Agenda 10-07-2025; 8-h - Adoption of a Resolution of Intent for Orange County to Participate in the North Carolina Commercial Property Assessed Capital Expenditure (C-PACE) Program

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2 I. Introduction to C-PACE In 2024, the North Carolina State legislature passed SB 802, with the following purpose: “The use of a C-PACE Program creates an additional financing mechanism for property owners to use private funds to finance improvements to their eligible property, thereby driving economic development by creating a diversity of jobs in the resilience and clean energy se ctors of the economy. The assessment requires minimal upfront costs and provides a more accessible financial mechanism to fund improvements that will increase the tax value of the affected properties at minimal administrative cost to local governments. C-PACE improvements allow property owners to save on their utility bills because the improvements lead to energy or utility savings and will result in improved indoor air quality or increased resilience, which will increase the ability of communities and local governments to respond to natural disasters and improve public health.” Under North Carolina General Statutes §160A-239.11 et seq. (the "C-PACE Act"), The Economic Development Partnership of North Carolina (EDPNC) is designated to administer a Commercial Property Assessed Capital Expenditure (C-PACE) Program. This Program allows owners of qualifying commercial property to obtain long-term financing from private capital providers for certain qualifying improvements up to 35% of the value of the property. Qualifying Improvements include energy efficiency, renewable energy, resiliency, and water conservation as well as improvements made to address safe drinking water. Similar C-PACE programs are active in over 36 states and have attracted more than $7 billion in private investment for thousands of properties. Counties and cities in North Carolina may participate in the statewide C-PACE Program to support commercial, industrial, agricultural, and multifamily property owners with access to financing for efficient and resilient building improvements (N.C.G.S. §160A-239.15). Joining the statewide program does not expose a local government to any financial or legal liability (N.C.G.S. §160A- 239.16 (a)). Private capital providers and the statewide administrator, EDPNC, will assist interested commercial property owners to apply for C-PACE financing. Local governments that join the C-PACE Program will be reimbursed for actual and reasonable costs associated with executing documents related to C-PACE assessments (N.C.G.S. §160A-239.15a(5)). To cover these costs, EDPNC will collect a $500 administration fee for approved C-PACE projects at time of closing. Except for executing documents necessary for a C-PACE financing, there is no other administrative involvement by the local government. Joining the C-PACE Program is a voluntary 3-step process, with support of EDPNC: 1) Adopt a Resolution of Intent 2) Hold a public hearing 3) Adopt a final Resolution to join the C-PACE Program A C-PACE assessment is secured by a voluntary senior lien on the property imposed by the local government at the property owner’s request and is paid back over time. The security of the C- PACE lien enables capital providers to offer C-PACE financing which spreads the cost of qualifying improvements over the useful life of the measures, a term generally lasting between 20-30 years. C-PACE liens are junior in priority to all taxes and other governmental liens. Like other assessments, C-PACE financing is non-accelerating, which means only current or past due payments can be collected. In the event of default, only the payments in arrears are due. If the property is sold, the C-PACE repayment obligation transfers automatically to the next owner unless it is fully repaid. No change in the Program or in North Carolina’s C-PACE legislation will affect a property owner’s eligibility or obligation to pay C-PACE assessments incurred. Local governments are not responsible for collection; duties for billing and collection will be delegated to and handled privately by the capital provider for the project financed (§160A-239.16 (b)). 20