HomeMy WebLinkAboutResolutions - 2024.04.24 - 41137
AGENDA ITEM: Amendment to the Property Assessed Clean Energy (PACE) Program Report
DEPARTMENT: Economic Development - Planning and Local Business Development
MEETING: Board of Commissioners
DATE: Wednesday, April 24, 2024 6:00 PM - Click to View Agenda
ITEM SUMMARY SHEET
COMMITTEE REPORT TO BOARD
Resolution #2024-4035 _ 24-28
Motion to adopt the attached suggested resolution.
ITEM CATEGORY SPONSORED BY
Resolution Yolanda Smith Charles
INTRODUCTION AND BACKGROUND
This is a request for the adoption of the “Oakland County PACE Program Report 2nd Edition.” This
Report will supersede the “2016 PACE Program Report” (1st Edition) and complies with
amendments made to Property Assessed Clean Energy Act (Michigan Public Act 270 of 2010),
which became effective on February 13, 2024. Corporation Counsel has reviewed the amendments
to the “Oakland County PACE Program Report-2nd Edition.”
The Oakland County Board of Commissioners established a countywide Property Assessed Clean
Energy (PACE) Program and PACE District in 2016. Oakland County has partnered with Lean &
Green Michigan (LAGM) since that time to administer the program. Lean & Green Michigan is a
public-private partnership that works with local governments, contractors, property owners, and
lenders to invigorate Michigan’s PACE statute with a market-based approach to energy finance and
economic development.
The PACE Program offers eligible property owners an innovative financing tool, through a long-term
special tax assessment on the property, to make the buildings more energy and water efficient
without incurring upfront costs. There is a wide range of eligible projects that help to reduce utility
costs and conserve natural resources, which may include installing energy efficient windows, doors,
roofs, lighting, and insulation. In addition, renewable energy solutions like solar, wind, and
geothermal systems may also qualify.
The Oakland County Department of Economic Development shall act as the PACE Coordinator and
staff oversee the Program on behalf of Oakland County, including receiving and reviewing all project
information from LAGM and ensuring coordination among various County Departments. In
partnering with LAGM, Oakland County has agreed that LAGM will act as PACE Administrator and
manage Oakland County’s PACE Program. To date, LAGM has administered 7 PACE projects in
Oakland County.
BUDGET AMENDMENT REQUIRED: No
Committee members can contact Michael Andrews, Policy and Fiscal Analysis Supervisor at
248.425.5572 or andrewsmb@oakgov.com or the department contact persons listed for additional
information.
CONTACT
Kristen Wiltfang, Administrator Trails, Transportation & Environment
Bradley Hansen, Business Development Representative Senior
ITEM REVIEW TRACKING
Aaron Snover, Board of Commissioners Created/Initiated - 4/24/2024
David Woodward, Board of Commissioners Approved - 4/24/2024
Hilarie Chambers, Executive's Office Approved - 4/29/2024
Lisa Brown, Clerk/Register of Deeds Final Approval - 4/29/2024
AGENDA DEADLINE: 04/24/2024 6:00 PM
ATTACHMENTS
1. 04.19.24 Draft Oakland County PACE Program Report 2nd Edition
2. PACE Presentation
COMMITTEE TRACKING
2024-04-17 Economic Development & Infrastructure - Recommend to Board
2024-04-24 Full Board - Adopt
Motioned by: Commissioner Angela Powell
Seconded by: Commissioner Robert Hoffman
Yes: David Woodward, Michael Spisz, Penny Luebs, Karen Joliat, Kristen Nelson, Christine
Long, Robert Hoffman, Philip Weipert, Gwen Markham, Angela Powell, Marcia Gershenson,
Charles Cavell, Brendan Johnson, Ann Erickson Gault, Linnie Taylor (15)
No: None (0)
Abstain: None (0)
Absent: Ajay Raman, Michael Gingell, Yolanda Smith Charles, William Miller III (4)
Passed
April 24, 2024
RESOLUTION #2024-4035 _ 24-28
Sponsored By: Yolanda Smith Charles
Economic Development - Planning and Local Business Development - Amendment to the
Property Assessed Clean Energy (PACE) Program Report
Chair and Members of the Board:
WHEREAS the Oakland County Board of Commissioners adopted Miscellaneous Resolution (MR)
#16276 in 2016 authorizing the establishment of a Property Assessed Clean Energy (PACE) District
and a PACE Program for the purpose of promoting the use of renewable energy systems and energy
efficiency improvements by owners of eligible real property; and
WHEREAS Public Act 270 of 2010 (the “PACE Act”) has recently been amended with the passage of
Senate Bills 302 & 303 of 2023; and
WHEREAS the projects that may now be financed under the PACE Program have been amended to
provide the option for property owners of retrofits or rehab projects to waive the energy savings
guarantee; for new construction, the energy savings guarantee is no longer required; require that new
construction be built above Michigan’s energy code; allow for the financing of environmental hazard
projects including mitigation of lead, heavy metal, or PFAS contamination in potable water systems,
mitigation of lead paint contamination; mitigation of the effects of floods or drought; and increase the
resistance of property against severe weather.; and
WHEREAS it has been determined that the PACE Program and PACE Report approved in 2016
require an amendment to be consistent with the amended PACE Act.
NOW THEREFORE BE IT RESOLVED that the Oakland County Board of Commissioners hereby
amends MR #16276 approving amendments to the Oakland County PACE Program and adopts the
amended PACE Program Report 2nd Edition attached to this resolution.
BE IT FURTHER RESOLVED that the Oakland County Board of Commissioners hereby finds that
the financing of PACE projects is a valid public purpose because it stimulates economic development,
improves property values, reduces energy costs, reduces greenhouse gas emissions, and increases
employment in the County.
BE IT FURTHER RESOLVED that all other provisions of the PACE Program and PACE Report not
amended herein shall remain in full force and effect.
BE IT FURTHER RESOLVED that all resolutions and parts of resolutions are, to the extent of any
conflict with this resolution, hereby rescinded.
BE IT FURTHER RESOLVED that the Oakland County Board of Commissioners authorizes the Chair
of the Board to execute necessary documents, agreements, certificates, and to take all other actions
necessary or convenient to implement a PACE Program consistent with the PACE Report on behalf
of Oakland County.
BE IT FURTHER RESOLVED that a budget amendment is not required.
Chair, the following Commissioners are sponsoring the foregoing Resolution: Yolanda Smith
Charles.
Date: April 24, 2024
David Woodward, Commissioner
Date: April 29, 2024
Hilarie Chambers, Deputy County Executive II
Date: April 29, 2024
Lisa Brown, County Clerk / Register of Deeds
COMMITTEE TRACKING
2024-04-17 Economic Development & Infrastructure - Recommend to Board
2024-04-24 Full Board - Adopt
Motioned by Commissioner Angela Powell seconded by Commissioner Robert Hoffman to adopt the
attached Resolution: Amendment to the Property Assessed Clean Energy (PACE) Program Report.
Yes: David Woodward, Michael Spisz, Penny Luebs, Karen Joliat, Kristen Nelson, Christine Long,
Robert Hoffman, Philip Weipert, Gwen Markham, Angela Powell, Marcia Gershenson, Charles
Cavell, Brendan Johnson, Ann Erickson Gault, Linnie Taylor (15)
No: None (0)
Abstain: None (0)
Absent: Ajay Raman, Michael Gingell, Yolanda Smith Charles, William Miller III (4)
Passed
ATTACHMENTS
1. 04.19.24 Draft Oakland County PACE Program Report 2nd Edition
2. PACE Presentation
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, Lisa Brown, Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true
and accurate copy of a resolution adopted by the Oakland County Board of Commissioners on April
24, 2024, with the original record thereof now remaining in my office.
In Testimony Whereof, I have hereunto set my hand and affixed the seal of the Circuit Court at
Pontiac, Michigan on Wednesday, April 24, 2024.
Lisa Brown, Oakland County Clerk / Register of Deeds
PACE PROGRAM REPORT
Property Assessed Clean Energy Program
Oakland County, Michigan
2nd Edition
Updated April 2024
Originally Published November 2016
Report Adopted by the Oakland County Board of Commissioners
on: April 24, 2024
Page | 1
TABLE OF CONTENTS
Page
Purpose of the Report .................................................................................................... 2
Introduction .................................................................................................................... 2
Lean & Green Michigan™ PACE Program Manual Description ..................................... 2
Oakland County PACE Program Requirements ........................................................... 3
APPENDIX A – PACE Special Assessment Agreement Template ............................... 11
SAA Appendix A – Program Eligibility Requirements ........................................... 37
SAA Appendix B – Special Assessment Parcel Description ................................. 38
SAA Appendix C – Special Assessment Roll ........................................................ 39
SAA Appendix D – Payment Schedule ................................................................. 40
SAA Appendix E – Description of Improvements .................................................. 41
SAA Appendix F – Lean & Green Michigan PACE Program Application ............... 42
SAA Appendix G – Form of Certificate of Assignment .......................................... 44
SAA Appendix H – Form of Lender Consent ........................................................ 46
SAA Appendix I – Form of Waiver of SIR And Savings Guarantee ...................... 48
SAA Appendix J – Insurance Requirements .......................................................... 49
The Oakland County PACE Program Report was amended by the Oakland
County Board of Commissioners on April 24, 2024.
Page | 2
PURPOSE OF THE PACE REPORT
Recognizing that there is a continuous need to enhance sustainable building practices,
conserve natural resources, increase job opportunities, and improve quality of life, the
Oakland County Board of Commissioners established a countywide Property Assessed
Clean Energy (“PACE”) Program and PACE District in 2016. Oakland County has
partnered with Lean & Green Michigan™ (“LAGM”) since that time to administer the
program and uses the criteria identified in this PACE Program Report 2nd Edition and the
current version of the LAGM PACE Program Manual as a basis to work from. This Report
supersedes the 2016 PACE Program Report and complies with amendments made to
Michigan Public Act 270 of 2010 (“the PACE Statute”), effective on February 13, 2024.
This PACE Program Report contains the information required by Section 9 of the PACE
Statute. Additional information is available from Oakland County and LAGM. The PACE
Program and PACE Program Report were initially approved by the Board of
Commissioners by Miscellaneous Resolution #16276 subsequent to a public hearing on
November 10, 2016.
INTRODUCTION
The PACE Program offers eligible property owners an innovative financing tool, through a
long-term special tax assessment on the property, to make the buildings more energy and
water efficient without incurring upfront costs. There is a wide range of eligible projects
that help to reduce utility costs and conserve natural resources, which may include
installing energy efficient windows, doors, roofs, lighting, and insulation. In addition,
renewable energy solutions like solar, wind, and geothermal systems may also qualify.
LAGM is a public-private partnership that works with local units of government, lenders,
contractors, and owners of commercial, industrial, multi-family, nonprofit, and agricultural
properties to implement PACE projects. Many local units of government throughout the
state have partnered with LAGM. This growing network of participants and partners
creates an efficient statewide marketplace, allowing property owners, lenders and
contractors to utilize a standardized process as they employ PACE financing in
multiple jurisdictions throughout the state.
LEAN & GREEN MICHIGAN™ PACE PROGRAM MANUAL DESCRIPTION
LAGM developed a collaborative process that streamlines establishing local PACE
Programs, program administration, project eligibility, financial evaluations, legal
reviews, and agreement templates. LAGM prepared the PACE Program Manual that
provides additional details and eligibility information for property owners that may be
interested in participating in the PACE Program. A copy of the manual is available at:
www.leanandgreenmi.com.
Page | 3
OAKLAND COUNTY PACE PROGRAM REQUIREMENTS
Michigan Public Act 270 of 2010, as amended authorizes local units of government to
adopt PACE programs that promote the installation of renewable energy systems,
energy efficiency improvements, water usage improvements, and environmental hazard
projects by owners of certain real property within a district designated by the local unit
of government.
As many of the details of a PACE transaction are determined on a project-specific
basis, adjustments to the Model PACE Special Assessment Agreement (Appendix A)
may be required to fit a particular transaction. Additionally, there are several blanks
left in the model agreement that should be filled in when the corresponding information
becomes available.
