ORDINANCE
WHEREAS, the City of Chicago (the "City") is a municipal corporation and home rule unit of local government of the State of Illinois authorized pursuant to the Property Assessed Clean Energy Act (50 ILCS 50/1 et seq.) (as amended, supplemented,' modified or replaced, the "PACE Act'') to establish a property assessed clean energy program (the "PACE Program''), create a PACE area (as defined in the PACE Act) and finance energy projects (as defined in the PACE Act); and
WHEREAS, pursuant to an ordinance adopted by the City Council of the City on July 25, 2018 and published at pages 81,610 - 81,771 of the Journal of the Proceedings of the City Council (the "Journal") for such date, Loop-Counterpointe Pace LLC was designated a Program Administrator (the "Administrator"') to assist the City in developing a PACE Program; and
WHEREAS, pursuant to an ordinance adopted by the City Council of the City on October 31, 2018 and published at pages 86,559- 86,593 of the Journal for such date (the "Authorizing Ordinance"), (a) a Program Report setting forth certain terms of the proposed PACE Program in conformity with the PACE Act (the "Original Report") was approved, (b) the PACE area was established, (c) the PACE Program was established in accordance with the Original Report, (d) the form of assessment contract with borrowers meeting the requirements set forth in the Original Report was approved, and (e) certain related actions were authorized; and
WHEREAS, the PACE Act was amended by Public Act 101-0169, effective July 29, 2019 (the "PACE Act Amendments"); and
WHEREAS, the Administrator has prepared the Amended Program Report attached hereto as Exhibit A (the "Amended Report") setting forth certain terms of the PACE Program in conformity with the PACE Act. including the PACE Act Amendments; and
WHEREAS, the City desires to approve the Amended Report,, approve a form of assessment contract with borrowers meeting the requirements set forth in the Amended Report, and amend the Authorizing Ordinance; now. therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CHICAGO AS FOLLOWS:
Section 1. Incorporation of the Recitals. The City hereby finds that all of the recitals contained in the preambles to this Ordinance arc true, correct and complete and are hereby incorporated by reference thereto and are made a part hereof.
Section 2. Amended Report. The Amended Report is hereby incorporated by reference thereto and made a part hereof. The City hereby approves the Amended Report in substantially the form attached hereto as Exhibit A. with such changes, deletions and insertions as shall be approved by the Commissioner of the City's Department of Planning and Development or a designee of such Commissioner (collectively, an "Authorized Officer"), including without limitation changes necessary or desirable in connection with amendments to
the PACE Act after the date hereof. All references in the Authorizing Ordinance to the Report are deemed to be references to the Amended Report.
Section 3. Amended Assessment Contract. The City hereby approves the form of Assessment Contract attached as Appendix B (the "Amended Assessment Contract") to the Amended Report, with such changes, deletions and insertions as shall be approved by an Authorized Officer, including without limitation changes necessary or desirable in connection with amendments to the PACE Act after the date hereof. All references in the Authorizing Ordinance to the Assessment Contract are deemed to be references to the Amended Assessment Contract.
Section 4. Amendment to Authorizing Ordinance. Section 5(c) of the Authorizing Ordinance is hereby amended by deleting the language struck through and inserting the language underscored, as follows:
(c) to negotiate, execute and deliver an agreement with the record owner of each property subject to an Assessment Contract (the "Owner"), under which the Owner would, with respect to the energy project, agree to comply with (i) the payment of prevailing wage rate as ascertained by the Illinois Department of Labor, and (ii) for energy projects in which the total project cost is over $2,000,000, the Minority-Owned and Women-Owned,Business Enterprise Procurement Program, Section 2-92-420 et seq., of the Municipal Code of the City of Chicago, as amended from time to time (the "Code") and the Minority- and Women-Owned Business Enterprise Construction Program, Section 2-92-650 et seq. of the Code and {Hi) Section 2-92-330 of the Code with respect to the number of total worker hours worked by actual residents of the City; and
Section 5. Enactment. The provisions of this Ordinance are hereby declared to be separable and if any section, phrase or provision shall for any reason be declared by a court of competent jurisdiction to be invalid or unenforceable, such declaration shall not affect the validity or enforceability of the remainder of the sections,, phrases and provisions hereof. All ordinances, orders and resolutions and parts thereof in conflict herewith are to the extent of such conflict hereby repealed, and this Ordinance shall take effect and be in full force immediately upon its adoption. No provision of the Code or violation of any provision of the Code shall be deemed to impair the validity of this Ordinance or the instruments authorized by this Ordinance or to impair the security for or payment of the instruments authorized by this Ordinance; provided further, however, that the foregoing shall not be deemed to affect the availability of any other remedy or penalty for any violation of any provision of the Code.
Section 6. Effective Date. This Ordinance shall become effective upon its passage and approval.
EXHIBIT A
Amended Program Report (attached)
CITY OF CHICAGO
Program Report )jc '
Property Assessed Clean Energy Program
09.09.2019 (Revised)
111 CITYOFCHH
mLQ', Program Report
gg&P Property Assessed Clean Energy Program
Table of Contents
Introduction|910|Purpose of the Program Report|910|Description of Chicago PACE|910|The Benefits of PACE |910|Roles and Responsibilities|910|Form of Assessment Contract|910|Identification of City Officials Authorized to Enter into an Assessment Contract|910|Program Eligibility Requirements|910|Application Process|910|Method for Determining Interest Rates, Repayment Periods, and Maximum Amount of an
Assessment|910|i
How Assessments Are Made and Collected !|910|Plan to Raise Capital|910|User Fees|910|The Term of an Assessment: 9
Determining Ratio of Assessment Amount to Property Value for the Program 9
Mortgage Notification and Consent 9
Marketing and Education 10
Additional Quality Assurance and Antifraud 10
Appendices
Map of the City of Chicago
Form of Assessment Contract
CITY OF CHICAGO
Introduction
The Cily of Chicago (the "City") is establishing a voluntary property assessed clean energy ("PACE") program to finance or refinance the acquisition, construction, installation or modification of an alternative energy improvement, renewable energy improvement, resiliency improvement or water use improvement that is affixed to real property including new construction (collectively, "Energy Projects").
The City's PACE program, known as Chicago PACE ("Chicago PACE"* or the "Program") is available for privately-owned commercial, industrial, multi-family (live or more units) and non-residential agricultural properties in the City (collectively, "Properties"). Chicago PACE is available City-wide, as reflected on the PACE area map, which is attached as Appendix A.
The Program is designed to accelerate private investment in Energy Projects on existing and newly constructed buildings on Properties. The City and its residents and businesses will benefit from the Energy Projects financed through the Program that enables private sector funding for up to 100% of the costs of Energy Projects, at no cost to the City, to further the City's sustainability and economic development goals, including:
Energy Efficiency and Clean Energy
Water Conservation
Climate Change Mitigation
Improved Air Quality
Economic Development and Job Creation
Minority- and Women-Owned Enterprises Engagement
Purpose of the Program Report
Enacted in 2017 and amended in 2018 (effective January 1, 2019) and 2019 (effective July 29, 2019), the Property Assessed Clean Energy Act, 50 ILCS 50/1 et seq. (the "Illinois PACE Act") authorizes local units of government in Illinois to establish PACE programs. The City established a PACE program by adopting an ordinance on October 31, 2018, meeting the requirements of Section 15 of" the Illinois PACE Act, including the adoption of a program report as required by Section 20 of the Illinois PACE Act. The
City adopted an ordinance on , 2019 approving an amended program report. This Program
Report contains a description of how PACE works, its benefits and an outline of the basic design and financing or refinancing structure of the Program.
Description of Chicago PACE
Chicago PACE finances or refinances the voluntary acquisition, construction, installation or modification of Energy Projects on Properties, utilizing a non-ad valorem assessment on the Properties being improved (the "Assessment*'). Record owners can use PACE financing or refinancing to fund up to 100% of the costs involved in Energy Projects, including all related equipment, materials and labor, as well as soft and closing costs.
The City will enter into an assessment contract with the record owner (the "Assessment Contract") in order to secure the PACE financing or refinancing. The Assessment Contract describes the Energy Project being financed, the Property on which such Energy Project will be affixed, and the amount financed. The Assessment Contract will also define capitalized closing costs, the interest rate, the term, the annual installments, including estimated annual costs, and the prepayment terms and conditions. Interest rates are fixed, the Assessment fully amortizes over the term of the Assessment and there are no balloon payments.
