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NYC issues biggest-ever C-PACE loan for 111 Wall retrofit

Mayor Bill de Blasio announced today that the city has helped arrange an $89 million loan to help the owners bring 111 Wall Street into line with New York carbon emissions targets.

It is the biggest loan to date issued under the C-PACE (Commercial Property Assessed Clean Energy) program, a government-approved low-cost, long-term, non-recourse capital solution for real estate transactions including sustainable new construction, gut renovations and value-add acquisitions.

Authorized by state statute and local ordinances, it is used to finance 100 percent of eligible hard and soft costs for a project.

Unlike traditional senior or mezzanine loans, it is secured by a special assessment against the property. Repayment of the assessment financing is done via the building owner’s property tax bill with payments due concurrent with ordinary property tax payments.

To date, 38 states and the District of Columbia have passed legislation to allow the use of C-PACE financing.

The money was provided to Nightingale Properties and Wafra Capital Partners, owners of 111 Wall,  through NYC Accelerator PACE Financing Program to retrofit the 900,000 s/f feet tower for efficiency, resiliency, and local law compliance.

The project is estimated to save $2.5 million in annual energy costs and avoid $750,000 in annual Local Law 97 fines starting in 2030.

The program, administered by the New York City Energy Efficiency Corporation (NYCEEC) on behalf of the City, will help property owners meet the City’s carbon emission targets under the Climate Mobilization Act by providing access to low-cost, long-term capital for energy efficiency and renewable energy retrofits.

Mayor Bill de Blasio announces New York City’s Green New Deal at Hunter’s Point South Park on Monday, April 22, 2019. Michael Appleton/Mayoral Photography

“If you can retrofit a building in New York City, you can do it anywhere,” said Mayor de Blasio. “Today, I want to send a clear message to all building owners in our five boroughs — you have a critical financial tool to redesign your properties for energy efficiency and sustainability. New Yorkers are depending on you to help us fight against the climate emergency by drastically reducing carbon emissions coming from buildings.”

“Building owners are not alone in the fight against climate change,” said Ben Furnas, Director of the Mayor’s Office of Climate and Sustainability. “The NYC Accelerator PACE Financing Program is an essential tool to decarbonize buildings at scale while shifting the cost burden away from property owners. Our team and partners at NYCEEC stand ready to help building owners and lenders finance green energy projects, reduce operating expenses, and meet local law requirements while cutting down on carbon emissions and improving tenants’ comfort.”

By 2030, the program is projected to create 689 green jobs and reduce 447,600 metric tons of CO2e from our atmosphere, an equivalent of taking 97,344 passenger cars off the road for a year.

The program is open to any commercial or multifamily buildings with three units or more, including tax-exempt non-profit and religious facilities, health care facilities, and industrial properties, that meet the requirements and eligibility.

Nightingale Properties and Wafra Capital Partners announced on Monday they had secured $500 million in financing from a consortium of lenders for the redevelopment of the building. They worked with Texas-based Petros PACE Finance to arrange the PACE loan with the city.

“There is something special about being the first C-PACE transaction completed in the Big Apple,” said Mansoor Ghori, CEO of Petros PACE Finance. “The fact that the first transaction shattered the record for the largest C-PACE transaction ever closed is proof of the magnitude of the City’s potential for C-PACE, and the wisdom of the Mayor and City’s leadership on climate change. “

“With these improvements, 111 Wall Street will be well-positioned to meet New York City’s requirements and attract today’s tenants that seek to lease buildings with forward-thinking green designs and environmental sustainability,” said Michael Gontar, Chief Investment Officer of Wafra Capital Partners. “We chose to work with Petros because of their industry-leading experience and execution capability giving us certainty of close on a C-PACE transaction of this size.”

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