One-of-a-kind loan supports DuPont building renovations

WILMINGTON – The historic DuPont building in downtown Wilmington will get new heating and cooling units thanks to the state’s first green energy loan to amortize on a tax bill.

The Buccini / Pollin Group obtained the 3.9 million dollars clean energy rated commercial property (C-PACE) loan from Greenworks Lending, a Connecticut-based lender focused on such transactions, which are limited by the estimated value of a property but paid annually over the life of the loan as part of a tax bill for a property.

While the C-PACE funding option has existed in the United States since a 2008 pilot program, Delaware authorized his program in 2018. Today, the Delaware Sustainable Energy Utility Inc. administers the Energize Delaware C-PACE program.

Tony DePrima, executive director of Energize Delaware, said his organization was delighted to celebrate its first deal.

“It wouldn’t be possible without the strong support of New Castle County Executive Matt Meyer and County Council as a whole. [and] we hope to expand the program to Sussex and Kent counties this year, ”he said in a statement.

More than 35 states as well as the District of Columbia have C-PACE enabling legislation and more than $ 800 million in projects have been funded, according to the US Department of Energy. The funding option mirrors that used for other infrastructure projects, such as sewers, water and roads, but extends it to projects that would provide incentives to invest in clean energy technologies.

A 2019 DOE-supported C-PACE loan study found that it was possible to create clean energy jobs while supporting homeowners. From 2008 to 2017, projects worth $ 887 million were completed, creating more than 13,000 jobs. During the same period, the study found only one default on a C-PACE loan out of 1,870 transactions nationwide. Landowners who are behind on annual payments for improvements may be subject to a lien on the property, but in almost all scenarios payment plans have been devised or tax bonds have been sold to third parties for ensure that payments have been caught.

Genevieve Sherman, head of new markets and partnerships at Greenworks Lending, said her company was excited to sign Delaware’s first C-PACE loan. She noted that C-PACE is still a new funding option for many states, but has significant benefits.

C-PACE allows real estate owners to make major building improvements without having to put upfront capital or make monthly loan payments, Sherman explained. The loans are also transferable to new owners, which means that they do not have to reduce the owner’s profits when selling a property.

Sherman said his 5-year company signed around $ 200 million in C-PACE loans backed by private investors, while the industry globally hit the $ 1 billion mark last year.

“We have other projects we are working on in Wilmington and the coastal county of Sussex, but we look forward to connecting with anyone who owns commercial property,” she said.

For the first project, Greenworks was able to find a prominent borrower and building.

Originally built in 1908, the DuPont building was the headquarters of EI DuPont du Nemours for a long time until 2015. Today it is the global headquarters of The Chemours Co., a global chemicals company.

Approximately 1 million square feet in size and occupying an entire city block, the building has undergone a major $ 175 million renovation project since BPG purchased it in 2017. Once completed, the space will be a modern mixed-use facility consisting of a hotel, luxury apartments, a theater, commercial spaces and class A offices.

The C-PACE funding will be used to cover several energy efficiency measures, according to Greenworks, including replacing cooling facilities, replacing boilers and renovating cooling towers. Notably, the new HVAC units will use the Opteon refrigerant, manufactured by Chemours, which has a much lower impact on global warming than earlier refrigerants like hydrofluorocarbons.

These upgrades will generate estimated savings of $ 14.2 million over the life of the equipment while providing environmental benefits equivalent to the reduction of 2,670 metric tonnes of carbon dioxide emissions per year.

In a statement, Doug Edwards of Seiberlich Trane Energy Services, the contractor for the project, said the C-PACE funding will support a project that “will create a lot of local jobs and significantly reduce the property’s carbon footprint.” It is an exciting win-win experience for all involved.

By Jacob Owens

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