The following information is required by Section 9 of the PACE Statute:
a. Form of PACE Contract
A copy of the PACE Special Assessment Agreement Template is attached hereto as
Appendix A. Individual property owners may negotiate project-specific terms to be
included in an actual agreement based upon the specific renewable energy systems,
energy efficiency improvements, water usage improvement, and environmental
hazard projects to be financed through the individual agreement, subject to the
limitations set forth herein.
b. Authorized Official and Program Administration
i. The Chairperson of the Board of Commissioners or the Chairperson’s
designee, (the “Authorized Official”) is authorized to enter into PACE
Contracts or PACE Special Assessment Agreements on behalf of Oakland
County in consultation with LAGM. The Authorized Official is further
authorized to sign any agreement, documents or certificates necessary to
facilitate the participation of property owners and to facilitate the purposes
hereunder, and take all other actions necessary to convenient to implement
a PACE Program consistent with this PACE Program Report.
ii. PACE County Coordinator: The Planning Manager of the Oakland County
Department of Economic Development shall oversee the Program on behalf
of Oakland County, including receiving and reviewing all project information
from LAGM and ensuring coordination among County Departments
including, but not limited to: Corporation Counsel, Treasurer, Equalization,
Assessor, Board of Commissioners, and their staff.
Page | 4
iii. PACE Administrator: In partnering with LAGM, Oakland County agrees to
have LAGM act as PACE Administrator and manage Oakland County’s
PACE Program. LAGM is authorized to negotiate with credit providers and
PACE project participants to facilitate the use of the PACE Program and to
assist PACE project applicants in obtaining financing.
c. Financing Parameters
In establishing its PACE District, Oakland County intends for PACE projects to be
funded through owner-arranged private financing.
i. There is no limit on the maximum aggregate annual amount of financing
provided by private commercial lenders under the program.
ii. The dollar amount for financing of a particular project will be established by
the property owner seeking to make the property improvement(s) and the
commercial lender seeking to finance the energy efficiency improvement(s),
environmental hazard project(s), and/or renewable energy system(s), as
approved by LAGM and the Authorized Official.
iii. Oakland County will not issue any debt, including bonds, notes or other
forms of indebtedness or provide any funding of any kind under the Program.
iv. Oakland County is not a party to the underlying owner-arranged private
financing and assumes no fiduciary responsibility regarding the underlying
owner-arranged private financing.
v. Oakland County is not responsible for managing the underlying owner-
arranged private financing and will NOT fund any losses should the borrower
default.
vi. The Program is not considered a bank agreement to provide funds to
Oakland County nor does it create any form of financial obligation for
Oakland County.
d. Application Process and Eligibility Requirements
i. Application Process: The application process for financing projects under the
Program shall be established by LAGM. A copy of the application form is
attached hereto as SAA Appendix F. This form may be changed or
amended as necessary by LAGM.
ii. Eligibility Requirements: The eligibility requirements for financing projects
under the Program shall be established by LAGM. Eligibility requirements
may be changed or amended as necessary by LAGM. A copy of the list of
eligibility requirements is attached hereto as SAA Appendix A.
Page | 5
e. Financing Terms of Assessments
i. The interest rate for PACE special assessment installments supplied by
commercial lenders shall be negotiated by the parties based on current
market conditions.
ii. The maximum allowable repayment period of a PACE special assessment
must be included in the PACE Special Assessment Agreement and will be
determined on a project-specific basis and shall not exceed the lesser of the
useful life of the Project financed by the assessment or 25 years.
iii. The maximum dollar amount of a PACE special assessment shall be
negotiated on a project-specific basis between the property owner and the
entity providing the financing based upon the specific renewable energy
systems, energy efficiency improvements, and environmental hazard
projects included in the individual PACE Special Assessment Agreement.
f. Assessment Collection Process
i. Within the parameters set forth herein, the Authorized Official will authorize
one or more commercial lenders to provide financing to defray all or part of
the cost of the Project, by special assessment upon the Special Assessment
Parcel, which the Authorized Official will find is especially benefited in
proportion to the costs of the renewable energy systems, energy efficiency
improvements, water usage improvement, or environmental hazard projects.
ii. The Authorized Official, or appropriate official, on behalf of Oakland County
and without objection by the property owner, will spread the Special
Assessment Roll, attached hereto as SAA Appendix C, to allocate one
hundred percent (100%) of the PACE special assessment levy created
hereby to the Special Assessment Parcel.
iii. The PACE special assessment, as allocated by the Authorized Official, or
appropriate official, on behalf of Oakland County without objection by the
property owner, will be finally established against the property and the
Project to be constructed on the Special Assessment Parcel. The PACE
special assessment will be effective immediately upon the execution and
delivery of the PACE Special Assessment Agreement by the property owner
to LAGM and the County. The PACE special assessment may be paid in
annual or semi-annual installments pursuant to Section 13(2) of the PACE
Statute. The Authorized Official, on behalf of Oakland County, will confirm
the Special Assessment Roll.
Page | 6
iv. The Oakland County Delinquent Tax Revolving Fund (“DTRF”) shall not be
used to advance, satisfy, or pay any delinquent installment of the PACE
special assessment, and no County funds will be used to repay any PACE
special assessment placed under this program. The commercial lender will
waive any claim to be able to seek payment from Oakland County through
the DTRF in the PACE Special Assessment Agreement.
g. Financing Program
i. LAGM has developed and will continue to develop an active roster of
financial institutions, institutional investors and other sources of private
capital available to finance PACE projects in Michigan. By partnering with
LAGM, Oakland County helps its constituent property owners gain access to
private capital made available through the statewide program.
ii. Oakland County authorizes the use of owner-arranged financing from
commercial lenders to finance qualified Projects under the Program.
h. Reserve Fund and Fee Schedule
i. Reserve Fund: By participating in the Lean & Green MichiganTM program,
Oakland County assists its constituent property owners in taking advantage
of any and all appropriate loan loss reserve and gap financing programs of
the Michigan Economic Development Corporation (“MEDC”) and other
federal and state entities. Such financing mechanisms can be used to
finance a reserve fund if deemed necessary and appropriate by Oakland
County. The Program is not considered a bank agreement to provide funds
to Oakland County nor does it create any form of financial obligation on
Oakland County.
ii. Fee Schedule: All application, administration and program fees are collected
from the record owner by LAGM. Oakland County will have no obligation
whatsoever in providing any application, administration, or program fees for
the initiation or management of the private lender debt. Administration and
program fees will be determined on a project-specific basis and will depend
on the size, nature and complexity of the project(s) and financing
mechanism(s) involved. A copy of the current LAGM administration and
program fees is published by LAGM in its PACE Program Manual available
upon request and at LAGM’s website.
Page | 7
i. Useful Life
i. The maximum length of time allowable for repayment of a PACE assessment
shall not exceed the lesser of the useful life of the Project paid for by the
assessment or 25 years and will be determined on a project-specific basis
by LAGM.
ii. Projects involving multiple energy efficiency improvements, renewable
energy systems, or environmental hazard improvements may aggregate the
useful life of each improvement to determine an overall useful life figure for
financing purposes. In aggregating the improvements, the property owner
must appropriately weigh each improvement’s dollar cost.
iii. Oakland County will bear no responsibility in determining the viability of the
efficiency improvements assisting in the funding of the underlying debt
service arrangement agreed to by LAGM, the lender and /or borrower, or the
borrower’s ability to fund the debt service should the efficiencies anticipated
not occur.
j. Property Eligibility Parameters
i. The ratio of the amount of the assessment to the market value of the
property must be appropriate and shall be set forth in the PACE Special
Assessment Agreement for each project. Additionally, the overall
indebtedness on the property must be appropriate.
ii. In calculating the appropriate ratios, the property owner and the lender
providing the financing may determine the market value of the property
using either: 1) the market value of the property before the Project as agreed
to by the property owner and the lender providing the financing using a
proper measure such as a recent appraisal or two times the State Equalized
Value; or 2) the market value of the property upon completion of the Project
as agreed to by the property owner and the lender providing the financing
using a proper measure such as an appraisal of the “as completed” value of
the property.
iii. In calculating the appropriate ratio of the amount of the assessment to the
market value of the property, the cost of the Project (excluding closing costs
and interest) shall generally not exceed 25% of the market value of the
property.
iv. In calculating the appropriate ratio of total indebtedness on the property to
the market value of the property, prior debt secured by the property plus the
PACE loan shall generally not exceed 90% of the market value of the
property.
Page | 8
v. LAGM and the Authorized Official may permit projects that exceed these
values for reasonable cause on a case-by-case basis, and in such cases
must include a letter of explanation as an addendum to the Special
Assessment Agreement.
k. Mortgage Consent Requirement
If a property is subject to a mortgage, the record owner must obtain written consent
from the mortgagee to participate in the Program. Proof of lender consent must be
submitted before a Special Assessment Agreement may be executed. A copy of the
lender consent to participate in a PACE Program form is attached as SAA Appendix
H.
l. Marketing and Education Program
i. LAGM has developed an ongoing marketing and participant education
program. By partnering with Lean & Green MichiganTM, Oakland County
gains access to this program and agrees to collaborate with LAGM in
promoting the Program and educating property owners in Oakland County
about opportunities to save energy, save money and improve their property
value.
ii. Subject to LAGM agreeing to and executing Oakland County’s Servicemark
license agreement, Oakland County authorizes LAGM the non-exclusive
right to use its Servicemarks, as previously provided (hereinafter “Marks”),
on any marketing materials, electronic presentations, and on its web site
www.leanandgreenmi.com relating to the adoption and implementation of
the PACE program in Oakland County. The Marks must be used by LAGM
with no variations of color, design or proportion. LAGM shall not use the
Marks for any other purpose. LAGM acknowledges that Oakland County
has intellectual property rights in the Marks. Nothing in this Agreement gives
LAGM any right, title, or interest in the Marks. Oakland County may rescind
authorization to use the Marks for any reason upon prior written notice to
LAGM. Within ten (10) business days of receipt of the notice of intent to
rescind authorization, LAGM shall cease using the Marks on its web site,
marketing materials or communications.
iii. More information regarding the Program can be obtained at LAGM’s
website: www.leanandgreenmi.com or at Oakland County’s website at:
www.oakgov.com.
Page | 9
m. Debt Service Reserve Fund
Oakland County is not utilizing a Debt Service Reserve Fund and will not offer any
lending or financing to any property owner under this Program.
n. Quality Assurance and Antifraud Measures
LAGM includes the following quality assurance and antifraud measures:
i. Business integrity review on clean energy contractors conducted by
Michigan Saves.
ii. Background check process on clean energy contractors conducted by
Michigan Saves.
iii. Other general due diligence as may be necessary or required.
o. Energy Audit or Energy Modeling Requirement
As set forth in the PACE Program Application, a baseline energy audit or energy
modeling must be completed before a Project is approved. Each contract should
provide adequate funding for monitoring and verification of energy savings
throughout the life of the special assessment.
p. Savings-to-Investment Ratio and Savings Guarantee Requirements
i. Unless waived by the record owner, Projects financed with more than
$250,000 require ongoing measurements to establish energy savings and a
guarantee from the contractor that the energy project will achieve a savings
to investment ratio greater than one.
ii. This requirement may be waived by the record owner and is not applicable
to a new construction energy project.
q. Michigan Uniform Energy Code Requirements
New Construction Energy Project(s) will demonstrate that the project will result in a
building or other structure that exceeds the applicable requirements of the Michigan
Uniform Energy Code and the Michigan Administrative Code.
r. Right to Review Oakland County PACE Program Documents
Oakland County reserves the right to review records relating to the Oakland County
PACE Program in possession of LAGM with prior written notice at any time during
the term of this Program.
Page | 10
s. Amendments to the Program
i. A public hearing is not required to amend this Program Report, except for
any changes to the aggregate annual amount of financing provided by
Oakland County.
ii. LAGM may propose amendments to the Oakland County PACE Program
Report as needed, in consultation with the Oakland County Program
Manager and associated County Departments.
iii. Any amendment(s) to the Oakland County PACE Program requires approval
by the Oakland Board of Commissioners.
t. Oakland County PACE Program and PACE District
The Oakland County PACE Program and PACE District shall coincide with Oakland
County's jurisdictional boundaries.
u. Assessment as Lien Against Property
In accordance with Section 13(1) of the PACE Statute:
i. An assessment imposed under the PACE Program, including any interest on
the assessment and any penalty, shall constitute a lien against the property
on which the assessment is imposed until the assessment, including any
interest or penalty, is paid in full.
ii. The lien runs with the property and has the same priority and status as other
property tax and assessment liens.
iii. The County has all rights in the case of delinquency in the payment of an
assessment as it does with respect to delinquent property taxes.
iv. When the assessment, including any interest or penalty, is paid, the County
shall remove the lien from the property.
v. Joint Implementation
In accordance with Section 19(1) of the PACE Statute, the County may join with any
other local unit of government, or with any person, or with any number or combination
thereof, by contract or otherwise as may be permitted by law, for the implementation
of the County's PACE Program, in whole or in part.
