Former Ecolab Office receives $15.8 million C-PACE loan to finance conversion to multifamily for Stella project in St. Paul, MN

Minneapolis, Minnesota (Jan. 3, 2025) – Developers Kaeding Development, Ron Clark, and Inland Real Estate have received a $15.8 million C-PACE loan from PACE Loan Group for the conversion of the former Ecolab office building at 386 Wabasha Street North in downtown St Paul into housing. The development team began construction in July to begin the conversion of the 197,692 sq. ft. former headquarters of Ecolab in downtown St. Paul into 174 multifamily homes, renaming the property “Stella.”

The C-PACE assessment is part of a total $68 million capital stack, which also includes Federal and State historic tax credits of $18 million.  Oak Brook, Illinois-based Inland Real Estate Group of Cos. purchased the site for $17.87 million in 2022.

“This financing tool was critical to our project's success,” said Carl Kaeding, founder and president - Kaeding Development. “With the level of complication to finance these types of conversions, we were glad to leverage PLG's expertise to get this closed.”

The PACE proceeds will be used to finance qualifying energy conservation measures including building envelope, windows, HVAC, plumbing, lighting systems, mechanical, and domestic hot water pumps. The renewable and energy conservation measures are expected to save $1,193,271 annually in the payback period of 13.6 years.

PLG Senior Vice President Matthew McCormack originated the loan amid a slowdown of conventional bank financing. “All office conversions are great C-PACE candidates because the requisite improvements result in significant changes to the heating, electrical, and plumbing infrastructures. This was a uniquely complicated transaction with a variety of capital sources and one where the CPACE exceeded the bank financing. The developers have worked hard to find a way to make this feasible and piece this capital stack together. I’m excited to be part of their solution,” he said.

When complete, the project will include 2,339 square feet of retail space, a coffee lounge, a mailroom, and the leasing office on the main floor. The lower levels include tenant storage, bike storage, and a pet run.

The second floor will include a fitness area, three "zoom room" co-working rooms, a lounge area, a conference room, restrooms, and a yoga studio. Residential units will be on the third through 14 floors, with the 15^th floor featuring penthouse units. The 16th floor will feature a community room, penthouse units, and an outdoor deck with sweeping views of St. Paul, the Mississippi River, and the surrounding area.

For more information on the project, visit https://www.kaeding-group.com/stella.

Media Contact:

Martha Nevanen

Martha@paceloangroup.com

651-492-5861