LA Project Is Largest to Use PACE Financing

February 25, 2014

Energy and water upgrades costing $7 million at a Hilton hotel were funded by utility savings

Using PACE (Property-Assessed Clean Energy) funds, the Hilton Los Angeles/Universal City has financed 100% of the $7 million cost of a range of building improvements, making it the largest PACE project to date in the U.S.

The PACE financing concept for efficiency improvements relies on an assessment made to the building owner’s property tax bill, much like any other municipal tax assessment. The assessment provides collateral for the debt, thus avoiding the kind of large upfront payment necessary for conventional financing. The assessment is transferred to any subsequent owner via the property tax. The current building owner and any future owner profit from lower utility bills made possible by the energy equipment upgrade.

Improvements at the Hilton, which opened in 1984, include LED lighting, low-flow water fixtures, window and elevator upgrades, and fans and chillers (see box). Annual energy and water savings in Year 1 are estimated at $800,000.

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