A decade since a Sonoma County banker switched on what’s now known as property-assessed clean energy, or PACE, loans, this type of financing is forecast to become the nation’s fastest-growing. And the Santa Rosa company he started to help local governments implement it is moving quickly into much larger Petaluma headquarters as PACE programs light up nationwide.
Among the nation’s top PACE loan originators and securitizers, Ygrene Energy Fund (ygreneworks.com) has been building its infrastructure — new top management and offices — in recent months as the company expands into operating PACE programs in new states and funding more commercial real estate projects.
Ygrene hopes to shift its headquarters from 16,000 square feet in multiple downtown Santa Rosa buildings to 40,000 square feet in former Athleta offices in south Petaluma as soon as next month. It’ll be the floor of the South McDowell Landing building that the women’s activewear company, owned by Gap, occupied until it left the city last fall.
“From a company perspective, Santa Rosa is a great place to start a business and grow,” said Rocco Fabiano, president and CEO of Ygrene since December.
But as the company has grown quickly — now about 275 employees in 10 locations, including 175 in the North Bay — the headquarters staff is sometimes tripling up in offices and filling up the city’s executive suites.
“For us, it was difficult to find 40,000 square feet of contiguous space in the Santa Rosa area,” Fabiano said. “And for us, it is more appealing to move farther south, because we’re growing very rapidly and drawing from a population base in San Francisco and the East Bay.”
100 MORE LOCAL JOBS
Ygrene plans to employ up to 500 by the end of this year, with probably about 100 more working locally.
A surge in lending activity is behind Ygene’s growth. The firm’s PACE loan originations grew 200 percent last year to nearly $500 million.
“We expect this year to be significantly higher,”Fabiano said.
The company’s YgreneWorks program administers PACE lending in 320-plus cities and counties mostly in California and Florida.
“We’re in a few states now, but we’re talking to others about expansion,” Fabiano said.
Besides Santa Rosa base of operations, the company has small offices in Sacramento, San Jose, San Diego, Seattle, St. Louis, Walnut Creek and Atlanta but two in Miami to serve the large Florida market for Ygrene.
Legislation to allow PACE residential and commercial loans has been adopted in 33 states and the District of Columbia, and programs have launched in 19 states and the district, according to New York-based PACENation, and advocacy group for the financing. But residential PACE loans currently are offered only in California, Florida and Missouri.
Missouri and Georgia are two growth states for Ygrene, Fabiano said. Ygrene is helping to develop the commercial PACE-oriented Clean Energy Atlanta program.
SETTING THE PACE
PACE loans are traced back to spring 2006. Ygrene founder Dennis Hunter, founder of Sonoma National Bank and a real estate developer, brought together three other local lenders to create the Green Energy Loan program. The original goal was to help homeowners pay for efficiency upgrades to reduce energy use and related carbon emissions by connecting loan to senior liens paid via property taxes over the loan term, passing from one property owner to the next.