AUSTIN — Petros PACE Finance, LLC, has closed a $4.2 million Commercial Property Assessed Clean Energy (C-PACE) transaction with REV Development, an owner, developer, and operator of hospitality properties, to finance energy-saving upgrades in the conversion of a historic building into Hotel Indigo Downtown Omaha, Nebraska.
The transaction will fund a portion of the renovation of Omaha’s century-old Logan Building. The seven-story building will be operated as a 90-key boutique hotel, with additional space for condos and ground-level retail that also includes a restaurant and speakeasy. The redevelopment project included energy-saving improvements to the property’s lighting, HVAC, windows, roofing, and plumbing systems.
“C-PACE has now become an indispensable development tool for historic rehabilitation projects, as a low-cost, long-term financing option that also promotes sustainability,” said Mansoor Ghori, Petros PACE Finance CEO. “This is our third closing with Mike Works and his team and we are excited to help him bring new life to this piece of Omaha history.”
C-PACE is a relatively new financing tool for energy and water efficiency projects that has grown quickly in recent years. As a low-cost, long-term permanent financing product secured as a property tax assessment, it provides developers with an alternative to mezz and equity that lowers overall capital costs and allows them to invest in higher efficiency building designs.
“For this project, we needed creative financing in order to transform a historic building that’s been vacant for decades,” said Mike Works, owner of REV Development. “Petros served as an invaluable partner by providing C-PACE financing to boost development and sustainability in this area of downtown and we look forward to continuing to work with them.”
The Hotel Indigo Downtown Omaha transaction marks Petros’ ninth funding in Nebraska. The City of Omaha serves as the administrator of the Eastern Nebraska Clean Energy Assessment District and New Generation Construction is serving as the general contractor for the project.
“C-PACE is a natural complement to other forms of public-private funding. Historic Tax Credits along with Tax Increment Financing and designation of the project as a part of an Enhanced Employment Area by the City of Omaha helped make the project a reality,” said Rob Shear, senior vice president—new markets for Petros.
Completion of construction is expected by July of 2020.