Sterling Heights

New partnership aims to assist businesses with efficiency upgrades

By Cortney Casey
C & G Staff Writer

Sterling Heights officials hope a new partnership with six other communities pays off in the form of affordable energy-efficient upgrades for local businesses.

City Council recently voted unanimously to join Roseville, Lathrup Village, Lincoln Park, South Lyon, Southgate and Washtenaw County in forming the Southeast Michigan Regional Energy Office Community Alliance.

To say the entity is in its early stages would be an understatement — “It’s not even a fledgling organization; it’s just being created now,” said Sam Offen, energy programs director for the Michigan Suburbs Alliance — but organizers have big plans for the future.

The SEMREO Community Alliance will essentially have the status of a single municipality, allowing it to apply directly for state and federal grants on behalf of its members.

It also will have the ability to bond and borrow money to lend to commercial property owners to fuel energy-efficient upgrades, a power bestowed by the state’s passage of the Property Assessed Clean Energy Act, or PACE, in 2010.

In a time when regions are in fierce competition for attracting companies, “it’s just another tool in our toolbox that we will be able to use to assist our businesses,” said Denice Gerstenberg, Sterling’s business development manager.

The city will be able to lure incoming businesses with availability of favorable financial mechanisms for helping fund such upgrades, and companies considering the purchase of existing buildings may find the structures more appealing if they boast low energy costs, she said.

“Who knows? That could … make or break a deal,” she said.

Gerstenberg emphasized that joining the Community Alliance costs Sterling nothing, and any bonding or borrowing would be done on behalf of the group, not impacting the city’s own bonding capabilities.

Energy-efficient improvements made by businesses — which could range from as simple as replacing aging windows to as elaborate as installing geothermal heating systems — would be purely voluntary, not something imposed on them by the alliance or city government, she added.

Under PACE, governmental units can issue bonds, notes, etc., to pay for such measures, then receive repayment from businesses via a voluntary property assessment, which places a lien on the property.

The Community Alliance’s parent organization, SEMREO — a partnership between the Michigan Suburbs Alliance, the Detroit-based Warm Training Center and the Michigan Municipal League — was inspired by the success of the Ann Arbor Energy Office, which has garnered accolades for saving the city money while obtaining numerous grants, said Offen.

For two and a half years, SEMREO has “been working on a series of projects for municipalities in the Detroit suburban area, mostly municipal improvement projects: lighting upgrades, street light replacements … programs to update the heating, ventilating and air conditioning systems — things that would improve the energy efficiency of these municipal facilities,” he explained.

But “in all of these, we have learned that in some cases, we’re not the right kind of organization to get certain funding available to us,” he said of SEMREO, which is pursuing a 501(c)(3) nonprofit designation. “If you’re a 501(c)(3), then we can go after private foundational grants, but we can’t apply for state or federal grants. Those are designed exclusively for municipalities.”

That means participating cities often have to apply for and attain the grants themselves before turning administration over to SEMREO, said Offen. But even then, state and federal officials sometimes insist upon working directly with the city representatives, which becomes problematic for smaller communities that lack the resources to deal with the grant process, he said.

The formation of the affiliated SEMREO Community Alliance will eradicate that problem, creating a “quasi-municipality” from the seven members, said Offen.

“Once this organization is created, it will have the same status in state law as a municipality,” he said. “It’s similar to, like, a port authority or transportation authority or other intergovernmental body that has the same kind of authority that a city would have.”

At press time, Offen said organizers were waiting for one final city, South Lyon, to officially adopt the agreement before sending it to Gov. Rick Snyder’s office for approval. He anticipated finalization could occur within the next few weeks.

For more information on SEMREO, visit www.regionalenergyoffice.org.

You can reach C & G Staff Writer Cortney Casey at ccasey@candgnews.com or at (586)498-1046.