Even though we have yet to finance our first project, it is clear that PACE is becoming an established reality in most people's minds. It is just a matter of time, and it's not clear at this point whether we'll get the legislation passed before the first town is approved for the program or vice versa.

Why there is any hesitation on the part of municipalities to at least request approval from the Division of Local Government Services in order to set up a program is still something of a puzzle to me. I understand that only a few towns "like to be first," and even those that are willing to try new things are extremely cautious about plunging in. But the reality is that PACE is the municipality's program, and towns are able to structure it very much to suit what they see as their own needs.

We do know that there are some misconceptions about the program, which we are working to clear up. In a recent email to Atlantic City we addressed the concern that PACE would somehow be seen as "adding to the tax bill." 

PACE adds no costs to the City, or to anyone’s tax bill. The special assessment arrangement is purely voluntary, and affects only the property owner obtaining the financing. This would be separate line item or possibly even a separate bill, not a part of their property tax, and has no connection to the assessed value of the property.

It does seem difficult to believe that a property owner might voluntarily request an assessment against their property, especially since they’re in a total state of shock about the property tax increase. It's likely that PACE will be used first because it's the only option. Many property owners are simply unable to finance the improvements they need to make.

All costs that the City might have in handling or processing payments (which are similar to PILOTs or other special assessments) are reimbursed by the program.

We’re sure that any reluctance to proceed is based on misconceptions which we can easily clear up. The City has many options, including that of creating a special PACE district for a single building — which otherwise might not be able to obtain the financing it needs to maintain and restore the building and its energy systems.

PACE also opens up additional opportunities for solar systems, cogeneration facilities (CHP), battery storage systems, and so on. We have both local and national contractors interested in using the program in Atlantic City, bringing local jobs and investment into the City. 

So that rather than going deeper into decline, PACE enables a municipality’s property owners to upgrade energy systems (and eventually address resiliency issues as well) in a way that’s designed to stimulate economic development and create new jobs. There is no evidence that PACE assessments make properties any harder to sell, or that mortgage lenders are unwilling to provide their approval.

We believe that PACE is a win-win-win solution; otherwise, as a 501(c)(3), we wouldn’t be advocating it. But we also believe it’s important to be able to meet any objections — if it doesn’t stand up to scrutiny, you shouldn’t do it. But if it does, you shouldn’t overlook it. It could make a great deal of difference in these difficult times. 

So we're working hard to get the first few towns on board. At the same time, the Passaic County Improvement Authority has announced its own program, supported by a consortium led by NW Financial; and we are working on expanding the number and kinds of programs available in the state. New legislation, supported by all parties, will make the program much easier to get passed and to implement, as well as expanding the range of improvements to be covered to include water conservation, resiliency improvements, and shelters.

This difficulty getting started, and the need for amending legislation, is common to most states that have passed PACE legislation (31 so far). The basic idea is quite simple; but the legislation needs to be flexible enough to enable the practical operation of what is, after all, a program designed to attract private investment to the community. Getting this right takes time, but if experience in other states is a guide, once we've cleared these hurdles, the program is likely to take off in those municipalities with the greatest number of potential projects, and see a rapid growth curve.

Once it does take off, co-marketing with New Jersey PACE will become truly valuable, and we would be doing both ourselves and the communities a disservice if we don't use that as a source of revenue, which can serve to offset higher project fees, and support smaller projects.