First Hotel in Houston to use PACE Financing

Congratulations to Houston and the Regency Inn Hotel

"The City of Houston adds another project to its TX-PACE portfolio with the closing of a $135,000 project at the Regency Inn & Suites. This is the first hotel to utilize the TX-PACE program and the first solar project for the City of Houston's TX-PACE program.

"The project will add a 45 kW solar power system that will offset a portion of the hotel's electric usage and help insulate the business from volatility in the power market. The availability of incentives and tax deductions are further motivating hotels around the country to invest in solar, providing a mechanism to strategically allocate resources while decreasing carbon footprint.

"The Regency Inn Hotel, located at 3617 E. Crosstimbers Street, will benefit from utility savings and tax incentives of more than $250,000 over the project's useful life. The project will be financed over an 18-year term."

Source Quoted: Texas PACE Authority

PACE Houston Facilitates First Texas Office Building PACE Project

PACE Houston acted as project facilitator and consultants to Stellar International Commercial Real Estate, LLC for their multi-tenant office building located at 1225 North Loop West. This project represents Texas' first office building energy retrofit to use PACE financing.

Mayor Turner, the City of Houston and Charlene Heydinger of the Texas PACE Authority are exercising leadership, commitment and vision in championing energy efficiency retrofit financing that makes financial sense.
— Tim Crockett, PACE Houston
PACE Houston logo  Building Energy Efficiency w website Nov 24 2017.jpg

Press Release

For immediate release:

 1225 North Loop West First Texas Office Building to Use PACE Financing

1225 North Loop West
First Texas Office Building to Use PACE Financing

PACE Houston has facilitated the closing of Texas' first office building renovation using PACE financing. The 200,000 SF, 11 story multi-tenant office building is located on I-610 at 1225 North Loop West.  A $1.3 million, fixed rate, 20-year PACE loan funded 100% of the cost of two new chillers, HVAC Controls and LED lights. The lifetime energy efficiency and operating cost savings are expected to exceed the cost of financing, making the loan self-liquidating, while increasing tenant comfort and the property’s market position.   

PACE Houston was engaged to guide the project through the PACE process from start to finish by the building management who noted, "PACE Houston has been the key partner to this project from the beginning. They know everything there is to know about PACE. Also, they have probably done more educating Houstonians on PACE than any other organization."

Tim Crockett, a 30+ year veteran in Houston Commercial Real Estate and co-founder of PACE Houston said, "PACE is the single biggest improvement in our industry I’ve seen in my 30-year real estate career."  

The City of Houston and the Texas PACE Authority exercised leadership in implementing this important energy efficiency financing program.  Mayor Turner first worked to pass PACE while working in the State Legislature and again when he launched the program last year as Mayor.

PACE legislation has now been adopted by 34 states and Washington DC.  Houston’s PACE program went live last year with Simon Properties adding Houston to the $500 million of PACE improvement projects they are doing around the nation. 

More information on PACE financing can be found at

Tim Crockett, President, PACE Houston at 713-530-7922



Permeable Paving

Houston has endured two "once in 100 years flood" and one "once in 500 year flood" in two years.  I'm not very clear on that math but the point is we have had some serious flooding.  Our hearts go out to those who lost loved ones, homes, cars and were otherwise affected.  

1900 Storm Grade Raising.jpg

What are we going to do about it?   There are some who say, it's too complicated a problem, there is nothing we can do about it.  When asked how do you deal with an overwhelming problem as large as global poverty, Mother Teresa said, I do what is in front of me.   And as Texan, we won't sit idly and do nothing, that's not in our DNA.  We can do what is in front of us.  Galveston pumped sand and mud out of the gulf and bay to raise much of the island by 6 feet after the 1900 storm. Their actions in response to the storm were called "Galveston's finest hour". The Netherlands built dikes to hold back the ocean.  I suggest we begin with some incremental steps - that collectively could have a big impact in addressing flooding.  Over time we may find many other improvements to deal with the problem but here is one idea we can do today.

How many people have you spoken with since the flood who said their house did not flood, BUT just by inches and others who said we took on only a small amount of water.  For these people, a tiny difference made all the difference.  What if we focused on one incremental change which could make a huge difference to the thousands of people?

