Mayor Greg Fischer today joined the Louisville Metro Office of Advanced Planning & Sustainability and members of the local development community to celebrate the recent conclusion of two agreements providing more than $9.1 million in loan funds efficiency ratings for downtown developments through the City’s Energy Project Assessment District. (EPAD).
The two developments are Number Fifteen, a Kentucky-centric bar, dining and entertainment experience on Whiskey Row, and a Tempo Hotel by Hilton on the southwest corner of Jefferson & Shelby streets. The two projects represent over $46 million in total investments in the downtown corridor.
“Now more than ever, the urgency to address the climate crisis is clear. Through the EPAD program, Louisville building owners can help us meet Louisville’s clean energy goals while improving their bottom line through sustainability,” said Mayor Greg Fischer. “EPAD is one of the tools provided by Louisville Metro Government (LMG) to make these critical investments easier than ever.”
The EPAD program uses a financing mechanism called Property Assessed Clean Energy (PACE) that helps property owners repay loans for energy efficiency, solar energy and water conservation projects without down payment. All of PACE’s capital comes from private sources without any subsidy from LMG.
However, unlike a traditional loan, PACE loans through the EPAD program are repaid through a voluntary special contribution added to the annual property tax bill collected by LMG. Applicants can receive PACE loans that cover up to 100% of the material and soft costs of the project. This translates to preserved lines of credit, increased cash flow, and no personal or business guarantees from the owner.
According to the US Green Building Council, investing in dense development in a downtown area conserves land and promotes livability, walkability and transportation efficiency, including reducing the distance traveled by vehicles. Additionally, investing in the adaptive reuse of existing buildings saves a high percentage of embodied energy by significantly reducing the energy consumption associated with each stage of demolishing a structure and constructing a new one. .
Number Fifteen received a 22-year, $4.2 million loan from LordCap Green to install improvements ranging from a high-performance building envelope to high-efficiency plumbing, electrical and mechanical systems at the 121 W. Main St. The historic WL Weller building will be transformed into a mixed-use bar, dining and entertainment venue featuring local offerings.
“With our lead lender River City Bank, the PACE financing made possible by LordCap Green was an integral part of our capital stack in Louisville. The ability to financially leverage energy efficiency upgrades to our historic building on Whiskey Row was a valuable financing option, increasing returns for our investors and reducing exposure to our primary lender,” said Spencer Fronk, CEO of The Numbers Holding. Company, LLC.
David Hobbs, president of Louisville-based River City Bank, said, “I think the PACE capital stack made sense for a multitude of reasons. The first, of course, is the creation of energy efficiencies associated with the project. The second is the amortization of the capital stack for the borrower. The third would be for increased property value based on energy cost savings. The fourth would be for the revitalization of a beautiful building and the creation of a great place for our city. Last, but not least, the creation of new jobs.
For the Tempo Hotel by Hilton, the developer received a $4.9 million PACE loan with a 25-year repayment term from PACE lender Twain Financial Partners. The six-story hotel, located at 710 E. Jefferson St., will feature 130 rooms, a lobby restaurant and a rooftop bar. The hotel will install energy efficiency systems, including the building envelope, heating and air conditioning, LED lighting and elevators.
“PACE is an important part of our capital stack for the Tempo Hotel. With interest rates and construction costs on the rise, PACE provides an essential tool for developers and building owners in Louisville looking to improve the energy efficiency of buildings,” said Mariah Weyland Gratz, CEO of Weyland. ventures.
Bosse Construction, based in Louisville, is the general contractor for the two EPAD projects.
“At Bosse Construction, we believe that the PACE funding opportunities that are now available through the Louisville Metro Energy Project Assessment District Program will enable increased investment in key construction projects in the Louisville area, particularly in the urban core. This is a win for our communities, our investors, and the environment,” said Daniel Lawson, Vice President of Bosse Construction
First launched in 2016, the EPAD program has now invested more than $15 million to make Louisville’s buildings more sustainable and resilient. It has been used by a variety of properties including a church, fitness center and multi-family dwellings.
Learn more about how to start an EPAD project at https://louisvilleky.gov/government/sustainability/epad-program.
In 2021, the Louisville Metropolitan Government, through its Office of Advanced Planning & Sustainability, announced a new partnership with Energize Kentucky to advance the EPAD program. In addition to the EPAD program, the office offers incentives for building and business owners to invest in energy efficiency through its Cool Roof incentive program and renewable energy through its Solar Over Louisville program. The office is working to meet Metro Louisville’s sustainability goals, including the goal of powering Louisville with 100% clean energy community-wide by 2040.
For more information about the Office of Advanced Planning and Sustainability’s clean energy and sustainability efforts, visit https://louisvilleky.gov/sustainability.