PACE Bond to Finance Temecula Hotel Construction
BB&K Served as Bond Counsel
Best Best & Krieger LLP’s Public Finance attorneys served as bond counsel for the issuance of Western Riverside Council of Governments’ commercial property assessed clean energy, or PACE, bond to finance construction of the Truax Hotel, a new 185-room luxury boutique hotel in Old Town Temecula. The $34 million in PACE bond proceeds will finance water conservation and energy efficiency features at the hotel, as well as seismic improvements on both the hotel and its parking structure.
PACE financing provides an opportunity for developers of new commercial construction to replace or reduce more expensive gap financing sources of a project’s capital stack, such as mezzanine financing. Unlike traditional financing, PACE financing is repaid through an assessment levied on the property. The assessment runs with the land and is not required to be repaid upon the sale of the property.
Legislation enabling PACE was first introduced in California in 2008 as a tool to assist municipalities reduce greenhouse emissions. Residential or commercial property owners can use PACE financing to finance water conservation, energy efficiency, seismic resiliency and fire hardening improvements.
Read more about the project in the Temecula Patch.