PRESS RELEASE, Texas PACE Authority: On July 3 the City of Dallas C-PACE program (Commercial Property Assessed Clean Energy) closed its first PACE project, enabling Alterra International, a Dallas, Texas-based global real estate development company to obtain $23.9 million in long-term fixed-rate financing from CleanFund Commercial PACE Capital for energy and water saving upgrades to the historic Butler Brothers Building at 500 S. Ervay Street across from City Hall.

The project is the largest C-PACE project to date in Texas and is the second largest single-funded C-PACE project in the nation.

The City’s C-PACE program is a proven financial tool that enables Texas commercial, industrial, agricultural, non-profit and multifamily property owners to upgrade facility infrastructure with energy and water saving measures using little or no upfront capital outlay. The program is designed so that owners lower their operating costs and pay for eligible improvements with the generated savings, taking advantage of affordable, long-term financing.

Alterra International utilized the City’s C-PACE program to finance energy efficient HVAC, lighting, insulation, roofing, glazing, and exterior waterproofing/plaster, and water saving plumbing and irrigation measures.

"The C-PACE financing allowed us to increase the building’s energy-efficiency, enabling the development to likely attract even more interest, as today's residents and tenants look for high-efficiency and low maintenance costs for their apartments and businesses, and hotel guests want to stay in buildings that are sustainable," said Mike Sarimsakci, President of Alterra International.

Originally constructed in 1910, the nine-story, 510,000 square-foot mercantile warehouse known as the Butler Brothers Building had long been an empty eyesore across from City Hall. Its redevelopment into 238 apartments, a 274-room dual-branded Fairfield Inn/Town Home Suites by Marriott, and retail and office space is expected to spur additional revitalization in the area.

Lower utility costs make the luxury apartments appealing to tenants. Projected benefits of the Butler Brothers Building C-PACE project for the City of Dallas and its citizens include:

  • Saving more than 6.6 million Kilowatt hours per year in electricity
  • Saving almost 700,000 Gallons of water per year
  • Saving over 3,500 Tonnes of CO2 per year
  • Contributing to the creation of over 100 jobs in the Dallas area

“A typical real estate capital stack falls short of the funds necessary to cover the additional up-front cost of more expensive energy and water saving equipment that lowers the property’s operating costs,” said Nathan Whigham, VP Business Development at CleanFund. “C-PACE financing replaces more expensive partner equity or mezzanine with low-cost, long-term financing.”

C-PACE has several additional benefits for developers:

  • C-PACE assessments do not accelerate; if the property is sold, the remaining payments transfer to the new owner;
  • C-PACE financing is cash-flow positive. Operational savings exceed the cost of repayment;
  • C-PACE is 100% financing with no down payment;
  • C-PACE financing complements historic grants, economic development incentives, rebates, tax incentives, etc.; and
  • C-PACE financing for energy and water efficiency measures and distributed generation technologies allow the developer to focus available capital on more accretive uses of capital (e.g., tenant improvements, hotel FF&E, etc.).

The Texas C-PACE program is voluntary and does not require taxpayer funds.

“The City of Dallas’ forward thinking economic development policies played a key role in turning around the empty building’s sixty-year downward spiral. The City’s C-PACE program complements other non-traditional capital sources including Texas’ historic tax credits used in this project,” said Charlene Heydinger, president, Texas PACE Authority.

The City’s C-PACE program is based on the Texas PACE in a Box model program designed by over 130 stakeholders for Texas.  The City of Dallas provides a market-based, flexible C-PACE program that enables property owners to do business with the parties of their choosing at the lowest possible administrative cost.  The program includes a high level of consumer protection to ensure that the projects will deliver the anticipated savings.  The program is administered by the non-profit Texas PACE Authority, which also administers this model program in eleven Texas counties and the City of Houston.

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