The Fredericksburg City Council is eyeing a new clean energy financing program whose first use would likely be for the proposed multipurpose stadium in Celebrate Virginia South.
Commercial Property Assessed Clean Energy Financing, or C–PACE as the program is called, would give local banks the option of granting landlords and developers a minimum $20,000 loan for a maximum of 20 years for such things as solar facilities, Energy Star-rated heating and air conditioning systems, LED lights and WaterSense-certified products.
The loan would be repaid through special real estate tax assessments, and secured by a special assessment lien.
“The public benefits of the program include the environmental benefits of energy-efficient, water-usage-efficient buildings, the incentive to renovate, retrofit or rehabilitate historic buildings, enhancement of the real property tax base and the promotion of employment and economic growth in the city,” Bill Freehling, director of the Fredericksburg Department of Economic Development and Tourism, told the City Council at its Oct. 23 meeting.
While the immediate use would likely be for the $35 million stadium the Potomac Nationals’ owners hope to build, Freehling said he thinks owners of older buildings in the city would be interested in C–PACE as well.
“If those buildings are updated with new and efficient HVAC systems, for example, they will enjoy a longer lifespan and will be more attractive to commercial tenants,” Freehling said.
City Council will hold a public hearing on the proposed C–PACE ordinance and fees when it holds a special meeting about the stadium at 7 p.m. Tuesday, Oct. 30, in Council Chambers in City Hall, 715 Princess Anne St.
Freehling said a number of states offer localities the option of creating C–PACE programs, and they first came to his department’s attention when a C–PACE loan was used for Audi Field, D.C. United’s stadium in the Buzzard Point neighborhood of Washington.
Virginia began the process to allow localities to create the programs in 2015, when legislation was approved that directed the Virginia Department of Mines, Minerals and Energy to develop guidelines for C–PACE. So far, Arlington County is the only Virginia locality that has adopted a C–PACE ordinance. Similar programs are in the works in both Loudoun and Fairfax counties.
“No C–PACE loans have yet been made in Virginia, however, and with this ordinance, Fredericksburg has an opportunity to establish itself as a statewide leader in green energy initiatives,” Freehling said. “If enacted, my office would plan to promote the new program extensively with real estate developers and rehabilitators.”
The advantage of a C–PACE loan is that costs of the special assessment can be passed on to tenants who benefit from the energy improvements. In addition, the financing and assessment also transfer if the property is sold.
The city’s version, if approved, would combine C-PACE loan payments with the city’s real property tax billing and collection. The city treasurer would first deduct any real estate taxes, penalties and interest due, and then remit payments to the lender, minus fees to cover billing and collection costs.
“This ordinance was drafted very carefully to protect the interests of city taxpayers,” City Attorney Kathleen Dooley told the council.
She said the program would give loan recipients a one-year grace period for any delinquent payments instead of the normal two-year period.
“The sooner you’re able to collect the delinquency, the less delinquency you’re chasing,” she said.
In other business at its meeting last week, the City Council held public hearings on three changes that it needs to pave the way for the stadium: tweaking the city’s comprehensive land-use plan, vacating a right of way in Celebrate Virginia South and granting a special-use permit for the stadium.
The council will take a first vote at Tuesday’s special meeting on allowing the undeveloped portion of the Carl D. Silver Parkway right-of-way to be realigned. The current general development plan shows a future extension of the parkway that would extend through the middle of the stadium property. The proposed realignment would instead curve around the stadium to the west, and enable a future intersection with Gordon W. Shelton Boulevard.
Council members will take a second vote on the right of way at its Nov. 13 meeting, as well as vote on the comprehensive plan amendment and the special use permit to allow a stadium in Celebrate Virginia South. They will also hear a presentation on a development and shared use agreement for the stadium, and vote to extend the 120-day study period for the stadium to Nov. 15.
Changes to the comp plan are needed to reflect the deal being negotiated between the city and Potomac Nationals owner Art Silber and his family. The Silbers plan to finance, build and maintain the stadium, and the city would be considered an “anchor tenant” in exchange for an annual payment to the club of $1.05 million for 30 years.
The city plans to cover its commitment through proceeds generated by the stadium. It would get exclusive use of the stadium for up to 183 days each calendar year for such things as high school, college and amateur athletics, as well as concerts and other major events.
It also would be able to use stadium facilities for conferences, meetings, job fairs and guest tours; and have use of a $25,000 suite at the stadium for all team home games to entertain businesses considering relocating to the city and rewarding those who have relocated.