CleanFund, a nationwide provider of Commercial Property Assessed Clean Energy (C-PACE) financing, recently announced closing $2.5 million in C-PACE funding for a 178-room Hotel Indigo at 220 S. Broadway in downtown Rochester, Minn.
The hotel is undertaking a $20 million rehab-redesign of a former Holiday Inn to create a fully modernized, amenity-laden Hotel Indigo. The attractive financing package delivered by CleanFund included a 20-year term and a rate significantly lower than alternative capital. With CleanFund's financing enabling a lower cost of capital, the redevelopment project was able to include the energy efficient attributes that today's hospitality guests demand, such as energy efficient HVAC, upgraded windows for efficiency and sound proofing, and LED lighting along with low-flow water fixtures.
Another innovative aspect of this transaction is that the C-PACE funding was able to be utilized for a multi-use property operating under a Home Owner Association (HOA) structure. The C-PACE improvements will provide primary benefits to the Hotel Indigo but also to separately-owned condominium-office spaces on the ground floor and upper-floor residential condominium homes.
With an opening date planned in mid-2019, the new Hotel Indigo will accommodate business, leisure and family travelers. Other improvements related to the redevelopment project include a completely redesigned and renovated main lobby, pool, common areas and all hotel rooms.
C-PACE financing, first introduced in 2008, is a form of voluntary parcel tax assessment financing to fund qualifying improvements that reduce energy and water usage, and that provide seismic and other resiliency benefits to the built environment.
In March, Colorado announced that 13 projects in the state — valued at approximately $15 million — have been financed through the state’s C-PACE program. Most of those projects were for office properties.
In February 2017, Renovate America and Greenworks Lending announced they would partner on C-PACE. The organizations will work through Renovate America’s HERO program. The first joint implementation are in Missouri and will expand to California. Renovate America plans to expand HERO to Florida as well. Greenworks Lending is active in Connecticut, Maryland, Rhode Island, Ohio, Texas and the District of Columbia.
