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Green Resources of the Financial Kind

Green Resources of the Financial Kind. F. L. Andrew Padian Vice President for Energy Initiatives The Community Preservation Corporation Northeast Regional Buyers Sellers Conference Albany NY July 1, 2010. The Community Preservation Corporation (CPC).

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Green Resources of the Financial Kind

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  1. Green Resources of the Financial Kind F. L. Andrew Padian Vice President for Energy Initiatives The Community Preservation Corporation Northeast Regional Buyers Sellers Conference Albany NY July 1, 2010

  2. The Community Preservation Corporation (CPC) • Non-profit 501 c(3) mortgage finance company • Founded in 1974 by NY clearinghouse banks • Sponsored by more than 70 banks and insurance companies in NY, NJ and CT • CPC Mission: • Provide an economic platform of investment to spur recovery in distressed communities • Develop and enhance public/private partnerships

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  7. The CPC One-Stop Shop Construction & Permanent Financing From Participating Banks Credit Enhancement CPC Public Subsidies & Approvals Technical Assistance Borrower

  8. Create a Program: “The CPC Green Initiative” • ONE BILLION DOLLARS! • Construction and permanent financing • Target Market - occupied multifamily properties • Audits - benchmark the buildings, create a usage database • Monitor the retrofits and measure the savings • Create a “One Stop Shop” for retrofit financing • Fold in the public incentives • Make retrofit part of the standard mortgage process

  9. Obstacle 1.: Resistance • Property Owners • Burdened by the recession • Not eager to take on new costs • Don’t always care about environmental implications • Institutional reluctance at CPC • Ongoing internal campaign to get comprehensive support for the “Green” Initiative • No corporate sustainability policy • Investment Community • Banks reluctant to put “new” money into programs • Willing partners: Local, State and Federal Governments • People tend to resist when government says to do something

  10. Obstacle 2.: Lack of Education • Economic benefits of retrofit are not empirically proven in multifamily finance • Deutsche Bank & Living Cities Study • This is not a simple problem to fix • People don’t believe in climate change • If the do they don’t want to think about it • People who do believe don’t have a road map • People haven’t personalized the issue • We are a long way from the tipping point

  11. Obstacle 3.: Lack of Flexible Public Programs • Recovery Through Retrofit • American Recovery & Reinvestment Act (ARRA) • Stimulus = Davis Bacon Act prevailing wage rates • Added cost to already marginal deals… • Reporting requirements are daunting for small owners • Incentive programs in NY take time to develop • NYSERDA, Local Utilities • CPC faces new sector challenges: • Energy vs. Housing • New language • New partners have different goals

  12. Scale of the Need in NY City • 3,328,000 Residential Units • If all units require retrofit at $3,000/unit • $9,984,000,000 • Weatherization for all of NY State • $440 million through the stimulus. • Less than 4.5% of the money needed

  13. CPC Green Initiative Goals • CPC’s Program is meant to do all of this • Make standard long term financing the glue that brings it all together • If the financing requires it – it has to get done • Appraisal, environmental report, engineering report and now – AUDIT! • Create a new mortgage delivery system • Engage capitalism

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