Anchorage officials and business leaders announced Monday that they had closed the biggest deal to date in a green financing program’s short history.
Through the city’s C-PACER program, a national lender has financed $5.5 million for the Alaska Hotel Group, which is renovating the former Aviator Hotel. The money is paying for upgrades that will give the building a smaller carbon footprint, higher property value and lower operating costs.
From a room stripped down to concrete floors and steel beams, one of the leaders of the hotel group, Sheldon Fisher, said there are already savings in their electric bill.
“A third-party engineer estimated that we would save around $600,000 a year over a 20-year expected life,” Fisher said. “That will be more than $12 million, and that’s not bad for a five-and-a-half million dollar investment.”
The money is paying for a new, combined heating and power system, ventilation systems, new insulation for the roof and walls, and new water-saving plumbing fixtures.
Over the life of the loan, the property owners must pay extra property taxes to the city, which in turn repays the loan. Former U.S. Senator and former Anchorage Mayor Mark Begich, another hotel group leader, said the city’s involvement helps secure better interest rates and more favorable terms than a typical, commercial business loan. He said it also adds to the pool of capital available for the overall renovation.
Melanie Lucas-Conwell directs the municipality’s C-PACER program, which was established in 2021 after a state law made these programs possible. C-PACER is short for “commercial property assessed clean energy and resilience.”
“The reason for having this event is to promote it and to show to more property owners that it is not as risky as it might seem, and that pretty much every property in Anchorage should be doing a C-PACER project, frankly,” she said.
Lucas-Conwell said her position and the city’s C-PACER program are funded through the program’s own fees, not taxpayer dollars.
So far, Lucas-Conwell said Anchorage is the only city or borough in the state with an active program. She said the Matanuska-Susitna Borough Assembly has passed a resolution to establish one, and that officials with the Kenai Peninsula Borough and both City of Fairbanks and Fairbanks North Star Borough are interested.
Begich said he hopes to reopen as a boutique hotel with 252 rooms in about six months. The renovations will include a new restaurant, microbrewery and heated decks with views of Denali. He said the hotel will be rebranded, but he can’t share the new name yet. It will be attached to a national franchise.