More than $80 million in development, all of it stalled for months if not years, is set to start this summer after being given a boost from a new clean energy financing program created by Oklahoma County commissioners.

The Commercial Property Assessed Clean Energy program, or C-PACE, provides developers with low-cost, long-term funding for energy efficiency, renewable energy sources, water conservation and building resiliency projects. The loans are tied to building’s property tax records as an assessment and are paid back over terms stretching 20 years or longer through a special property assessment.

The funding can provide up to 100% financing based on eligibility, no down payment, and if the property is sold, any remaining assessment can be passed on to the new owner.

Anne-Marie Funk, whose firm ADG Blatt Architects worked on First National Center's conversion into apartments and a hotel, explained to commissioners the financing is increasingly important as energy prices climb higher. Funk, marketing director at the firm, said about 60% of energy use is from commercial structures.

“Projects are getting more and more complicated,” Funk said. “Developers are using as much public incentive as they can possibly get into a project. C-PACE funding means that developers can do the right thing by bringing energy efficiency and new ways to save energy into our buildings.”

C-PACE is a national initiative that began in 2009 and is available in 22 states. Oklahoma lawmakers approved statutes allowing its use in 2019. The financing, launched by Oklahoma County in March, is coming into play as commercial development is facing labor shortages and spiraling material costs

Pivot Project was the first recipient of C-PACE for its redevelopment of a former Chrysler dealership at 301 NW 13. Backed by Nuveen Green Capital, the $1.1 million loan was used to upgrade the building’s windows, heating and air conditioning systems, and thermal and moisture improvements for the building’s exterior.

Jonathan Dodson, a partner in Pivot Project, said the funding allowed the group to take the former dealership, now home to a bakery, architecture firm and fabrication shop, and upgrade it with double pane energy efficient windows, new heat and air conditioning systems with individual units, and LED lighting.

“What we found personally with a lot of our projects being in the urban core is because these are of a certain size and require a certain perspective toward Oklahoma City, there isn’t a ton of money chasing these projects,” Dodson said. “We can go in and do what is necessary to bring up the standards of these buildings where a lot of them have been vacant a long time and help investors bridge the value and cost gap.”

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Nuveen Green Capital also is backing a $2 million C-PACE loan toward an office building Pivot Project is preparing to build this summer. The $16.5 million, four-story building will start going up this summer on an empty lot at 1204 N Hudson Ave. that was targeted for construction of a hotel. The hotel project disappeared when the COVID-19 pandemic devastated the hospitality industry.

Two other projects proceeding with C-PACE are among the more ambitious downtown development projects announced in the past couple of years.

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NOVA, at 1 NW 6, was announced by developer Brandon Lodge in 2021 and is to include a full-size grocery, urban rooftop greenhouse, brewery, 20 apartments and shops.

Lodge was recently approved for $5.6 million in C-PACE funding, which he said will defray upfront expenses and provide gap financing with competitive fixed interest rates. Lodge, like other developers, is overcoming cost increases with NOVA estimated at $22.4 million.

Lodge said the C-PACE financing provides his investors with a level of comfort they wouldn’t have had without knowing C-PACE reliably backs a part of the equity. He is now looking at starting construction this summer.

“We’ve been stalled waiting for C-PACE to go through,” Lodge said. “It’s a big and expensive and complicated project. The anchors are a rooftop greenhouse and a grocery store. It’s a tough but good project. C-PACE helped get the ball over the crest of the hill.”

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Daniel Mercer, CEO of COOP Ale Works, said that while the wait for Oklahoma County to launch C-PACE was longer than expected, it’s worth the wait. Mercer said he used the delays to work with state officials on title issues for the 23rd Street Armory that will become the brewery’s new home combined with a hotel, restaurant, bar and event center.

“We always intended to use renewable sources to power the facility,” Mercer said. “This provides us a pretty significant funding mechanism.”

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