Black Desert Resort, an $820 million golf, retail and residential development under construction in Ivins, near St. George, has received a major infusion of capital from a federal-state program aimed to boost renewable energy and efficiency. Developers say the new financing will help them complete construction and aid in their efforts to purchase Red Mountain Resort, a similar development just across Snow Canyon Parkway from Black Desert.{mprestriction ids="1,3"}
The new $153 million in funding comes from the joint federal and state Commercial Property Assessed Clean Energy program, known as C-PACE. The $153 million award announced recently is the largest C-PACE award in the nation’s history, nearly doubling the previous record of $89 million awarded to the 111 Wall Street building in New York City for carbon-reduction renovations. The C-PACE funding was furnished by Petros PACE Finance of Austin, Texas, the nation’s largest C-PACE financing company. D.A. Davidson & Co.’s Salt Lake City-based Special District Group served as broker, banker and advisor for the deal.
Black Desert Resort qualified for the grant because of its use of renewable resources such as using its own water wells and a water recycling system that will keep the resort from drawing off the city water supply, and the largest-of-its-kind system to draw power from the Internet to reuse the amount of electricity the resort needs from existing power lines.
“We had an engineering partner hire a third party to go through our resort and they said we’re spending $200 million more than required by the [C-PACE] building code,” Patrick Manning, owner of Black Desert developer Enlaw LLC, told St. George News. “They said, ‘Here’s the building standard’ and we exceeded that.”
While C-PACE is a federal program administered by state governments like Utah’s, funding comes from investors like “Shark Tank”-style venture capitalists and other capital investors. The idea is the government puts a lien on the property and the investors make a 30-year, no-interest loan with the expectation that the energy cost savings will ultimately pay for the loan.
“C-PACE has arrived as a mainstream financing tool of choice for large, complex integrated commercial construction and renovation projects across the country. The Black Desert Resort funding is a perfect example of the value C-PACE financing brings to property owners: lower financing costs, more flexibility across the capital stack and the ability to fund environmentally important improvements and innovations,” said Mansoor Ghori, CEO and co-founder of Petros PACE Finance.
Black Desert has also received $106 million in bonding through an Ivins city Public Infrastructure District, or PID, where hikes in the property taxes of Black Desert residents over the next 20 years will go toward paying off the bond.
Although the PID received pushback from local residents, Brennen Brown, managing director for the D.A. Davidson group that has handled both the PID and C-PACE financing for the resort, said the C-PACE award is validation for the city giving its financial backing.
“This remarkable project features some of the most innovative financing tools available in the market today, and we’re proud to be a leader in providing these financial solutions for our clients,” Brown said in an e-mailed statement to St. George News.
The 580-acre Black Desert Resort will include a 150-room hotel, approximately 1,000 condominiums, an 18-hole Tom Weiskopf-designed golf course and clubhouse and a pedestrian-only retail and the Desert Boardwalk restaurant and retail village that will be similar to places like Town Square in Las Vegas and The Grove in Los Angeles, developers said.
The golf course will be the first part of the resort completed. Developers report that the finishing touches are underway and the course will open in November for preview rounds by people who want to purchase property in the development.
A spokesperson for Enlaw LLC said the company also expects to take possession of Red Mountain Resort in November and begin integrating it into Black Desert.{/mprestriction}