City ol"Chicago PACE Program Report
CITY OF CHICAGO
The Assessment Contract will be recorded by the Cook County Recorder of Deeds as a lien on the property and thereafter will be funded through the issuance of PACE bonds by the City or the Illinois Finance Authority (the "IFA"). ln some cases, Energy Projects may also be temporarily funded through a warehouse fund until the PACE bonds are issued. Pursuant to the Assessment Contract, the record owner makes Assessment installment payments of principal, interest, and any other annual costs. The Assessments are either billed directly to the record owner or added to'the record owner's tax bill.
Because the Assessment is attached to the Property being improved, if the Property is sold before the Assessment is paid off the balance of the Assessment Contract remains with the Properly and seamlessly transfers to the new record owner without any need to approve the new record owner.
- ; PACE Project Process
Record Owner 1 prequalifiesiwith Program Administrator*
If qualifiedjiRecord Owner hiresibuilding . professionals
.Upon approval, Record OwnerS and the Gity execute an ¦ Assessment Contract :::
M" 'Asse&smenfjConfrdct.isv- ~j k recorded' fay' t^^^ook'Courity^ "*iRecorderibflI)eeds
Bond*Issuer (City or IFA) i sells PACEibonds to pay for the. approved Energy " i Projects
¦>" •">* Contractors commenceiworkf on. the ^approved Eneir^' Projects'sand'afe paid in '-f installments as work is completedswithithe i' - \' . net PACE bond proceeds.
*" ""RecordsOwneriisTeither billed by ¦
the Program^AoJiunistratoriOr the— i Cook Countv's.Treasurer's Office
m0KMi:£mms:L. ¦ ¦¦
The Benefits of PACE
PACE provides the following benefits to the City:
Improves air quality and reduces pollution;
Accelerates needed private infrastructure improvements;
Spurs local workforce development and job creation in the clean energy sector;
Provides a steady stream of work and revenue to building professionals; and
Boosts Minority- and Women-Owned Enterprises.
Roles and Responsibilities
The City's Department of Planning and Development ("DPD") will oversee Chicago PACE. As the principal planning agency for the City, DPD promotes the comprehensive growth and sustainability of the City and its neighborhoods. DPD also oversees the City's zoning and land use policies, and. through its economic development and housing bureaus, employs a variety of resources to encourage business and real estate development, as well as a diverse and stable housing stock throughout the City.
The City has selected Loop-Counterpointe PACE LLC ("LCP") lo serve as the program administrator for the Program (the "Prom-am Administrator") and has entered into an agreement with LCP.
City of Chicago PACE Program Report
CITY OF CHICAGO
I lie Program Administrator will be responsible for overseeing and implementing the Program, including: processing applications; statutory underwriting; coordinating among record owners, capital providers, contractors and other building professionals; reporting and arranging for reporting to the City; Program marketing and outreach to record owners, contractors and other building professionals, the Minority- and Women-Owned Business Enterprise ("M/WBE"') community and the real estate and environmental associations; and arranging for capital. The primary responsibilities of the Program Administrator will be to:
Receive, process and approve PACE financing or refinancing applications
Manage the day-to-day operations of the Program
Establish a Program website
Register contractors and other building professionals, third-party capital providers, and energy consultants
Publish the Program Guidebook (the "Guidebook'") for record owners and contractors and other building professionals
Provide detailed guidelines on how to apply for and receive PACE financing or refinancing
Provide summary statistics and reports to DPD
Form of Assessment Contract
The form of the Assessment Contract between the City and the record owner(s) of the Property for which PACE financing or refinancing is provided is attached to this Program Report as Appendix B. The Assessment Contract contains the terms of the Assessment under the Program and the financing or refinancing to be provided by way of the issuance of" PACE bonds or temporarily through warehouse financing or refinancing before PACE bonds are issued. The form of the Assessment Contract will be completed and, as necessary, modified to include the specific terms of each financing or refinancing.
Identification of City Officials Authorized to Enter into an Assessment Contract
T he Commissioner of DPD is authorized to enter into Assessment Contracts.
Program Eligibility Requirements
Eligible Properties. The Illinois PACE Act prescribes the types of privately-owned real properties or real property owned by a not-for-profit located in the City on which eligible Energy Projects may be affixed.
Commercial
Industrial
Multi-family (Five (5) or more units)
Non-residential agricultural.
Residential properties of four (4) units or less and properties owned by a governmental unit are not eligible.
Eligible Energy Projects. The types of Energy Projects that are eligible for PACE financing or refinancing are, but not limited to:
"Alternative enemy improvements" any fixture, product, system, equipment, device, material, or interacting group thereof intended to charge a motor vehicle that is fully or partially powered by electricity, including but not limited to:
City of Chicago PACE Program Report
CITY OF CHICAGO
¦ Charging stations including electrical wiring and outlets
"Energy efficiency improvements" any fixture, product, system, equipment, device, material, or interacting group thereof intended to decrease energy consumption or enable a more efficient use of electricity, natural gas, propane, or other forms of energy on property, including but not limited to: S Insulation in walls, roofs, floors, foundations, or heating and cooling distribution systems; ^ Energy efficient windows and doors, multi-glazed windows and doors, heat absorbing or heat-rcflcctive glazed and coated window and door systems and additional glazing, reductions in glass area, and other window and door systems that reduce energy consumption; S Automated energy or water control systems;
•S High efficiency heating, ventilating, or air-conditioning and distribution systems;
S Caulking, weather-stripping, and air sealing;
S Energy lighting fixtures;
S Energy controls or recovery systems;
S Day lighting systems;
S Any energy efficiency project, as defined in Section 825-65 of the Illinois Finance Authority Act; and
S Any other fixture, product, system, equipment, device, or material intended as a utility or other cost-savings measure as approved by the City.
"Renewable energy improvements" any fixture, product, system, equipment, device, material, or interacting group thereof on the property of the record owner that use one of more renewable energy resources to generate electricity, including any renewable energy project, as defined in Section 825-65 of the Illinois Finance Authority Act.
"Resiliency improvements" any fixture, product, system, equipment, device, material, or interacting group intended to increase resilience or improve the durability of infrastructure, including but not limited to:
^ Seismic retrofits
S Flood mitigation
S Fire suppression
S Wind resistance
S Energy storage
S Microgrids
S Backup power generation
"Water use improvement" any resiliency improvement, fixture, product, system, equipment, device, material or interacting group thereof intended to conserve water resources or improve water quality on property, including but not limited to, all of the following: S Water management or efficiency systems ¦S Water recycling
S Capturing, reusing, managing, and treating stormwater
S Bioretention, trees, green roof, porous pavements, or cisterns for maintain or restoring natural hydrology
S Replacing or otherwise abating or mitigating the use of lead pipes in the supply of water: and
City of Chicago PACE Program Report
CITY OF CHICAGO
S Any other resiliency improvement, fixture, product, system, equipment, device, or material intended as a utility or other cost-savings measure as approved by the City.
The Program website and the Guidebook will further describe the eligibility requirements for each type of eligible Energy Project.
Other Statutory Underwriting Requirements. The Illinois PACE Act prescribes statutory underwriting criteria that each applicant must satisfy. The record owner must provide evidence of the
following:
The property must be located entirely within the Chicago PACE area, which is the City's limits, as reflected on Appendix A.
There are no delinquent taxes, special assessments, or water or sewer charges on the property.
There arc no delinquent Assessments on the property under a PACE program.
Whether there are any involuntary liens on the property, including, but not limited lo, construction or mechanics liens, lis pendens or judgments against the record owner, environmental proceedings, or eminent domain proceedings. There are no notices of default or other evidence of property-based debt delinquency that have been recorded and not cured.
The record owner is current on all mortgage debt on the property, the record owner has not filed for bankruptcy in the last 2 years, and the property is not an asset in a current bankruptcy proceeding.
The aggregate amount financed or refinanced under one or more Assessment Contracts cannot exceed 25% of the greater of (1) the assessed value of the property or (2) the appraised value, as determined by a licensed appraiser.
All work requiring a license, under any applicable law, to acquire, construct, install or modify an Energy Project shall be performed by a licensed contractor or other building professional that agreed to adhere to a set of terms and conditions through a process established by the Program.
- ¦ The contractors to be used have signed a written acknowledgement that the City will not authorize final payment to the contractor until the City has received written confirmation from the record owner that the Energy Project was properly acquired, constructed, installed or modified and is operating as intended; provided, however, that the contractor or contractors retains all legal rights and remedies in the event there is a disagreement with the record owner.
