Heard on the Street: Downtown hotel project locks down $2.5 million in 'green' financing
Developers are using novel financing to lock down $2.5 million in funding for a $20 million Rochester hotel renovation project.
California-based EKN Development Groupannounced today that it has closed on Commercial Property Assessed Clean Energy (C-PACE) funding provided by CleanFund. CleanFund is also based in California.
C-PACE financing is a form of voluntary parcel tax assessment financing to fund improvements that reduce energy and water usage.
EKN, which has two other Rochester projects in the works, closed the 16-story downtown Holiday Innhotel at 220 S. Broadway last month to start a $20 million upgrade of the 49-year-old building.
The plan is to transform the "monolithic" complex into a modern, high-end property under the Indigohotel brand.
The work is focused on the hotel portion of the 16-story building, floors two through eight. The street level of the hotel is comprised of separately owned business condos occupied by the Rochester Area Chamber of Commerceand the Smith Schafer & Associatesaccounting firm. Floors nine through 16 are residential condominiums with many individual owners.
The financing package by CleanFund included a 20-year term. The funding reportedly allows the redevelopment project to include environmental attributes, such as energy-efficient HVAC, upgraded windows for efficiency and sound proofing, LED lighting and low-flow water fixtures.
"CleanFund’s C-PACE financing lowered our weighted average cost of capital for the overall project, and allowed us to avoid any value-engineering that can sometimes pressure a project to cut back on green attributes. No doubt, it’s a better building with C-PACE," stated EKN’s Director of Finance Jason Bassin the announcement of the deal.
The plan is to complete the renovations of the 178-room complex and re-open it under the Hotel Indigo brand by mid-2019.