Portman Holdings, the Atlanta-based developer of the planned Hyatt Regency hotel at the Calvin L. Rampton Salt Palace Convention Center in Salt Lake City, has closed on $54.7 million in Commercial Property Assessed Clean Energy (C-PACE) funding that will allow the company to proceed immediately with the project. The funding is being provided by CleanFund Commercial PACE Capital Inc. of Sausalito, California, through provisions of Salt Lake City’s recently revamped C-PACE program.
With the financing in place, Salt Lake City and the developer held a ground-breaking ceremony for the project on Jan. 10.
The C-PACE contribution to the $377 million in total project costs will be used to fund C-PACE-eligible energy efficiency improvements such as heating and cooling systems, interior lighting and equipment, fans, heat rejection, pumps and water systems. As a result, the hotel’s energy performance is projected to exceed the local energy code compliance level by over 20 percent, the developer said.
C-PACE is an innovative financing structure, now available in 31 states, that makes it possible for owners and developers of commercial, industrial and other non-residential properties to obtain low-cost, long-term financing for energy efficiency, water conservation, seismic strengthening and renewable energy projects. The Salt Lake City project is the largest single amount ever financed by C-PACE nationally. The loan closed on Dec. 30.
Salt Lake City has set aggressive sustainability goals to be 100 percent renewable by 2030 and cut carbon emissions by 80 percent by 2040. Outgoing Mayor Jackie Biskupski said, “C-PACE was the lowest cost of capital for the developer, Portman Holdings, which enabled the project to proceed. We expect that C-PACE is going to be a catalyst to enable the city to meet our sustainability goals.”
Opening in 2022, the Hyatt Regency Salt Lake City will be the first four-star large hotel opening in the city since the 2002 Winter Olympic Games. The 700-room, upscale, full-service hotel will serve as the Salt Palace Convention Center’s on-site hotel.
“The project has always had an ambitious construction and capital plan,” said Portman Holdings' president, John Portman IV. “We were fortunate enough to work with talented and capable people with the city and county to learn what sustainable financing resources were available to the project. Once we were introduced to C-PACE, we immediately saw the opportunity to cost-effectively fund the sustainable elements of the project. CleanFund provided the capital in an upfront manner and was a delight to work with. We are very pleased with how they approached the deal and the partnership, especially given the overall complexity of the project.”
Salt Lake City wanted the project to move forward and with no further tax incentives available, the city reached out to the Utah C-PACE program.
“We recently redesigned the Utah C-PACE program with new legislation that not only addresses the potential credit risks of C-PACE and enabled the program to work as it was originally intended. The goal of the C-PACE program is to make it easy and affordable for Utah’s commercial buildings owners to invest in upgrades that will not only benefit their bottom line and their tenants, but also the planet,” said Theddi Wright Chappell, director of the Utah C-PACE Program.
“The Hyatt Regency Salt Lake City project was the most heavily sought-after project with an extremely competitive RFP process,” said Woolsey McKernon, managing director of CleanFund. “In the end, CleanFund provided the most attractive financing package that worked for Portman Holdings.”