PACE is an acronym for Property Assessed Clean Energy. PACE is a program that offers loans to homeowners and businesses owners specifically for energy efficient upgrades and retrofits that improve the property value and cut energy costs.

The program allows commercial or residential owners to borrow money for energy efficient improvements such as installing new windows, insulation or other upgrades that reduce energy consumption. The loan could also help pay for a geothermal heat pump, solar photovoltaic systems, solar panel roofs and roof tiles and other retrofits.

PACE allows property owners to borrow up to 20% of the value of the property and have 20 years to pay off the loan. If the program goes through, the city would use a third party administrator to supply the loans and run the program.

 As a whole, the city council expressed concerns about the program’s feasibility, success and negative affects. The biggest question that came up was the possibility of mortgage companies Fanny Mae and Freddie Mac redlining the community. That’s because loans through the PACE program are attached to the property not the owner; therefore if the property defaults PACE receives payments before the bank.

“If we adopt this, then Fanny Mae and Freddie Mac may redline our community and penalize everybody else in the community, just not limited to PACE people for mortgages. I would not be in favor of enacting PACE in the city until the federal government backs it, period,” Councilmember David Hastings said.

 Vice Mayor Michele King replied by saying, “That’s illegal.”

 Councilmember Jennifer Salmon also expressed concern saying, ““Ninety percent of new mortgages are held by Fannie Mae and Freddie Mac ... a lot of people won’t be able to take advantage of it unless the PACE (Assessment) Protection Act Passes.”

For now, Gulfport City Attorney Andrew Salzman and City Manager Jim O’Reilly will look into redlining.

The second main concern was over the contract the city would have between a third party administrator who would provide the loans. The council discussed whether or not a 20% loan is enough of an impact, how this program would help with redeveloping the 49^th St corridor, and how the administrator or entity that provides the loans would determine what contractors could install the new retrofits.

Councilmember Jennifer Salmon suggested stricter provisions in the contract, such as using contractors or building companies from Gulfport. Councilmember Hastings expressed problems with the amount of city involvement and possible liability.

“This is a lot of involvement of the city, where I was told the city wasn’t going to have to do anything,” Hastings said.

 Vice Mayor Michele King said the council was getting too involved with the contract when the task at hand is whether or not to vote on a PACE Ordinance establishing a district.

“That’s part of a legal binding agreement. It’s not an ordinance. I don’t want us to get confused between the two things,” King said.

Passing the PACE Ordinance would only establish a district. Putting together a contract is a step in the future.

City Attorney Andrew Salzman said, “Yes, we can be as stringent as possible in the contract. You’re not obligated if you pass this ordinance to do anything than go to the next step.”

“For me, I’d like to see us set the district up. This is a voluntary agreement. This is a choice you make. There’s no cost for the city by establishing the district. I would like to see us at least establish the district,” Councilmember Sam Hendersen said.

Mayor Mike Yakes agreed with Hendersen saying, “I think if we can come to an agreement of establishing a district ... we have set in motion the potential to move forward if and when that comes available, and we are able to obtain a person willing to fund the program. I don’t know if that money is out there, but it is something that we won’t be able to find out until we go (through) round one to get to round two. That’s how I see it. I like the idea of opportunity and the ability of a person to look at another resource, whether they chose to go that way or not is not my call,” Mayor Mike Yakes said.

 The PACE Ordinance is up for first reading on Tuesday January 18^th during the City Council Regular meeting beginning at 7pm.

 You may read the Ordinance and view Tuesday night’s workshop online.