Two more big projects by one developer in downtown OKC got multimillion-dollar boosts for energy conservation from Oklahoma County with approval of special adjustable-rate loans to be paid back over decades along with the borrowers' twice-a-year property tax payments.

The Board of County Commissioners approved contracts this week for the new Guernsey company headquarters to be built to anchor Alley North at 13 NW 13, and Medley Marketplace at 9 NW 6 for "clean energy financing" through Commercial Property Assessed Clean Energy, or C-PACE.

C-PACE contracts allow low-cost, long-term, partial construction financing to commercial property owners for constructing or remodeling buildings to higher-than-typical standards of energy efficiency, water conservation and general building resiliency.

"This can be anything from LED lighting to water improvements, to building envelope improvements," said Keith Kuhlman, director of special projects for the Oklahoma Industries Authority, which administers the program in Oklahoma County. Elsewhere in the state, it's handled by Oklahoma C-PACE in Tulsa.

The borrowers here this week were limited liability companies associated with Oklahoma City's Pivot Project.

• HARDTOFIND LLC was approved for a $3,271,000 loan from Amalgamated Bank, New York, for the Guernsey headquarters, estimated to cost $40 million.
• LibertyBellOK LLC was approved for $5,066,900 in financing from Nuveen Green Capital in Darien, Connecticut, for Medley Marketplace, the former Stow's Office Furniture store, estimated at $30 million.

Guernsey, Medley Marketplace to get first C-PACE construction loans since Convergence in 2023

Meeting a high energy-efficiency standard for construction is right up Guernsey's alley, said Kuhlman. The engineering firm will relocate from 5555 N Grand Blvd.

"Being an engineering company, they really strive to do that," he told the commissioners.

Medley Marketplace "has been on our radar for a long time, Kuhlman said. A previous owner secured a C-PACE loan, county records show, but apparently never closed on it.

Pivot has used C-PACE financing with three other developments: The Hudson Office Building, 1201 N Hudson Ave.; Harvey 13, 301 NW 13; and Main Street Arcade, 621 W Main St.

The contracts for the Guernsey-anchored Alley North and Medley Marketplace were the first two since 2023, when a $28,395,718 loan was approved for Convergence, the biotech research-and-development campus at 308 NE 9. Kuhlman said that is the largest C-PACE loan in Oklahoma so far.

Adjustable-rate C-PACE 'clean energy' loans are now available in Oklahoma County

The financing arrangements OK'd this week were also the first since county commissioners decided, at the Oklahoma Industries Authority's request, to approve adjustable-rate loans as an option in early March.

High interest rates had the program, first started here in 2021, at a standstill, Kuhlman said, for borrowers' fear of getting stuck with a high fixed rate for years once rates go back down.

Candace Baitz, vice president of acquisitions and development for the Pivot Project, said the new loans allow the developer to pay one rate for five years, then have opportunities to have the rate reset lower, depending on market conditions.

"It's really great the county (OK'd) the adjustable rate," Baitz said. "It's really important for our market."

High loan rates sapped interest in C-PACE 'clean energy' construction loans

C-PACE got off to a good start here, Kuhlman said, but then loan rates rose and interest dwindled.

"The reason that is a deal is typically C-PACE contracts are 20 to 25 years and up," he said. "Most construction and first-place construction loans are seven to 15 years. So, to lock themselves into that long of a term for that high of an interest rate on a C-PACE contract, which is at a fixed rate, is just not working on their balance sheets.

"What we're tying to do is find a bridge to come up with a solution to allow these users to make these loans and get an interest rate that can potentially come down when interest rates come down and inflation comes down."

Staff writer Richard Mize covers Oklahoma County government and the city of Edmond. He previously covered housing, commercial real estate and related topics for the newspaper and Oklahoman.com, starting in 1999. Contact him at rmize@oklahoman.com.

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