SOLAR TODAY - June 2009

case study solar renovation

Financing included
$25 million for renovation,
including $5 million for
the photovoltaic system.

borrego solar

34 June 2009 SOLAR TODAY solartoday.org

had lived there 20 years, under a Housing and Urban Development Section 8 reduced-rent lease. A tight-knit community, where families felt safe and comfortable, had formed.

However, tenants complained frequently about poor maintenance and deteriorating facilities. In 2003, the tenants formed an advocacy group, and relations with management grew hostile. Both tenants and the on-site

To speed rooftop assembly, racks were prefabricated and lifted into place.

manager called the San Diego police to report potentially abusive confrontations. The San Diego Housing Commission (SDHC) determined that the conflict could be resolved only with a change of management. After firing its on-site manager and cleaning up some vermin-infested apartments, the Order of St. Augustine decided it didn’t have the resources to manage the complex efficiently. Its board announced plans to sell the property.

In 2006, Steadfast Residential Properties (SRP) of Newport Beach, Calif., began negotiating to buy the development and put out bids for a major renovation. Steadfast has developed or acquired and refurbished more than 20,000 apartments and manages about 15,000 units in California. In May 2008, Steadfast bought Villa Nueva for $41.2 million, using financing arranged by the SDHC through a tax-exempt bond. Steadfast found financing for an additional $25 million for renovation, including $5 million for a 687-kilowatt photovoltaic (PV) system.

The PV system is an important part of the business plan. Kyle Winning, president of SRP, explains that tenants pay $820 to $1,270 monthly for the two-, three- and four-bedroom apartments, with rent adjusted for income and family size. Tenants pay no utility bills: SRP does that, off a master meter. The PV system