County joins St. Paul Port Authority to offer green energy loans locally

Rock County Commissioners signed a joint powers agreement with the St. Paul Port Authority Sept. 7.
Now they can offer Property Assessed Clean Energy (PACE) loans through the non-profit governmental agency for up to $1 million.
At the same meeting, commissioners approved the PACE loan to GreenSmith Luverne Holdings LLC, which will borrow $1 million to build two market-rate apartment buildings on the former Sharkee’s site in Luverne.
Building costs are estimated at $6.6 million.
“The county’s responsibility is the assessment,” said County Administrator Kyle Oldre. “We would collect the dollars back and repay the Saint Paul Port Authority.”
Previously the county has partnered with the Rural Minnesota Energy Board for clean energy projects. However, Oldre said loans for a similar program through the Southwest Regional Development Commission are capped at $100,000, while PACE’s maximum is $1 million.
Meeting through Zoom, Michael Linder with the Port Authority and Peter Lindstrom with the University of Minnesota Extension (CERT) program outlined the agreement and how the program works.
“The risk is that the special assessment paid by the property owner could go delinquent,” said Linder.
“The county would go through its normal tax forfeiture process like any other special assessment.”
The tax assessment loan is about one-sixth of the project’s total value. The value of the apartments would cover the tax delinquency.
County Attorney Jeff Haubrich said the risk to the county is minimal. “There is an asset there,” he said.
Loan repayment is over a 15-year period with annual assessment payments between $50,000 to $60,000 a year, according to information at the commissioners’ meeting.
The Port Authority has 65 similar agreements with government entities throughout the state.
Wendy Anderson, a financial consultant on the project from Springfield, Minnesota, told commissioners via Zoom she has worked with the city of Luverne for the past two years.
The coronavirus pandemic in 2020 slowed the project. The city has worked with Anderson on a tax increment financing agreement for the project as well as agreed to complete site work at the South Highway 75 and Hatting Street location.
Construction of the two apartment buildings with the total of 54 units will begin this fall, according to Aaron Smith with GreenSmith Builders out of Minneapolis. Smith is project manager for the Luverne project.
“We are excited about the project,” Smith told the commissioners via Zoom. “We think this will be one of the ‘greenest’ apartment buildings built in the state of Minnesota.”
A “green” structure uses less water, optimizes energy efficiency, generates less waste, conserves natural resources and provides healthier spaces for occupants as compared to a conventional building.
“We seek to have a more comfortable, healthier, extremely energy-efficient building that provides lower total cost of rent for our guests by significantly reducing energy bills,” Smith said after the meeting.
Each building will have an elevator, access to the Luverne Loop, and will be next door to a proposed new Caribou Coffee. The first tenants are expected to move in next year.
GreenSmith buildings are also constructing a net zero home on East Christensen Drive and are working with the city of Luverne for other green building opportunities, Smith indicated.
Smith and out-of-state investors Marc Wigder and Alvin “Hope” Johnson make up GreenSmith Luverne Holdings and will own and operate the apartment complexes.