Development—Santa Fe, New Mexico
The Sophia Building
The Sophia Building, located in Santa Fe, is a 14,500 square foot office building whose sole tenant is the Santa Fe County Magistrate Court. Acquired in 2006, we have since upgraded the interior lighting by replacing all the interior fluorescent T-12 fixtures with T-8 or better, installed a new highly reflective TPO roof resulting in less energy use during the cooling season (and reducing the local ‘heat island effect'), and installing a 45kW solar photovoltaic system on the roof, which will generate an estimated 75,000 kWh of electricity per year. As a result, the building has reduced its carbon footprint by over 80%. Moreover, in addition to reducing the operating costs of the building, the PV system will generate approximately $10,000 per year in additional income to the property over the 20 year term of a Renewable Energy Certificate purchase agreement entered into with the local utility. The cost of the lighting retrofit was partially offset by an efficiency rebate from the utility; the cost of the PV system is significantly reduced by a federal rebate, which returns 30% of the system cost in a single cash payment.
It bears noting that securing approval of the mortgage-holder on Sophia to install the PV system was enormously difficult, expensive and time-consuming, taking over a year. The lender would not allow secondary collateralized financing for the PV system, either through a secondary lender or from within the ownership entity, despite its advantages to the property, and would not recognize the PV system as a separate investment property. Rather, the PV project had to be funded via capital contributions from the ownership entity members, which required incurring unanticipated legal fees to amend the Operating Agreement to give the lender the comfort they required and to properly reflect the priority returns such a financing mechanism required. Moreover, as a result of all the delays caused by the lender's resistance, the project had to forego a 30% rebate on the cost of the new roof – a cost often included in the federal program when calculating the basis of a new rooftop PV system. Notwithstanding, the PV system should pay for itself within 5 years of commissioning, and the result may be the first carbon-neutral courthouse in America.
The Sophia Building, located in Santa Fe, is a 14,500 square foot office building whose sole tenant is the Santa Fe County Magistrate Court.
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