Projects in downtown Oklahoma City are getting a boost from new clean energy loans
The more than $80 million development, which has stalled for months, if not years, is scheduled to begin this summer after getting a boost from a new clean energy funding program created by Oklahoma County commissioners had received.
The Commercial Property Assessed Clean Energy program, or C-PACE, provides developers with low-cost, long-term financing for energy efficiency, renewable energy, water conservation and building resilience projects. The loans are linked to the property tax of the building as an assessment and will be repaid over a period of 20 years or more through a special assessment.
More:Downtown’s historic OKC bank is set to be converted into apartments and retail
Financing can be up to 100% finance depending on eligibility, no deposit and if the property is sold the remaining valuation can be passed on to the new owner.
Anne-Marie Funk, whose practice ADG Blatt Architects worked on converting the First National Center into apartments and a hotel, told commissioners that as energy prices soar, funding is becoming more important. Funk, the company’s marketing director, said that about 60% of energy use comes from commercial structures.
“Projects are becoming more and more complicated,” says Funk. “Developers use as many public incentives as possible for a project. C-PACE funding means developers can do the right thing by bringing energy efficiency and new ways to save energy into our buildings.”
More:12-story tower announced for a corner across from the Oklahoma City National Memorial
C-PACE is a national initiative that began in 2009 and is available in 22 states. The Oklahoma legislature approved legislation allowing its use in 2019. The funding, launched by Oklahoma County in March, comes into play as commercial development faces labor shortages and rising material costs
Pivot Project was the first recipient of C-PACE for the redevelopment of a former Chrysler dealership at 301 NW 13. The $1.1 million loan, backed by Nuveen Green Capital, was used to replace the windows, heating and Modernize air conditioning systems as well as the building’s heat and heat supply Moisture improvements for the building envelope.
Jonathan Dodson, a partner in the Pivot project, said the funding will allow the group to upgrade the former car dealership, which now houses a bakery, architectural practice and manufacturing shop, with energy-efficient double-glazed windows, new heating and air conditioning systems for individual units and LED lighting.
“What we’ve personally found with many of our downtown projects is that these projects are of a specific size and require a specific perspective of Oklahoma City. There’s not a lot of money to pursue these projects,” Dodson said. “We can go in and do whatever is necessary to raise the standards of these buildings, many of which have long been vacant, and help investors bridge the value and cost gap.”
Nuveen Green Capital is also backing a $2 million C-PACE loan for an office building that Pivot Project plans to build this summer. The $16.5 million, four-story building will open this summer on a vacant lot at 1204 N Hudson Ave. built, which was intended for the construction of a hotel. The hotel project disappeared as the COVID-19 pandemic ravaged the hospitality industry.
Two other projects being carried out with C-PACE are among the more ambitious downtown development projects announced in recent years.
Announced in 2021 by developer Brandon Lodge, NOVA, 1 NW 6 will include a full-size grocery store, urban rooftop greenhouse, brewery, 20 apartments and shops.
Lodge was recently approved in C-PACE funding for $5.6 million, which he believes will cover upfront costs and provide gap funding at competitive fixed rates. Lodge, like other developers, is overcoming cost increases, with NOVA valued at $22.4 million.
Lodge said the C-PACE funding provides investors with a level of convenience they would not have had had they not known that C-PACE was reliably backing a portion of the equity. Now he wants to start construction in the summer.
“We stalled waiting for C-PACE to come through,” Lodge said. “It’s a big, expensive and complicated project. The anchors are a rooftop greenhouse and grocery store. It’s a tough but good project. C-PACE helped get the ball over the hilltop.”
More:Conversion of the COOP Ale Works Armory back on track with hotel, brewery, restaurant and event center
Daniel Mercer, CEO of COOP Ale Works, said that while the wait for C-PACE to launch in Oklahoma County was longer than expected, it was worth the wait. Mercer said he used the delays to work with state officials on title issues for the 23rd Street Armory, which will be the brewery’s new home combined with a hotel, restaurant, bar and events center.
“Our intention was always to power the facility with electricity from renewable sources,” Mercer said. “This provides us with a pretty significant funding mechanism.”
Steve Lackmeyer joined The Oklahoman in 1990. He is an award-winning reporter, columnist and author covering downtown Oklahoma City, urban development and business for The Oklahoman. Contact him at [email protected] Please support his work and that of other Oklahoman journalists by subscribing to scribe.oklahoman.com today.