More than $80 million in development, all tied up for months or even years, is set to begin this summer after being boosted by a new clean energy funding program created by Oklahoma County commissioners.
The Commercial Property Assessed Clean Energy, or C-PACE, program provides developers with low-cost, long-term financing for energy efficiency, renewable energy sources, water conservation and land resiliency projects. buildings. Loans are tied to the building’s property tax records as an assessment and are repaid over terms of 20 years or more through a special property assessment.
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Finance can provide up to 100% financing based on eligibility, with no down payment, and if the property is sold, any remaining appraisal can be passed on to the new owner.
Anne-Marie Funk, whose firm ADG Blatt Architects worked on converting the First National Center into apartments and a hotel, told commissioners that funding is increasingly important as energy prices rise. Funk, the company’s chief marketing officer, said about 60% of energy consumption comes from commercial structures.
“Projects are getting more and more complicated,” Funk said. “Developers use as many public incentives as they can possibly fit into a project. C-PACE funding means developers can do the right thing by bringing energy efficiency and new ways to save energy. energy in our buildings.
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C-PACE is a nationwide initiative that began in 2009 and is available in 22 states. Oklahoma lawmakers approved bylaws allowing its use in 2019. The funding, launched by Oklahoma County in March, comes into play as commercial development faces labor shortages and an increase in material costs.
Pivot Project was C-PACE’s first recipient for its redevelopment of a former Chrysler dealership at 301 NW 13. Backed by Nuveen Green Capital, the $1.1 million loan was used to upgrade windows, systems heating and cooling systems for the building, as well as thermal and humidity improvement systems for the exterior of the building.
Jonathan Dodson, a partner at Pivot Project, said the funding enabled the group to take the former dealership, which now houses a bakery, architectural practice and fabrication shop, and upgrade it with energy efficient double glazed windows, new heating and air conditioning systems with individual units and LED lighting.
“What we’ve found personally with a lot of our projects in the urban core is because they’re a certain size and require a certain perspective towards Oklahoma City, there’s not a ton of money for these projects,” Dodson said. “We can come in and do what is necessary to raise the standards of these buildings where many of them have been vacant for a long time and help investors close the gap in value and cost.”
Nuveen Green Capital is also backing a $2 million C-PACE loan for an office building that Pivot Project is preparing to build this summer. The four-story, $16.5 million building will begin this summer on an empty lot at 1204 N Hudson Ave. which was targeted for the construction of a hotel. The hotel project disappeared when the COVID-19 pandemic devastated the hospitality industry.
Two other projects underway with C-PACE are among the most ambitious downtown development projects announced in the past two years.
NOVA, at 1 NW 6, was announced by developer Brandon Lodge in 2021 and is to include a full-size grocery store, rooftop urban greenhouse, brewery, 20 apartments and retail.
Lodge was recently approved for $5.6 million in funding from C-PACE, which he says will cover upfront expenses and provide gap financing with competitive fixed interest rates. Lodge, like other developers, is weathering cost increases with NOVA estimated at $22.4 million.
Lodge said C-PACE financing provides its investors with a level of comfort they would not have had without knowing that C-PACE is reliably backing a portion of equity. He now plans to start construction this summer.
“We were stuck waiting for C-PACE to pass,” Lodge said. “It’s an important, expensive and complicated project. The anchors are a rooftop greenhouse and a grocery store. It’s a difficult but good project. C-PACE helped get the ball over the crest of the hill.
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Daniel Mercer, CEO of COOP Ale Works, said that while Oklahoma County’s wait to launch C-PACE was longer than expected, it was worth the wait. Mercer said he used the delays to work with state officials on title issues for the 23rd Street Armory which will become the brewery’s new home combined with a hotel, restaurant, bar and center of events.
“We always intended to use renewable sources to power the facility,” Mercer said. “It provides us with a fairly large funding mechanism.”
Steve Lackmeyer started at The Oklahoman in 1990. He is an award-winning journalist, columnist and author who covers downtown Oklahoma City, urban development and the economy for The Oklahoman. Contact him at [email protected] Please support his work and that of other Oklahoman reporters by purchasing a subscription today at subscribe.oklahoman.com.