PACE Loan Group Arranges $4M in C-PACE Financing for Short-Term Rental Condos in Traverse City, Michigan

by Kristin Harlow

TRAVERSE CITY, MICH. — PACE Loan Group has arranged nearly $4 million in C-PACE financing for The Boardwalk, a short-term rental condominium project under construction in Traverse City. The property is being built in two phases. The first phase, which features 42 units with first-floor retail space, received $1.7 million in early 2023 and is slated for completion in March. The second phase, which features 48 units, received $1.8 million and is scheduled for completion in the second quarter. The project is utilizing modular construction methods.

The senior lender for both C-PACE loans was a local credit union. The PACE proceeds will be used to finance energy conservation and renewable energy measures, including increased building insulation, Energy Star windows, high-efficiency HVAC and plumbing fixtures, and LED lighting. The renewable and energy conservation measures are expected to save $120,140 annually in the payback period of 13.5 years.

The Boardwalk marks the fourth PACE project in Grand Traverse County and the 76th in the state of Michigan. The PACE program is administered in a public-private partnership through Lean & Green Michigan. C-PACE, or Commercial Property Assessed Clean Energy, is a financing tool that provides long-term, low-cost construction financing for new and existing buildings. Eligible improvements include energy efficiency, water efficiency, renewable energy and resiliency measures such as seismic and stormwater measures.

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