11
APPENDIX A
SPECIAL ASSESSMENT AGREEMENT TEMPLATE
________________________________________SPACE ABOVE FOR RECORDING PURPOSES____________________________________
PACE SPECIAL ASSESSMENT AGREEMENT
(OWNER-ARRANGED FINANCING)
by and among
OAKLAND COUNTY, MICHIGAN
and
PROPERTY OWNER
and
PACE LENDER
Dated: _____________________
12
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS ....................................................................................................14
ARTICLE II DESCRIPTION OF IMPROVEMENTS ...........................................................16
ARTICLE III COVENANTS OF THE PROPERTY OWNER ..............................................17
ARTICLE IV PACE SPECIAL ASSESSMENT ....................................................................17
ARTICLE V CONDITIONS PRECEDENT ...........................................................................23
ARTICLE VI REPRESENTATIONS AND WARRANTIES ................................................24
ARTICLE VII DEFAULT .......................................................................................................27
ARTICLE VIII MISCELLANEOUS ......................................................................................29
APPENDIX:
APPENDIX A: PROGRAM ELIGIBILITY REQUIREMENTS
APPENDIX B: SPECIAL ASSESSMENT PARCEL DESCRIPTION
APPENDIX C: SPECIAL ASSESSMENT ROLL
APPENDIX D: PAYMENT SCHEDULE
APPENDIX E: DESCRIPTION OF IMPROVEMENTS
APPENDIX F: LEAN & GREEN MICHIGAN PACE PROGRAM APPLICATION
APPENDIX G: FORM OF CERTIFICATE OF ASSIGNMENT
APPENDIX H: FORM OF LENDER CONSENT
APPENDIX I: FORM OF WAIVER OF SIR AND SAVINGS GUARANTEE
APPENDIX J: INSURANCE REQUIREMENTS
Oakland County PACE Special Assessment Agreement
13
PACE SPECIAL ASSESSMENT AGREEMENT
(OWNER-ARRANGED FINANCING)
THIS PACE SPECIAL ASSESSMENT AGREEMENT (this “Agreement”) is made
this [DATE] between Oakland County, a Michigan constitutional corporation (the “County”),
whose address is 1200 North Telegraph, Pontiac, Michigan 48341, [PROPERTY OWNER], a
Michigan limited liability company (the “Property Owner”), whose address is [ADDRESS], and
[PACE LENDER], a Michigan limited liability company (the “Lender”), whose address is
[ADDRESS].
RECITALS:
A. Pursuant to the PACE Statute and a resolution adopted by the Oakland County
Board of Commissioners on November 10, 2016, the County has established the PACE Program
as described in the PACE Program Report and has created the Special Assessment District under
the PACE Program for the purpose, inter alia, of assisting a record owner of property within the
Special Assessment District in obtaining Owner-Arranged Financing from a commercial lender to
defray the costs of one or more Project on the property.
B. Under the PACE Statute, the County is authorized, pursuant to an agreement with
the record owner of property within the Special Assessment District, to impose a special
assessment on the property to be benefitted by the Project in order to secure and provide for the
repayment of the Owner-Arranged Financing.
C. The Property Owner desires to undertake a certain Project on commercial,
industrial, or agricultural property of the Property Owner located within the Special Assessment
District, as described herein, and has obtained a commitment from the Lender to make the Loan
to the Property Owner to defray its cost.
D. In order to induce the Lender to make the Loan to the Property Owner, the Property
Owner has requested that the County enter into this Agreement to impose a special assessment on
the property to be benefitted by the Projects, in accordance with the PACE Statute, which special
assessment will secure and provide for repayment of the Loan from the Lender.
E. Pursuant to the PACE Statute and the PACE Program, the County is authorized to
enter into this Agreement.
In consideration of the foregoing and the mutual covenants contained in this Agreement,
the County, the Property Owner and the Lender agree that:
Oakland County PACE Special Assessment Agreement
14
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Capitalized terms used in this Agreement and Recitals shall have
the meanings stated in the PACE Statute and as stated immediately below, except to the extent the
context in which they are used requires otherwise:
(a) “Agreement” means this PACE Special Assessment Agreement as same may be
amended and/or restated.
(b) “Applicable Interest Rate” means the per annum rate of interest specified in the
Loan Documents at which the Special Assessment Roll bears interest as calculated by the Lender
in accordance with the provisions of Section 4.01 of this Agreement.
(c) “Assessor” means the of the appropriate individual, or their designee, serving as
the assessor of the local jurisdiction in which the Special Assessment Parcel is located, within
Oakland County.
(d) “Authorized Official” means the Chairperson of the Board of Commissioners, or
the Chairperson’s designee, who is authorized to exercise the authority of an Authorized Official
under the terms of the PACE Program Report.
(e) “Default Rate” means the rate(s) dictated for counties by the Michigan General
Property Tax Act of 1893 as amended (MCL 211.78a and 211.78g).
(f) “Energy Efficiency Improvement” means the acquisition, installation,
replacement, or modification of equipment, devices, or materials intended to decrease energy
consumption, including, but not limited to, all of the following: insulation in walls, roofs, floors,
foundations, or heating and cooling distribution systems; storm windows and doors; multi-glazed
windows and doors; heat-absorbing or heat-reflective glazed and coated window and door systems;
and additional glazing, reductions in glass area, and other window and door system modifications
that reduce energy consumption; automated energy control systems; heating, ventilating, or air-
conditioning and distribution system modifications or replacements; caulking, weather-stripping,
and air sealing; replacement or modification of lighting fixtures to reduce the energy use of the
lighting system; energy recovery systems; day lighting systems; installation or upgrade of
electrical wiring or outlets to charge a motor vehicle that is fully or partially powered by electricity;
measures to reduce the usage of water or increase the efficiency of water usage; and any other
installation or modification of equipment, devices, or materials approved as a utility cost-savings
measure by the County.
(g) “Energy Project” means any of the following: an Energy Efficiency Improvement;
or the acquisition, installation, replacement or modification of a Renewable Energy System or
anaerobic digester.
(h) “Event of Default” has the meaning set forth in Section 7.01 hereof.
Oakland County PACE Special Assessment Agreement
15
(i) “Environmental Hazard Project” means the acquisition, installation,
replacement, or modification of equipment, devices, or materials intended to address
environmental hazards, including, but not limited to, measures to do any of the following: mitigate
lead, heavy metal, or PFAS contamination in potable water systems; mitigate the effects of floods
or drought; increase the resistance of property against severe weather; mitigate lead paint
contamination.
(j) “Force Majeure” means unforeseeable events beyond a party’s reasonable control
and without such party’s failure or negligence including, but not limited to, acts of God, acts of
public or national enemy, acts of the federal government, fire, flood, epidemic, quarantine
restrictions, strikes and embargoes, labor disturbances, the unavailability of raw materials, and
delays of contractors due to such causes, but only if the party seeking to claim Force Majeure takes
reasonable actions necessary to avoid delays caused thereby.
(k) “General Property Tax Act” means the General Property Tax Act, Act 206, Public
Acts of Michigan, 1893, as amended.
(l) “Improvements” means the Renewable Energy Systems, Energy Efficiency
Improvements, water usage improvements, and Environmental Hazard Projects being undertaken
by the Property Owner on the Special Assessment Parcel as described in Appendix E attached
hereto.
(m) “LAGM” shall mean Lean & Green Michigan, LLC, a Michigan limited liability
company.
(n) “Lean & Green Michigan™” means a statewide property assessed clean energy
program open to all local units of government operated as a public-private partnership by LAGM
in order to facilitate property assessed clean energy program-financed transactions.
(o) “Lender” has the meaning set forth in the preamble.
(p) “Loan” means the loan obtained by the Property Owner from the Lender pursuant
to Owner-Arranged Financing to defray a portion of the cost of the Improvements under the terms
of the Loan Documents.
(q) “Loan Documents” means the Loan Agreement, dated as of [DATE], between the
Property Owner and the Lender and any and all exhibits or attachments thereto, including any
documents amending, restating, replacing, extending or otherwise modifying the Loan Agreement
and all documents provided to the Lender from time to time by the Property Owner to evidence or
secure the Loan as required pursuant to the terms of the Loan Agreement.
(r) “Owner-Arranged Financing” means the process by which a property owner
secures financing for improvements to its property that does not involve bonds or any other form
of funding provided by the County.
(s) “PACE Program” shall mean the property assessed clean energy program
implemented by the County pursuant to the PACE Statute and the PACE Program Report to
Oakland County PACE Special Assessment Agreement
16
stimulate Renewable Energy Systems, Energy Efficiency Improvements, water usage
improvement, and Environmental Hazard Projects in conformity with the PACE Statute.
(t) “PACE Program Report” means the Lean & Green Michigan™ PACE Program
Report approved by the Oakland County Board of Commissioners on April 24, 2024, including
any amendments or changes thereto made before the date of this Agreement.
(u) “PACE Statute” means Act 270 of the Michigan Public Acts of 2010, as amended,
commonly referred to as the Property Assessed Clean Energy Act, MCL 460.931 et seq.
(v) “Payment Schedule” has the meaning set forth in Section 4.01 hereof.
(w) “Project” means an Environmental Hazard Project or Energy Project.
(x) “Property Owner” has the meaning set forth in the preamble.
(y) “Renewable Energy System” means a fixture, product, device, or interacting
group of fixtures, products, or devices on the customer’s side of the meter that use one (1) or more
renewable energy resources to generate electricity, gas, or other power. Renewable Energy System
includes a biomass stove but does not include an incinerator or digester.
(z) “Special Assessment” means the money obligation created pursuant to this
Agreement with respect to the Special Assessment Parcel used to defray the cost of the
Improvements and which shall, together with all interest, charges and penalties which may accrue
thereon, be a lien upon the Special Assessment Parcel of the same priority and status as other
property tax liens and other assessment liens as provided in the PACE Statute until such amounts
have been paid in full.
(aa) “Special Assessment District” means the Special Assessment District established
as part of the PACE Program pursuant to the PACE Statute.
(bb) “Special Assessment Parcel” means the property located in the Special
Assessment District to which one hundred percent (100%) of the Special Assessment has been
spread by the County and which is more particularly described on the attached Appendix B.
(cc) “Special Assessment Roll” has the meaning set forth in Section 4.01 hereof.
ARTICLE II
DESCRIPTION OF IMPROVEMENTS
Section 2.01 Description of Improvements. The Improvements to be acquired,
constructed, installed and financed by the Property Owner under the PACE Program are described
in Appendix E attached hereto. If after project approval, the Property Owner seeks to undertake
additional Improvements, Appendix E may be amended or supplemented from time to time. Such
additional Improvements must meet all the eligibility criteria of the PACE Program and the PACE
Oakland County PACE Special Assessment Agreement
17
Program Report and may be added to the original application as a modification, or submitted as a
new project, at the discretion of LAGM and the Authorized Official.
ARTICLE III
COVENANTS OF THE PROPERTY OWNER
Section 3.01 Acquisition, Construction and Installation of Improvements.
(a) The Property Owner covenants and agrees to acquire, construct and install the
Improvements as described in Appendix E on the Special Assessment Parcel described on
Appendix B in full conformity with all applicable laws and regulations and in compliance with
the PACE Program eligibility requirements set forth in Appendix A. If the proceeds of the Loan
are not sufficient to pay the costs of the Improvements as required, the Property Owner agrees to
complete the Improvements and to pay that portion of the costs of the Improvements in excess of
the amount of the Loan. The Property Owner acknowledges and agrees that the County makes no
representation, either express or implied, that the proceeds of the Loan will be sufficient to pay the
total costs of the Improvements, and the Property Owner agrees that if, after exhaustion of the
proceeds of the Loan, the Property Owner shall be required to pay any portion of the costs of the
Improvements from its own funds, the Property Owner shall not be entitled to any reimbursement
therefore from the County or from the Lender, nor shall the Property Owner be entitled to any
abatement or diminution of the amount of the Special Assessment created by this Agreement or of
any interest, fees, charges, or penalties which may accrue thereon.