The record owner shall provide to the City an evaluation of the existing water or energy, use and a modeling of expected monetary savings for any proposed Energy Project. Water Use Improvement Projects that improve water quality do not have to model expected monetary savings.
Capital Provider Underwriting Requirements. In addition to the statutory underwriting requirements, the applicable capital provider may have additional underwriting requirements. The Program website and the Guidebook will have additional information regarding these requirements and the specific underwriting requirements will be made available to record owners upon request.
Compliance Requirements. All projects will comply with the State's prevailing wage requirements and reporting obligations. Projects in which the total project cost is over $2 million will comply with the City's Minority and Women-Owned enterprise participation requirements and with requirements with respect to the number of total worker hours worked by actual residents of the City. I he Program website and the Guidebook will have additional information regarding these requirements and obligations.
Application Process
City of Chicago PACE Program Report
CITY OF CHICAGO
The application process is described below.
Prc-Application Process
Preliminary Review
Submit Required Documentation
Final Review, Signing and Recording
Closing and Bond Issuance
Chicago PACE Application Program
Pie-Application Process
Application
Preliminary Review >>
Submit
Required
Documentation
Record owners can visit the Program's website or review the Guidebook to: Review the eligibility requirements
Review the terms and conditions of financing or refinancing Review the application process
Download or complete an Application to pre-qualify their eligible projects
The Program Administrator will accept applications through the Program website, by mail or over the telephone
Each application must be accompanied by the required application fee and must include: A description of the proposed Energy Project to be installed or modified A legal description of the eligible property to which the proposed Energy Project will be installed
A completed Economic Disclosure Statement and Affidavit
Based on the information in the application and information obtained by the Program Administrator from public sources, the Program Administrator may issue a preliminary approval letter granting approval of the requested financing or refinancing, in whole or part The preliminary approval will be subject to verification of all eligibility requirements and any other conditions specified in such preliminary approval letter on or before the closing of the Assessment
The record owner will be required to:
Obtain an acceptable property appraisal, if a current one does not exist
Obtain an assessment of the existing conditions and modeling of expected monetary
savings for the proposed Energy Project
Acquire a financial commitment from a capital provider, with assistance from the Program Administrator (if needed)
Provide lien holders with notice of intent, and obtain lender consent, to enter into an Assessment Contract with the City
Submit any other information and documentation requested by the Program Administrator
Final Review, Signing and Recording
The Program Administrator will review all the required information and documentation submitted by the record owner
If all the information and documentation is satisfactory, the Program Administrator will complete an Assessment Contract and all other documentation required in connection with Assessment Contract and submit it to the record owner for signature and thereafter submit it to the City for signature
Assessment contract will be recorded after execution
¦ Following the recording of the Assessment Contract, the Program Administrator will
Closing and coordinate with the record owner, the issuer of the bonds and the capital provider, as well as
Bond Issuance any other service providers, lo cause the PACE bonds to be issued (or funds provided under
a warehouse fund) and the proceeds thereof applied in accordance with the Assessment Contract and the PACE bonds or the warehouse fund.
City of Chicago PACE Program Report
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Method for Determining Interest Rates, Repayment Periods, and Maximum Amount of an Assessment
Interest Rates. The interest rate that will be charged pursuant to any Assessment Contract will be determined by the capital provider based on prevailing market conditions, subject to negotiation by the record owner. The Program Administrator is committed to scaling Chicago PACE and will seek to arrange capital with interest rates competitive with other PACE programs.
Repayment Periods. The repayment period for an Assessment cannot exceed the estimated useful life of the Energy Projects being financed. The record owner may request, or the capital provider may require, a shorter period.
Assessment Amount. 'I he aggregate Assessment amounts cannot exceed 25% of the greater of the assessed value or the appraised value, as determined by a licensed appraiser,' of the property, ln addition, the maximum amount of an Assessment may not exceed the actual cost of the Energy Projects being financed or refinanced and closing costs, including the cost of materials and labor necessary for the acquisition, construction, installation or modification of the Energy Projects, permit fees, inspection fees, application and administrative fees, bank fees, and all other fees that may be incurred by the record owner pursuant to the installation and modification of the Energy Projects and the issuance of PACE bonds, including capitalized interest and prepayment fees.
How Assessments Are Made and Collected
The Assessment Contract will be recorded by the Cook County Recorder of Deeds as a lien on the property, until the Assessment, including any interest, penalty and prepayment fee, is paid in full. The lien has the same priority as real estate property taxes and other special assessment liens.
Assessment installments may be billed either by the Cook County Treasurer's Office, which would include the installments on the property's tax bill or by the City, which would issue invoices through the Program Administrator. The installments generally are payable semi-annually on the first business day in March and September. The payments by the record owner are used to pay the Assessment which secure the outstanding PACE bonds or the warehouse fund. The Program Administrator will notify the City, who then notifies the Cook County Treasurer's Office, if any Assessment installment is delinquent. Delinquent Assessment installments are subject to the same rights and remedies as delinquent real estate property taxes or other delinquent special assessments, including a property tax sale.
Plan to Raise Capital
The City may issue PACE bonds under the Illinois PACE Act or the City can elect to have the Illinois Finance Authority ("1FA") issue PACE bonds. Subsection (cl) of Section 825-65 of the Illinois Finance Authority Act provides for the assignment of Assessment Contracts securing such PACE bonds by the City to the IFA. Interim financing prior to the issuance of PACE bonds by the City or the IFA may be provided only by a warehouse fund, except that warehouse funds or interim financing established by capital providers may only hold Assessment Contracts for a maximum of 36 months from the date of recording of the applicable Assessment Contract.
PACE bonds issued to finance or refinance Energy Projects under the Illinois PACE Act shall not be general obligations of the City or the IFA but shall be secured by the payments under one or more
City of Chicago PACT. Program Report
CITY OF CHICAGO
Assessment Contracts on benefited property or properties within the City and. if applicable, revenue sources or reserves established by the City or the IFA from bond proceeds or other lawfully available funds. In addition, PACE bonds may be secured by municipal bond insurance, letters of credit or public or private guarantees or sureties. The maturity of the PACE bonds shall not exceed 40 years from the date of issuance.
The Program Administrator is responsible for arranging the capital to acquire the bonds to finance or refinance approved Energy Projects. During the pilot stage, the Program Administrator will provide capital from two sources to ensure a sufficient funds are available to acquire the PACE bonds issued by the City or the IFA or to establish a warehouse fund. The Program Administrator will provide the capital through its affiliate, Counterpointe Sustainable Real Estate and through capital raised by Loop Capital Markets in private placements. All purchasers of the PACE bonds and warehouse lenders will be accredited investors or qualified institutional buyers that are approved by Loop Capital Markets and the Program Administrator pursuant to requirements that will be set forth in the Guidebook.
After a pilot stage period of 12 months from the closing of the City's first PACE transaction, the Program Administrator will solicit third party capital providers (a "Third Party Capital Provider") to apply to register with the Program to originate Assessments to finance or refinance Energy Projects and to purchase PACE bonds to finance or refinance such projects. Each approved Third Party Capital Provider will also pay M/WBE Outreach Program Fees (the "'Program Fees") for each Assessment based on a percentage of the cost of each Energy Project linanced or refinanced with PACE bonds purchased by such Third Party Capital Provider. The amount of the Program Fees will be set from time to time by the Program Administrator with the approval of the Commissioner of DPD. The Program Fees will be outlined in the Guidebook. The Program Fees will be earmarked for M/WBE community engagement by the Program Administrator, including outreach opportunities for the M/WBE contractors and other .building professionals.
As Chicago PACE evolves, the Program Administrator will seek to employ , more complex bond structures to attract a broader group of capital providers with different investment goals and risk appetites to further drive down the cost of PACE financing or refinancing in Chicago.
User Fees
The record owner will be charged certain fees and costs in connection with applying for and obtaining financing or refinancing under the Program: The Program Administrator will not charge a fee for contractors or other building professional to apply for, or to maintain, registration with the Program.
Certain fees are categorized as Costs of Issuance, Annual Fees or Application Fees and can be financed under the Assessment Contract. The actual amounts and additional details will be provided on the Program website and in the Guidebook.
Cost of Issuance. The cost of issuance includes:
A program administrative fee. payable to the Program Administrator.