TRUEGRID Tire on Permeable Grid.jpg

One such incremental improvement is to replace at least some parking lots with permeable paving.  Rather than using concrete or asphalt which causes all the rain that falls there to run off to some other place and contribute to area flooding, one Houston company has developed a better idea.  An effective and affordable alternative utilizing stabilized porous material, covered with either stone or grass, strong enough to support fully loaded 18 wheelers that allows water to be both absorbed into the ground and some be retained temporarily within the permeable paving itself and allowed to drain away at a slower pace, lessening flooding. 

Interestingly, this solution has been developed by a Houston based company who is a leader in that field.  They have partnered with us at PACE Houston to help educate the public and get more of this solution installed. If you want to know more we are available to discuss your specific application.

Contact Tim Crockett at 713-530-7922 or at 


Historic building near Dallas' city hall lands biggest clean energy-tied loan in Texas history

Dallas Business Journal Complete Article by Candace Carlisle, Senior ReporterDallas Business Journal

Begin Quote

The Dallas developer behind proposed plans to bring a Trump-branded hotel to downtown Dallas has landed $23.9 million in Property Assessed Clean Energy finance funds — which will help update the $120 million historic building with energy-efficient systems and water reduction technology.

This loan is the largest commercial Property Assessed Clean Energy (PACE) deal in Texas and is believed to be the second largest of its kind in the country.

Alterra International, which is based in Dallas and San Francisco, decided to apply for the PACE loan for the nine-story, century-old building at 500 S. Ervay St. to help it increase the energy-efficiency of the redevelopment project, which is still underway.

Munsch Hardt Kopf & Harr P.C. represented Alterra International in securing the PACE funds.

”With the loan’s focus to increase energy-efficiency, the development will likely attract even more interest, as today’s residents and tenants look for high-efficiency and low maintenance costs for their apartments and businesses and hotel guests want to stay in buildings that are sustainable,” said Mike Sarimsakci, president of Alterra International, in a statement.

”Combined with federal and state history tax credits, we feel the PACE loan will enable us to bring this catalytic and complicated project into a reality,” he added.

The energy-efficiency updates will improve the property’s value and enable the owner of the building to lower an overall first lien loan on the project. The PACE loan was secured through a contractual assessment lien — which has the same priority as a tax lien loan.

The PACE assessment lien cannot be accelerated, like a conventional construction financing loan, and can only be enforced for the delinquent assessment amounts.

PACE loans, which are made through a city ordinance adopted by Dallas city officials, pair well with historic buildings that require additional capital to bring an aging property to modern energy efficiency standards, said Phil Geheb, a shareholder at Munsch Hardt.

”In my practice, I am beginning to see greater interest in the utilization of this program for history and non-history renovation projects because of its flexibility, relative low-cost and non-recourse nature,” he added.

Alterra International has been working on the redevelopment of 500 S. Ervay for years, transforming long-vacated real estate next to Dallas City Hall into 238 apartments and a 270-room dual-branded Fairfield Inn and Town Home Suites by Marriott, as well as retail and a small office complex on the ground floor of the property.

Sarimsakci says he hopes the redevelopment of the century-old building will be a catalyst for the immediate neighborhood. The apartments and small office space have been completed.

The dual-branded hotel is slated for completion by the end of the year.
— Dallas Business Journal Complete Article by Candace Carlisle, Senior Reporter Dallas Business Journal

City of Houston and Hays County Property Assessed Clean Energy (PACE) Programs Close First Projects

City of Houston and Hays County Property Assessed Clean Energy (PACE) Programs Close First Projects

Simon Properties Projects in Houston, Hays County Exceed
$4 million in PACE Investment

HAYS COUNTY / HOUSTON -- The City of Houston and Hays County announced the closing of their first commercial Property Assessed Clean Energy (PACE) projects at the Houston Premium Outlets and San Marcos Premium Outlets. Combined, the Simon Properties projects will receive over $4 million in energy and water saving retrofit investments financed by Petros PACE Finance.

"Houston is the energy capital of the world and has a responsibility to lead by example and use our energy resources as efficiently as possible," said Houston Mayor Sylvester Turner. "We created the Houston PACE program to help Houston businesses access low-cost financing and lower their utility bills. We're thrilled our first PACE project is at the Houston Premium Outlets and we hope more businesses will follow their lead."

