Commission hears New Mexico CPACE briefing; Exceptional Healthcare outlines Farmington emergency hospital financing needs

San Juan County commissioners heard a presentation on New Mexico’s CPACE (Commercial Property Assessed Clean Energy) program and a project briefing from Exceptional Healthcare, which said it intends to use CPACE financing for energy- and water-efficiency measures at a Farmington emergency hospital under construction.

Eric Christensen, program administrator with Adelante Consulting, explained that CPACE finances energy, water and resiliency improvements on privately owned commercial, agricultural, industrial and multifamily properties of five or more units. “All of the funding comes from the private sector,” Christensen said, and counties must opt in by ordinance to permit CPACE transactions in their jurisdictions because the program uses an improvement special assessment lien to secure repayment.

Christensen highlighted features county officials asked about during the Q&A: CPACE transactions do not make a county liable for the property owner’s debt; the lender — not the county — generally handles billing and collections; lenders require lienholder consent because the CPACE special assessment holds priority after property taxes; and the program charges an administrative fee of 1% of the financing amount capped at $25,000 to sustain program operations. New Mexico’s statutory authorization was the Improvement Special Assessment Act (2023), Christensen said.

Don Nicolini, vice president of development for Exceptional Healthcare, described the Farmington facility as an emergency hospital with 24/7 staffing, observation beds and imaging, targeting an opening in the fourth quarter of the year. Nicolini said the company has already invested capital into construction and energy upgrades and is seeking CPACE to help finance costly, efficiency-focused components such as its HVAC system. “The HVAC system for our hospital to do the energy conservation improvements cost $1,200,000. That would change. So I need help paying for it,” Nicolini said.

Nicolini described the current project footprint as roughly 21,000 square feet with an additional 4,000 square feet added after community feedback. He also said the site plan includes provisions for a helipad; Nicolini said the Federal Aviation Administration has issued the helipad license and the company will seek a special-use permit from the City of Farmington.

County Treasurer Miss Talby asked whether the assessor’s office or treasury would have new reporting responsibilities. Christensen said modern CPACE programs typically delegate billing and collection to the lender (rather than placing repayments on the county tax bill) and offered to connect county staff with assessor offices in other counties that have closed CPACE transactions.

Commissioners asked about patient transfers and operational agreements with hospitals. Nicolini said transfers and clinical coordination are management- and operations-level responsibilities handled by Exceptional Healthcare operations staff; he said conversations with local providers — including San Juan Regional Medical Center — were ongoing but not finalized. Commissioners requested follow-up contact with Exceptional Healthcare’s operations leads for details about emergency protocols.

Christensen also summarized transactions in New Mexico, including a large Santa Fe transaction (Bishop’s Lodge, a $76,000,000 package over 25 years) and other projects including a multifamily transaction (Rancho Santa Fe Apartments, about $15.9 million over 27 years). He said CPACE offers fixed-rate financing up to 30 years, can fund retrofit or new construction, and can finance eligible measures completed within three years of application approval.