A local nonprofit this week named state Sen. Eric Pratt, R-Prior Lake, its 2019 Clean Energy Legislative Champion for his work expanding a renewable energy and energy efficiency loan program to new construction projects, including a new hotel in Shakopee.
Pratt received the award from Clean Energy Economy Minnesota on Tuesday at My Place Hotel, a roughly $6 million, 63-room extended-stay hotel under construction near Canterbury Park.
Thanks to legislation pushed by Pratt, the nonprofit and others this year, the hotel qualified for a $1.2 million low-cost loan for such improvements as high-efficiency boilers and air conditioning and better-insulating windows.
Pratt said he was honored by the award and credited a bipartisan and varied coalition for helping developers choose construction options that are more pricey upfront but save power and money over time.
More efficient heating and cooling systems and the like are often the first things to go when a developer is trying to stick to a budget, said Pete Klein, vice president of finance at the Saint Paul Authority.
The authority manages loans like the one to My Place, which are part of the state’s Property Assessed Clean Energy financing program.
“Your legislation opened the door,” Klein told Pratt. “It really is a great option, a better option.”
Property assessed financing works by extending a loan that’s paid back with an additional assessment on a given development’s property taxes, according to the U.S. Department of Energy.
Before this year’s change, these loans in Minnesota were limited by a property’s assessed value, said Rafi Golberstein, president of the PACE Loan Group, My Place’s lender.
The loans were useful for renovations but basically worthless for new buildings because unused land’s pre-construction assessed value is so low, he said. Pratt’s legislation changed that so the energy efficiency loans can be based on appraised value, many times higher than assessed value, instead.
That made the program helpful for My Place, which should open in January or February, developer and owner Matt Eller said. Energy is a major expense over time for hotels, he said, so higher efficiency will make a worthwhile dent in operating costs.
“Anything you can do to reduce costs is a big deal,” Eller said.
Clean Energy Economy Minnesota was involved in the effort because it aims to make the case that more environmentally friendly choices make financial sense for businesses, Executive Director Gregg Mast said.
Several other construction projects around the state have qualified for similar loans in just the last few months, Klein and others said. Pratt said most have been hotels and senior living facilities, but he expects the program to spread to other project types.
Pratt is a member of the state Senate’s Energy and Utilities Finance and Policy Committee and has authored several energy-related proposals, including one that passed the Legislature this year authorizing a study into using closed landfill land for solar panels.
He co-hosted a Shakopee forum in June where some Republicans argued conservative, market-based principles can foster more renewable energy generation.