A pair of historic conversion projects in downtown Kansas City will soon see new life after benefiting from a combined $3 million in PACE financing, thanks to CleanFund.
CleanFund is the largest national commercial PACE provider, which offers 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.
The first project will turn the dilapidated Brookfield Building at 101 W. 11th Street into a modern, high efficiency mixed-use building while also restoring its historic grandeur. The 85-year-old building has sat vacant while developers worked to raise capital for the project. The development partnership consists of the principals of Kothe Real Estate Partners, Great Lakes Management Group, and KP Property Development. The partners, operating as Brookfield Hotel Operator LLC, said 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 $2.42 million in PACE financing marks the largest commercial PACE transaction in Kansas City to date.
PACE Sage of Overland Park brought the Brookfield project to CleanFund and assisted the developer in obtaining more than $400,000 of additional PACE funding on top of what developers originally applied for.
The second project to receive PACE financing is 1721 Walnut Street. Linden Street Partners plans to convert the former warehouse into a modern three-story 38-unit apartment building. With $625,000 in PACE financing, the project will receive a new roof, insulation, and new windows.
All in all, these energy efficient upgrades are expected to reduce both buildings' energy consumption by roughly $550,000 annually.
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 says it's built strong relationships in Kansas City with property owners, project developers, and local financial institutions -- including 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 to improve their properties by deploying state-of-the-art energy efficiency systems for optimum building performance,” CleanFund Senior Director Joshua Kagan said. “We are also grateful to both Anne and Rob Hill of Rahill Capital and Rob Shear of 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,” Show Me PACE Chairman Josh Campbell said. “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.”