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Multnomah County Commissioner-elect Jules Bailey is spearheading an effort to create a county program that would provide cheap financing for energy-efficiency retrofits of commercial buildings.

Through the program, lenders would provide low-interest, long-term loans for various projects to increase energy efficiency in the built environment. Lenders would receive assurance of repayment because debt would be assessed by the county via borrowers’ property taxes, Bailey said. No support from taxpayers would be required, he said.

“There is capital, but builders are very risk averse,” he said. “This is a proven way to secure a funding mechanism in a way that doesn’t involve the public.”

The program would help owners defray costs – and provide a boost for the industry, Bremik Construction President Brent Parry said.

“Everything does get down to that first cost,” he said. “If people can find a way to defray that first cost or find another funding mechanism, that’s the way to do it.”

Details of the program are still being worked out, but Parry envisions developers bundling project pieces – such as an HVAC system replacement, a seismic upgrade or a rooftop solar array installation – into a separate, more affordable loan.

Bailey, who has been working with Portland Development Commission and county leaders for more than a year, intends to introduce the program this summer after he is sworn into office June 9.

“They’re champing at the bit,” he said of PDC officials who envision the program facilitating projects throughout Portland.

Bailey was part of the Oregon Legislature that in February passed House Bill 4041. It opened the door for counties to establish programs allowing third-party financing of retrofit projects in which loans come from private sources, but debt is attached to the borrower’s property tax rolls.

Any sale of the property would then transfer the loan to the buyer, Bailey said.

“It gives the lender assurance and allows really cheap capital,” he said. “It is very attractive to building owners, who can upgrade their buildings.”

The program is modeled after California’s , which were introduced for residences in 2008. The default rate for PACE commercial projects is less than 1 percent, Bailey said.

The PDC has studied PACE and other states’ programs, agency spokesman Shawn Uhlman said.

“The PACE piece is part of a broader legislation that allowed the open market financing,” he said. “We’re interested in pursuing a role in that program. It certainly is intriguing.”

A similar residential retrofitting program, Clean Energy Works, started as a pilot program in Portland in 2009 and expanded statewide in 2010. The program, which allows homeowners to pay back low-interest loans on their utility bills, helped Portland-based Neil Kelly Co. increase its performance division from four employees to 70 during the deepest depths of the recession, said Tom Kelly, the company’s president and owner.

“That totally changed the dynamic,” he said. “A lot of growth happened in the recession, which was what those stimulus dollars were intended to do. We were one of those companies that created jobs.”

A program targeting commercial retrofits could provide a similar boost, Kelly said.

“Of course we are interested,” he said. “Small-scale commercial retrofitting is a huge opportunity.”