Rosenberg & Estis, P.C. facilitates $89m NYC Accelerator C-PACE loan

Manhattan, NY Rosenberg & Estis, P.C. facilitated an $89 million NYC Accelerator Commercial Property Assessed Clean Energy (C-PACE) loan to help Nightingale Properties and Wafra Capital Partners retrofit 111 Wall St. to be energy efficient.

It’s one of the largest C-PACE funding transactions in U.S. history and one of the first in the city since the state Legislature established the funding structure in New York in 2009. Michael Lefkowitz, managing member, and Stefanie Graham, of counsel, with Rosenberg & Estis, P.C., both members of the firm’s Transactional Department, facilitated the deal on behalf of the property’s new owners.

The loan, which will fund energy efficiency and renewable energy improvements for more than 900,000 s/f of offices at the former Citibank building, will be repaid via an annual property tax assessment. The funding will help the building comply with the stringent carbon-cutting requirements in New York City’s Local Law 97, one of 10 bills in the city’s sweeping 2019 Climate Mobilization Act.

The improvements are expected to save $2.5 million in annual energy costs and help the building’s owners avoid $750,000 per year in LL97 fines alone, beginning in 2030, according to NYC mayor Bill de Blasio’s office. LL97 requires over 50,000 of the city’s largest buildings to reduce carbon emissions by 40% by 2030 (and by 80% by 2050). New York’s Climate Leadership and Community Protection Act, also passed in 2019, adds its own energy efficiency benchmarks.

“Rosenberg & Estis is proud to have made history by facilitating the largest C-PACE loan in U.S. history and the first such deal in New York City,” said Lefkowitz. “This difference-making deal will help a landmark building in the heart of New York City’s financial district operate more cleanly and efficiently. It sets a precedent for other building owners in America’s biggest city to fund the improvements required to comply with LL97.”

“This is only the beginning of a growing trend for property owners, who will gravitate to this financing as a way to operate more cleanly and efficiently,” Graham said. “This is a powerful tool that is made on more attractive terms than traditional mezzanine debt.”