CastleGreen Finance, C-PACE Financing, Efficient Sustainable Energy

New York City / C-PACE

The City of New York has aggressively embraced carbon emission reduction legislation through Local Law 97. Lesser known is Local Law 96, which enables the NYC C-PACE program. This financing program unlocks the potential for property owners to secure long-term, fixed-rate financing exclusively for projects that support energy efficiency initiatives that also serve to reduce carbon emissions through a special tax assessment mechanism. This strategic public-private partnership can serve to help achieve the aggressive carbon emission reduction goals sought by New York City and pave the way for a greener urban landscape.

The adoption of the C-PACE program positions NYC property owners to leverage this innovative financing program. empowering them to either modernize existing commercial buildings that embody principles of clean energy and renewable energy advancements. As a testament to its effectiveness, the C-PACE program stands as a beacon for promoting the adoption of clean, sustainable energy solutions, enabling significant energy-saving upgrades across all commercial property types.

CastleGreen Finance, in this synergistic public-private partnership with the city of New York, plays a crucial role in catalyzing investments in energy efficiency projects. By facilitating access to capital for clean, sustainable energy and resource conservation initiatives, CastleGreen Finance is at the forefront of driving the transition towards a more sustainable energy paradigm within the city’s bustling commercial sector.

The NYC C-PACE initiative is designed to cater to a diverse array of commercial properties, including multifamily residences, office buildings, industrial sites, retail spaces, hospitality properties, and specialized mixed-use developments. The C-PACE-NYC program is distinguished by its focused emphasis on minimizing environmental impact, reflecting a comprehensive approach to fostering sustainable growth and resilience in New York City’s vibrant urban ecosystem.

New York City's Passes Climate Mobilization Act (Local Law 97)

New York City 4th of July 2021

In April 2019, the New York City Council took a monumental step in the fight against climate change with the passage of the Climate Mobilization Act. This landmark legislative package, aimed at drastically reducing the city’s carbon footprint, featured several key initiatives, with Local Law 97 emerging as its cornerstone. This pivotal law mandates that most buildings exceeding 25,000 square feet undertake significant reductions in greenhouse gas emissions through comprehensive energy efficiency upgrades and the adoption of clean energy solutions, with many of these requirements set to commence in 2024.

In a move to support and facilitate these critical environmental upgrades, the Council also sanctioned the introduction of the New York City Commercial Property Assessed Clean Energy (C-PACE) program. This program represents a game-changing financial mechanism, empowering NYC building owners to finance the entirety of their energy efficiency retrofits and clean energy projects. The genius of C-PACE financing lies in its method of repayment: instead of traditional loan structures, owners repay the financed amount via a special assessment added directly to their property tax bills. This arrangement not only simplifies the repayment process but also aligns the financing terms with the lifespan of the implemented improvements, which can extend up to 30 years, ensuring there are no looming balloon payments.

The C-PACE program distinguishes itself by providing capital sourced from the private sector, thereby enabling building owners to achieve financing for projects that encompass renewable energy installations, energy efficiency enhancements, and other sustainable measures. This innovative approach to financing is designed to align economic incentives with environmental stewardship, offering a pragmatic pathway for property owners to contribute to New York City’s ambitious climate goals.

NYC PACE / CastleGreen Financing Environment Friendly Energy Solutions and Updating

C-PACE Financed Energy Efficient Commercial Building Construction

A wide variety of the construction elements of full building designs can be funded through CastleGreen Finance and C-PACE. Eligible energy efficient components range from building envelope insulation, including windows and roofs, HVAC systems, lighting and electrical, conveyor systems, building controls and low flow water saving fixtures, among others. C-PACE can also be used for soft costs, such as architectural costs, impact and permit fees and engineering costs, as well as closing costs and financing fees.

Ceiling and light panel with Fluorescent lamp on the modern ceil

Lighting retrofits are among the most popular single measure renovations due to their relatively high savings to investment ratio. A lighting retrofit will generally return the equity investment over a 3 to 4 year period. They are often combined with lighting control systems to further enhance the savings benefits and remove the impact of management on the savings. CastleGreen Finance in collaboration with C-PACE Real Estate financing can fund 100% of a lighting retrofit project, eliminating the need for additional equity and stretching the payments over a 10-15 year period.

Heating, Ventilation and Air Conditioning (HVAC) upgrades are among the most expensive single measure improvements commercial property owners will require. In addition to the energy efficiency to be gained by installing a new HVAC system, new temperature control systems help maintain the utility savings often lost through management inefficiency. The current health crisis has added a new element to HVAC upgrades as new guidance to improve ventilation, air quality and hepa filters increase the necessity for this important building improvement. CastleGreen Finance with C-PACE Real Estate financing can fund 100% of an HVAC replacement with a term of 20-25 years.

Energy renewables such as solar panel, wind turbines and battery storage and back up are C-PACE eligible improvements that often pay for themselves by virtue of energy generated by the powers of nature, promoting clean air environment. C-PACE can fund 100% of a renewable project and be combined with government rebates and tax incentives to drastically reduce or even completely offset their installation costs leaving behind a clean and more efficient property.

Weather and natural disaster conditions may include such items as seismic upgrades in earthquake zones around the country and wind mitigation improvements for hurricane prone locations. Not only do these upgrades keep people safe, but they also bring the properties to updated code requirements and reduce insurance costs. In most earthquake prone areas, CastleGreen Finance / C-PACE may finance seismic related building elements of a new construction, even if the building is simply built to their applicable seismic building code requirements.

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C-PACE financing
energy efficiencies
C-PACE partnership

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Why partner with CastleGreen Finance?

CastleGreen brings all our resources to create a capital structure to help our clients unlock the potential of their real estate.

Experience

Leadership in CastleGreen Finance brings over 75 years of experience in commercial real estate to the table across a broad range of financing disciplines. The extensive real estate experience combined with its core C-PACE capabilities provides our clients with the knowledge and resources to create a capital stack to most effectively fulfill its needs.

Integrity

The CastleGreen Finance philosophy is a simple one. We tell our clients what we can do and then we simply do it. We are not only focused on a single deal, but are dedicated to building a lasting relationship for years to come.

Reliability

CastleGreen Finance understands that the most important part of any real estate transaction is showing up with the capital at closing. Our team focuses on the details of every deal to ensure that we completely understand what is necessary to help get our clients to the finish line.