SY Holdings Nabs Record Construction C-PACE Loan for Upstate NY Hotel
CleanFund is supplying $21.6 million of construction debt toward the development of a luxury boutique hotel in New York’s Hudson Valley by SY Holdings, Commercial Observer can first report.
The loan for Wildflower Farms, a 65-room hotel in Gardiner, N.Y., marks the largest transaction to date in the State of New York under the Energy Improvement Corporation’s Commercial Property Assessed Clean Energy (C-PACE) program, designed to aid borrowers with energy efficiency or renewable energy projects via a special assessment on their properties. The deal is also the Empire State’s first new construction C-PACE loan and one of the nation’s few new hotel construction projects to be financed since the COVID-19 pandemic first struck in March 2020.
“The fact that this was one of very few new construction hospitality projects to be financed in the ‘COVID era’ speaks volumes to the expertise and creativity of the developer,” said Luke Hingson, CleanFund vice president, East Coast business development, who originated the C-PACE financing. “It also serves as proof that C-PACE financing can add significant value to commercial real estate projects when more traditional forms of financing are not available or are too expensive.”
Wildflower Farms is planning to operate as one of the greenest hotels in the country. with a scheduled opening in fall 2022. The development, which will be managed by the Auberge Resorts Collection, was awarded the Designed to Earn the ENERGY STAR certification for meeting strict U.S. Environmental Protection Agency criteria for energy efficiency. The project will also subscribe to community solar, enabling a lower carbon footprint to help reduce greenhouse gas emissions.
Located at 2702 Main Street around 90 miles north of Manhattan, the 141-acre property will encompass a restaurant, a spa, cooking school, and farm with river frontage and mountain views. The land is situated near the entrance of Mohonk Preserve, a hiking, biking and rock-climbing destination that receives more than 500,000 annual visitors.
“This transaction required ingenuity and close collaboration among all stakeholders under especially challenging market conditions for new construction and hospitality,” Kristin Soong Rapoport, managing partner at SY Holdings, said in a statement. “It signals the beginning of a green-led recovery for New York.”
NY Green Bank, a division of the New York State Energy Research and Development Authority, is providing a $25 million senior loan for the development. CleanFund said the support from NY Green Bank could result in up to 463 megawatt-hours of electricity savings and 484 British thermal units annually.
“With this investment, we are demonstrating to the market the viability of energy efficiency financings and ultimately drawing more capital into this space, to move us closer to the State’s climate and clean energy goals,” Andrew Kessler, acting president of NY Green Bank, said in a statement.