A downtown Dallas historic building redevelopment has landed a $23.9 million loan as part of a national energy efficiency program.
The more than century old Butler Brothers Building is being converted into a $120 million mixed-use use project with apartments and hotel rooms.
The developer Alterra International received the Property Assessed Clean Energy loan because of its energy efficiency and water conservation features.
It's the largest such clean energy program loan ever made in Texas and second largest in nation, according to law firm Munsch Hardt Kopf & Harr PC that arranged the transaction.
"This specific loan will aid in constructing energy-efficient systems and implementing water reduction technology," the law firm said in a statement. "The updates will improve the property value and enable the owner of the project to lower the overall first lien loan for the project."
The 9-story Butler Brothers Building when redevelopment is finished will have 238 apartments; a 270-room dualbranded Fairfield Inn/Town Home Suites by Marriott, retail and office space.
The apartments are finished and the hotel is expected to open at the end of the year.
The building across from Dallas City Hall was constructed in 1910 as a mercantile warehouse.
"PACE loans pair incredibly well with historic buildings that are typically energy inefficient and require additional capital in order to renovate the property to modern energy efficiency standards," Phill Geheb with Munsch Hardt said in a statement. "In my practice, I am beginning to see greater interest in the utilization of this program for historic and nonhistoric renovation projects because of its flexibility, relative low-cost and non-recourse nature."
The City of Dallas, bond buyer and special administrator Clean Fund Commercial PACE Capital Inc., program administrator Texas PACE Authority, Public Finance Authority BNY Mellon all worked with Munsch Hardt on the funding.
"The PACE loan is a significant milestone for the Butler Brothers Building," said Mike Sarimsakci, president of developer Alterra International. "Combined with federal and state historic tax credits, we feel the PACE loan will enable us to bring this catalytic and complicated project into a reality."