RIM Architects Taps Green Financing for Building Retrofit
A recently completed mural decorates the east wall of 645 G Street, overlooking the parking lot to Anchorage City Hall.
The first project in Alaska to take advantage of a new way to finance energy efficiency improvements is the building next door to Anchorage City Hall.
Stewards of the Future
RIM Investments and Nuveen Green Capital closed a deal for a $680,000 retrofit of the four-story building at 645 G Street occupied by a UPS Store, McGinley’s Pub, RIM Design, RIM Architects, and RIM Investments, which has owned the building since 2002.
This marks the city and state’s first C-PACE project, which stands for Commercial Property Assessed Clean Energy. The financing model has been used in most other states, and Alaska’s version arrived in 2017. The state law lets local governments create and manage C-PACE programs, but it wasn’t until April 2021 that the Municipality of Anchorage established the first one.
The program works by tacking loan payments for energy efficiency upgrades onto property tax assessments, lowering the financing cost by using the municipality as a middleman.
The retrofit of 645 G Street includes LED lighting, thermostats that lower the temperature when the building is unoccupied, heating system upgrades, a new water heater, and a new combined heat and power system, which will reduce the building’s reliance on grid electricity. With the planned energy efficiency measures, RIM estimates a 42 percent reduction in energy costs annually.
“As stewards of the future of design and architecture, it is important that we support and usher in technologies that will have an impact in the world of buildings,” says Michelle Klouda, principal at RIM Architects. “My hope is that this firsthand experience will allow us the opportunity to show our clients and the community that energy efficiency and renewables are attainable and accessible.”
Nuveen Green Capital is a national leader in sustainable commercial real estate financing.
“We are thrilled to see the C-PACE market continue to expand and are proud to finance the first C-PACE project in Alaska,” says Aidan McLaughlin, director of originations at Nuveen Green Capital. “We look forward to funding many more projects in the state through this innovative financing mechanism that saves property owners money while supporting the local economy, as well as the environment.”
C-PACE financing is intended to cover the full costs of eligible improvements, with little or no up-front, out-of-pocket cost to the owner. The arrangement attaches payment obligations to the property as a lien, rather than to the borrower, and reduces collection risks for lenders.
Northrim Bank is facilitating the 645 G Street retrofit as the senior lender in the project. “Northrim Bank seeks to be at the forefront of local development and innovation,” says the bank’s president, Mike Huston. “Working with RIM Investments, Nuveen, and the Municipality of Anchorage, we’re excited to bring the first C-PACE financing to Anchorage and Alaska, paving the way for future energy efficient projects to enrich our community and local economy.”
The building at 645 G Street in downtown Anchorage, across from the Dena’ina Civic & Convention Center, has been owned by RIM Investments since 2002.
The project might not have come together without the municipality creating a mechanism to bring together lenders and building owners. “This is a great example of a public-private partnership, as well as Alaska joining other states to use this innovative financing tool to fund economic growth and improve our building stock,” says Melanie Lucas-Conwell, Anchorage C-PACE manager. “RIM Investments’ project is paving the way for future C-PACE projects in Alaska. This is good for our local economy, jobs, and business growth.”
Mayor Dave Bronson adds that he hopes this is the first of many such projects.
RIM Investments owner Larry Cash has been an advocate of C-PACE since the first legislation passed in 2017. “As the first C-PACE loan recipient in Anchorage, we want to inspire local businesses to reduce their carbon footprint,” he says. “This program makes it easier for companies to upgrade their buildings to be more energy efficient.”
This summer, new legislation broadened the scope of the original C-PACE program, allowing loans for new construction and for resiliency projects; extending the maximum loan term from twenty years to thirty; adding a provision for refinancing; basing eligibility on the property’s market value instead of assessed value; and eliminating savings-to-investment ratio as a criterion for loans.