A company from Austin, Texas, has closed two Commercial Property Assessed Clean Energy (C-PACE) transactions totaling $4.9 million with Ross Group, a Tulsa-based developer, to finance energy-saving building measures in the redevelopment of two properties into hotels in downtown Tulsa.
Ross Group secured $3.2 million in C-PACE financing from Petros PACE Finance, LLC for the recently completed renovation and conversion of the historic Tulsa Club building into a 90-room Hilton Curio hotel.
Also, $1.7 million in C-PACE financing was secured for the building of the 116-room Holiday Inn Express & Suites-Downtown. The deals mark the first C-PACE transactions to close in Oklahoma.
Ross Group will use the funds for sustainable design elements that are incorporated into the redevelopment of the two properties, including efficient heating, cooling, plumbing and lighting systems, along with building envelope improvements.
The Tulsa Club’s 1920s-era building was home to a prominent social club in the city but sat vacant for years before its recent conversion into a hotel. The site of the Holiday Inn Express Downtown Tulsa was previously occupied by two older commercial buildings.
C-PACE is a relatively new financing tool for energy and water efficiency projects, which has grown quickly in recent years. As a low-cost, long-term permanent financing product secured as a property tax assessment, it provides developers with an alternative to mezzanine debt and equity that lowers overall capital costs and allows them to invest in higher efficiency building designs.
“Ross Group is committed to development practices that improve our community’s infrastructure,” Warren Ross, chairman and president of Ross Group, said in a statement. “C-PACE financing is a cost-effective financing tool to include in the capital stack of future developments that promote sustainability and economic development.”
PACE Financial Servicing serves as the interim administrator of the Tulsa County PACE program.