(b) To provide for monitoring and verification of the Project, the Property Owner has
created an Energy Star Portfolio Manager account and has linked this account to the LAGM
Energy Star Portfolio Manager account. The Property Owner has entered all electricity bills for
the Special Assessment Parcel for the year (12 consecutive months) immediately preceding the
installation of the Project. The Property Owner further agrees to enter its electricity bills for the
duration of the Agreement on an annual basis. Annual electricity bills for the Special Assessment
Parcel will be entered into the Property Owner’s Energy Star Portfolio Manager account
by January 31 of each year after the year for which the electricity bills are to be entered. The
County shall have no responsibility and makes no representation regarding the Project, and shall
have no responsibility and makes no representation regarding the Owner-Arranged Financing,
except as expressly stated in this Agreement.
ARTICLE IV
PACE SPECIAL ASSESSMENT
Section 4.01 PACE Special Assessment Created.
(a) At the request of the Property Owner, the County hereby determines to assist the
Property Owner in obtaining the Loan to defray a portion of the cost of the Improvements on the
Special Assessment Parcel by the levy of the Special Assessment upon the Special Assessment
Parcel, which the Authorized Official on behalf of the County finds is especially benefited in
proportion to the cost of the Improvements. The Special Assessment created hereby has been
Oakland County PACE Special Assessment Agreement
18
spread by the Assessor on behalf of the County on the Special Assessment Roll attached hereto as
Appendix C (the “Special Assessment Roll”), with the consent of the Property Owner, to allocate
one hundred percent (100%) of the Special Assessment to the Special Assessment Parcel.
(b) The Special Assessment, as allocated by the Authorized Official with the consent
of the Property Owner, is hereby finally established and levied against the Special Assessment
Parcel as described on the attached Appendix B in the principal amount of [LOAN AMOUNT] as
stated on the Special Assessment Roll. The Special Assessment is effective immediately upon the
execution and delivery of this Agreement by the Property Owner. The Special Assessment shall
be paid by the Property Owner in [NUMBER] semi-annual installments on the dates and in the
amounts set forth in the payment schedule attached hereto as Appendix D (the “Payment
Schedule”). The Special Assessment Roll and the Payment Schedule are hereby confirmed by the
Authorized Official on behalf of the County. The unpaid amount of the Special Assessment Roll
shall bear interest from the date of execution and delivery of this Agreement at the Applicable
Interest Rate, as calculated by the Lender in accordance with the terms of the Loan Documents,
payable by the Property Owner semi-annually on each date on which any installment of the Special
Assessment is due in accordance with the Payment Schedule. Notwithstanding the foregoing, (i)
if any installment of the Special Assessment or any interest due and payable on the Special
Assessment Roll is not paid by the Property Owner when and as the same shall become due and
payable in accordance with the provisions of this Section 4.01 or (ii) any “event of default” under
the Loan Documents has occurred and is continuing, the unpaid amount of the Special Assessment
Roll shall bear interest at the Default Rate as calculated by the Lender in accordance with the terms
of the Loan Documents, for as long as such amounts remain unpaid or for so long as such “event
of default” under the Loan Documents exists and is continuing. The County, the Property Owner
and the Lender agree that the Lender shall be solely responsible for the determination from time
to time of the Applicable Interest Rate and the Default Rate and the amount of interest due and
payable by the Property Owner on the Special Assessment Roll on each day on which interest
thereon is due and payable as provided in this Agreement, and the Lender’s determination thereof
shall be binding on the Property Owner absent manifest error. The Property Owner and the Lender
agree that the County shall under no circumstance have any obligation to determine the Applicable
Interest Rate or the Default Rate or to calculate the amount of any interest payment due on the
Special Assessment Roll as provided in this Agreement, and the County may conclusively rely
upon the Lender’s determinations thereof for the purpose of exercising and discharging all of the
County’s rights and obligations under this Agreement. The Lender agrees to provide, or cause to
be provided, notice to the Property Owner and the County of the determinations of the Applicable
Interest Rate and the Default Rate, as applicable, pursuant to this Section 4.01(b) at such times,
and from time to time, as the Property Owner or the County may request.
Section 4.02 Assignment of Special Assessment Payments to Lender. At the request of
the Property Owner and the Lender, and pursuant to Section 9(g)(iii) of the PACE Statute, the
County hereby irrevocably assigns to the Lender its right to receive all installments of the Special
Assessment required to be paid by the Property Owner pursuant to this Agreement, whether in
accordance with the Payment Schedule or upon prepayment of the Special Assessment in whole
or in part in accordance with Section 4.06 of this Agreement, together with all payments of interest
due and payable on the Special Assessment Roll at the Applicable Interest Rate or the Default
Rate, as the case may be, as provided in Section 4.01(b) of this Agreement. In pursuance of the
Oakland County PACE Special Assessment Agreement
19
foregoing, the County, the Property Owner and the Lender agree that, except as provided in Section
4.05 of this Agreement, (i) all installments of the Special Assessment, whether payable in
accordance with the Payment Schedule or upon prepayment of the Special Assessment in whole
or in part in accordance with Section 4.06 of this Agreement, together with all payments of interest
due and payable upon the Special Assessment Roll at the Applicable Interest Rate or the Default
Rate, as the case may be, shall be paid by the Property Owner directly to the Lender when due at
such address in the United States as may be designated by the Lender in writing to the Property
Owner and the County; (ii) the County shall have no obligation or duty to include any installments
of the Special Assessment on any tax bill issued by the County or to bill, collect or remit to the
Lender any installments of the Special Assessment or any interest due and payable upon the
Special Assessment Roll; and (iii) absent receipt by the County of written notice from the Lender
of a payment default in accordance with Section 4.05 hereof, the County shall be entitled to
conclusively presume that all installments of the Special Assessment and all payments of interest
due and payable on the Special Assessment Roll and any penalties, fees, or charges on the Special
Assessment have been made by the Property Owner to the Lender when due as required by the
terms of this Agreement.
Section 4.03 Property Owner’s Consent to Special Assessment; Waiver.
(a) The Property Owner hereby irrevocably consents to and confirms the creation of
the Special Assessment Roll and the levy of the Special Assessment established pursuant to this
Agreement and EXPRESSLY WAIVES ANY AND ALL CLAIMS CHALLENGING AND
DEFENSES TO, THE LEGALITY, VALIDITY, ENFORCEABILITY OR COLLECTABILITY
OF THE SPECIAL ASSESSMENT, including, but not limited to, claims arising from, relating to
or otherwise based upon any theory of procedural defect concerning the approval of the
Improvements, the establishment of the Special Assessment District, confirmation of the Special
Assessment Roll and the Payment Schedule, the County’s right to place the Special Assessment
lien on the Special Assessment Parcel, any foreclosure action taken by the County regarding the
Special Assessment Parcel, the collectability and due dates of the Special Assessment installments
and interest due and payable on the Special Assessment Roll, or any other theory or claim. The
Property Owner further waives notice of hearing and the right to file objections if and to the extent
such rights exist under any special assessment ordinance of the County.
(b) Following the signing of this Agreement, no suit or action of any kind shall be
instituted or maintained for the purpose of contesting or enjoining the collection of the Special
Assessment, and the Property Owner, for itself and its successors in interest, lessees, purchasers,
and assigns with respect to all or any part of the Special Assessment Parcel, hereby irrevocably
waives its rights to contest the Special Assessment with any adjudicative body having jurisdiction
over the subject matter, including, but not limited to, the Michigan Tax Tribunal.
(c) In addition to any conditions, covenants, warranties and representations specified
in the Loan Documents, the Property Owner shall not sell, transfer, alienate or convey any of its
interest in the Special Assessment Parcel without first having given written notice of the Special
Assessment to any successors in interest, lessees, purchasers or assigns and having made a copy
of this Agreement part of any purchase contract, sale contract, lease agreement, deed or any other
conveyancing instrument by which the Property Owner purports to assign all or any part of its
Oakland County PACE Special Assessment Agreement
20
interest in the Special Assessment Parcel to any successors in interest, lessees, purchasers,
transferees, licensees and assigns. This Agreement shall be recorded against the real property
constituting the Special Assessment Parcel by the PACE Lender with the Register of Deeds of
Oakland County, State of Michigan.
(d) The Property Owner agrees that it, its successors and assigns shall, during the term
of this Agreement and the Special Assessment, pay all ad valorem real property taxes and
assessments levied against the Special Assessment Parcel when due and the Property Owner
specifically waives, irrevocably for itself, its successors and assigns as to any and all portions of
the Special Assessment Parcel, the right to pay ad valorem real property taxes and assessments on
any other installment method which may be available to property owners in the County.
(e) The County agrees that following (i) payment by the Property Owner in full of the
Special Assessment, together with all accrued interest on the Special Assessment Roll, and all
other interest, charges, fees, and penalties which may accrue thereon, and (ii) receipt by the County
of written acknowledgment from the Lender that the Special Assessment, together with all accrued
interest on the Special Assessment Roll, and all other interest, charges, fees, and penalties which
may accrue thereon, has been paid to the Lender in full, and (iii) an attestation by an authorized
officer of the Lender that the statements contained in the foregoing notice are true, correct, and
complete as of the date of such notice, it will promptly execute and deliver documentation
discharging the lien of the Special Assessment on the Special Assessment Parcel. Until the Special
Assessment liability has been fully satisfied and the lien discharged, each purchaser of all or any
part of the Special Assessment Parcel, as a condition of closing on such purchase, shall execute
and deliver to the County a written notice: (i) acknowledging the principal amount unpaid and
outstanding on the Special Assessment; (ii) agreeing to the assumption of the liability to pay the
Special Assessment, and any interest charges, fees, or penalties which may accrue thereon, on a
timely basis, when due, until the remaining balance and interest on said Special Assessment has
been paid in full; (iii) acknowledging that the title insurance policy will state that the Special
Assessment has not been paid at time of closing thereon; and (iv) agreeing to pay to the Lender at
or prior to the close of the purchase all past due installments of the Special Assessment and all past
due payments of interest on the Special Assessment Roll. The representations set forth in such
written notice shall be enforceable at law and in equity, including without limitation, by way of
specific performance.
Section 4.04 Lien. The Special Assessment is an obligation with respect to the Special
Assessment Parcel, and shall, until paid, be a lien upon the Special Assessment Parcel for the
amount of the Special Assessment and all interest, charges, fees, and penalties that may accrue
thereon. Such lien shall be of the same character and effect as liens created pursuant to the
ordinances of the County for County taxes and shall be treated as such with respect to procedures
for collection as set forth in the General Property Tax Act and the ordinances of the County,
including accrued interest, charges, fees, and penalties. The Special Assessment confirmed hereby
is a debt to the County from the Property Owner and its successors in interest, lessees, purchasers
and assigns. The right of the County to receive all installments of the Special Assessment required
to be paid by the Property Owner pursuant to this Agreement, together with all payments of interest
due and payable on the Special Assessment Roll at the Applicable Interest Rate or the Default
Rate, as the case may be, as provided in Section 4.01, has been irrevocably assigned by the County
Oakland County PACE Special Assessment Agreement
21
to the Lender in accordance with the provisions of Section 4.02 of this Agreement. No judgment
or decree shall destroy or impair any lien of the County upon the premises assessed for such
amount of the Special Assessment as may have been equitably or lawfully charged and assessed
thereon. Failure of the Property Owner or any subsequent property owner to receive any notice
required to be sent under the provisions of the ordinances of the County or this Agreement shall
not invalidate the Special Assessment or the Special Assessment Roll and shall not be a
jurisdictional requirement. Notwithstanding any term of this Agreement to the contrary, no
delinquent taxes and penalties and interest thereon or fees and costs related thereto or the collection
thereof relating to the Special Assessment Parcel shall have priority over any amounts due from
any property tax or assessment liens to the County.
Section 4.05 Payment Default.
(a) If any installment of the Special Assessment or interest due on the Special
Assessment Roll shall not have been paid by the Property Owner to the Lender, as assignee of the
County, at the time and in the amount required by Section 4.01 hereof (a “Payment Default”), the
Lender shall, within thirty (30) days following the date such sums were due and payable (the
“Payment Default Date”), deliver written notice to the County stating all of the following: (i) that
a Payment Default has occurred under this Agreement; (ii) the Payment Default Date; (iii) the
amount of the Special Assessment that was due and payable as of the Payment Default Date and
which remains unpaid and the amount of interest on the Special Assessment Roll and any penalties,
fees, or charges on the Special Assessment that was due and payable as of the Payment Default
Date and which remains unpaid and any penalties, fees, reasonable attorney’s fees or charges owed
under this Agreement or the Loan Documents (collectively, the “Payment Default Amount”); and
(iv) an attestation by an authorized officer of the Lender that the statements contained in the
foregoing notice are true, correct and complete as of the date of such notice. Upon receipt of such
notice from the Lender, the County shall take such actions as may be required to cause the Payment
Default Amount to be certified for collection on the summer or winter tax bill next succeeding the
Payment Default Date, and such Payment Default Amount shall be collected at the same time and
in the same manner as is prescribed for the collection of the County taxes under the General
Property Tax Act and the ordinances of the County. The County may assess a fee for delinquent
taxes, interest, penalties, and fees as provided under General Property Tax Act Section 211.78.
