The city of Chicago is rolling out a new loan program aimed at encouraging property owners and developers to make clean energy improvements. If it catches on, the system could play a vital role in increasing sustainability while boosting economic development.
Known as Chicago Property Assessed Clean Energy (PACE), the program offers low-cost financing for energy-efficient improvements in new and existing buildings such as solar panels, green roofs, and water-saving devices.
The money is then repaid in the form of a special assessment added to future property tax bills for each building. The loan program is based on 2018 legislation that classifies sustainable upgrades as a public benefit.
Buildings are significant contributors of carbon dioxide emissions. Together with construction, they account for 39 percent of emissions annually, according to the United Nations Environment Program.
The first Chicago property to take full advantage of the PACE program is a landmark Loop building at 208 S. LaSalle Street. Built in 1914, the historic office building has found new life as a hotel. The developer Prime Group will convert the upper five floors into a 233-room Reserve hotel (the building’s lower levels became a JW Marriott in 2010).
The team behind the $118 million project received roughly $21 million in PACE financing. The money will fund the installation of energy-efficient windows, elevators, lighting, plumbing, and HVAC systems ahead of the Reserve’s planned 2021 opening, reported the Chicago Sun-Times.
“This is a good program for both the city and the private sector,” Prime Group chairman Michael Reschke told the newspaper.
In addition to commercial properties, residential buildings with five or more units can also apply for PACE loans. Another notable project that could get help from PACE is the long-vacant Uptown Theater. Developers for that project seek $14 million in financing for energy-efficient upgrades.