The 417-foot, 32-story First National Bank Building in downtown Saint Paul was constructed in 1931 and competed with New York City’s Empire State Building for construction materials. Madison Equities, the new owner of the building as of winter 2015, worked with Petros PACE Finance and the Saint Paul Port Authority to make $6.8 million in energy efficiency upgrades ($5M from Petros and $1.8M from SPPA), including energy management, HVAC, LED lighting, and occupancy sensors. These improvements are expected to reduce energy consumption and related costs by 35-40%.
Property-Assessed Clean Energy (PACE) is a new way to finance energy efficiency and renewable energy upgrades to the buildings of commercial property owners. Energy-saving measures pursued by the owners receive project financing and are repaid as a separate item on their property tax assessment for a set period. PACE eliminates the burden of upfront costs by providing low-cost, long-term financing. In the case of the First National Bank building the assessment is placed and managed by Ramsey County.
“PACE will allow Madison Equities to pass the costs (PACE assessment payments) on to the tenants that are going to see the reduction in energy costs,” noted Peter Klein who runs Saint Paul Port Authority’s PACE program. “Otherwise, this would be a big negative cash outflow to the building owner, making it unlikely that they would go ahead with the project. That is why PACE is such a good solution for multi-tenant buildings. It is also positive cash flow to the tenants since the energy savings will be greater than the PACE assessment payments.”
We talked to Chris Droske, an Energy Advisor with Franklin Energy Services, to learn more about the building and it’s energy-efficient transformation.