First California commercial PACE project funds new resort
The first ground-up new construction project in California, an IHG-Hotel Indigo operated by Highgate Hotels located in Coachella, will be funded by Commercial PACE financing.
PACE Equity, the leading CPACE (Commercial PACE) funder of commercial real estate development projects in the US, and Renew Financial, the inventor of PACE financing, announced the completion and funding for the first ground-up new construction project in California, an IHG-Hotel Indigo operated by Highgate Hotels located in Coachella to support the popular music festival held there each year.
The building represents an investment of $51 million to the area and is the first luxury hotel in Coachella. PACE Equity funded approximately $7.9 million for the project, representing 15 percent of the total development cost. PACE Equity also performed the energy engineering required for CPACE financing, obtained all governmental and mortgage approvals, and assisted with structuring the capital stack.
Developed by Stuart Rubin, Hotel Indigo is a luxury hotel for the many festivals and events in Coachella and Palm Springs. Until now, the nearest hotel to the Coachella Music Festival has been nearly 10 miles from the grounds. The unique design, by famed architects Kristi Hanson, Carrier Johnson and James Beard Nominee Elizabeth Blau, includes the 51 casita, 250-room Hotel Indigo and features a 10,000-square-foot saltwater pool, with an 11-acre entertainment area to host events.
"This is the culmination of years of work to bring the first IHG – Hotel Indigo to Coachella. As longtime travelers to the area, we are proud of what we're creating and look forward to the opening in the fall," said Stuart Rubin, the project's developer. "The entire development and financing team worked closely together to see our vision achieved. Utilizing PACE Equity reduced our cost of capital. What made the difference was that PACE Equity brought not only financing but a turnkey service including the structuring with the rest of the capital stack, the required approvals for PACE and the necessary energy engineering."
"This was a complex project financing with a lot of moving parts and parties involved," said Beau Engman, PACE Equity founder and president. "I am glad we were able to set an expectation very early in the process and deliver exactly on that expectation. And now I can't wait to stay at such a beautiful resort. We are thrilled to be a part of this great development."
After pioneering the use of CPACE financing with ground-up development, this is PACE Equity's eighth funded new construction project across six different states. The PACE Equity project and sustainable features include seismic strengthening concrete and framing, domestic hot water, LED lighting, energy efficient HVAC systems and windows.
Matt Harrigan, PACE Equity managing partner for California, commented, "I'm excited that the first new construction PACE financing in the state of California will bring a much-needed luxury hotel experience to the music-lovers of Coachella. PACE Equity worked seamlessly with the project team, Calmwater Capital, and George Smith Partners to close on this financing."
"This project highlights the power of PACE financing to benefit entire communities," said Renew Financial CEO Cisco DeVries. "In addition to being a state-of-the-art, high-efficiency property, the Hotel Indigo and its guests will generate economic benefits for local businesses in the Coachella area for many years to come. Renew Financial is honored to have worked with PACE Equity on the first new construction CPACE project in California history."