow and value of the building First payment is due months after closing Assessment typically does not have to be repaid upon sale – it transfers to the next owner

7 On-demand funding with fast approval process Funds for new construction and improvements/renovations $250,000 - $50,000,000 Thanks to our lending partners, Show Me PACE has completed four PACE projects - exceeding $5 million in PACE-financing - in its first 10 months of existence. $50,000 - $5,000,000 Show Me PACE lending partners $250,000 - $10,000,000 PACE funding comes from private capital sources.

8 C-PACE is available in >1,000 muni’s in US >750 >$250Million and > 3,000 jobs -46% EE / 45% RE / 9% mixed Commercial PACE in US

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Who does PACE benefit? 10 Private market investors like PACE because assessment liens are a proven, strong credit. Property owners see an opportunity to reduce their energy costs and make their buildings more valuable. Existing mortgage lenders support projects because they increase the value of their collateral. Local governments like PACE because it creates energy jobs and helps meet conservation goals. Contractors support PACE because it opens up new sales opportunities for them. Taxpayers like PACE because no tax funds are used and the local economy gets a boost. PACE is a win/win for all stakeholders !

11  The Missouri State Legislature approved legislation to establish PACE (Property Assessed Clean Energy) in (§ to § )  The legislation:  Spells out requirements for acceptable projects  Designates clean energy districts as public bodies  Requires municipalities to adopt a PACE ordinance in order for PACE projects to be approved within their boundaries  One of 3 broadest in Country. PACE legislation

Role of Municipality 12 Municipality passes ordinance allowing Show Me PACE to utilize assessment mechanism (through the existing process between the municipality & Assessor’s Office). Municipality enters into Cooperative Agreement with Show Me PACE as required by the ordinance. Municipality may appoint a representative to serve on the Show Me PACE Advisory Board (which meets once a year.) No obligation, exposure or liability for municipality

13 ZERO additional cost to the city/county ZERO additional workload for city/county employees Show Me PACE handles all aspects of administration No obligation, exposure or liability for the municipality

Project Highlights Total PACE Financing: $610,500 Term: 10 Years Interest Rate: 5.57% Energy Savings: 30% Annual PACE Assessment: $93,600 Building Details Type: Industrial Manufacturing Square Feet: 116,239 Stories: one story, single-user masonry building Year Built: 1979, owned by Kramer Assets Group, LLC List of Improvements Engineering analysis, design & drawings Lighting 25-Ton AC VAV Distribution System EMS for Office Commissioning plant and office systems Roof replacement 2015 Show Me PACE Project Cambridge Engineering, Chesterfield, MO

2016 Set The PACE St. Louis Project Type: Multi Family Project Cost: $600,000+ Assessment Term: 19 years Utility Savings: $1.6 Million Project Components: LED Lighting, HVAC, Building Envelope Project Type: Multi Family Project Cost: $600,000+ Assessment Term: 20 years Utility Savings: $1.6 Million Project Components: LED Lighting, Building Envelope, Solar, Windows, Roof

Guiding Principles: What make Show Me PACE unique 16  A nonprofit-driven, low-cost administrative structure is used.  The program is open to all building owners, developers, contractors and finance providers.  Show Me PACE promotes economic development and sustainability in Missouri communities.  The program protects the interests of mortgage lenders by requiring mortgage lender consent and institutional grade underwriting for each project.

17 Missouri Energy Initiative is a nonpartisan, nonprofit association working to increase energy economic development, innovation, and education throughout the state. The organization encourages creative collaborations and promotes affordable, reliable and sustainable energy efforts. Administrator of Show Me PACE