PACE Equity offers funding for new Cambria hotel in Michigan
September 26, 2019 – PACE Equity had recently completed $6.8m (£5.4m) in funding for a new Cambria hotel in downtown Detroit, Michigan.
The new construction is expected to transform an underutilised building while contributing to the connectivity on the west side of downtown Detroit’s Central Business District.
The funding will help Cambria hotel in entering the Detroit market and is also the first new construction PACE project in Michigan.
The $49m (£39m) mixed-use new construction and redevelopment project used a $25m (£20m) construction loan, an economic development, loan, developer equity and equity from the opportunity zone programme and PACE Equity offered the remaining 14% of the capital stock.
Local developers for Detroit Cambria Hotel include Koucar Management and Means Group, collectively, 600 Ventures II.
PACE Equity has also acted as a one-stop solution by offering the developer turnkey service for the entire partnership process, making the funding easy to integrate into the financing.
The new 154-room Cambria hotel is expected to be an upscale, stylish and modern lodging option for the city, with locally inspired menus and design elements.
The new construction and the redevelopment will include an onsite restaurant featuring celebrity chef Fabio Viviani, a rooftop lounge and office and retail space.
The restaurant and hotel are expected to attract Detroit crowds and business professionals. Construction of the hotel is expected to be completed next year.
Claimed to be a highly energy-efficient, the building is expected to help save the property owner, $6.5m (£5.2m) in utility and operational savings, together with nearly $3.5m (£2.8m) in tax benefits, resulting in savings nearly $10m (£8m).
PACE Equity Michigan managing director Sonya Delley said: “PACE Equity funding is a great tool for developers to bring in additional, low-cost funding to revitalize communities by either preserving functionally obsolete buildings, adaptively re-using existing buildings or constructing new buildings in an environment where capital resources are scarce.
“Our capital replaces more expensive funding such as short-term loans or mezzanine, and outside or joint venture equity that developers do not have to raise or source.
“In this case, PACE Equity also worked alongside state incentives while filling a gap in the capital stack for a project that will continue to make downtown Detroit more walkable and refurbished.”