Market Segment: Commercial
Project Type: PACE Financing
July 12, 2016
Innovative Private-Public Partnership Between Dayton Leaders, Plug Smart, and Building Owner Enable $2 Million Kettering Tower Renovation
Dayton's tallest building, the 30 story Kettering Tower is in the final stages of a $2 million renovation project. What's interesting about the project is how the job was enabled by an innovative financing program, known as PACE (Property Assessed Clean Energy) and lots of behind the scenes work between building owner, Tower Partners LLC, the mayor's office, city commission, Port Authority, and the energy services provider and project manager, Plug Smart. The teamwork in this private-public partnership brought the PACE Program to the table, and made this ambitious project a reality.
"The City Commission is proud to participate in the renovation of one of Dayton's landmarks, the Kettering Tower, through approval of a special energy improvement district," states Mayor Nan Whaley. "The tower's owners recognize downtown Dayton as a great place to invest, and we are happy to join them in creating another Dayton success story."
PACE is an innovative program that makes it possible for owners of commercial and industrial properties to obtain low-cost, long-term financing for energy-efficiency, water conservation and renewable energy projects. PACE has been established in 32 states and its statutes authorize municipalities and counties to work with lenders to provide upfront financing to property owners for qualified projects, and to collect the repayment through annual assessments on the property's real estate tax bill.
The PACE Program was introduced to Tower Partners by one of Ohio's leading energy services firms, Plug Smart. "The Kettering Tower needed a lot of work to the building's infrastructure and needed to improve its ability to manage energy on its various systems. After we conducted our comprehensive facility analysis, we knew this had the potential to be a fully funded PACE project," states Lucas Dixon, Chief of Strategy for Plug Smart. "We have a lot of experience developing PACE projects. One of the big challenges was it had never been done in Dayton before so a lot of groundwork was necessary to tap into the program."
Plug Smart collaborated with Jerry Brunswick. President of the Dayton Montgomery County Port Authority, the provider of the PACE financing. Jerry spearheaded the bringing together of the Mayor's office and city commission to form a true private-public partnership that enabled PACE funds to be accessed in Dayton. "City leaders were excited about joining with us to bring PACE financing to Dayton," states Jerry Brunswick. "Everyone wanted to help make this project happen. We were very happy when we heard Plug Smart was working with the Kettering Tower, because it was the first building we thought of when we began working on the PACE mechanism. The city and port are looking forward to seeing more building owners take advantage of the PACE Program as part of the downtown renovation efforts in the months ahead."
The work on Kettering Tower is also bringing money into area companies. Because this building is such a signature effort for downtown Dayton, Project Manager Plug Smart made the commitment to hire local service providers. "We've worked almost exclusively with Dayton/Miami Valley contractors," continued Plug Smart's Dixon. "One of the other ways this project is deemed successful is by the work and commerce it has infused into the Dayton area." The job began earlier this year and is scheduled to be completed mid-to-late fall.
Tower Partners LLC are very pleased because the project was fully funded through PACE and Port Authority. The new building automation system, cooling tower upgrades, high efficiency lighting, and other work will save an estimated $367 thousand dollars each year in reduced operation costs. In addition, through Plug Smart, Tower Partners was able to take advantage of over $300 thousand in various energy saving incentives.
"PACE is a great private-public partnership that enables building renovation, creates jobs, while at the same time conserving energy and helping the environment. I believe we are going to see Dayton's civic leadership use it as an effective tool for promoting commerce, renovating downtown, and revitalizing the city," concluded Dixon from Plug Smart. "PACE solves a lot of problems for building owners in the sense that it allows building owners to pay for improvements using 100%, off-balance sheet financing, that can survive a transfer of ownership while at the same time improving the value of the property and delivering superior cash on cash returns."
Plug Smart believes there are many buildings in Dayton and across Ohio that could qualify for a fully funded PACE Program, but are just unaware of it or do not know how to access it. "This is where we can help. Plug Smart has developed some of the largest commercial PACE projects in Ohio and our team can help our clients leverage this unique and innovative program from concept through construction."