The New York City Department of Finance (“NYCDOF”) has published for comment proposed rules which would establish criteria and program guidelines for the New York City Commercial Property Assessment Clean Energy (“C-PACE”) Program. The proposed rules establish eligibility criteria for obtaining C-PACE loans for the purpose of retrofitting or renovating properties for energy efficiency or for the purpose of installing renewable energy systems for on-site use, and details the process of collecting and remitting of such loan payments. The NYCDOF would be the “Administering Agency” under the proposed rule and oversee the program in the city.
The New York City Energy Efficiency Corporation (“NYCEEC”) will be the Program Administrator in New York City. As Program Administrator, NYCEEC will work on behalf of NYCDOF in collecting the loan payments. Under the current proposed rule, the loans for energy efficiency improvements will not be available for new constructions. A public hearing on the proposed rules is scheduled for 11 AM on November 30, 2020, and the comment period for the proposed rules ends on December 2, 2020.
The borrowing of C-PACE loans may require existing lender consent, as these loans may have higher priority than existing loans on the property. The loans allow the developers and owners to make energy-efficient improvements on the property, using funds from pre-qualified private lenders. The proposed rules are also ambiguous in permitting refinancing of the C-PACE loans.
The New York State Legislature already allows real estate developers and commercial property owners to obtain C-PACE financing for new construction projects, but such financing may only be done through a local government program.