A City administrative fee, payable to the City in connection with DPD's oversight of the Program and the Program Administrator,
A private placement fee, payable to Loop Capital Markets for acting as the private placement agent or underwriter of the bonds issued in connection with the Program,
An issuer fee. payable to IFA as the issuer of the bonds issued in connection with the Program, but only if IFA is selected by the City to be the issuer.
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CITY OF CHICAGO
Counsel tees (bond and/or disclosure) and trustee tees, payable to counsel and the trustee in connection with the issuance of the bonds.
Deposits lo reserve funds established in connection with the issuance of the bonds, if applicable,
Recording fees payable to the Cook County Recorders Of lice to cover the cost of recording the Assessment Contract,
Capital provider origination fee, payable to the applicable capital provider in connection with purchase of the bonds or the warehouse funds and
The additional Program Fee required of Third Party Capital Providers, if applicable.
Annual Fees. The recurring annual fees consist of the annual trustee's fee, the annual servicer's fee and, if the Cook County Treasurer bills the record owner for the annual installment of the Assessment, then the fee, if any, of the Cook County Treasurer. "None of the recurring annual fees may be capitalized and all the recurring annual fees are subject to either contracts with the City or approval by the Cily.
Application Fee. There will be no fee for initial prequalification to determine whether a record owner and the property meet the minimum eligibility criteria of the Program. Once an application is submitted to the Program, an application fee will be charged. If the Assessment closes, the fee will be applied as a credit against the Program Administration fee payable to the Program.
The Term of an Assessment
The maturity of an Assessment may not exceed the useful life of the Energy Project. The expected useful life is determined based on industry standards and manufacturer's warranties. A partial list of types of Energy Projects and their estimated expected useful lives can be found in the Guidebook. When installing multiple Energy Projects, the maximum maturity available is the maturity associated with the greatest financing or refinancing amount. The maturity of an Assessment will generally be in five-year increments, between five and 40 years. The Program reserves the right to approve a maturity shorter than the requested maturity. The maturity of the Assessment will be set forth in the Assessment Contract.
Determining Ratio of Assessment Amount to Property Value for the Program
For the purpose of determining the value of a property for inclusion in the Program, the property will be valued at the greater of (1) the assessed value of the property and (2) the appraised value of the property, as determined by a licensed appraiser. If the proposed Energy Project qualifies for the Program utilizing the assessed value, the Program Administrator may waive the requirement to obtain an appraisal.
Mortgage Notification and Consent
Under the Illinois PACE Act, the record owner shall provide written consent from the holders or loan servicers of any existing mortgages encumbering or otherwise secured by the Property, to enter into the Assessment Contract, together with the maximum principal amount to be financed and the maximum annual Assessment necessary to repay that amount. A verified copy of the written consent of the existing mortgage holder for the record owner to enter into the Assessment Contract and acknowledging that the existing mortgage will be subordinate to the financing or refinancing and Assessment Contract and that the City or, if applicable, its permitted assignee can foreclose the property if the Assessment is not paid has been provided to the City.
City of Chicago PACE Program Report
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Marketing and Education
Marketing Education and outreach activities will be the responsibility of the Program Administrator, who will:
Plan and execute education/outreach campaigns and informational events
Develop and provide Chicago PACE orientations
Create, update, and distribute Chicago PACE educational materials
Manage and regularly update Chicago PACE website
Create case studies to highlight the success of the Program
Create and distribute press releases for other newsworthy items
Develop and implement a strategic marketing campaign lo increase participation of small property owners and M/WBE entities
Pre-qualify energy professionals
Website Development. Working with the City, the Program Administrator has created the City of Chicago PACE Program website. The website is fully interactive and provides information about the Chicago PACE Program, including links to legislation, online applications, document retention, third party reviewer portal and record owner portal and contact information. www.ChicagoPACE.org
Education and Outreach Campaign. The Program Administrator will communicate the benefits of the Program to all stakeholders by creating, updating and distributing PACE educational materials throughout the City. Chicago PACE case studies will be created and posted on the Program website on recent newsworthy financings that provide details of the financing. Meetings will be held throughout the City to educate all stakeholders, i.e. Mortgage Lenders, Contractors, Energy Professionals, Developers, and Property Owners, on how to finance energy projects using PACE in Chicago. Property owners can visit Chicago PACE website to learn about eligibility requirements, financing or refinancing terms and other details and find approved contractors and eligible Energy Projects, including specific products.
MWBE Outreach and Marketing Plan. The Program Administrator will actively conduct outreach to MBEs and WBEs and educate them on how to participate in the Program and work with the City to register certified MBE and WBE linns as pre-qualified contractors. The Program Administrator will also host lunch and learn sessions for all stakeholders throughout the Cily.
Additional Quality Assurance and Antifraud
Quality assurance protocols serve to prevent improper or low-quality installation or modification of Energy Projects and protect against fraud and abuse of the Program. The Program will institute quality assurance protocols administered by the Program Administrator and overseen by DPD. Quality assurance protocols and procedures are subject to review and adjustment from time to time by the Commissioner of DPD based on applicable City, State and federal standards. Details on the current quality assurance protocols and procedures are outlined in the Guidebook. Despite the presence of these protocols and procedures, responsibility for the successful operation of an Energy Project is that of the record owner and its registered professionals. None of the City, the Program Administrator, any issuer of bonds, capital provider, underwriter or private placement agent, trustee, servicer or any of their respective directors, managers, officers, employees, advisors, agents shall have any liability for the selection, installation and modification and operation of any eligible Energy Project.
City of Chicago PACE Program Report
Appendix A to Program Report Map of the City of Chicago (attached)
Appendix Bto Program Report Form of Assessment Contract (attached)
CITY OF CHICAGO PACE PROGRAM
ASSESSMENT CONTRACT
(THE ABOVE SPACE FOR RECORDER'S USE ONLY)
THIS ASSESSMENT CONTRACT (this "Contract"), dated as of the Effective Date (as defined below), is by and between the City of Chicago, a municipal corporation and home rule unit of local government of the State of Illinois (the "City") and person or persons as the titleholder or owner of the beneficial interest set forth on Exhibit A (the "Record Owner") in the property described on Exhibit A (the "Property").
RECITALS
WHEREAS, the City has conducted the proceedings required by Section 15 of the Property Assessed Clean Energy Act, 50 ILCS 50/1 et seq. (the "Act"') and established a property assessed clean energy program (the "PACE Program") within the jurisdictional boundaries of the City (the "PACE Area") to allow the financing or refinancing of certain "energy projects" (as defined in the Act), funded through the sale of bonds, subject to the Act through the sale of bonds pursuant to subsection (d) of Section 825-65 of the Illinois Finance Authority Act, 20 ILCS 3501/801-1 et seq. (the "Authority Act"), which bonds will be secured through the levy of certain special assessments pursuant to "assessment contracts" (as defined in the Act) on "property" (as defined in the Act) benefitted by such energy projects;
WHEREAS, the Act provides that a "record owner" (as defined in the Act) of property within the PACE Area may apply to the City or its "program administrator" (as defined in the Act) to facilitate access to capital to provide funding for an energy project and that the City may enter into an assessment contract with a record owner of property to finance or refinance one or more energy projects on the property, which assessment contract provides for the repayment of the financed amount of the cost of an energy project through assessments on the property benefitted;
WHEREAS, the Property is located in the PACE Area established by the City as of the last date entered with the signatures of the parties below ( the "Effective Date"):
WHEREAS, the Record Owner has requested the City enter into this Contract and the Cily has verified the information required by Section 25(c) of the Act as further described herein;
WHEREAS, the City has appointed Loop-Counterpointe PACE LLC, a Delaware limited liability company, as a program administrator (together with any successors thereto, the "Program Administrator"") for the PACE Program as it pertains to this Contract;
WHEREAS, the Record Owner has completed an application (the "PACE Project Application*') for financing under the PACE Program ("PACE Funding") for the energy project, including the acquisition, construction, installation and modification thereof described in Exhibit A (the "Project"), and has satisfied the PACE Program requirements, including without limitation, obtaining a written consent from any and all holders of mortgages recorded against the Property, and the Program Administrator has issued an approval of the Record Owner's PACE Project Application, all in accordance with the Program Guidebook administered by the Program Administrator with respect to the PACE Program and in effect on the dale hereof (the '"Program Guidebook");
WHEREAS, the Program Administrator and the Record Owner may request that the Illinois Finance Authority, a body politic and corporate duly organized and validly existing under and by virtue of the laws of the State of Illinois (the "Authority"), finance the Project through the sale of bonds pursuant to subsection (d) of Section 825-65 of the Authority Act, and if applicable, that a Warehouse Fund (as defined in the Act) provide interim financing prior to the issuance of bonds by the Authority; and
WHEREAS, pursuant to the Act, the City and the Record Owner desire to enter into this Contract, pursuant to which the Record Owner will agree to pay the assessment in order to finance or refinance the Project and the City may agree to assign this Contract in furtherance of providing financing for the Project.
