Richmond closes first C-PACE deal for downtown tower redevelopment

The City of Richmond has closed its first financing deal under its Commercial Property Assessed Clean Energy (C-PACE) program, using the tool to support the redevelopment of the former Dominion Energy tower at 707 East Main Street.

The project marks the first completed transaction since Richmond adopted C-PACE, a financing mechanism that allows commercial and multifamily property owners to fund energy-related upgrades through long-term, fixed-rate assessments attached to the property rather than the owner. The city has not disclosed how long the program has been in place prior to this deal or whether other projects have applied.

Under the redevelopment plan, the lower floors of the building will be converted into an AC Hotel by Marriott, while the upper floors will be redeveloped into apartments. Plans also call for a ground-floor restaurant, the AC Lounge, that would be open to the public. Douglas Development is leading the project.

City officials say the C-PACE financing will support energy-efficiency and resiliency improvements as part of the adaptive reuse. However, the city has not released details on the size of the financing, the specific improvements being funded, or projected energy savings.

C-PACE financing differs from traditional loans by placing a voluntary assessment on the property that is repaid over time, typically through the property tax bill. While proponents argue the structure lowers upfront costs and aligns repayment with long-term building performance, the assessment remains with the property if it is sold, a factor that can affect refinancing and future ownership.

“This is the first time we’ve been able to use the program as intended,” said Laura Thomas, director of the city’s Office of Sustainability, in a statement. She said the goal is to encourage reinvestment in existing buildings while improving energy performance.

Douglas Development said the financing helped make the building’s adaptive reuse feasible. The company did not disclose whether the project includes any affordable housing units or provide details on job creation associated with the hotel and restaurant.

Richmond’s C-PACE program operates through a partnership with the Virginia PACE Authority and the Virginia Department of Energy, which administer a statewide framework allowing localities to offer the financing option. Participation by property owners is voluntary, and projects must meet eligibility requirements tied to energy or resiliency improvements.

The city has promoted C-PACE as one of several tools to encourage downtown reinvestment, particularly as older office buildings face high vacancy rates. Whether the program sees broader use beyond this initial project remains to be seen.

More information about Richmond’s C-PACE program, including eligibility requirements and the application process, is available on the city’s website here.