Pinellas County Commissioner Susan Latvala favors implementing the Property Assessment Clean Energy program for commercial and residential property countywide. She is responsible for first bringing the program to the commission’s attention soon after it was approved by the state legislature.
Screenshot by SUZETTE PORTER
Pinellas County John Morroni, a former Realtor, is concerned that the Property Assessment Clean Energy program could hard the county’s real estate market. He did agree to support a trial of the program on commercial properties.
CLEARWATER – Owners of commercial property may soon be able to take advantage of a new financing program to make certain types of improvements.
Pinellas County Commissioners approved, 5-1, staff’s ranking of firms to implement a Property Assessment Clean Energy program for commercial property countywide. Commissioner Norm Roche voted no. Commission Chair Ken Welch was absent.
A motion to include residential property in the program was defeated, 4-2, with all but Commissioners Susan Latvala and Charlie Justice voting no.
Pinellas County’s Purchasing Department released a Request for Proposal Aug. 5, on request of the commission, to find a provider to implement a PACE program to help property owners in need of financing for wind resistance, energy efficiency and renewable energy improvements.
The state legislature authorized the program, which was implemented in 2010, to allow the use of a special assessment, which becomes part of the property tax bill, for certain improvements to residential, commercial and industrial property.
The billing is attractive to financers due to the means of collection – property tax bill – and that PACE liens get priority over mortgage payments due. However, two government loan programs, Freddie Mac and Fannie Mae, refuse to finance homes that are part of the PACE program and may file a lawsuit against the program.
Property owners, using the PACE program, have an advantage of potentially attractive interest rates, and the ability to pay off the loan through on-going assessments on property tax bills.
According to a staff report, the PACE program “is intended to stimulate economic activity in a variety of sectors, including alternative energy, energy conservation, building materials and associated products.”
Commissioners John Morroni and Roche objected to including residential properties in the program. They have concerns that the program may do harm than good to the real estate market. Morroni suggested starting with commercial properties as a trial and perhaps expanding into residential in the future.
Roche agreed, but prefers to let the free market provide financing.
“I’m concerned about the fragility of the real estate market,” Roche said.
He’s also uncomfortable using the property-tax process as guarantee for the loan payments.
“That changes the role of government,” he said.
Commissioner Janet Long spoke in favor of an open market instead of picking one vendor to run the PACE program. However, other commissioners believe it would be less confusing to the public to have one vendor – at least in the beginning. All did agree with Long that a free market could create a more competitive environment and lower interest rates.
Commissioner Karen Seel expressed concern that the county’s involvement would mean the public would seek help from the county if the workmanship on projects proved unacceptable. County Attorney Jim Bennett said the only tie to the county would be the tax assessment.
“The contract would be between the property owners with the vendor,” he said.
The county would have no liability for workmanship, he said. The county is just a financial tool, he added.
County Administrator Bob LaSala said staff would ensure that the vendor understood it was responsible for making sure its clients knew that PACE was not a county program.
Latvala and Justice said the program could be a benefit to the real estate market by allowing people to make improvements to the safety of their homes. In addition, the state legislature is reportedly considering an amendment to the program that could assist people needing to make improvements to lower their flood insurance rates.
In the end, commissioners approved staff’s ranking of firms and directed staff to negotiate a contract with the No. 1 ranked firm Ygrene Energy Fund Florida to provide a PACE program for a countywide program for commercial properties only. The commission also asked that the contract include a mechanism for a periodic review.