NOW, THEREFORE, in consideration of the foregoing and the material covenants hereinafter contained, the Record Owner and the City formally covenant, agree and bind themselves and their successors and assigns as follows:
AGREEMENT
Section 1. Purpose. The Record Owner and the City are entering into this Contract for the purpose of financing or.refinancing the Project.
Section 2. The Property. This Contract relates to the Property. The Record Owner has provided to the City sufficient evidence that the Record Owner is the titleholder or owner of the beneficial interest in the Property and possesses all legal authority necessary to execute this Contract.
Section 3. Assessment; Bonds; Installment; Prepayment; Collection.
(a) The Assessment. The Record Owner hereby freely and willingly agrees that a special assessment in the amount specified in Schedule I (the "Assessment") shall be levied by the City on the Property pursuant to the Act. I he amount of the Assessment shall be the amount specified in Schedule I. which includes an amount to pay all or a portion of the costs of (i) the Project, ( ii) incidental expenses, if so specified in Schedule I. (iii) capitalized interest on bonds to be issued or. if applicable, the Warehouse Fund, if so specified in Schedule I. and (iv) funding
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any required debt service reserve, if so specified in Schedule 1 (collectively, the "Financing Purposes'"). The Record Owner acknowledges and agrees that the amount of the Assessment does not exceed the special benefit conferred on the Property by the Financing Purposes thereon.
Bonds. The City hereby determines that bonds, which may be serial bonds, term bonds or both, shall be issued (i) by the City pursuant to the Act or (ii) upon assignment of this Contract to the Authority, by the Authority pursuant to the Authority Act, all in accordance with the Act (the "Bonds") and shall be secured by the Assessment to pay the cost of the Financing Purposes, and that, if applicable, interim financing prior to the issuance of Bonds may be provided through a Warehouse Fund.
Interest; Assessment Installments. Interest on the Assessment shall begin to run from the date the Bonds are issued or, if applicable, interim financing from the Warehouse Fund is issued, and shall be computed at the rate specified in Schedule I. The unpaid Assessment shall be payable in installments of principal and interest as set forth in Schedule 1.
Collection. The annual proportion of the Assessment coming due in any year, together with the annual interest thereon, shall be payable in the same manner and at the same time and in the same installments as the general taxes on the Property are payable or as otherwise provided in Schedule 1 attached hereto, and have the same priority, become delinquent at the same time and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do the general taxes on the Property. The City may delegate the authority to bill and collect the Assessment to the Program Administrator, or its designee.
Administrative Expenses. In addition to the .installments of the Assessment described in subsection (c) of this Section, the City or any Assignee (as defined below) may (or may direct the Program Administrator on behalf of the City or any such Assignee, as the case may be, to), in accordance with the Act, add thereto amounts in order to pay for the costs of collecting the Assessment, the annual administration of the Assessment, the annual administration of the Bonds or the Warehouse Fund and other administrative costs (the "Annual Assessment Administrative Fee"). Schedule 1 shows the estimated Annual Assessment Administrative Fees, however such estimated Annual Assessment Administrative Fees might increase if the costs of collecting the Assessment Installments or administering the Program increase. The Record Owner agrees to pay actual Annual Assessment
» Administrative Fees, which may be higher than such estimates.
( f) Prepayment of the Assessment. The Assessment may be prepaid, in whole or in any amount of" at least the minimum set forth in Schedule I, at any time upon the payment of (i) the amount of any delinquent installments ol" principal or interest on the Assessment, together with penalties accrued to the date of prepayment, plus ( ii) the whole or. subject to the minimum amount set forth in this subsection, a portion of the unpaid non-delinquent principal of the Assessment (the "Assessment Prepayment Amount"), plus (iii) interest on the Assessment Prepayment Amount lo the redemption date occurring at least 30 days following the date the prepayment is made, plus (iv) an amount equal to the redemption premium, if any. set forth on Schedule I. plus ( v) a reasonable fee, if charged by the Authority or Program Administrator, for the cost of administering the prepayment and the redemption of Bonds.
No Reduction or Offset. The Record Owner hereby acknowledges and agrees thai the Assessment will not be subject to reduction, offset or credit of any kind in the event that the Project Tails to perform in any way or for any reason. t
No Acceleration; Survival. Amounts due under the Assessment will not accelerate upon a default or late payment or enforcement of remedies under this Contract and the Assessment, the lien thereof and the obligation to pay Assessment installment when they become due shall survive any such event and continue until paid in full.
Section 4. Record Owner's Representations and Warranties
The Record Owner represents and warrants to the City and each Assignee (as hereinafter defined) , which representations and warranties shall be true and correct as of the Effective Date and at all times thereafter as follows:
Organization and Authority. The Record Owner, if a legal entity, is duly organized, validly existing and in good standing in the state of its organization and with authority to do business under the laws of the State of Illinois. The Record Owner has all necessary power and authority to own the Property and to conduct its business and enter into the transactions contemplated hereby. The Record Owner has the right to enter into and perform this Contract, and the execution, delivery and performance of this Contract and each and every document specified in the List of Documents contained in Exhibit A executed in connection therewith (collectively, the "Transaction Documents") have been duly authorized, executed and delivered and constitute valid and binding obligations of the Record Owner, each enforceable in accordance with its terms, and will not violate any applicable law or result in the creation of a lien against the Property except as contemplated by this Contract.
Financial Statements. All financial statements delivered to the City or the Program Administrator are true and correct, have been prepared in accordance with United States generally accepted accounting principles consistently applied, fairly represent the financial condition of the Record Owner as of the date thereof, and no material adverse change has occurred in the financial condition presented therein since such date.
No Litigation. There are no actions, suits or proceedings pending or, to the knowledge of the Record Owner, threatened, against or affecting it or the Property which could materially adversely affect the Record Owner, its financial condition, the Property or the construction of the Project or the Record Owner's ability to satisfy its obligations under this Contract and any of the Transaction Documents, if applicable.
Title. The Record Owner has good and insurable title to the Property. Except as set forth on Exhibit 13 ("Permitted Liens"), there are no involuntary liens on the Property, including, but not limited to, construction or mechanics liens, lis pendens or judgments against the Record Owner, environmental proceedings, or eminent domain proceedings.
Property-Based Debt: Taxes. The Record Owner is not in default under, and has received no notices of default, under any property-based debt that has not been otherwise cured. The Record Owner is current on all mortgage debt on the Property, has not had an Insolvency Event in the last two (2) years from the date hereof, and the Property is not the subject of any|1010|
Insolvency Event. There are no delinquent taxes, special assessments, or water or sewer charges on the Property. There are no delinquent assessments on the Property in a property assessed clean energy program (including the Program).
(1) Compliance Willi Laws. The Record Owner has complied with, and will continue to comply with, all applicable statutes, regulations and ordinances in connection with the Property and construction of the Project. All permits, consents, approvals and authorizations required to be issued by any governmental body (collectively, the "Permits'*) necessary for (a) the construction of the Project in accordance with the plans and specifications (together, the "Plans") submitted by the Record Owner; (b) the construction, connection and operation of all utilities necessary to service the Project; and (c) the construction and use of all roadways, driveways, curb cuts and other vehicular or other access to and egress from the Project, as shown on the Plans either (i) have been obtained, are valid, are in full force and effect and have been complied with by the Record Owner in all respects; or (ii) will be obtained, will be valid, will be in full force and effect prior to the initiation of construction of the Project, and Record Owner will be in compliance therewith in all respects prior to any "permitted assignee'" (as defined in the Act) to which this Contract has been assigned (the "Assignee") disbursing any Bond proceeds or interim financing provided by a Warehouse Fund, if applicable. Construction of the Project in accordance with the Plans will comply with applicable zoning, use, building or other applicable codes, laws, regulations, ordinances and Permits and any restrictive covenants affecting the Property.
