CCG PACE Funding Closes $3.55 Million in Retroactive C-PACE Funding for Milwaukee’s Cambria Hotel
Milwaukee, WI - The Cambria Hotel Milwaukee Downtown located at 503 N. Plankinton Avenue utilized $3.55 Million of Commercial Property Assessed Clean Energy (C-PACE) capital to retroactively finance the water and energy efficient improvements incorporated within its design. Completed in 2019, the four-story, 132-room hotel was designed with the modern traveler in mind, including design elements and artwork that celebrate the local area's wooded parks, regional flora and unique freshwater history as well as protect that natural environment by maximizing water and energy efficient technologies.
The Cambria Hotel Milwaukee Downtown held its grand opening in October 2019 and was well received by travelers to Milwaukee. However, like other hotels nationwide, it suffered when the COVID-19 pandemic hit in March 2020 causing it to close for several months. To help get through this temporary downturn, the hotel's developer, Murphy Development Group, recently utilized the City of Milwaukee's PACE Program to access capital. Milwaukee's PACE Program is part of the City's plan to significantly reduce the energy usage of its buildings by making it easier for property owners to pay for energy and water efficient upgrades. Similar to retroactive C-PACE programs with varying look-back periods in 22 other states, Milwaukee's PACE Program authorizes retroactive financing for commercial property owners that would like to finance energy improvements that were recently completed. Retroactive C-PACE financing can provide funds to property owners that, due to COVID-19 and the ensuing business environment, may need to fill critical gap funding requirements for operations or retirement of existing debt.
The Cambria Hotel Milwaukee Downtown's retroactive C-PACE loan was sized based on operational savings from the installation of energy efficiency measures, such as roof and wall insulation, high efficiency windows, LED lighting, heating ventilation and air conditioning (HVAC) units, low-flow showers and faucets, and exterior LEDs. The energy efficiency and water conservation improvements to the Cambria Hotel will help the property save approximately 800,000 kWh and over 3.3 million gallons of water annually.
"The PACE program was a perfect fit for our project." noted John Murphy, Chairman and Chief Executive Officer of Murphy Development Group. "Participating in Milwaukee's PACE Program offered our ownership group the unique opportunity to benefit from front end supplemental project funding, while maintaining and expanding our sustainability initiatives. CCG PACE Funding was extremely effective in supporting us in what was a seamless, smooth and efficient process. A great team promoting another great Milwaukee program!"
"C-PACE financing makes it possible for commercial property owners to obtain long-term financing for up to one hundred percent of the hard and soft costs of energy efficiency, renewable energy and water conservation improvements to commercial properties. C-PACE financing is a low-cost replacement for more expensive debt and equity," explained Paul Hoffman, Managing Director, CCG PACE Funding. "The retroactive C-PACE financing is an important facet of the financial structure that provides long-term financial stability for the Cambria Hotel during a time period when almost all other hospitality financing sources have paused lending due to the COVID-19 Pandemic."
Communities of all sizes are currently looking for cost-effective economic development tools. And, C-PACE financing is a potent and powerful funding source that state and local governments can implement and make available to local commercial property owners.
Matt Donath, Sustainability Program Coordinator, City of Milwaukee's Environmental Collaboration Office noted, "Commercial PACE projects play an important role in the City of Milwaukee reaching its energy reduction and greenhouse gas goals, all while benefiting building owners through reduced utility costs and higher property values. We were excited to work with Murphy Development Group and CCG PACE Funding to help finance this project, especially given the circumstances with COVID-19. The Cambria Hotel project will not only save 800,000 kWh of electricity per year, it will also create jobs in downtown Milwaukee and help reduce greenhouse gas emissions in our city."
About Milwaukee PACE
The City of Milwaukee's Property Assessed Clean Energy (PACE) Financing program helps commercial property owners affordably finance energy efficiency, water efficiency, and renewable energy upgrades in their buildings. This public-private partnership leverages private capital to supply upfront funding for the improvements and collects payments through a voluntary municipal special charge (City Ordinance 304-26.5). The special charge is attached to the property, not the owner, and is paid back through the property tax system over time. Projects are designed so that the annual energy and other savings pay for the special charge, providing a net positive cash flow. The City of Milwaukee's PACE Financing program is managed by the City of Milwaukee's Environmental Collaboration Office (ECO). View more information at https://city.milwaukee.gov/bbc/services/PACE-Financing.
About Murphy Development Group
Murphy Development Group, LLC focuses on generating development opportunities in the multifamily, hospitality and office sectors across the country. Through sound investment strategies and extensive due diligence, the dynamic development team at Murphy Asset Management (MAM) assists with identifying, evaluating and executing the projects by combining sound financial modeling, economic analysis and entrepreneurial creativity. For more information, please refer to http://murphyres.com/murphy development-group-llc.
About CCG PACE Funding
CCG PACE Funding, LLC provides long-term, flexible financing to owners of large-scale commercial properties located throughout the United States that intend to utilize C-PACE financing for energy efficiency, water conservation, renewable energy, seismic and wind improvements as part of their capital stacks. The firm's C-PACE financings are individually customized to meet the needs of each stakeholder. CCG PACE Funding is affiliated with CityScape Capital Group, LLC, an entity that has over 25 years of experience funding more than $1.6 Billion of debt and equity into highly structured transactions located throughout the country involving historic, new markets, energy and low-income housing tax credits. For additional information, please visit www.ccgpace.com.
