The use of Commercial Property Assessed Clean Energy (C-PACE) loans for conversion projects is reaching new dimensions with Cleveland's fifth-tallest building. ErieView Development has secured a $93.4 million C-PACE loan from Nuveen Green Capital (NGC). This loan will finance the conversion of the former Erieview Tower building in Downtown Cleveland into Ohio's first W Hotel, as announced by the lender. The developer will also offer residential apartments and office space on the upper floors of the building as part of the comprehensive redevelopment project.
Chris Ellis, Senior Director of Originations at NGC, explained that the deal, announced on Tuesday, highlights how C-PACE financing can be used in the capital stack for a variety of CRE projects, particularly office conversions. Ellis noted that the borrower chose to utilise the maximum allowable amount of C-PACE proceeds under Ohio law to save costs and avoid future refinancing.
Ellis emphasised that C-PACE can be particularly advantageous for adaptive reuse projects like this one, as older buildings being converted for new uses often do not meet current energy regulations and require more components to be updated. This creates a larger pool of costs eligible for value-adding C-PACE financing. According to Ellis, this transaction is the largest C-PACE transaction completed in Ohio to date.
He added that C-PACE can remain an effective financing tool for adaptive reuse projects in ageing commercial buildings across the Midwest, in cities such as Cleveland, Columbus, Chicago, Detroit and Minneapolis, in the future.
In addition to the C-PACE loan, ErieView Development secured $20 million in senior financing from CNB Bank for the project. The company also received $104.6 million from a combination of equity sources, bridge loans against historic preservation tax credits for the building's historical aspects, a loan from Cuyahoga County, and incentives from the Cleveland-Cuyahoga County Port Authority, Ellis said.
The 40-storey tower at 100 Erieview Plaza, built in 1964, will be converted into the W Cleveland Hotel with 210 rooms. In addition to hotel rooms, the building will also comprise 215 apartments on floors 17 to 28 and office space on floors 29 to 38. Completion of the hotel and apartments is planned for late 2027. Elias Kassouf, Principal at ErieView Development, stated in a release that Erieview had always been part of a larger vision for downtown, and this project is bringing that vision to fruition. He described it as a transformative investment in the heart of the city.