Notwithstanding the foregoing provisions of this Section 4.05(a), if the County shall determine
that the notice of the Lender described in this Section 4.05(a) was not received by the County in
sufficient time to permit the Payment Default Amount to be placed for collection on the summer
or winter tax bill next succeeding the Payment Default Date, such Payment Default Amount shall
be certified for collection on the next summer or winter tax bill issued thereafter. The County shall
be entitled to conclusively rely upon any notice of the Lender delivered pursuant to this Section
4.05(a) as to the existence of a Payment Default and as to the Payment Default Amount, and shall
not be liable to the Property Owner or to any other person for any action taken by the County
pursuant to the terms of this Agreement or otherwise in reliance upon the information contained
in such notice. Absent receipt by the County of written notice from the Lender of a Payment
Default in accordance with this Section 4.05(a), the County shall be entitled to presume
conclusively that all installments of the Special Assessment and all payments of interest due and
payable on the Special Assessment Roll have been made by the Property Owner to the Lender
when due as required by the terms of this Agreement, and the County shall have no obligation or
Oakland County PACE Special Assessment Agreement
22
duty to include any installments of the Special Assessment on any tax bill issued by the County or
to bill, collect or remit to the Lender any installments of the Special Assessment or any interest
due and payable upon the Special Assessment Roll.
(b) Oakland County hereby agrees that, pursuant to the assignment set forth in Section
4, it will cause to be paid over to the Lender all amounts received by the County Treasurer as
collections of any Payment Default Amount, with the exception fees for delinquent taxes, interest,
penalties, and fees as provided under General Property Tax Act Section 211.78 and assessed
pursuant to Section 4.05(a) above, of the Special Assessment within forty-five (45) days of the
date such sums are received by the County Treasurer. The parties hereto expressly acknowledge
and agree that in no event shall Oakland County advance to the Lender the amount of any unpaid
Payment Default Amount of the Special Assessment, and Oakland County shall be obligated to
pay over to the Lender only such sums as are actually received by the County Treasurer as
collections of any Payment Default Amount of the Special Assessment.
(c) In the event that any interest, penalties, fees or other charges shall be imposed upon
the Special Assessment Parcel or against the Special Assessment Roll or the amount of any unpaid
Special Assessment pursuant to the ordinances of the County or the General Property Tax Act, by
Oakland County, Michigan, for the administration, billing, collection or enforcement of the Special
Assessment created hereby, such amounts shall remain a debt of the Property Owner to Oakland
County, Michigan, as their interests may appear, and shall not be deemed to have been assigned to
the Lender pursuant to the terms of this Agreement or otherwise.
(d) The Lender hereby agrees and acknowledges that it shall have no right, and if such
right were to be found to exist, hereby waives such right, to seek payment of any delinquent
installment of the Special Assessment, and any interest, penalties, fees, or other charges, through
the Oakland County Delinquent Tax Revolving Fund (“DTRF”), or any subsequent County fund
which may replace the DTRF, or any other County funds.
Section 4.06 Prepayment of Special Assessment. Subject to the provisions of the Loan
Documents, including, without limitation, prepayment penalties, if any, the Property Owner may,
upon sixty (60) days’ written notice to the Lender and the County, prepay any installment of the
Special Assessment specified in the Payment Schedule by causing to be paid to the Lender the
amount of the installment to be prepaid, together with accrued interest thereon to the date of
prepayment. If such prepayment of any installment is not received by the Lender on the date
specified for prepayment, the Lender shall promptly deliver written notice to the County that such
prepayment was not received by the Lender.
Section 4.07 Invalidity; Cure. In the event of any invalidity of the Special Assessment,
the Authorized Official, at the request of the Lender, and if the County shall have received
indemnity satisfactory to the Authorized Official for its costs and expenses (including reasonable
attorneys’ fees), shall cause a new Special Assessment to be made for all or any part of the
Improvements in accordance with the PACE Statute and the PACE Program as reasonably
determined by the Authorized Official. The Property Owner, on behalf of itself and its successors
in interest, lessees, purchasers, and assigns, hereby waives any objections to and agrees to the
imposition of such new Special Assessment; provided, however, that the amount of the new
Oakland County PACE Special Assessment Agreement
23
Special Assessment shall not exceed the unpaid principal amount of the Loan at the time the new
Special Assessment shall be established.
Section 4.08 County or County Treasurer Becoming Owner of the Special
Assessment Parcel. In the event that Oakland County or Oakland County Treasurer takes
ownership of the Special Assessment Parcel by operation of law, the County Treasurer and the
Lender agree that while the lien on the Special Assessment Parcel will remain in full force and
effect, and all principal, interest, penalties, fees, and other charges, either based under law or on
the Loan Documents will continue to accrue during the period of time that Oakland County or
Oakland County Treasurer owns the Special Assessment Parcel. No loan or special assessment
payments, including interest, penalties, fees or other charges, are required to be paid or will be
accrued by Oakland County or Oakland County Treasurer to the Lender. Additionally, neither
Oakland County nor the Oakland County Treasurer shall be required or obligated to pay Lender any
installment of the Special Assessment or the accrued interest, penalties, fees, or other charges
which accrue during such time of their ownership. Any and all principal, interest, penalties, fees,
and other charges which accrue during the period by which the Oakland County or Oakland County
Treasurer owns the Special Assessment Parcel will, in the sole and unlimited discretion of the
Lender, either be: (1) considered immediately due and payable by any person or entity who
purchases the Special Assessment Parcel from Oakland County or Oakland County Treasurer, and
no sale or transfer of the Special Assessment Parcel is valid unless and until all principal, interest,
penalties, fees, and other charges have been paid by the subsequent owner of the Special
Assessment Parcel; or (2) capitalized into the outstanding principal balance of the Special
Assessment, causing the Lender to provide a revised Payment Schedule in an amount necessary to
amortize the new outstanding principal balance of the Special Assessment over the remaining
number of payments. The lien created by the Special Assessment shall not be extinguished or
released until all necessary principal and interest payments, as well as all penalties, fees, and other
charges, as determined solely by Lender, have been paid and received by Lender.
ARTICLE V
CONDITIONS PRECEDENT
Section 5.01 Conditions Precedent to the County’s Obligations.
The obligations of the County under this Agreement shall be subject to the satisfaction of
the following conditions precedent on or prior to the date of execution and delivery of this
Agreement by the County, unless waived in writing by the County:
(a) The County, the Property Owner and the Lender shall have authorized, executed
and delivered this Agreement and all approvals required hereby shall have been secured.
(b) No action, suit, proceeding or investigation shall be pending before any court,
public board or body to which the Property Owner or the County is a party, or shall be threatened
in writing against the Property Owner or the County, contesting the validity or binding effect of
this Agreement, the Special Assessment or the Owner-Arranged Financing contemplated hereby,
or which, if adversely decided, could have a material adverse effect upon the ability of the Property
Owner to pay or the County to levy the Special Assessment or to assign to the Lender the right to
Oakland County PACE Special Assessment Agreement
24
receive payments of the Special Assessment, or which could have a material adverse effect on the
ability of the Property Owner or the County to comply with any of the obligations and terms of
this Agreement.
(c) There shall be no ongoing breach of any of the covenants and agreements of the
Property Owner required to have been observed or performed by the Property Owner under the
terms of this Agreement and no Event of Default by the Property Owner, and no event which, with
the passage of time or the giving of notice or both could become an Event of Default by the
Property Owner under this Agreement, shall have occurred.
(d) All documents, schedules, materials, maps, plans, descriptions and related matters
which are contemplated to be made Appendices to this Agreement shall have been fully completed
by the Property Owner to the County’s reasonable satisfaction and such Appendices shall be true,
accurate and complete.
(e) The Property Owner shall meet all eligibility requirements as set forth in
Appendix A.
(f) The Property Owner and the Lender shall have authorized, executed and delivered
the Loan Documents, and the Lender shall have funded the Loan in accordance with the terms of
the Loan Documents.
(g) The Property Owner shall not have filed for bankruptcy or sought the protections
of any state or federal insolvency law providing protections to debtors.
(h) The Property Owner shall have obtained consent from each holder of a mortgage
interest or lien upon the Special Assessment Parcel prior to the execution and delivery of this
Agreement in substantially the form set forth in the PACE Program Report.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.01 Representations and Warranties of the County.
The County represents and warrants to the Property Owner that, as of the date of this
Agreement:
(a) The execution and delivery of this Agreement has been duly authorized by the
County, this Agreement binds the County, and is enforceable against the County in accordance
with its terms, except as enforceability may be limited by law, bankruptcy, insolvency, fraudulent
conveyance, or other laws affecting creditors’ rights generally, now existing or hereafter enacted,
and by the application of general principals of equity, including those relating to equitable
subordination.
(b) To the best of its knowledge, neither the execution and delivery of this Agreement
nor the consummation of the transaction contemplated herein is in violation of any provision of
Oakland County PACE Special Assessment Agreement
25
any existing law, ordinance, rule, resolution or regulation to which the County is subject, or any
agreement to which the County is a party or by which the County is bound, or any order or decree
of any court or governmental entity by which the County is subject.
(c) There are no delinquent taxes, special assessments, or water or sewer charges on
the Special Assessment Parcel that will be assessed under this Agreement; and there are no
delinquent assessments on the Special Assessment Parcel under a PACE program.
Section 6.02 Representations and Warranties of the Property Owner.
The Property Owner represents and warrants to the County and the Lender that:
(a) The Property Owner is duly organized and validly existing as a limited liability
company in good standing under the laws of the State of Michigan, with power under the laws of
the State of Michigan to carry on its business as now being conducted, and is duly qualified to do
business in the State of Michigan; and the Property Owner has the power and authority to own the
Special Assessment Parcel and to carry out its obligation to complete the Improvements.
(b) The execution and delivery of this Agreement will not result in a violation or default
by the Property Owner of any provision of its Articles of Organization or Operating Agreement,
or under any indenture, contract, mortgage, lien, agreement, lease, loan agreement, note, order,
judgment, decree or other instrument of any kind or character to which it is a party and by which
it is bound, or to which it or any of its assets are subject.
(c) The Property Owner is the sole and exclusive legal and equitable title owner of fee
simple title to the Special Assessment Parcel and the Improvements located, or to be located,
thereon and has full legal power and authority to consent to the finalization and levying of the
Special Assessment as provided herein.
(d) The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all requisite action, and this
Agreement has been duly executed and delivered by the Property Owner and constitutes a valid
and binding agreement enforceable against the Property Owner in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance or other
laws affecting creditors’ rights generally, now existing or hereafter enacted, and by the application
of general principles of equity, including those relating to equitable subordination.
(e) Property Owner warrants and agrees that any contractual, legal, equitable, or other
disputes between it and the Lender--other than matters specifically related to enforcement of
property tax obligations--or the contractor involved in the Improvements, do not involve the
County, and Property Owner agrees to release, discharge, and hold the County, its employees and
agents, and LAGM, harmless in any such disputes, claims, or causes of action.
(f) The Property Owner, the Special Assessment Parcel and the Improvements satisfy
all of the PACE Program eligibility and program requirements set forth in Appendix A.
Oakland County PACE Special Assessment Agreement
26
(g) The Property Owner has no knowledge of or reasonably should know of, any action,
suit, proceeding or investigation pending before any court, public board or body to which the
Property Owner or Oakland County is a party, or shall be threatened in writing against the Property
Owner or Oakland County, contesting the validity or binding effect of this Agreement, the Special
Assessment or the Owner-Arranged Financing contemplated hereby, or which, if adversely
decided, could have a material adverse effect upon the ability of the Property Owner to pay or
Oakland County to levy the Special Assessment or to assign to the Lender the right to receive
payments of the Special Assessment, or which could have a material adverse effect on the ability
of the Property Owner or Oakland County to comply with any of the obligations and terms of this
Agreement.
(h) The Property Owner is not currently in breach of and has no knowledge of any
ongoing breach of any of the covenants and agreements of the Property Owner required to have
been observed or performed by the Property Owner under the terms of this Agreement and no
Event of Default by the Property Owner, and no event which, with the passage of time or the giving
of notice or both could become an Event of Default by the Property Owner under this Agreement,
shall have occurred.
