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Low-Cost Financing, Creating Long-Term Value
Class Green helps a municipal or a state government, not-for-profit entity, or corporation harness its real estate or infrastructure assets as an alternative, low-cost source of capital - or acquire its currently-leased real estate, as a means to reduce operating costs - while simultaneously improving the energy and operating efficiency, and otherwise building the long-term value, of the assets. The municipality (or other entity) retains complete operating and economic control, thereby investing in its assets rather than selling them.
Energy and other operating savings from the physical improvements, when offset against the lease payments or debt service from the transaction, can produce a zero or even negative net cost of capital and budget impact - meaning that overall, the transaction saves the municipality (or other entity) money each year. In addition, in the case of reverse privatizations (acquiring buildings currently leased from third parties), further money can be saved by replacing existing lease payments with substantially lower COP or bond payments.
In either case, the effective cost of capital is significantly lower than for conventional municipal bonds, sale-leasebacks, long-term concessions and other privatizations, as well as for stand-alone energy performance contracts or power purchase agreements. Class Green tailors each transaction to the municipality’s specific needs and priorities, offering flexible financial, operating and sustainability options.
Building and Infrastructure Efficiency Improvements
Working with a municipality or other entity to identify and prioritize its operating efficiency goals, Class Green integrates sustainability and other physical improvements into the overall transaction. These improvements may target:
- For buildings - energy efficiency (lighting, HVAC, building envelope), onsite renewable energy (solar, geothermal), water efficiency, indoor environmental quality (air filtration and flow, daylighting, interior fit-out), “visible green” (green roofs, trees/landscaping), and recommissioning and other measures tied to LEED and Energy Star certification
- For non-building infrastructure assets - LEDs for streetlights, biogas harvesting for landfills, combined heat and power systems for water treatment plants, upgrades to municipal vehicle fleets, and other initiatives
To further enhance the economics of the transaction, Class Green helps identify and integrate any potential grants, tax credits, or other government incentives that may be available.
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