Approval of Plans and Budgets. Any Plans submitted will be a true and accurate reflection of the Project (when completed) and have been approved as required by all governmental bodies or agencies having jurisdiction over the Project or will be approved prior to the first disbursement request. The budget for construction of the Project (the "Budget") is an accurate current budget of all costs necessary to construct the Project in accordance with the Plans and is attached lo the construction contract(s) to which the Record Owner is a party and described on Exhibit A pertaining to the construction and installation of the Project (the "Construction Contract"). The cost of construction of the Project is not expected lo exceed the cost therefor set forth in the Budget. The Record Owner is responsible for any costs in excess of the Budget.
Contractors. All work requiring a license under any applicable law to acquire, construct, install, or modify the Project has been and will be performed by licensed contractors that have agreed to adhere to the City's or the Program Administrator's terms and conditions. All such contractors have signed a written acknowledgment that the City or its Program Administrator will not authorize final payment to such contractor until the City has received written confirmation from the Record Owner that the Project was properly acquired, constructed, installed or modified and is operating as intended.
(i) Mortgage Holder Consent. The Record Owner represents and warrants that the
Record Owner has (i) disclosed to the City or the Program Administrator, the identities ol" all
persons, if any, that hold mortgage liens against the Property (whether recorded or unrecorded)
that may be affected by the Assessment; (ii) has obtained and delivered to the City or the
Program Administrator the written consent of all such persons to the Assessment; and (iii) to the
Record Owner's knowledge, no such consent has been withdrawn or revoked.|1010|
(j) Insurance. The Record Owner has provided lo the City or the Program Administrator satisfactory evidence of current insurance policies on the Property. Such policies shall meet the specifications set forth in accordance with the Program Guidebook incorporated herein by reference but, notwithstanding such specifications, to the extent Bonds are issued under the Authority Act, the Authority, any Bond Trustee and any Warehouse Fund shall be named as an additional insured (mortgagee/loss payee) on all insurance policies required hereunder.
(k) PACE Project Application. All representations, warranties, statements, exhibits, instruments and other documents contained in or included as a part of the PACT: Project Application are true, correct and complete as of the Effective Date. The Project constitutes an "'energy project'" and the Property constitutes "property"" as each term is defined in the Act.
(I) No Impairment. No fraud, error, omission, misrepresentation, negligence or similar occurrence with respect to the Property, Plans, Budget, Construction Contract or Project has taken place on the part of the Record Owner or any other person, including, without limitation, any appraiser, title company, closing or settlement agent, realtor, builder or developer or any other party involved in the Property, Plans, Budget, Construction Contract or Project, that would impair in any way the rights of the City or the Program Administrator in the Property, Plans, Budget, Construction Contract or Project or that violated applicable law.
(in) Environmental Matters. Except as shown on Schedule II attached hereto (the "'Environmental Schedule"), there are no underground storage tanks located on the Property; there is no past or present non-compliance with environmental laws, or with permits issued pursuant thereto, in connection with the Property (which has not been fully remediated in accordance with environmental laws); there is no environmental remediation required (or anticipated to be required) with respect to the Property; and Record Owner does not know of. and has not received, any written or oral notice or other communication from any person (including but not limited to a governmental entity) relating to hazardous substances or remediation thereof, of possible liability of any person pursuant to any environmental law, other environmental conditions in connection with the Property, or any actual or potential administrative or judicial proceedings in connection with the foregoing.
(n) Property Value. The aggregate amount to be financed or refinanced hereunder and any other assessment contract related to the Property does not exceed 25% in relation to the greater of (i) the value ol" the Property as determined by the office of the applicable county assessor; or (ii) the value of the Property as determined by an appraisal conducted by a licensed appraiser.
Section 5. Record Owner Covenants
The Record Owner hereby covenants and agrees as follows:
(a) Maintenance of Property. The Record Owner shall, at all limes, maintain the Property and, after construction, the Project. The Record Owner shall pay when due all taxes, assessments (including the Assessme'nt), water charges, sewer charges and all other charges
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levied on or against the Property, and upon written request, submit to the City or the Program Administrator official receipts evidencing such payments.
Construction Start and Completion. The Record Owner shall commence construction of the Project and shall diligently proceed with construction of the Project in accordance with the approved Plans and Budget and in a good, substantial and workmanlike manner in accordance with the Construction Contract and all applicable laws, ordinances, codes, rules and regulations. [Construction of the Project shall be completed on or prior to the Outside Completion Date as defined in Exhibit A, if applicable.]
Protection Against Liens. Except for any Permitted Liens^the Record Owner shall promptly pay and discharge all claims for labor performed and material and services furnished in connection with construction of the Project, and take all other steps necessary to prevent the assertion of claims or liens either against the Property or the Project, other than (i) the claims and lien provided herein, (ii) liens, if any, for taxes imposed by any governmental authority not yet due or delinquent, and (iii) such other title and survey exceptions as the City or the Program Administrator has approved or may approve in writing in its sole discretion.
Periodic Reports/Certifications. Upon request by the City or the Program Administrator during the period construction of the Project begins on the Property until the Project has been accepted as completed pursuant to the terms of the Construction Contract, the Record Owner shall provide to the City or the Program Administrator a written statement, certified as true, correct and complete, setting forth the status of the Project, including an updated schedule for completion of construction of the Project. Such certification shall be in such form and with such detail as the City or the Program Administrator shall specify and may be included in completion certificate(s) as set forth in the Guidebook.
Notice of Claims; Adverse Matters. The Record Owner shall promptly notify the City or the Program Administrator in writing of any potential Insolvency Event and all pending or threatened litigation or other matters that may materially and adversely affect the Property or Record Owner's ability to meet its obligations under the Transaction Documents or otherwise with respect to the Financing Purposes. '"Insolvency Event" shall mean the Record Owner has (i) consented to the appointment of a conservator or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling of assets and liabilities or similar proceeding or of relating to the Record Owner or relating to all or substantially all of such Record Owner's property, (ii) fails to pay its debts as they become due and such failure has not been cured within thirty (30) days of the event; (iii) admitted in writing its inability to pay its debts as they become due, (iv) filed a petition to take advantage of any applicable insolvency or reorganization statute, (v) made an assignment for the benefit of its creditors, (vi) has filed against it a petition for involuntary bankruptcy or some other involuntary insolvency proceeding which is not dismissed within thirty (30) days, or (vii) voluntarily suspended payment of its obligations.
Waiver and Release of Claims Against City, the Program Administrator, the Authority and Related Parties. For and in consideration of the City's execution and delivery of this Contract and the Authority and, if applicable, the Warehouse Fund providing capital to finance the Project. Record Owner (for itself and for any successor-in-interest to the Property and for anyone claiming by, through or under Record Owner, including without limitation, heirs.|1010|
personal representatives, mortgagees and transferees), hereby waive the right to recover from the City, the Program Administrator, the Authority, the Warehouse Fund and any and all members, officers, officials, agents, bond trustee, employees, attorneys and representatives of any of them, as well as their successors and assigns (collectively, the ""Financing Parties"), and fully and irrevocably release the Financing Parties from, any and all claims, obligations, liabilities, causes of action or damages (including attorneys' fees and court costs), that Record Owner may now have or hereafter acquire against any of the Financing Parties and accruing from or related to (i) this Contract, (ii) the disbursement of Bond proceeds or interim financing provided by a Warehouse Fund, if applicable, (iii) the levy and collection of the Assessment, (iv) the imposition of the lien of the Assessment, (v) the performance of the Project, (vi) the Project, (vii) any damage to or diminution in value of the Property that may result from construction or installation of the Project, (viii) any injury or death that may result from the construction or installation of the Project, (ix) the selection of mahufacturer(s), dealer(s), supplier(s), contractor(s) and/or installer(s), and their action or inaction with respect to the Project, (x) the merchantability and fitness for any particular purpose, use or application of the Project, (xi) the amount of energy savings, energy production, water conservation or other performance outcomes resulting from the Project or any assured performance guaranty, (xii) the workmanship of any third parties under any agreements including, without limitation, any Construction Contract, and (xiii) any other matter with respect to the PACE Program (collectively, the "Liabilities").
This release includes claims, obligations, liabilities, causes of action and damages of which the Record Owner is not presently aware or which the Record Owner does not suspect to exist which, if known by the Record Owner, would materially affect Record Owner's release of the Financing Parties. Notwithstanding the foregoing, Record Owner's releases under this Section shall not extend to Liabilities arising from any Financing Parties willful misconduct. The Record Owner acknowledges that the Financing Parties established the PACE Program solely for the purpose of facilitating financing of energy projects arranged by owners of commercial property located in the PACE Area. The Financing Parties are not responsible for the selection, management and/or supervision of the Project, the Project's performance, the Construction Contracts or any assumed performance guaranty. Any issues related to performance of the Project should be discussed with chosen contractors, installers, manufacturers and/or distributors involved with the Project. The waivers and releases by Record Owner contained in this Section shall survive the disbursement of any Bond.proceeds, interim financing provided by a Warehouse Fund, if applicable, or any portion thereof, the transfer or sale of the Property by Record Owner and the termination of this Contract.
