Petros PACE Finance, LLC has closed an $8 million Commercial Property Assessed Clean Energy (C-PACE) transaction with Pedersen Development Company, a Colorado-based developer, to finance energy efficiency measures in the construction of a 13-story Hyatt House in downtown Kansas City, Missouri.
Pedersen will use the funds to incorporate sustainable design measures, including the efficient building envelope components of roofing, walls and windows, HVAC equipment, hot water heaters, LED lighting and elevators, in the construction of a 153-room hotel at the southwest corner of Ninth Street and Broadway.
C-PACE is a relatively new financing tool for energy and water efficiency projects that has grown quickly in recent years. A low-cost, long-term financing product secured as a property tax assessment, it solves many problems that have historically prevented commercial building owners from investing in energy efficiency or renewable energy, such as high upfront costs.
Over the 20-year life of the loan, energy-conserving features will generate over $7 million in utility and maintenance savings and a CO2 reduction of 1,159 metric tons.
This marks Petros’ fourth C-PACE deal in Missouri. Show Me PACE serves as the administrator of the Jackson County Property Assessed Clean Energy Program and Brinkmann Constructors serves as the general contractor for the project. The development also benefitted from incentives provided through the Land Clearance and Redevelopment Authority of Kansas City (LCRA), including a 15-year property tax abatement, Community Improvement District (CID) funding and a sales tax exemption on construction materials.
Construction is expected to begin this month with completion expected in January of 2021.