(i) The Property Owner has reviewed and hereby approves all documents, schedules,
materials, maps, plans, descriptions and related matters which are contemplated to be made
Appendices to this Agreement, which have been fully completed by the Property Owner to
Oakland County’s reasonable satisfaction, as true, accurate and complete.
Section 6.03 Representations and Warranties of the Lender.
The Lender represents and warrants to the County that:
(a) The Lender has experience in the market for property assessed clean energy
programs and assessments and is capable of evaluating the merits and risks of its participation in
the Owner-Arranged Financing contemplated by this Agreement.
(b) The Lender has made its own independent investigation of the Property Owner, the
terms of this Agreement, the nature of the Special Assessment created hereby and the procedures
for the collection and enforcement of the Special Assessment under this Agreement and the laws
of the State of Michigan, and is not relying on the County, its agents, attorneys or employees for
any of such information or with respect to the sufficiency and scope of such investigation. The
Lender has not received, and is not relying on, any representations of the County with respect to
the Property Owner.
(c) Lender warrants and agrees that any contractual, legal, equitable, or other disputes
between it and Property Owner--other than matters specifically related to enforcement of property
tax obligations--do not involve the County, and Lender agrees to release, discharge, and hold
Oakland County, its employees and agents, and LAGM, harmless in any such disputes, claims, or
causes of action.
Oakland County PACE Special Assessment Agreement
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ARTICLE VII
DEFAULT
Section 7.01 Property Owner Event of Default. If the Property Owner shall default in
the performance of any covenant or agreement on its part contained in this Agreement and such
default shall continue for a period of ten (10) days after written notice thereof has been given to
the Property Owner by the County, an “Event of Default” shall be deemed to have occurred under
this Agreement.
Section 7.02 Remedies for Property Owner Event of Default. Upon the occurrence of
an Event of Default as provided in Section 7.01 hereof, the County, after giving written notice as
required, without further notice of any kind, and in addition to all other rights and remedies
provided at law or in equity, shall be entitled to seek and obtain a decree of specific performance
of this Agreement from a court of competent jurisdiction; or have the right to recover from the
Property Owner any damages incurred by the County and any costs incurred by the County in
enforcing or attempting to enforce this Agreement or the Special Assessment, including attorneys’
fees and expenses; or to foreclose on the Special Assessment Parcel and to sell all or any part of
the Special Assessment Parcel to the extent necessary to recover any damages and costs; or any
combination of the foregoing. Notwithstanding the foregoing, the parties hereto acknowledge and
agree that neither the County nor the Oakland County Treasurer shall be obligated to institute any
of the actions or proceedings or to exercise any of the remedies authorized by this Section 7.02
upon the occurrence of an Event of Default hereunder, and that its obligations with respect to the
billing, collection and enforcement of the Special Assessment or any installment thereon shall be
limited to those obligations set forth in Article IV of this Agreement. The Lender acknowledges
that neither the Special Assessment nor any installment thereon can be accelerated. Future
installments of the Special Assessment shall continue to be a lien on the Special Assessment Parcel
in accordance with the General Property Tax Act until notice has been provided to Oakland County
by Lender that such amounts have been paid in full, including an attestation by an authorized
officer of the Lender that the statements contained in the foregoing notice are true, correct and
complete as of the date of such notice.
Section 7.03 The County Default. If the County materially defaults in the performance
of any covenant or agreement on its part contained in this Agreement and shall fail to proceed in
good faith to cure such material default within sixty (60) days after written notice thereof has been
received by the County from the Property Owner or the Lender, a “County Default” shall be
deemed to have occurred under this Agreement.
Section 7.04 Remedy for County Default. Upon the occurrence of a County Default as
provided in Section 7.03 hereof, and if the Property Owner or the Lender, as the case may be, shall
have otherwise fully performed all of its obligations hereunder, the Property Owner or the Lender,
after giving written notice as required, without further notice or demand, shall be entitled to seek
and obtain a decree of specific performance from a court of competent jurisdiction; but neither the
Property Owner nor the Lender shall have any claim or the right to recover money damages against
the County, including, but not limited to, any costs or fees (including attorneys’ fees and/or other
legal expenses) incurred by the Property Owner or the Lender in enforcing or attempting to enforce
this Agreement. Neither the occurrence of a County Default nor the institution of any proceeding
Oakland County PACE Special Assessment Agreement
28
or the exercise of any remedy upon the occurrence of a County Default shall negate or diminish
the obligations of the Property Owner hereunder to pay the installments of the Special Assessment
and interest accrued on the Special Assessment Roll and all other costs hereunder when the same
shall become due and payable.
Section 7.05 Indemnification of Oakland County.
(a) By Property Owner. Except to the extent claims arise from Oakland County's
gross negligence or intentional misconduct, Property Owner agrees to indemnify, defend and save
harmless Oakland County against, and from any and all liabilities, obligations, damages, penalties,
claims, costs, charges and expenses (including, without limitation, fees and expenses of attorneys,
expert witnesses and other consultants) which may be imposed upon, incurred by or asserted
against Oakland County because of any of the following:
(1) Any negligent or tortious act, error, or omission held in a court of
competent jurisdiction to the extent it is attributable, to the Property Owner, or any of its
personnel, employees, consultants, agents, or any entities associated or affiliated with the
Property Owner (directly or indirectly) or any subsidiary to the Property Owner now
existing, or to be created, its agents and employees for whose acts any of them might be
liable.
(2) Any failure by the Property Owner, or any of its employees to perform
their obligations either implied or expressed under this Agreement.
Nothing in this article shall be deemed to relieve the Property Owner of its duties to defend
Oakland County, as specified, pending a determination of the liabilities of the Property Owner, by
legal proceeding or agreement. Oakland County shall cooperate with the Property Owner in the
defense against the suit. In no event shall the Property Owner make any admission of guilt or
liability on behalf of Oakland County without Oakland County’s prior, written consent.
(b) By Lender. Except for claims arising from Oakland County's gross negligence,
Lender agrees to indemnify, defend and save harmless Oakland County against, and from any and
all liabilities, obligations, damages, penalties, claims, costs, charges and expenses (including,
without limitation, fees and expenses of attorneys, expert witnesses and other consultants) which
may be imposed upon, incurred by or asserted against Oakland County because of any of the
following:
Any gross negligent or tortious act, error or omission held in a court of competent jurisdiction to
be attributable in whole or in part to the Lender, or any of its personnel, employees, consultants,
agents, or any entities associated or affiliated with the Lender (directly or indirectly) or any
subsidiary to the Lender now existing, or to be created, their agents and employees for whose acts
any of them might be liable.
Nothing in this article shall be deemed to relieve Lender of its duties to defend Oakland County,
as specified, pending a determination of the liabilities of the Lender, by legal proceeding or
agreement. The County shall cooperate with Lender in the defense against the suit. In no event
Oakland County PACE Special Assessment Agreement
29
shall Lender make any admission of guilt or liability on behalf of Oakland County without Oakland
County’s prior, written consent.
For purposes of these provisions, the term "County" includes the County of Oakland and all other
associated, affiliated, or subsidiary departments or divisions now existing or to be created, their
agents, employees, and elected or appointed officials.
This indemnity must not be construed as a waiver of any governmental immunity Oakland County,
its agencies, or employees, has as provided by statute or modified by court decisions.
Section 7.06 Waiver. Failure of any party hereunder to act upon discovery of a default
or to act upon the existence of an Event of Default shall not constitute a waiver of the right to
pursue the remedies provided herein.
Section 7.07 Acknowledgment. Notwithstanding any term of this Agreement or any other
document or instrument relating to the subject matter hereof, Property Owner and Lender
acknowledge and agree that Oakland County is not issuing any debt, including bonds, notes or
other forms of indebtedness or providing any funding of any kind under the PACE Program or this
Agreement, is not a party to the underlying Owner-Arranged Financing between Property Owner
and Lender and assumes no fiduciary responsibility regarding the underlying Owner-Arranged
Financing private financing, is not responsible for managing the underlying Owner-Arranged
Financing, and has no obligation to, and will not, fund any losses should the Lender default in the
performance of its obligations under this Agreement, any Loan Documents, or otherwise fail to
comply with any law or ordinance of any nature. The PACE Program is not considered a bank
agreement to provide funds to Oakland County nor does it create any form of financial obligation
for Oakland County.
Section 7.08 Insurance. At all times during the term of this Agreement (as defined in
Section 8.01 “Term” below), Property Owner and Lender shall obtain and maintain insurance
according to the requirements listed in Appendix I.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Term. Except as otherwise provided in this Agreement, the terms of this
Agreement shall commence on the date first written above and shall terminate at such time as the
Special Assessment liability shall have been fully satisfied as provided in Section 4.03(e) hereof.
Section 8.02 Assignment.
(a) Except as otherwise provided herein and as provided in Section 8.02(b) hereof, no
party to this Agreement may transfer, assign or delegate to any other person or entity all or any
part of its rights or obligations arising under this Agreement without the prior written consent of
the other parties hereto excepting as otherwise expressly provided herein.
Oakland County PACE Special Assessment Agreement
30
(b) The Lender and its successors and assigns may assign its rights and obligations
under this Agreement and its rights in the Special Assessment, in whole but not in part; provided,
however, that any such assignment shall be made only in accordance with applicable law; and
provided further, however, that no such assignment shall be effective unless the County shall have
first received (i) written notice of the assignment disclosing the name and the address of the
assignee, which shall be an address in the United States and (ii) a Certificate of Assignment
executed by the assignee in the form attached to this Agreement as Appendix G. From and after
the date of satisfaction of the conditions for the assignment of this Agreement as provided in this
Section 8.02(b), the assignee of the Lender shall be a party hereto and shall have the rights and
obligations of the Lender specified hereunder, and such assignee shall be deemed to be the
“Lender” for all purposes of this Agreement.
Section 8.03 Notices. All notices, certificates or communications required by this
Agreement to be given shall be in writing and shall be sufficiently given and shall be deemed
delivered when personally served, or when received if mailed by registered or certified mail,
postage prepaid, return receipt requested, addressed to the respective parties as follows, or to such
other address as such party may specify by written notice to the other parties hereto:
If to the County: Oakland County
Attn: Chairperson, Board of Commissioners
1200 North Telegraph Rd
Pontiac, MI 48341
With a copy to: Oakland County Economic Development
Attn: Planning Manager
2100 Pontiac Lake Rd, Bldg 41W
Waterford, MI 48328
With a copy to: Oakland County Treasurer
Attn: Chief of Tax Administration
1200 North Telegraph Rd, Dept 479
Pontiac, MI 48341
With a copy to: Oakland County Equalization
Attn: Equalization Manager
250 Elizabeth Lake Rd, Suite 1000W
Pontiac, MI 48341
Oakland County PACE Special Assessment Agreement
31
With a copy to: Oakland County Program Administrator
Lean & Green Michigan
3400 Russell Street, Suite 255
Detroit, Michigan 48202
If to the Property Owner: PROPERTY OWNER
ADDRESS
With a copy to: PACE LENDER
ADDRESS
With a copy to: Oakland County PACE Administrator
Lean & Green Michigan
500 Temple Street, Suite 6270
Detroit, MI 48201
If to the Lender: PACE LENDER
ADDRESS
With a copy to: Oakland County PACE Administrator
Lean & Green Michigan
500 Temple Street, Suite 6270
Detroit, MI 48201
Section 8.04 Amendment and Waiver No amendment or modification to or of this
Agreement shall be binding upon any party hereto until such amendment or modification is
reduced to writing and executed by each party hereto. No waiver of any term of this Agreement
shall be binding upon any party until such waiver is reduced to writing, executed by the party to
be charged with such waiver, and delivered to the other parties hereto.
Section 8.05 Entire Agreement. This Agreement constitutes the entire agreement
between the County, on the one hand, and the Lender and the Property Owner, on the other hand.
There are no other representations, warranties, promises, agreements or understandings, oral,
written or implied, between the County, on the one hand, and the Lender or the Property Owner,
on the other hand.
Section 8.06 Execution in Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original and all of which shall constitute the same
instrument.
Oakland County PACE Special Assessment Agreement
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Section 8.07 Captions. The captions and headings in this Agreement are for
convenience only and in no way limit, define or describe the scope or intent of any provision of
this Agreement.
