Washington County staff recommend sunsetting CPACE pilot after two completed projects

Acting Chair Pam Treese — sitting in for Chair Harrington — and county staff discussed a staff recommendation to end Washington County’s Commercial Property Assessed Clean Energy program before its scheduled demonstration end date.

"Based on the lack of meaningful policy connections, we recommend sunsetting the program," Economic Development Manager Adrienne Chalay told the Board. Staff said the recommendation is driven primarily by insufficient staffing to manage the program and by limited evidence that the program produced the intended resilience and economic-development outcomes.

The CPACE program, authorized by the Oregon State Legislature and implemented by the County through Board ordinance, allows private capital providers to make long‑term, priority-lien loans to commercial property owners for clean‑energy, water‑efficiency and seismic improvements. Washington County adopted Ordinance 891 on Oct. 18, 2022, and a second ordinance amendment in Nov. 2024 established a demonstration period through 2025 and required a program assessment prior to a December 30, 2025 sunset unless the Board continued it.

Chalay and Assistant County Administrator Anne Ober told commissioners the County received multiple inquiries since 2022 but has completed two CPACE projects: a 90‑room hotel in the Cedar Mill area financed with a CPACE loan of $9,900,000, and a self‑storage facility near the Hillsboro airport with a CPACE loan of $8,600,000. Both loans were financed by private capital providers; staff said capital providers often initiate CPACE deals and that minimum project sizes and lender relationships have limited takeup among smaller property owners.

Staff described several recurring impediments in the application pipeline: the requirement that the CPACE loan take super‑priority in the property lien stack, difficulties obtaining lienholder consent or subordination, and turnover among capital providers in some transactions. Staff also said one additional application reached the deposit stage but failed to close because the owner could not secure lienholder consent.

The County collects application and closing fees; staff said each of the two closed projects paid a $15,000 fee. Chalay noted the County is reimbursed for processing fees but said the time required from economic development staff and County counsel has been substantial compared with the program’s limited local policy outcomes.

If the Board supports staff’s recommendation, the proposed schedule would bring an ordinance to the Board for a first reading on March 18 and a second reading with public hearing on April 1; if adopted the ordinance would become effective no sooner than 14 days after adoption. Staff said the County could also continue to provide technical assistance to cities and regional partners that want to run CPACE programs locally and that outside groups (noted in the presentation as Kolpak/OPAC and other capital‑provider entities) are researching alternative ways to structure CPACE offerings.

Commissioners asked whether there are projects in the pipeline (staff said none at present), whether the County will need to take action if a closed project defaults (staff said only to the extent enforcement of the benefit assessment agreement is required for lien enforcement), and whether the Board could simply allow the ordinance to expire on Dec. 30, 2025 rather than pass an amendment now. Staff replied letting the ordinance lapse is an option but recommended the ordinance process if the Board wants a clearer termination or to prevent new applications immediately.

Several commissioners said the program appears to have been a niche tool that required many aligned conditions to benefit smaller property owners, and they indicated support for sunsetting while retaining the option to revisit CPACE if demand grows and staffing returns.

Chalay and Ober said they will provide any additional materials the Board requests and that staff will support outreach if cities or partner districts want to pursue CPACE variants.