Notwithstanding the foregoing or anything to the contrary contained in this Contract, the waiver and release provided for in this Section shall not bar the Record Owner, its successors-in-interest to the Property, from bringing an equitable action against the City for specific performance of its duties and obligations under this Contract, or to enjoin or prevent the violation of this Contract thereby, it being understood and agreed, however, that the Financing Parties shall not be liable for money damages or costs of such equitable proceeding except insofar and to the extent such Liabilities arise from their willful misconduct.
(g) Engineering Commissioning and Verification.
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If the PACE Funding exceeds $2 million, then, to verify that the Project is installed and performs according to projections modeled and reported in an Energy Audit, Energy Review or Renewable Energy Feasibility Study provided by the Record Owner and accepted by the Program Administrator to satisfy the requirements of the PACE Program and detailed in the Technical Project Review ("TPR'*) submitted as part of the PACE Project Application, engineering commissioning and verification ("ECV") of the Project shall be performed according to the requirements set forth in the Program Guidebook.
Upon completion of ECV, the Record Owner shall submit a post-construction ECV report to the City or the Program Administrator in a form provided by the Program Administrator. This report shall contain:
A statement that systems have been completed in accordance with the Project Report and Project contract documents, and that the systems are performing as expected; and
Identification and discussion of any substitutions, compromises, or variances between the final design intent, contract documents and as-built conditions.
Section 6. Lien; Foreclosure.
Lien. The Assessment, and each installment thereof and the interest and any penalties thereon shall constitute a lien against the Property until they are paid, which lien shall be coequal to and independent of the lien for general taxes.
Foreclosure. The Record Owner acknowledges and agrees that if any Assessment installment is not paid when due, the City shall have all rights and remedies for such nonpayment as it does with respect to delinquent property taxes and other delinquent special assessments as set forth in Article 9 of the Illinois Municipal Code, including the lien, sale, and foreclosure remedies described in that Article ("Enforcement Remedy"). Any Assignee shall have and possess the delegable powers and rights al law or in equity as the City would have with respect to an Enforcement Remedy with regard to (i) the precedence and priority of liens evidenced by this Contract, (ii) the accrual of interest, and (iii) the fees and expenses of collection, and shall have the right to enforce such liens through an Enforcement Remedy. The Record Owner acknowledges that the Assignee may obligate itself, through a covenant with the owners of the Bonds, to exercise an Enforcement Remedy with respect to enforcement of delinquent Assessments under circumstances specified in such covenant.
Section 7. Financing or Refinancing of the Project. The parties hereby agree that the net proceeds of the Bonds or interim financing provided by a Warehouse Fund, if applicable, allocable to the Assessment shall be used to finance or refinance the Project.
Section 8. Term; Contract Runs with the Land; Division.
(a) Except as otherwise set forth in this Contract, this Contract shall expire upon the final payment or prepayment of the Assessment.|10 10|
This Contract establishes rights and obligations that are for the benefit of the Property and, therefore, such rights and obligations run with the land.
The obligation to pay the Assessment is an obligation of the Property and no agreement or action of the Record Owner shall be competent to impair in any way the rights of the City or the Program Administrator or the rights of any Assignee, including, but not limited to, the right to pursue judicial foreclosure of the Assessment lien or the right to enforce the collection of the Assessment or any installment thereof against the Property.
In the event the Property is divided whjle the Assessment remains unpaid, the unpaid installments of the Assessment shall be segregated and apportioned by the City or the Program Administrator in accordance with a method selected by it in its good faith judgement.
Section 9. Recordation of Documents. The City or the Program Administrator shall record or cause to be recorded in the office of the County Recorder this Contract and any other documents required by applicable law or any Assignee to be recorded.
Section 10. Notice. The Record Owner shall provide written notice to any subsequent purchaser of the Property, or a portion thereof, of the obligation to pay the Assessment.
Section 11. Waivers, Acknowledgment and Contract.
Since the Assessment is voluntary and imposed, in accordance with the Act, pursuant to this Contract, the Record Owner hereby waives any requirements otherwise applicable to special assessments under any other provision of Illinois law, for notice or public hearing .
The Record Owner hereby waives its right to appeal or contest the Assessment or to file any lawsuit or other proceeding to challenge the Assessment or any aspect of the proceedings of the City undertaken in connection with the PACE Program. The Record Owner hereby agrees that the Record Owner and its successors in interest to fee title in the Property shall be solely responsible for the installation, operation and maintenance of the Project. The Record Owner hereby acknowledges that the Record Owner and its successors in interest to fee title in the Property will be responsible for payment of the Assessment regardless of whether the Project is properly installed, operated, maintained or performs as expected.
The Record Owner hereby agrees that the City is entering into this Contract solely for the purpose of assisting the Record Owner with the financing or refinancing of the Project, and that neither the City nor the Program Administrator has any responsibility of any kind for, and shall have no liability arising out of, the installation, operation, financing, refinancing, maintenance or performance of the Project. The Record Owner hereby certifies to the Cily that the City has complied with the provisions of Section 25 of the Act. The Record Owner hereby waives the right to recover from and fully and irrevocably releases the Financing Parlies from any and all losses, liabilities, claims, damages (including consequential damages), penalties, fines, forfeitures, costs and expenses (including all reasonable out-of-pocket litigation costs and reasonable attorney's fees), relating to the subject matter of this Contract that the Record Owner may now have or hereafter acquire against the Financing Parties.
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Section 12. Indemnification.
The Record Owner agrees to indemnify, defend, protect, and hold harmless the Financing Parties from and against all losses, Liabilities, claims, damages (including consequential damages), penalties, fines, forfeitures, costs and expenses (including all out-of-pocket litigation costs and attorney's fees) and any demands of any nature whatsoever related directly or indirectly to, or arising out of or in connection with (i) the Record Owner's participation in the PACE Program, (ii) the Assessment, (iii) the Project, or (iv) any other fact, circumstance or event related to the subject matter of this Contract, regardless of whether such losses, liabilities, claims, damages (including consequential damages), penalties, fines, forfeitures, costs and expenses (including all out-of-pocket litigation costs and attorney's fees) accrue before or after the date of this Contract.
The provisions of this Section shall survive the termination of this Contract.
Section 13. Right to Inspect Property. The Record Owner hereby grants the City, the Program Administrator, the Authority, the Bond trustee, the Warehouse Fund and their respective agents and representatives the right to enter at any reasonable time, upon reasonable notice, to inspect the Project. The Record Owner further hereby grants the City, the Program Administrator, the Authority, any Bond trustee, the Warehouse Fund and their respective agents and representatives the right to examine and copy any documentation relating to the Project.
Section 14. PACE Project Application. The Record Owner hereby represents and warrants to the City and the Program Administrator, that the information set forth in the PACE Project Application submitted to the City or the Program Administrator in connection with its request for PACE Funding is true and correct as of the date hereof, and that the representations set forth in the PACE Project Application with respect to the Property and the Record Owner arc true and correct as of the date hereof as if made on the date hereof.
Section 15. Amendment. This Contract may be modified or amended only by the written agreement of the City (or its Assignee, as applicable) and the Record Owner and the consent of the Assignee, if any.
Section 16. Binding Effect; Assignment. This Contract inures to the benefit of and is binding upon the City and the Record Owner and its respective successors and assigns. The City has the right to assign any or all of its rights and obligations under this Contract without the consent of the Record Owner. Each of the Program Administrator, the Authority (cither directly or via an intermediate assignment), any Capital Provider (either directly or via an intermediate assignment), any Bond trustee (either directly or via an intermediate assignment) or the Warehouse fund shall be a "permitted assignee" (as defined in the Act) for any purpose hereunder. ^
Section 17. Exhibits. Exhibit A. Schedule 1 and Schedule II attached to this Contract are incorporated into this Contract by this reference as if set forth in their entirety in this Contract. '
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Section 18. Severability. If any provision of this Contract is held invalid or unenforceable by any court of competent jurisdiction, such holding will not invalidate or render unenforceable any other provision of this Contract.