Section 8.08 Applicable Law; Venue. This Agreement shall be governed in all respects,
whether as to validity, construction, performance and otherwise, by the laws of the State of
Michigan. All parties consent to the personal jurisdiction of any competent court in Oakland
County, Michigan, for any action arising out of this Agreement. Parties agree that it will not
commence any action against the County because of any matter arising out of or relating to the
validity, construction, interpretation and enforcement of this Contract, in any courts other than
those in the County of Oakland, State of Michigan unless original jurisdiction is in the United
States District Court for the Eastern District of Michigan, Southern Division, the Michigan
Supreme Court or the Michigan Court of Appeals.
Section 8.09 Mutual Cooperation. Each party to this Agreement shall take all actions
required of it by the terms of this Agreement as expeditiously as possible and shall cooperate to
the fullest extent possible with the other parties to this Agreement. Each party to this Agreement
shall exercise reasonable diligence in reviewing, approving, executing and delivering all
documents necessary to accomplish the purposes and intent of this Agreement. Each party to this
Agreement also shall use its best efforts to assist the other parties to this Agreement in the
discharge of its obligations hereunder and to assure that all conditions precedent to the financing
arrangements are satisfied.
Section 8.10 Binding Effect; No Third-Party Beneficiary. This Agreement shall be
binding upon the parties hereto and upon their respective successors and assigns. In no event shall
the provisions of this Agreement be deemed to inure to the benefit of or be enforceable by any
third party, except for permitted assigns.
Section 8.11 Force Majeure. No party hereto shall be liable for the failure to perform
its obligations hereunder if said failure to perform is due to Force Majeure. Said failure to perform
shall be excused only for the period during which the event giving rise to said failure to perform
exists; provided, however, that the party seeking to take advantage of this Section shall notify the
other party in writing, setting forth the event giving rise to said failure to perform, within ten (10)
business days after the occurrence of said event.
Section 8.12 Merger. This document, including the Appendices, contains the entire
agreement between the parties and all prior negotiations and agreements are merged in this
document. Parties have not made any representations except those expressly set forth. No rights
or remedies are, or will be acquired by any of the parties by implication or otherwise unless set
forth.
Section 8.13 Severability. If any provision of this agreement or the application to any
person or circumstance is, determined to be invalid or unenforceable by means of law, the
remainder of the agreement will remain in full force and effect.
Oakland County PACE Special Assessment Agreement
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[SIGNATURES ON THE FOLLOWING PAGE]
Oakland County PACE Special Assessment Agreement
34
IN WITNESS WHEREOF, Oakland County, [PROPERTY OWNER], and [LENDER]
have caused this PACE Special Assessment Agreement to be duly executed and delivered as of
the date first written above.
[PROPERTY OWNER]
Signature
By:
Its:
State of Michigan )
) ss
County of Oakland )
The foregoing instrument was acknowledged before me this ____ day of _______, 202X, by
_____________ the Authorized Signatory of [PROPERTY OWNER] on behalf of [PROPERTY
OWNER].
Notary Public
___________________County, Michigan
My commission expires ________________
Oakland County PACE Special Assessment Agreement
35
IN WITNESS WHEREOF, Oakland County, [PROPERTY OWNER], and [LENDER]
have caused this PACE Special Assessment Agreement to be duly executed and delivered as of
the date first written above.
Oakland County
Signature
By: David T. Woodward
Its: Chairman, Board of Commissioners
State of Michigan )
) ss
County of Oakland )
The foregoing instrument was acknowledged before me this ______ day of _______, 202X, by
David T. Woodward, Chairman, Board of Commissioners, on behalf of Oakland County.
Notary Public
___________________County, Michigan
My commission expires ________________
Oakland County PACE Special Assessment Agreement
36
IN WITNESS WHEREOF, Oakland County, [PROPERTY OWNER], and [LENDER]
have caused this PACE Special Assessment Agreement to be duly executed and delivered as of
the date first written above.
[Lender]
Signature
By:
Its:
State of _______ )
) ss
County of _____ )
The foregoing instrument was acknowledged before me this ____ day of _______, 202X, by
___________. the Authorized Signatory of ____________, on behalf of _____________.
Notary Public
___________________County, __________
My commission expires ________________
Oakland County PACE Special Assessment Agreement
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APPENDIX A
PROGRAM ELIGIBILITY CHECKLIST
Property is privately owned commercial, industrial, agricultural, or multifamily residential
with 4 or more dwelling units, real property within the County’s jurisdictional boundaries,
which may be owned by any individual or private entity, whether for-profit or non-profit. MCL
460.933(g).
There are no delinquent ad valorem taxes, special assessments, or water or sewer charges on
the property. The Authorized Official at his discretion may disqualify properties that although
not currently delinquent, have been delinquent within six months of the application’s
submission. MCL 460.941(2)(a).
There are no delinquent assessments on the property under a PACE program. MCL
460.941(2)(b).
The term of assessment shall not exceed the lesser of the useful life of the Project paid for by
the assessment or 25 years. Projects that consist of multiple energy projects or environmental
hazard projects with varying lengths of useful life may blend the lengths to determine an
overall assessment term that does not exceed the useful life of the improvements in aggregate.
MCL 460.939(i).
An appropriate ratio must be determined for the amount of assessment in relation to the
assessed value of the property. MCL 460.939(j).
Written consent from the mortgage holder must be obtained if the property is subject to a
mortgage. MCL 460.939(k).
A baseline energy audit or energy modeling must be conducted for the Project on property that
is approved by LAGM. Such approval may be granted retroactively if the audit meets the
standards of LAGM. MCL 460.939(o).
For projects financed for more than $250,000, a performance guarantee must be provided by
the contractor(s) to guarantee a savings to investment ratio greater than one (1). The
performance guarantee must meet the standards set by LAGM, and include financial and
logistical arrangements for ongoing measurement and verification of energy savings. This
requirement may be waived by the Property Owner and is not applicable to new construction
energy project. MCL 460.939(p).
Oakland County PACE Special Assessment Agreement
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APPENDIX B
SPECIAL ASSESSMENT PARCEL DESCRIPTION
Parcel Number:
Address:
LEGAL DESCRIPTION:
Oakland County PACE Special Assessment Agreement
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APPENDIX C
SPECIAL ASSESSMENT ROLL
PACE Project Special Assessment
Parcel Number:
Address:
City:
Owner:
Assessment:
Percent:
I certify that the above is the special assessment roll created for the PACE project referenced in
this document in the applicable county, city, village, or applicable entity in the State of Michigan,
subject to payment of the special assessment as outlined in Appendix C of this document.
_____________________________________________________
_____________________________________________________
Dated
Oakland County PACE Special Assessment Agreement
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APPENDIX D
PAYMENT SCHEDULE
(TBD)
Oakland County PACE Special Assessment Agreement
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APPENDIX E
DESCRIPTION OF IMPROVEMENTS
Oakland County PACE Special Assessment Agreement
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APPENDIX F
PACE Program Application
Property and Property Owner Information
1. Property/Parcel Legal Name(s) (as they appear on property tax records)
Parcel #: _______________________
Address: _______________________
Owner: _______________________
2. Property Type (double-click to check all that apply)
Agricultural
Commercial (including multifamily with 4 or more units)
• Type of commercial property - ____________________
Industrial
Nonprofit
3. Property Record Owner(s) Contact Information
Property Owner/Company Name: _______________________
Signatory Name: _______________________
Address: _______________________
E-mail Address: _______________________
Telephone Number: _______________________
4. Property Owner(s) Type
Individual LLP LLC
Corporation 501(c)3 Other ______________
5. Property Valuation
State Equalized Value (SEV): $______________________
Date of SEV: _______________________
Valuation (per Appraisal): $______________________
Date of Appraisal: _______________________
6. Existing Liens Against Property (tax, special assessment, water or sewer charges, etc.)
Amount Type End Date
$ _____________________ _____________________ _____________________
$ _____________________ _____________________ _____________________
Total Dollar Amount of Liens Against Property: $__________________
7. Balance of Any Mortgage(s):
Amount of Mortgage Name of Mortgage Holder
Mortgage $ __________________ __________________
Additional Debt on Property $ __________________ __________________
a. Consent: If subject to a mortgage - Consent by mortgage holder(s) must be obtained.
Oakland County PACE Special Assessment Agreement
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Project Information
1. PACE Project Developer (Lean & Green Michigan can make referrals if necessary.)
Name: __________________
Address: __________________
E-mail Address: __________________
Telephone Number: __________________
Other Contractors: __________________
2. Overall Project Cost: __________________
3. Savings to Investment Ratio* (as provided in Savings Guarantee)
3a. Year 1: __________________
3b. Overall: __________________
3c. Waived ___________________
4. Useful Life of Project Measures: _____ years
5. User ID for Energy Star Portfolio Manager (for property): _______________________
PACE Loan Details
1. PACE Lender/Capital Provider (Lean & Green Michigan can make referrals if necessary.)
Name: __________________
Address: __________________
E-mail Address: __________________
Telephone Number: __________________
2. Requested Assessment Amount
Project Cost: $ __________________
Energy Audit or Model $ __________________
Engineering/Architect Plans $ __________________
Building Permit Fees $ __________________
Other (Please explain) $ __________________
Total Assessment Amount: $ __________________ (Total of all lines above)
3. Requested Assessment Repayment Period: _____ years
4. Interest Rate Offered by Lender: _____%
Oakland County PACE Special Assessment Agreement
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APPENDIX G
FORM OF CERTIFICATE OF ASSIGNMENT
This Certificate of Assignment of the Special Assessment Agreement (“Assignment”),
dated effective as of date, (the “Effective Date”), is made by [LENDER] (“Assignor”) to
_______________ (“Assignee”). Assignor and Assignee are referred to at times, each individually
as a “Party,” and collectively as the “Parties.”
Agreement
1. For good and valuable consideration and the payment of [PAYMENT AMOUNT],
the receipt and sufficiency of which is hereby acknowledged, confessed, stipulated and agreed
upon by Assignor, Assignor ASSIGNS, BARGAINS, GIVES, SETS OVER, CONVEYS,
TRANSFERS and DELIVERS to Assignee all of Assignor’s rights, title, interest, obligations, and
duties under the Special Assessment Agreement entered into by Assignor, Property Owner, and
________________ (the “Transferred Interest”), together with all of Assignor’s rights to receive
payments from Property Owner attributable to the Transferred Interest arising on and after the date
of this Assignment.
2. Assignor warrants that: (i) it is authorized to execute this document; (ii) it is
conveying good, indefeasible title to the Transferred Interest; and (iii) the Transferred Interest is
free and clear of all liens and encumbrances, and no party has any rights in or to acquire, or hold
as security, or otherwise, the Transferred Interest.
3. Assignor hereby agrees to make, execute and deliver to Assignee any and all further
instruments of conveyance, assignment or transfer, and any and all other instruments, as may be
necessary or proper to carry out the purpose and intent of this Assignment and/or to fully vest
Assignee in all rights, titles, interests obligations, and duties of Assignor in and to the Transferred
Interest, which instruments shall be delivered to Assignee as soon as possible without any
condition or delay on the part of Assignor.
4. Assignee hereby accepts all of Assignor’s rights, title, interest, obligations, and
duties under the Special Assessment Agreement and agrees to be bound by its terms. From and
after the date of this Assignment and satisfaction of the conditions contained in Section 8.02(b) of
the Special Assessment Agreement, Assignee shall be a party to the Special Assessment
Agreement and shall have the rights and obligations of the Assignor specified thereunder, and
Assignee shall be deemed to be the “Lender” for all purposes of the Special Assessment
Agreement.
5. All notices, certificates or communications provided pursuant to the Special
Assessment Agreement to Assignee shall be delivered as provided in the Special Assessment
Agreement to:
Oakland County PACE Special Assessment Agreement
45
_______________________________
(Name)
_______________________________
(Address)
_______________________________
(Attention)
IN WITNESS WHEREOF, Assignor and Assignee hereby agree to be bound by the terms
of this Assignment and each has executed this Assignment to be effective as of the Effective Date.
ASSIGNOR:
____________________________________
[LENDER]
By: _________________________________
Its: _________________________________
ASSIGNEE:
____________________________________
Name: ______________________________
By: _________________________________
Its: _________________________________
Oakland County PACE Special Assessment Agreement
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APPENDIX H
FORM OF LENDER CONSENT
Lender Consent and Acknowledgement of Owner Participation in
Oakland County, Michigan, PACE Program
This acknowledgement is granted date, 20__, by Name of Mortgage Holder (the “Lender”), and
for the benefit of PROPERTY OWNER (the “Property Owner”), and Oakland County in the State
of Michigan.