"Hays County created a PACE program to help our businesses lower their operating costs with energy and water saving updates that benefit all of our citizens," comments Hays County Judge, Bert Cobb. "It's great to see the San Marcos Premium Outlets, one of Texas' top tourist destinations, be the first of many Hays County PACE projects."

PACE is an innovative financing program that enables owners of commercial and industrial properties to obtain low-cost, long-term loans for water conservation, energy-efficiency improvements, and distributed generation retrofits.

PACE financing will fund energy and water efficiency improvements at both outlet malls. Examples of efficiency improvements include: interior and exterior LED lighting, HVAC replacement, smart glass, heat reducing awning technology, replacement of hundreds of faucets, and conservation updates to water features and irrigation technology.

Combined, Anticipated Savings Benefits at Houston Premium Outlets and San Marcos Premium Outlets:

  • Annual electricity use will be reduced by 2,546,000 kWh
  • Annual water savings of over 11,500,000 gallons of water per year
  • Carbon dioxide emissions (CO2e) reduction of over 1,845 tonnes per year
  • Sulfur oxide emissions (SOX) reductions just under one tonne each year
  • Nitrogen oxide emissions (NOX) reductions exceeding 3 tonnes annually


Financing Energy Efficiency - National Association of Realtors Article by Bobby Hickman

The National Association of Realtors published this article "Financing Energy Efficiency" by Mr. Bobby L. Hickman. In this article Mr. Hickman reviews the evolving and fragmented residential PACE market and interviews Tim Crockett about Commercial PACE in Texas. Tim's comments highlight how Texas has chosen an open lender model, requires an engineer to stamp the energy report prior to funding and requires that the existing lender consent to the PACE loan.  (Click on the above Picture for the full article)

Read More

Greater Houston Retailers Cooperative Association recommends PACE Houston site

Benefits of Going Green

By Jeff Thompson GHRA April 2017 Issue Page 14

"If you’ve been in the convenience store business for any length of time, you’ve probably been approached by one or more vendors offering to reduce your energy costs with LED lights. This can be a costly conversion. What you may not know is that you can accomplish many energy saving goals for your business by utilizing a PACE loan. PACE stands for Property Assessed Clean Energy, and the loan structure is unique in that it is capitalized by independent lenders. Property owners like the PACE Loan program because it presents positive cash flow benefits immediately, and the annual assessment can usually be passed through to the tenants, who benefit from the lower utility bills. Even if you are intending to sell your property in the near future, there may be benefits for you since the financing stays with the property. Specifically, in the event the current owner should choose to sell the property, the current owner is not obligated to pay anything more than the Annual Assessment then due. As such, any a capital improvements made to your property using this loan structure can benefit your property value and resulting selling price. Perhaps the biggest benefit to a PACE Loan is that it requires an independent assessment of the loan and the anticipated energy savings. Also, a PACE energy efficiency project potentially increases the property’s Net Operating Income and building value. This independent assessment requires that upon analyzing the projected green energy savings, that the Savings to Investment Ratio (SIR) must be greater than "1". The Savings is calculated as the sum of the savings over the useful life of the project. The Investment is calculated as the Principal value of the Investment. Another simpler way to state this, is that the amount you save in utility payments must be greater than your annual assessment payments. This Benefits of Going Green means that in addition to having a zeroinvestment capital improvement to your property, your net operating income will see positive monthly benefits or else the loan won’t be approved. Rather than spending the entirety of this article discussing the benefits of a PACE loan we can also talk about what types of energy efficiency improvements can qualify for PACE funding. In the Houston area, the items which will produce the most benefit are HVAC, insulation, lighting (indoor and outdoor), cool roofs (reflective white roof), energy management systems, car charging stations, bike racks, windows, glazing. HVAC components include chillers, cooling towers, air handlers, thermostats, boilers, variable drive fans (VDF's). If you decide to pursue this type of funding, you can learn more at www., and keep an eye out for potential energy saving LED manufacturers in future issues of In Action Magazine. Keeping it Green can help keep you in the green."

