KANSAS CITY, MO (January 10, 2017) — Two developers in downtown Kansas City will utilize a combined $3M in PACE financing to upgrade the historic Brookfield Building at 101 W. 11th Street and a former warehouse at 1721 Walnut Street. The financing will be used for a series of energy efficiency upgrades and improvements to their properties, both of which are being redeveloped into mixed-used buildings in the heart of downtown Kansas City.
Both projects are being financed by CleanFund, the largest national commercial PACE provider, offering long-term financing for energy efficiency, renewable energy, and water conservation specifically for commercial, industrial, multifamily and other non-residential properties across the U.S.
Property Assessed Clean Energy (“PACE”), is neither traditional debt nor equity. Legislatively approved in 33 states, PACE allows commercial real estate owners to borrow capital to modernize their buildings while repayment is via their property taxes.
CleanFund has built strong relationships in Kansas City with property owners, project developers, and local financial institutions such as Equity Bank, Dougherty Funding, and US Bank CDC, to jointly support the downtown redevelopment of Kansas City with the tools to make renovation projects economically feasible.
“It has been a pleasure working with Kevin Page and the other owners of the Brookfield Building as well as Linden Street Partners (owners of Walnut Street) to improve their properties by deploying state-of-the-art energy efficiency systems for optimum building performance,” says Joshua Kagan – Senior Director at CleanFund. “We are also grateful to both Anne and Rob Hill (Rahill Capital) and Rob Shear (PACE Sage) for continuing to bring such high-quality projects to CleanFund. With our simple and efficient financing solution, we look forward to helping other Missouri-based commercial building owners improve their properties.”
CleanFund worked with the statewide Show ME PACE Clean Energy District to administer the funding for both projects. ”Show Me PACE is excited to facilitate the funding of the first PACE hotel project in Missouri and to bring CleanFund and their impeccable reputation to our state,” noted Show Me PACE Chairman, Josh Campbell. “These two projects serve to continue the revitalization of downtown Kansas City while saving the properties more than $3.3 million on their energy and utility costs over the life of the PACE assessments.”
Redevelopment of the historic Brookfield Building in downtown Kansas City will transform a dilapidated downtown property into a modern, high efficiency mixed-use building, while restoring it to its historic grandeur. The 85-year old building has stood vacant since 2005 as developers worked to raise capital for the project. The principals of Kothe Real Estate Partners, Great Lakes Management Group, and KP Property Development formed a partnership, Brookfield Hotel Operator LLC, to redevelop the historic Brookfield Building. They saw PACE as a perfect solution for financing high-efficiency new heating, ventilation and air-conditioning systems, new LED lighting and water heater improvements. The $2,420,000 in PACE financing is the largest commercial PACE transaction in Kansas City to date.
PACE Sage (www.pacesage.com) of Overland Park, KS, a local PACE finance originator, brought the Brookfield project to CleanFund and assisted the developer in obtaining more than $400,000 of additional PACE funding than what was originally applied for.
1721 Walnut Street is located in the Crossroads Art District and is a focal point of Kansas City’s urban redevelopment. Linden Street Partners acquires, repositions and develops real estate assets in the western and central United States with a primary focus on the development of mixed-use, multi-family housing in the urban cores of cities with economic vitality and a demonstrated commitment to walkability and transit-oriented development. Linden Street Partners will utilize $625,000 in PACE financing for a new roof, insulation, and new windows as part of the redevelopment project that will turn a three-story warehouse into a modern, 38-unit apartment building with ground floor commercial space. The improvements are expected to reduce both buildings’ energy consumption by about $550,000 annually.
RAHILL Capital (www.rahillcapital.com) of St. Louis served as the PACE project consultant for the Walnut project. “Owners are always looking for sources of funds to make their project happen or make their returns more attractive,” said Anne Murphy Hill, founder and president of Rahill Capital. “PACE is an attractive accretive class of capital for developers.”
“It’s been wonderful working with a number of great partners, including some of the region’s most prominent banks and law firms,” said Josh Smith, CleanFund’s Senior Transaction Counsel, who worked closely with the various parties to structure PACE as part of the redevelopments. “This transaction demonstrates that PACE can work in conjunction with a much larger capital stack, including traditional construction loans, tax equity funds, state and federal historic tax credits, and new market tax credits.”
About CleanFund Commercial PACE Capital
CleanFund Commercial PACE Capital is the leading provider of long-term financing for energy efficiency, water conservation, renewable energy to commercial, multifamily and other nonresidential properties in the U.S. With significant expertise in commercial real estate, finance, renewable energy and PACE policy, CleanFund is the largest direct provider of PACE capital. The company’s PACEDirect™ and SolarPACE™ financing programs enable property owners to install modern energy and water technology with no up-front cost, increasing property cash flows and value. For more information, please visit www.CleanFund.com.
About Show Me PACE
Show Me PACE is a leading statewide PACE district, promoting economic development through a one-of-a-kind open market program providing on-demand funding. SMP is administered by the Missouri Energy Initiative (MEI), a nonpartisan nonprofit association of public and private sector energy entities working to increase energy-related economic development. The connection between MEI and Show Me PACE has resulted in a district with low fees, efficient processing and a focus on providing services for innovative and impactful projects.
About RAHILL Capital
RAHILL Capital, the largest PACE consultant in Missouri, works with Property Owners and Developers looking for a cost effective, streamlined process of securing PACE funding.
About PACE Sage
PACE Sage is a Midwest region PACE financing originator. PACE Sage brings value to developers and property owners by educating them on PACE, while making the ‘application to close’ process simple and quick, assisting with energy engineering that maximizes the available PACE funds for projects.
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