The Loudoun government will develop a program to facilitate loans from private lenders to commercial property owners investing in clean energy projects.
County supervisors voted unanimously Jan. 18 to moved ahead with the Property Assessed Clean Energy Program.
The loans would be secured by a special voluntary lien against the property and would follow the property if it is sold.
County Chairwoman Phyllis J. Randall (D-At Large) said she has received letters in support of the idea from the Washington Airports Task Force, the Loudoun County Chamber of Commerce, and John Marshall Bank, among others.
County staff members said Loudoun’s system would be structured to avoid putting the local government at any financial risk—if the borrower defaults, there is no obligation to the county. The county would bear the cost of managing the loans, estimated to amount to no more than one part-time job. Vice Chairman Ralph M. Buona (R-Ashburn) has suggested that may be recoverable through fees.
Staff members advocating PACE also said the program also opens up more financing for clean energy projects because those projects take longer to pay for themselves than a typical commercial real estate loan. While those loans may be paid off over five to 10 years, PACE loans are contemplated to have terms as long as 25 years.
Supervisor Ron A. Meyer Jr. (R-Broad Run) said the program is “very much a free-market solution.”
“This is a local solution that doesn’t really involve government all that much except for facilitating a property rights transaction, so it’s a great free-market solution applied at the local level,” Meyer said.
Although PACE programs for residential projects exist elsewhere, and state law would allow including multifamily projects of five families or more, the board is so far sticking with commercial projects.
Meyer said he would be interested in exploring including residential projects in the future, particularly around Metro stops. He thanked Gerry Gurgick, who has been an advocate for PACE in Loudoun for years.
Loudoun will be one of the first localities in Virginia to launch a PACE program. According to county staff’s research, only Arlington County has adopted a PACE ordinance. That happened in November.