A federal district court judge barred the U.S. Environmental Protection Agency from freezing its own green bank loans, including one for an affordable housing project in Oregon.
Now that a federal judge has blocked the U.S. Environmental Protection Agency’s freeze on loans and grants from its green bank program, Robert Shepherd hopes his firm can finally begin work on renewable-energy and energy-efficiency elements of his affordable housing project.
The EPA’s termination of $20 billion in green bank loans and grants and its freeze on related Citibank accounts have high-centered the energy portions of the $25.5 million Belmont Dairy Apartments and Lofts redevelopment project in the Sunnyside neighborhood of Portland, Ore.
This week, U.S. District Court Judge Tanya S. Chutkan enjoined the EPA from terminating awards of green bank financing for clean-energy, energy-efficiency and climate-resilience projects. While attorneys sort out the practical implications of the judge’s order, the order plainly directs Citibank to disburse program funds that were dedicated to projects before the mid-February suspension of project funding.
It was under that suspension that Shepherd anxiously wondered about the fate of a 10-year, reduced-rate loan for $1.5 million that the EPA had set aside for the housing project. The loan was to upgrade the building’s energy systems so that his investment firm, with help from $6 million in loans from the Portland Housing Bureau, could guarantee affordable rental rates for 65 of the project’s 85 units for 99 years, Shepherd said.
Plans that Shepherd has pulled together over two years call for a 165-kilowatt solar system to max out the building’s roof space as well as heat pumps and energy-efficiency improvements, all to supplant a conventional boiler and construction inefficiencies.
Shepherd is the founder and managing partner of Vital Housing, a mission-driven Seattle investment company that aims to return profits to investors while providing affordable housing – in this case, to residents making household incomes of 60% of the Portland median.
Brokering the EPA loan was a member organization of Climate United, a key nonprofit litigant opposing the green bank termination and freeze. Money to fund the EPA loan was placed in a Citibank account for the Portland project.
“My loans closed,” Shepherd said. “They just didn’t give me the money.”
Shepherd calls the EPA’s action on its green bank a “dereliction of duty” that flew in the face of public priorities. “It makes all the sense in the world for government to participate in a public-private partnership to increase housing affordability and energy efficiency,” he said.
Amid the resulting hiatus, Shepherd has juggled communication with his various stakeholders while launching work to improve the building’s roof. “We had all the subs (subcontractors) and third parties scoping so that we could be ready to go when everything was approached,” he said.
Chutkan’s preliminary injunction this week was the second time she has ruled against the EPA in the case. In the prior instance, she scolded the agency by saying it had shown no evidence of malfeasance that EPA officials had said prompted the green bank closure.
Yet, the injunction does nothing to bar further litigation. A footnote in her order suggests that the EPA could appeal her injunction in coming days. In fact, she ordered Citibank to wait until 2 p.m. Eastern time Thursday before releasing any grant or loan funding.
Yet, Climate United applauded what appeared to be a victory at least for now. “Today’s decision gives us a chance to breathe,” a statement from Climate United quoted Chief Executive Officer Beth Bafford as saying.
