Ari Kresch, CEO of 1-800-LAW-FIRM, likes to brag that his Southfield company is the first in the country to use its phone number as its actual name.
Perhaps more significantly, though, he may be the first attorney in the country to use an innovative, new financing mechanism called PACE, which stands for property assessed clean energy, to make major, money-saving, clean-energy upgrades to his building.
The roof of Kresch’s 1-800-LAW-FIRM building, near the busy intersection of I-696 and the Lodge Freeway, is now covered with brand-new solar panels. Four small wind turbines are on their way, and his parking lot will soon boast a solarized carport and electric-vehicle charging stations along with newly installed high-efficiency lighting.
Yet Kresch did not front a dime of his own money on the $540,000 project, managed by Novi-based solar installer Srinergy, and likely never will: His financing is so favorable that when the panels and turbines finally spark up and cut his monthly $6,000 electric bills in half, those savings will more than cover his loan payments.
Michigan’s PACE law is what makes his loan so easy. It was enacted in 2010; Southfield adopted its own ordinance, based on the law, in July 2012. Since then, two other cities and seven counties have adopted the identical ordinance.
Dubbed Lean & Green Michigan by its author, the ordinance allows businesses to borrow from a private lender, but repay it via special assessments on their local property taxes.
Making the private loan into a property tax obligation greatly reduces the risk of default, motivating lenders to grant longer terms with smaller monthly notes. Kresch’s PACE loan is for 20 years, rather than the three to five years typical of commercial financing, so his savings more than cover loan payments.
PACE is now approved in 31 states and Washington, D.C., and depending on how ordinances are written, can use bonds or private financing. It aims to boost business’s profits without tying up their capital, put contractors to work on efficiency and renewable energy projects, and curb climate- and health-damaging emissions.
Kresch said he could do the project without PACE, but wants to spotlight the financial opportunity it offers Michigan. Read more.