Time is Money - Delaying Cost Savings Measures Means Permanently Lost Income

Time is Money - Delaying Cost Savings Measures Means Permanently Lost Income

I’ve heard this saying so often that it has lost some of its impact on me yet it remains as true as ever.  After recently completing an energy efficiency study for a building owner where all parties agreed that certain actions would result in this 600,000 SF building immediately reducing their electricity expenditures by 20% there seemed to be no sense of urgency.  Given this building is currently spending $2.00/SF per year on electricity, taking this action would save them $20,000/month. Unlike a one-time saving such as a discount on a purchase, we’re talking about operational savings where they will achieve the savings each and every month if and when they implement the prescribed action.  So for every month they delay they forever lose the opportunity to save those dollars.

Let's say the improvements that would generate savings are delayed 6 months. That would represent $120,000 in lost savings. 

Using a 5% discount rate, the present value of that lost 6 months of $20,000/month in operational savings would be $101,513.




Texas Commercial PACE Program: Protecting Borrowers and Creating Economic Benefits

Today [January 10, 2017] The Wall Street Journal published a front page article about the California residential PACE program highlighting problems relating to consumer protection and other issues. Fortunately, none of these problems or issues are relevant to, or cause for concern under, the Texas PACE program for the reasons listed below:

  • The purpose of the Texas PACE statute is to enable energy-efficiency financing for commercial and industrial properties.

  • Residential PACE loans are not permitted in Texas.

    • The Texas PACE statute does not authorize single-family residential PACE loans.

    • PACE financing for residential property is available only to borrowers who are in the business of operating multi-family properties containing 5 or more units.

  • The Texas PACE statute includes multiple layers of protection for commercial property owners and lenders, including:

  • Commercial property with a mortgage is not eligible for a PACE loan without the written consent of the mortgage holder. This approach protects preexisting lien rights of the mortgage holder.

    • Prior to closing a PACE loan, an independent professional engineer must confirm that projected savings are consistent with applicable technical standards.

    • Upon completion of the project, an independent professional engineer must confirm that the equipment was properly installed and is operating as intended.

    • The term of the commercial PACE assessment cannot exceed the projected useful life of the improvements.

    • Private, open-market lenders provide all PACE financing in Texas. The Texas PACE program does not utilize government bonds or public funds.

    • All PACE programs established in Texas are administered by the Texas PACE Authority, a non-profit organization whose sole purpose is to operate PACE programs for local jurisdictions. This arrangement is unique to Texas and avoids conflicts that can arise when the PACE administrator is a for-profit organization that receives compensation for both facilitating the program and arranging the loans.

    • Lenders, contractors and other service providers for all PACE projects in Texas are selected independently by the property owners in a free-market, competitive environment not restricted to any particular or favored contractors or lenders.

The Texas commercial PACE program was designed by a group of more than 130 stakeholder-volunteers dedicated to ensuring that the problems and issues highlighted in The Wall Street Journal article will not arise in Texas.

For more information about the Texas PACE program, visit and, or contact Charlene Heydinger at


WSJ Article on Residential PACE Quoted in Entirety

Begin Quote of WSJ Article by Kirsten Grind

"America’s Fastest-Growing Loan Category Has Eerie Echoes of Subprime Crisis

Lenders offering energy-conscious loans care little about borrowers’ creditworthiness, contractors function as loan brokers—and investors can’t get enough

Cindi Ventura helps her mother out of the San Jose, Calif., house where they live. They got a PACE loan for $16,732 after eroded sewer pipes caused a flood. PHOTO: PRESTON GANNAWAY FOR THE WALL STREET JOURNAL



Updated Jan. 10, 2017 2:41 p.m. ET

Deanna White told a contractor she couldn’t afford the $42,200 loan he recommended for improvements to her house in Inglewood, Calif. The contractor, she recalled, said she wouldn’t be on the hook because the loan was part of a “government program.” She applied and was approved.

Two years later, Ms. White is struggling to make payments on the loan, which was packaged with more than 10,000 similar loans into bonds and sold to investors. Under its terms, Ms. White’s five-bedroom house could be foreclosed on if she defaults.

Her loan is part of a booming corner of the lending industry called Property Assessed Clean E