Recitals
A. Pursuant to Public Act No. 270 of 2010, the County established the County Property
Assessed Clean Energy (“PACE”) Program on date, 20__, by resolution, to promote installation
of energy projects and/or environmental hazard projects.
B. The Property Owner has applied to the Program to finance the amount of $ AMOUNT OF
FINANCING, to be paid back as an assessment on Property Owner’s real property, described in
Appendix D attached hereto (the “Property”), over a period of twenty years.
C. Owner has previously executed a mortgage, deed of trust, dated ______ ___, 20__, to the
Lender, covering the Property, to secure a promissory note in the sum of $ AMOUNT OF LOAN, and
recorded on _____ ____, 20__ at ___, Page ____, Oakland County Register of Deeds.
D. Repayment by the Property Owner under the PACE Special Assessment Agreement will
be a statutory assessment levied against the Property notice of which shall be recorded against the
Property in the Office of the County Clerk/Register of Deeds for Oakland County, and which
assessment, together with interest and any penalties, shall constitute a lien (the “Lien”) on the
Property, and shall be collected subject to the terms agreed to between the parties and as contained
in the PACE Special Assessment Agreement.
Consent and Acknowledgement
Lender acknowledges that it has been informed of the Property Owner’s participation in the
County PACE Program and agrees that Property Owner’s execution of the PACE Special
Assessment Agreement will not constitute a default under Lender’s Deed of Trust.
Execution of this Consent and Acknowledgement by Lender’s representative shall constitute full
and complete consent to the Property Owner’s participation in the County PACE Program.
Oakland County PACE Special Assessment Agreement
47
Name of Lender: ________________ Date: _________________
By: ___________________________
Title: _________________________
STATE OF MICHIGAN
COUNTY
The foregoing instrument was acknowledged before me this ___ day of ______, 20__, by
_________________, on behalf of _________________.
____________________________________
_________________, Notary Public
County, State of _________
Acting in ____________ County
My Commission Expires:
Oakland County PACE Special Assessment Agreement
48
APPENDIX I
FORM OF WAIVER OF SIR AND SAVINGS GUARANTEE
This waiver of the savings-to-investment ratio requirement and guarantee of savings (“Waiver”)
is acknowledged on this ___ day of ____, 20__ by [Property OWNER]
Recitals
A. Pursuant to Public Act No. 270 of 2010, as amended, Oakland County established the
Oakland County PACE Program to promote installation of renewable energy systems,
energy efficiency improvements, water usage improvement, and environmental hazard
projects.
B. The Property Owner has elected to participate in this program and plans to enter into a
Special Assessment Agreement with Oakland County and [LENDER] for the purpose of
financing the installation of [IMPROVEMENTS] on its property.
C. Pursuant to MCL 460.939(1)(p)(ii), unless waived by the Property Owner, the contractor
must guarantee to the Property Owner that the project will achieve a savings-to-investment
ratio greater than one, and agree to pay the property owner for any shortfall in savings, on
an annual basis.
D. The Property Owner has elected to waive this requirement.
IN WITNESS WHEREOF, the Property Owner hereby waives the requirement that the project
achieve a savings-to-investment ratio greater than one, and that the contractor guarantee the
savings, and make up for any shortfall on an annual basis. Property Owner expressly waives any
and all claims challenging the legality or validity of this waiver or the legality, validity, or
collectability of the PACE special assessment.
[PROPERTY OWNER]
By:
Its:
State of Michigan )
) ss
_______ County )
The foregoing instrument was acknowledged before me this ____ day of _______, 20__, by
________ the ____________ of _______________ on behalf of ______________________.
Notary Public
___________________County, Michigan
My commission expires ________________
Oakland County PACE Special Assessment Agreement
49
APPENDIX J
INSURANCE REQUIREMENTS
During the term of this Agreement, Property Owner shall provide and maintain, at Property
Owner’s own expense, all insurance as set forth and marked below, protecting Oakland County
(referred to in this appendix as the “County”) against any Claims, as defined below. The insurance
shall be written for not less than any minimum coverage herein specified. Limits of insurance
required in no way limit the liability of the Property Owner. “Claims” means any loss; complaint;
demand for relief or damages; lawsuit; cause of action; proceeding; judgment; penalty; costs or other
liability of any kind which is imposed on, incurred by, or asserted against the County or for which
the County may become legally or contractually obligated to pay or defend against, whether
commenced or threatened, including, but not limited to, reimbursement for reasonable attorney fees,
mediation, facilitation, arbitration fees, witness fees, court costs, investigation expenses, litigation
expenses, or amounts paid in settlement.
Primary Coverages
Commercial General Liability Occurrence Form including: (a) Premises and Operations; (b)
Products and Completed Operations (including On and Off Premises Coverage); (c) Personal and
Advertising Injury; (d) Broad Form Property Damage; (e) Broad Form Contractual including
coverage for obligations assumed in this Contract;
$1,000,000 – Each Occurrence Limit
$1,000,000 – Personal & Advertising Injury
$2,000,000 – Products & Completed Operations Aggregate Limit
$2,000,000 – General Aggregate Limit
$ 100,000 – Damage to Premises Rented to You (formally known as Fire Legal Liability)
Workers’ Compensation Insurance with limits statutorily required by any applicable Federal or
State Law and Employers Liability insurance with limits of no less than $500,000 for each
accident, $500,000 for a disease for each employee, and $500,000 for a disease policy limit.
Property Owner must comply with the following:
1. Be a Fully Insured or State approved self-insurer;
2. Sole Proprietors must submit a signed Sole Proprietor form; or
3. Exempt entities, Partnerships, LLC, etc., must submit a State of Michigan form WC-337 Certificate
of Exemption.
Evidence of workers’ compensation insurance is not necessary if neither Property Owner nor any
Property Owner’s Employees come onsite to any County real property, land, premises, buildings, or
other facilities in the performance of this Contract.
Commercial Automobile Liability Insurance covering bodily injury or property damage arising
out of the use of any owned, hired, or non-owned automobile with a combined single limit of
$1,000,000 each accident. This requirement is waived if there are no Property Owner owned, hired,
or non-owned automobiles utilized in the performance of this Contract.
Oakland County PACE Special Assessment Agreement
50
Commercial Umbrella/Excess Liability Insurance with minimum limits of $2,000,000 each
occurrence. This coverage shall be in excess of the scheduled underlying General Liability,
Automobile Liability, and Employer’s Liability Insurance policies with exclusions that are not
broader than those contained in the underlying policies. This Umbrella/Excess requirement may
be met by increasing the primary Commercial General Liability limits to meet the combined limit
requirement.
General Insurance Conditions
The aforementioned insurance shall be endorsed, as applicable, and shall contain the following
terms, conditions, and/or endorsements. All certificates of insurance shall provide evidence of
compliance with all required terms, conditions and/or endorsements.
1. All policies of insurance shall be on a primary, non-contributory basis with any other insurance
or self-insurance carried by the County;
2. The insurance company(s) issuing the policy(s) shall have no recourse against the County for
subrogation (policy endorsed written waiver), premiums, deductibles, or assessments under
any form. All policies shall be endorsed to provide a written waiver of subrogation in favor of
the County;
3. Any and all deductibles or self-insured retentions shall be assumed by and be at the sole risk of the Property
Owner;
4. Property Owner shall be responsible for their own property insurance for all equipment and
personal property used and/or stored on Special Assessment Parcel;
5. The Commercial General Liability and Commercial Automobile Liability policies along with
any required supplemental coverages shall be endorsed to name the County of Oakland and it
officers, directors, employees, appointees, and commissioners as additional insured where
permitted by law and policy form;
6. If the Property Owner’s insurance policies have higher limits than the minimum coverage
requirements stated in this document the higher limits shall apply and in no way shall limit the
overall liability assumed by the Property Owner under contract.
7. The Property Owner shall require its Property Owners or sub-Property Owners, not protected
under the Property Owner’s insurance policies, to procure and maintain insurance with
coverages, limits, provisions, and/or clauses equal to those required in this Contract;
8. Certificates of insurance must be provided prior to the County’s execution of the Contract and
must bear evidence of all required terms, conditions and endorsements; and provide thirty (30)
days’ written notice of cancellation/material change endorsement to the insurance coverages
required by this Appendix.
9. All insurance carriers must be licensed and approved to do business in the State of Michigan
along with the Property Owner’s state of domicile and shall have and maintain a minimum
A.M. Best’s rating of A- unless otherwise approved by the County Risk Management
Department.
PACE Program
Property Assessed Clean Energy
Mary Freeman
Owner & Outreach
Todd Williams
President &
General Counsel
Jon Wylie
Senior Counsel
Meghan Ross
Communications &
Business Associate
Lenders
Property
Owners
Contractors
Oakland County
Department of Economic Development
Equalization
Board of
Commissioners
Treasurer’s
Office
Corporation
Counsel
PACE Program Administrator
About Lean & Green Michigan
•Lean & Green Michigan is a public-private partnership that
works with local governments, contractors, property owners,
and lenders to invigorate Michigan’s PACE statute with a
market-based approach to energy finance and economic
development.
•Lean & Green Michigan helps commercial, industrial and
multifamily property owners take advantage of PACE to
finance energy projects eliminate waste and save money
through long-term financing solutions that make energy
projects profitable.
PACE in Michigan
PACE was established by the
Michigan Property Assessed Clean
Energy Act (PA 270, 2010) mended in
2024.
Lean & Green Michigan is a public-
private partnership launched in 2012
that serves 58 counties, cities and
townships in Michigan, comprising
over 75% of Michiganders.
•The Oakland County Board of Commissioners passed a Resolution of Intent to
create a PACE district by joining the Lean & Green Michigan statewide PACE
program on October 6, 2016.
•The Oakland County Board of Commissioners held a public hearing and
subsequently passed a Final Resolution adopting the PACE Program and the
first edition of the PACE Report on November 10, 2016.
•Amendments made to Property Assessed Clean Energy Act (Michigan P.A. 270
of 2010) effective on February 13, 2024 and require updates to the Oakland
County PACE Program Report.
•March 2024 Department of Economic Development prepared draft Oakland
County PACE Program Report- 2nd Edition to comply with P.A. 270 amendments.
PACE Timeline in Oakland County
Qualified Properties
Commercial & Industrial hotels, hospitals, restaurants,
office buildings, senior living & more
Multifamily housing (4+) both market-rate and low-income
apartment buildings
Agricultural farms, wineries
Nonprofits houses of worship, private schools,
cooperatives & more
Energy Efficiency: lighting, HVAC, windows, EV
charging, insulation, roofing, caulking
Qualified PACE Upgrades
Water Efficiency: stormwater recapture, low-flow
toilets/sinks/showerheads, greywater systems, green
roof, permeable pavement
Renewable Energy: solar energy, solar roofs,
wind energy, geothermal, CHP
PACE Amendments – February 13, 2024
Senate Bills SB302 and SB303
●Property owners will have the option to waive the SIR and savings
guarantee for projects.
●New PACE construction projects are now required to be built above
Michigan’s energy code, but will no longer require a savings to
investment ratio (SIR) or savings guarantee.
●Expands PACE to allow for the financing of Environmental Hazard
PACE: mitigate harmful substances from drinking water, mitigate
the effects of flood or drought, increase the resiliency of the
property against severe weather, and mitigate lead paint
contamination.
DRAFT
3.29.2024
PACE Program Documents
PACE Projects in Oakland County
•Powers Distributing (Orion, 2016)
•Heller Machine Tools (Troy, 2016)
•Hatchery Road Apartments (Waterford, 2018)
•Strand Theatre (Pontiac, 2020)
•Atrium Apartments (Southfield, 2021)
•Comfort Inn & Suites (Independence, 2021)
•The Laurels of Lake Orion (Orion, 2023)
•Birmingham Tower (Birmingham, 2024)
Why PACE?
•Commercial building owners spend $200 billion per year on utilities, yet 30% of this
is waste. The energy projects that could make these properties efficient often
require significant up-front capital and take years to achieve profitability.
Commercial loans typically have a tenor of 3-5 years, making the annual
repayment greater than the energy savings. PACE changes all of this by allowing
property owners to finance energy efficiency and renewable energy projects via a
property tax special assessment.
•Oakland County will enforce the PACE assessment just like any other property tax
obligation and lenders feel secure in providing fixed-interest loans with terms of up
to 25 years. The result is 100% up front financing to facilitate energy-saving
projects.
•PACE projects create good jobs, and helps communities upgrade their building
stock, which increases the local tax base over time.