Section 19. Corrective Instruments. The City (or its Assignee, as applicable) and the Record Owner, with the consent of the Assignee, if any, shall, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required in order to carry out the expressed intention of this Contract; provided, however, the prior written consent of the Authority shall be obtained in connection with any such amendment or supplement if Bonds are issued through the Authority, pursuant to subsection (d) of Section 825-65 of the Authority Act; provided, further, however, if applicable, the prior written consent of the Warehouse Fund shall be obtained in connection with any such amendment or supplement if funding by the Warehouse F und is outstanding.
Section 20. Governing Law: Venue. This Contract shall be construed in accordance with and governed by the laws of the State of Illinois applicable to contracts made and performed in the State of Illinois. T his Contract shall be enforceable in the State of Illinois, and any action arising hereunder shall (unless waived by the City in writing) be tiled and maintained in the Circuit Court of Cook County; provided, however, that actions to foreclose delinquent installments of the Assessment shall be tiled and maintained in the Circuit Court of the County identified in Exhibit A.
Section 21. Counterparts. This Contract may be executed in several counterparts, each of which is an original and all of which constitutes one and the same instrument.
Section 22. Monitoring and Recording of Telephone Calls. T he City or the Program Administrator may monitor and/or record telephone calls for security and customer service purposes. By agreeing to this Contract, the Record Owner agrees to have his, her or its telephone calls with the City or the Program Administrator recorded.
Section 23. Electronic Signatures.
The parties hereto acknowledge and agree that this Contract may be executed by one or more electronic means ("'Electronic Signatures"). Each party hereto agrees that Electronic Signatures provided by such parly shall constitute effective execution and delivery of this Contract by such party to all other parties to or relying on this Contract. Each party hereto agrees that Electronic Signatures shall constitute complete and satisfactory evidence of the intent of such party to be bound by those signatures and by the terms and conditions of this Contract as signed. Each party hereto agrees that Electronic Signatures shall be deemed to be original signatures for all purposes. ,
Each party hereto agrees to accept Electronic Signatures provided by any and all other parties to this Contract as (i) full and sufficient intent by such parties to be bound hereunder, (ii) effective execution and delivery of this Contract, and (iii) constituting this Contract an original for all purposes, without the necessity for any manually signed copies to be provided, maintained or to exist for back up or for any other purpose.
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(c) If Electronic Signatures are used to execute this Contract, each parly hereto hereby accepts the terms of. and intends and does sign, this Contract by its Electronic Signature hereto.
Section 24. Transaction Documents.
The Record Owner acknowledges and agrees that the entire agreement between Record Owner and the City includes the Transaction Documents.
By executing this Contract, the Record Owner acknowledges and agrees that:
The Record Owner has had sufficient time to review and has reviewed each of the Transaction Documents and has had the opportunity to ask any questions of the City, the Program Administrator, or the Assignee that Record Owner may have regarding such Transaction Documents;
The Record Owner acknowledges receipt of and has reviewed, understands and agrees to each and every additional requirement and term contained in the Program Guidebook; and
The Record Owner has reviewed, understands, agrees to and affirms each and every representation and warranty contained in the Record Owner's PACE Application and the Program Guidebook.
Section 25. Execution and Return of Contract. The Record Owner must execute and return this Contract to the City or the Program Administrator at the address set forth in the "Notice Information" section of Exhibit A so that it is received by the City or the Program Administrator not later than the expiration date set forth on Exhibit A. If the Record Owner fails to return this Contract so executed to the City or the Program Administrator by the expiration date, the City reserves the right to require the Record Owner to enter into a new Contract. The signature of each person signing as or on behalf of the Record Owner must be notarized by a duly licensed notary unless executed by Electronic Signatures.
13
IN WITNESS WHEREOF, the City and the Record Owner have caused this Contract to be executed in their respective names by their duly authorized representatives, all as of the Effective Date.
Record Owner:
, Signature
Date:
Month/Day/Year
STATE OF )
)
COUNTY OF )
I, , a notary public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY THAT , the
of , a , personally known to me to be the
same person whose name is subscribed to the foregoing instrument as such ,
appeared before me this day in person and acknowledged that signed and delivered the said
instrument, pursuant to authority given by said , as own free and
voluntary act, and as the free and voluntary act of the municipal corporation for the uses and purposes therein set forth.
GIVEN under my hand and notarial seal as of , .
Notary Public
My Commission Expires: (SEAL)
14
IN WITNESS WHEREOF, the City and the Record Owner have caused this Contract to be executed in their respective names by their duly authorized representatives, all as of the Effective Date.
City: Authorized Signatory
Name (Please Print)
Signature Date of Execution
STATE OF ILLINOIS) )
COUNTY OF COOK ) ,
I, , a notary public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY THAT __ , the
of the City of Chicago, a municipal corporation and home rule unit of the State of
Illinois, personally known to me to be the same person whose name is subscribed to the foregoing
instrument as such , appeared before me this day in person and acknowledged
that signed and delivered the said instrument, pursuant to authority given by said municipal
corporation, as own free and voluntary act, and as the free and voluntary act of the
municipal corporation for the uses and purposes therein set forth.
GIVEN under my hand and notarial seal as of
Notary Public
My Commission Expires: (SEAL)
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EXHIBIT A
RECORD OWNER, DESCRIPTION OF PROPERTY, DESCRIPTION OF PROJECT, TRANSACTION DOCUMENTS, OUTSIDE COMPLETION DATE, IDENTIFICATION OF CIRCUIT COURT, NOTICE INFORMATION AND EXPIRATION DATE
Record Owner:
Description of Property:
Property Address: PINS:
County: Cook Description of Project:
The Project consists of the following (check all that apply):
Energy Efficiency Improvement Alternative Energy Improvement
Water Use Improvement Renewable Energy Improvement
Resiliency Improvement
Transaction Documents: Outside Completion Date:
Identification of Circuit Court for Foreclosure Actions: Expiration Date:
A-1
Notice Information:
[PACE Program Notice Information] [Record Owner Notice Information]
Legal Description:
EXHIBIT B PERMITTED LIENS
[NOT ATTACHED FOR INTRODUCTION]
B-1
SCHEDULE I
TERMS OF ASSESSMENT AND SCHEDULE OF ANNUAL ASSESSMENT INSTALLMENTS, INCLUDING PRINCIPAL, INTEREST AND ESTIMATED ANNUAL
ASSESSMENT ADMINISTRATIVE FEES
Terms of Assessment
Assessment Amount:
The amount of the Assessment (the "Assessment Amount") is allocable to the following costs, fees and expenses eligible for financing: the cost of the Project ("Project Cost"), including the cost of materials and labor necessary for installation, permit fees, inspection fees, and other eligible costs, fees and expenses related to acquisition, construction, installation or modification the Project; program administrative fees ("Program Fees), including the costs and fees of the Program or other fees that may be charged to the Record Owner in connection with the application for PACE Funding, the execution of this Contract, the issuance of Bonds by the City or the Authority and the provision of interim financing by the Warehouse Fund; other third-party fees, costs and expenses ("Other Fees") that may be incurred by or charged to the Record Owner in connection with the execution of this Contract, the issuance, of Bonds and the provision of interim financing, including property specific legal reviews and recording fees; prepaid interest that is capitalized ("Capitalized Interest"); a debt service reserve, if required ("Debt Service Reserve"); and any fees charged by any Capital Provider and Warehouse Fund ("Capital Provider Fees"). [The Assessment shall be spread among the PINs in the [years and] amounts [as set forth below] [in an amendment to this Schedule which shall be executed when the Bonds are issued or the interim financing is provided]].
Project Cost
Program Fees
Other Fees
Capitalized Interest
Debt Service Reserve (if required)
Capital Provider Fees
Assessment Amount
Interest Rate: % per annum
Term: years
Prepayment:
The Assessment may be prepaid, in whole or in part, as described in Section 3( f) of this Contract and as set forth below.
Minimum prepayment amount: $
Redemption p re m i u m:
I
Schedule of Annual Assessment Installments
Annual Assessment Administrative Fees are not included in the Assessment Amount set forth above and are due and payable by the Record Owner in addition to the Assessment Installment
Tax Year (commencing January 1) Interest Principal Assessment Installment (sum of Interest and Principal) Estimated Annual Assessment Administrative Fees* Total Estimated Contractual Assessment Payment
*Subject to change as set forth in Section 3(e) of this Contract.
SCHEDULE II ENVIRONMENTAL SCHEDULE
[NOT AT TACHED. FOR INTRODUCTION]