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Eclipse Bank helps finance Hyatt House branded hotel

07/16/2024

Eclipse Bank helps finance Hyatt House branded hotel
By Brian Planalp – Staff reporter, Cincinnati Business Courier

Creative financing will allow a unique West Chester hotel project, stalled during the Covid-19 pandemic, to restart with the goal of opening by the end of 2024.

The 136-room Hyatt House-branded hotel and attached 10,800-square-foot rehab facility has sat unfinished at the prominent southwest corner of Cox Road and Liberty Way since construction halted in 2021.

Minneapolis-based PACE Loan Group announced June 20 it closed a $17.7 million loan to complete construction of the hotel and attached facility. The loan will be used to refinance existing debt and complete construction of the project, which is expected to open by November.

Louisville-based Eclipse Bank is providing another $9 million to the project, bringing the total capital stack to $38.2 million.

The $17.7 million loan comes in the form of commercial property assessed clean energy financing, or C-PACE, which spreads out the upfront costs of implementing energy-efficient infrastructure. Building owners borrow money for their projects with no down payment and make repayments through an assessment on their property tax bill. The assessment transfers when the property is sold, and the PACE lien is senior to most other debt, which safeguards investors and incentivizes long amortization periods with low fixed monthly payments.

C-PACE programs began to take off in 2009 and have quickly gained popularity among incumbent banks and new entrants. PACE Loan Group was founded in 2017 as a subsidiary of AllianceBernstein, a global asset management firm.

The hotel project’s energy-efficiency investments, including HVAC, plumbing, lighting, electrical, building envelope and elevators, are expected to realize $31,620 in yearly savings, according to a news release.

C-PACE programs are authorized at the state level. Ohio’s C-PACE legislation only authorizes C-PACE financing in special improvement districts, or SIDs. West Chester Township created an SID specifically for the hotel project.

“Hyatt House will be a great addition to the ongoing development at the Liberty Way interchange,” Lisa Brown, West Chester Township assistant administrator, said in the release. “West Chester is always happy to work with a business partner to provide high-quality amenities to our residents and visitors. It has taken longer than expected to get to this point; now that C-PACE financing is secured, West Chester is confident this project will be swiftly completed.”

 

The hotel project is unique as regards the rehab clinic annex, which is expected to be leased to a provider offering physical and occupational therapy, pharmacy services, a spa, medical and wellness workshops, a conference center and retail services.

The hotel, though operated independently from the clinic, will provide coordinated packages for clinic patients to stay as guests.

The clinic will offer 40 rooms at full buildout by the end of 2025.

“This was a creative, but very impactful way to deploy C-PACE and will enable the project team to finalize and open a cutting-edge concept that blends hospitality and health care,” Rafi Golberstein, CEO and founder of PACE Loan Group, said in the release.