Twain Financial Partners has leveraged its ability to provide both C-PACE financing and historic tax credit equity in connection with the rehabilitation of the historic Farmers and Mechanics National Bank Building, 714 Main St., Fort Worth, into a 226-room Kimpton Hotel. Twain said in a news release.
The website Architecture in Fort Worth says the 24-story building was designed by Sanguinet & Staats with Mauran, Russell and Crowell as associate architects. Westlake Construction Co. of St. Louis was the general contractor. When it opened, and for a short time after, it was the tallest building in Texas at 307 feet.
The building is on the lists of the National Register of Historic Places and the City of Fort Worth Highly Significant Endangered Landmarks.
Commercial Property Assessed Clean Energy (C-PACE) financing is a state-based program allowing private lenders, like Twain Financial, to provide long-term, fixed rate financing for energy efficient components of new construction and historic rehabilitation projects.
Twain provided $20.7 million in state and federal historic tax credit equity and $5.8 million in C-PACE financing to the project. The combination of Twain's C-PACE and Historic Tax Credit investment represents more than 30% of the project's total capital stack, the company said.
"Pairing C-PACE financing and historic tax credits together on this project helped showcase Twain's wide breadth of services and expertise in complex real estate transactions," said Nick Maglasang, Vice President at Twain.
"We are increasingly seeing C-PACE and historic tax credits used together in historic rehabilitation projects and Twain is uniquely situated to provide both sources of capital to these transactions," Maglasang said.
The Architecture in Fort Worth site says the building sold in January of 2004 to a local developer who planned to convert the historic skyscraper into 70 loft apartments, but decided to remodel the building and use it again for office space.
In 2007, the remodeling began, but before it was completed, XTO Energy purchased the building and continued the construction and renovation.
The restoration – with great attention to original details – was completed in 2010. With XTO Energy mostly leaving Fort Worth, the building was sold in 2018 for conversion into a Kimpton Hotel.
While this represents Twain's first joint C-PACE and HTC transaction in Texas, Twain has successfully provided both C-PACE and historic tax credit equity to several other transactions throughout the country.
C-PACE financing, which can often fund up to 20% of construction costs, is repaid as a special assessment on the property and collected in the same manner as property taxes, Twain said in the release.
State and federal historic tax credit programs encourage private investment in the rehabilitation of historic buildings by permitting eligible projects to claim a percentage of certain rehabilitation expenses as a credit against their federal tax liability.