CCG PACE Funding Closes $3.55 Million in Retroactive C-PACE Funding for Milwaukee's Cambria Hotel
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."