ABFH Uses PACE Financing for New Hotel Development
Green Financing Program is Helping to Build Greener Buildings
(Milwaukee, WI) Van Buren Management, a Milwaukee-based commercial real estate firm, recently used the City of Milwaukee’s commercial property assessed clean energy (C-PACE) finance program to retroactively fund energy and water efficiency improvements for The Marlow Hotel.
The Marlow Hotel, 790 North Jackson Street, is a boutique hotel located on the edge of Cathedral Square Park. The once empty office building overlooking the park has been transformed into a 43-room boutique hotel. The 100-year-old building isn’t a stranger to change; the four-story building was originally built in 1920 to serve as a car showroom.
PACE Equity was the lender that financed $2.5 million in PACE financing for the project. The high-performance upgrades included in the redevelopment project are expected to save the property owner $217,555 a year on utility bills, nearly cutting their annual utility costs in half. Not only will the energy upgrades save money, but the green updates will also save an estimated 3,073,085 kBTUs per year. Energy efficiency delivers several environmental benefits. It notably reduces greenhouse gas emissions, both direct emissions from fossil fuel consumption and indirect emissions reductions from electricity generation.
“Our client, Van Buren Management, transformed a historic downtown building into a luxury boutique hotel with efficiency features to appeal to the modern traveler. PACE Equity was excited to refinance the project and help the developer realize improved return on equity,” shared Griffin Peterson, Managing Director, PACE Equity – Wisconsin.
The Marlow Hotel classifies as a high-performance building in the PACE Program. With energy savings that exceed the state code by over 20%, it is the first project to take advantage of the new PACE Program Pathway that encourages property owners to build greener buildings. High-performance upgrades included in the PACE financing included: the building envelope, HVAC, LED lighting, domestic water heater, and elevator upgrades.
A high-performance PACE project needs to meet ONE of the criteria listed below:
- Include a Renewable Energy Improvement and at least three Energy Efficiency Improvements and/or Water Efficiency Improvements.
- Reduce Source Energy Intensity (EUI) to the EUI target identified in ASHRAE 100 - 2018, for the applicable building type.
- Achieve modeled energy consumption for the property that meets the requirements of ASHRAE 90.1-2019.
- Reduce estimated energy usage by at least 20 percent below the amount of energy that would be consumed in a comparable code-minimum building.
- Achieve LEED BD+C v4.1 Silver or Gold certification and recieve a minimum of four points on the Energy Optimization credit.
“Milwaukee’s PACE financing program provides a convenient, cost-effective way for commercial businesses to reach high-performance building standards and finance 100 percent clean energy and sustainability improvements,” noted Erick Shambarger, Environmental Sustainability Director. He continued, “The Marlow is great example. We encourage other commercial property owners to incorporate clean energy improvements in their new construction, adaptive reuse or retrofit projects because it benefits the environment and individual business bottom line, and helps to strengthen the local economy.”