Aurora committee approves ordinance to enable IFA commercial PACE financing

The Aurora Rules Administration Procedure Committee voted Jan. 6 to approve an ordinance enabling the Illinois Finance Authority's commercial property-assessed clean energy (CPACE) program within city limits, allowing eligible property owners to access third-party financing for energy efficiency, renewable energy, water conservation and certain resiliency projects.

Lisonbee Lindberg, director of sustainability for the City of Aurora, told the committee the ordinance would "allow eligible property owners within city limits to access this financing" and emphasized "there's no cost, debt, or financial liability to the city at all." Brad Fletcher of the Illinois Finance Authority described the agency as a state conduit issuer that works with private capital providers to underwrite and fund projects.

Under the program as described to the committee, financing is repaid through a special assessment on the property, paid alongside property taxes; the IFA issues bonds or notes through private lenders and administers the program. Lindberg said projects may be financed up to 100% of eligible project costs subject to limitations tied to property value (she described a working example where a $250,000 project on a $1,000,000 property could be covered). Typical financing terms discussed ranged from roughly 10 to 30 years (with statutory authority allowing up to 40 years in limited cases). Fletcher said interest rates are set by private lenders and underwriters and are priced on a project-by-project basis.

Fletcher also explained an important market and legal characteristic: "PACE financing does not accelerate upon a default," meaning the assessment does not become immediately due in full the way a mortgage might, and that PACE obligations can remain attached to the property and transfer with a sale. Both presenters stressed the ordinance is enabling only: the city will have final sign-off on any CPACE project and may refuse to execute closing documents if not satisfied.

Lindberg said the city will charge a $150 administrative fee per project (waivable) and plans to track projects for economic development and sustainability data. Fletcher said IFA has financed roughly $85 million to $90 million in CPACE-type financing across Illinois to date and framed Aurora's multi-county geography (four counties) as a reason a citywide, standardized program could reduce friction for lenders and developers.

Aldermen asked about eligibility for roofs, condominiums, HOAs for commercial uses, multifamily units (five units or more), annexation of unincorporated property and whether nonprofits qualify; presenters said many such uses generally can qualify under the statute and that the 2019 rewrite clarified certain nonprofit and condominium eligibility.

Alderman Berreau moved to approve ordinance 25-0947; the motion passed on a voice vote and the chair announced, "Ayes have it 4 0." The item will move on to the Committee of the Whole for further consideration.

Next steps: the ordinance will proceed to the Committee of the Whole (COW) for further action and any specific CPACE project would return to the city for a final sign-off before execution.