A program offering low-cost loans to help Northwest Arkansas property owners make their buildings more energy efficient or use more renewable power now covers twice as many people.
The Property Assessed Clean Energy district created by Fayetteville's government in late 2014 also encompasses Springdale after its City Council appointed two members of the district's oversight board this month. The appointments are the final step in joining the district, according to a news release from the program's administrator.
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For more information about the Property Assessed Clean Energy loan program and to apply, visit the Arkansas Advanced Energy Equity Program website at a2e2.net.
The clean energy program's loans pay for a commercial property's heating and air conditioning upgrades, solar panel installation or any other project costing at least $25,000 and saves the owner enough in energy costs to cover the loan payments. The loans also cover 100 percent of the cost without a hefty down payment.
"It helps relieve the upfront cost barrier that so many business owners face when they want to make energy improvements," said Steve Patterson, a partner with the Arkansas Advanced Energy Equity Program, which administers the program at no cost to the cities. "Some of them are using HVAC equipment that's 30 years old, and it's just not performing efficiently."
The General Assembly created the program in 2013, allowing local governments to set up districts in which property owners pay back the loans as a property tax for up to 20 years. Pulaski County is the only other area in the state with a district, Patterson said.
No public money goes into the program; the equity group instead charges a 3 percent fee on each loan.
Springdale's two board members are Steve Miller, a retired architect who donated his services for Springdale parks and its animal shelter, and Micah Thompson, a vice president and commercial loan officer at Chambers Bank. They join Fayetteville's Cameron Baker, Don Bennett, James Bell, Sarah Marsh, Frank Mayfield, Michael Phipps and Matt Pope.
So far only one group has benefited from the Northwest Arkansas district, Patterson said.
The Fayetteville nonprofit Communities Unlimited, which works to improve water infrastructure and housing throughout the South, borrowed $27,000 from Iberia Bank of Fayetteville to replace its lighting with more efficient LEDs, upgrade its heating and air conditioning, plant shady deciduous trees near the building and make other changes the nonprofit group expected would save $5,000 each year, enough to pay off the loan in about five years.
As part of the program, a certified energy auditor finds out what needs fixing and puts together a plan, including how much money the changes will save, Patterson said. Now the program will keep track of the nonprofit group's utility bills to make sure the renovation is helping costs.
The work finished about a month ago, said Bruce Darr, the group's lending director.
"It was a great idea. We are very excited about it," Darr said. The LED lighting is more comfortable for staff members than fluorescent or incandescent, for one, and the energy efficiency also complements the nonprofit's mission, he added. "It's just a great thing for a small business or really any business to consider."
Four or so other businesses are in the process of getting loans ranging from $50,000 to $160,000, Patterson said. He said part of the reason participants are accumulating so slowly is the program has to be essentially self-sustaining, meaning it can't pile on a bunch of loans at the start.
The program also isn't covering residential projects because different federal housing agencies don't yet agree on how to treat the property lien to pay off the loans, Patterson said.
Mortgage lenders don't want to allow the loan if they would become responsible for it with a house that goes into foreclosure, said Thompson, the Chambers Bank appointee. He said he hopes to at least begin streamlining the process so lenders will be more eager to participate in the program. School districts and older industrial complexes could be good candidates, he added.
"Once we get a few in and get some projects under our belt, I think it'll take off," he said.
Springdale spokeswoman Melissa Reeves agreed, calling the program a "great opportunity" for Springdale businesses.
"We really hope to see it develop a residential component in the future," she added.
NW News on 08/24/2016