Lean & Green Michigan
June 12, 2015
SOUTHFIELD, MI – Suppose you owned a business, apartment complex or factory and realized it was costing you vast sums in wasted energy.
That is actually more likely than not to be the case. According to the U.S. government, the average building wastes a third of all the energy it uses. But many owners are reluctant to tackle the problem.
Why? Cost: Banks generally limit commercial lending loans to three to five years – sometimes with a balloon payment at the end.
Monthly payments are usually higher than any utility savings, and few businesses can wait years to see a positive bottom line.
Now imagine this: What if there was a program under which you could contract for the improvements you need, and have the costs added as a special assessment to your property tax?
No taxpayer money whatsoever would be involved. The payments would be spread out over 10 to 20 years, structured in a manner that would guarantee the property owner would save more every month than she or he will have to pay in added taxes.
“No money down and positive cash flow,” said Andy Levin, CEO of a company called Levin Energy Partners.
Well, guess what. That program exists today in Michigan – though too few people know about it, and fewer still take part. And Levin, a 54-year-old dynamo with a background in job creation and a Harvard Law degree, is doing his best through a subsidiary called Lean and Green Michigan to bring it to as many people as possible.
“Retrofitting older buildings is the easiest way to get huge environmental and energy savings,” Levin said. “This is a game-changing, under-the-radar project.”
The mechanism that makes this all legally possible is a program called PACE, which stands for Property Assessed Clean Energy. Thirty-one states, including Ohio. have passed PACE legislation in the past few years; the Toledo-Lucas County Port Authority’s Better Building Challenge is another such program.
Though programs differ from state to state, in Michigan, where a PACE statute was passed in 2010, “the county is simply giving its businesses a property tax tool to make long-term financing work for clean energy projects,” Levin said.
Single family homes and buildings owned by government aren’t eligible for PACE, though just about any other property is – not only commercial, but agricultural. Private non-profits, including churches, hospitals and private schools can also take part.
There are a few limitations; the property can’t be overly leveraged; buildings have to be in basically good shape, with at least a decade of use ahead of them. If the property is sold, the assessment is paid by the new owner.
“There is absolutely no reason for anyone not to do this,” Levin said. Levin Energy Partners is a for-profit company, though he indicates his profits have so far been small, as has the salary he pays himself. His company gets compensated, he said, by administrative fees on each privately financed PACE deal, not by government.
These days, he spends a fair amount of his time trying to persuade Michigan cities and counties to embrace PACE. Though anyone in the state can apply, there are certain advantages if a host government is part of the program. So far 13 Michigan counties are members, as are a handful of cities in Oakland, the biggest holdout.
Political suspicions may be more of a factor. Levin is a scion of perhaps Michigan’s most prominent Democratic family.
His father, U.S. Rep. Sander Levin, has been in Congress for decades; his uncle is recently retired U.S. Sen. Carl Levin.
Andy Levin himself narrowly lost a race for a state senate seat in 2006, has been a successful union organizer, and ran Michigan’s Department of Labor and Economic Growth under the state’s last Democratic governor, Jennifer Granholm.
But he emphatically denied this was any kind of personal or political vehicle. “I’m not running for anything; I’m not running for my father’s seat. Washington is broken; Lansing is broken.”
“This is a way to make something positive happen for business and for the environment that is totally non-partisan.” He noted that some of the counties that have joined, such as Montcalm and Calhoun, are among the most heavily Republican in the state.
Other environmentalists are also enthusiastic. “Andy Levin’s approach creates the solution necessary for a sustainable energy future,” said Debra Rowe, the president of the U.S. Partnership for Education for Sustainable Development. “With this long-term financing program, we can meet most of our energy needs with energy sufficiency and renewable energies,” she said, adding, “We need this kind of financing for the residential sector as well.”
For now, Lean & Green Michigan is concentrating on spreading the word in the business sector. Levin is hoping that there will be more interest as more projects come on line. So far, his team’s pride and joy is a case where the Michigan Public Service Commission used PACE financing to retrofit a privately owned building it leases.
So far, less than half a million dollars in PACE financing has generated $720,000 in savings. But there are more than $50 million in other projects in the pipeline, including one at a major shopping mall. “I’m as excited about this as anything I’ve done,” he said.
If his project eventually saves businesses and tenants the billions that seem possible, he won’t be the only one. Anyone interested can learn more at www.leanandgreenmi.com.
Veteran journalist and national Emmy Award winnerteaches at Wayne State University, serves as Michigan Radio’s senior political analyst and writes regularly for several publications. He also serves as The Toledo Blade’s writing coach and ombudsman and is host of the weekly television show Deadline Now on WGTE-TV in Toledo.