Baker Tilly assists in closing first PACE Wisconsin project
Our client’s need
After 15 years of vacancy, a development team sought to redevelop a 102-year-old warehouse into a boutique hotel, Hotel Indigo Madison. This historic building, located a few blocks from Wisconsin’s State Capitol building, will undergo an extensive renovation and a five story addition. It will include a 144 room hotel and restaurant.
In a rapidly evolving city and neighborhood, the project is significant to Madison’s industrial east side. Keeping the historic 5-story brick façade and addressing energy efficiency were two goals of the project. Given the additional costs associated with these goals, the development team needed alternative financing to make the project possible.
Baker Tilly Capital solution
Property Assessed Clean Energy (PACE) was identified as an important component in the financing of the project. PACE closed a critical gap in the capital structure, which also included bank debt, equity and state and federal historic tax credits. The team assisted the client in meeting PACE Wisconsin guidelines, identifying an energy engineer that would guarantee the energy savings and finding a lender for the project.
Baker Tilly presented the project to multiple lenders and ran a competitive process that helped the client select a lender with competitive terms and a strong track record of closing in a timely manner.
Results
With Baker Tilly Capital assistance, the development team secured a $1.5 million PACE loan and $5.1 million in historic rehabilitation tax credits closing the financing gap and funding the energy efficient components of the redevelopment. The owner will also realize more than $1.9 million in energy savings as a result of this financing.
As the first transaction to utilize PACE Wisconsin financing, it represents an important milestone for PACE financing, the City of Madison and the State of Wisconsin.
For more information on this, or to learn how Baker Tilly specialists can help, contact our team.
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