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Pier 1 San Francisco

Energy Financing Gives San Francisco a New Claim to Fame: Better Buildings

New city bond program funds green upgrades at historic building

San Francisco’s historic Port Authority Property at Pier 1, leased by Prologis Inc., will be the first energy efficiency upgrade in San Francisco funded by Property-Assessed Clean Energy (PACE) bond financing. 

 

PACE financing is a tax assessment bond to help building owners raise capital for energy upgrades, the nation's largest financing program to reduce energy and water use in commercial buildings. San Francisco was one of the first U.S. cities to launch a PACE program, called GreenFinanceSF, making $100 million in bonding capacity available to the city’s property owners. 

 

Johnson Controls will design and execute the Prologis project. Efficiency upgrades will include 1,500 new lighting fixtures, a 200-kilowatt rooftop solar array and improvements to the building’s heating, ventilation and air conditioning systems. The retrofit project is expected to:

 

  • Reduce annual energy costs by over $98,000
  • Reduce purchased energy by 35 percent 
  • Create nearly 30 jobs and $3.7 million in additional spending in California during construction

 

Increasing energy-efficiency financing represents one of the largest opportunities for the U.S. to expand economic growth and create jobs. For building owners, energy efficiency lowers operating costs, increases occupancy, enhances building quality and increases financial returns. Financing programs such as PACE are a critical step in helping building owners overcome common barriers to executing energy efficiency projects such as split incentives and insufficient credit. 

 

 “Billions of square feet of office space could be transformed into valuable property to save money, create jobs and reduce greenhouse gas emissions and it’s all beginning at Pier 1," said Chuck McGinnis, director commercial energy solutions, Building Efficiency, Johnson Controls.  The $1.35 million PACE bond will cover the $1.56 million project costs. The difference will be paid for by Prologis using capital reserves. The low-interest bond will be paid for over 20 years through property taxes. This long-term repayment mechanism results in annual energy savings that greatly exceed the annual property tax cost, making PACE finance highly attractive to home and building owners.

 

Learn more about how the PACE bond program provides capital to retrofit America's towns and cities.

 

Read our whitepaper on new financing models for private-sector building retrofits.

 

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