HOSPITALITY: Hilton Universal City’s $7 million efficiency upgrade sets national standard.
By ELLIOT GOLAN Staff Reporter at the San Fernando Business Journal
PHOTO CREDIT BY THOMAS WASPER
The 24-story Hilton hotel at 555 Universal Hollywood Drive will receive about $7 million of water- and energy-efficiency improvements under the Property Assessed Clean Energy, or PACE, program. The program, adopted in 2009 by Los Angeles County, allows property owners to receive affordable financing for energy-saving improvements. The loan is repaid through a special assessment on proper- ty tax bills over a period of years.
“By doing this, we were able to protect some funds for other uses,” said hotel General Manager Mark Davis. “And it doesn’t really impact the balance sheet here at all.”
PACE legislation has been passed in 31 states, but the Hilton renovation is the largest ever undertaken. The biggest previous project was announced in July in Sacramento, where Metro Center Corporate Park, a four-building, 250,000-square-foot office park, will receive $3.2 million in upgrades.
The Hilton Universal City, which was built in 1984 and has 489 rooms, is the largest hotel in the Valley region.
Structured Finance Associates LLC, a San Marcos firm that provides capital toward energy-efficient and sustainable upgrades, is providing the $7 million in financing. The Hilton’s owner, Sunhill Properties LLC, has 20 years to pay back the loan in bi-annual payments.
Davis would not specify the exact interest rate, but described it as a “little higher margin than a typical secured loan.” He added the upgrades will not affect room rates and other customer costs.
The hotel will get new LED lighting, replace its shower heads with low-flow versions, exchange bathtubs for showers, install electric vehicle charging stations and make elevator improvements.
The upgrades, which began in October and should be complete by early next year, are expected to save the hotel $800,000 in annual energy costs. They also will save about $28,000 in water costs a year by conserving 2.8 million gallons of water.
Davis expects that the savings will offset the cost of the loan, making the project cash- flow positive.
Bruce Baltin, a senior vice president at the Los Angeles office of PKF Consulting USA, a hospitality consultancy, said the proj- ect will do more than reduce energy costs.
“There are a lot of businesses and agencies that make sustainability a box you have to check to make a hotel acceptable,” he said. “They can market this.”
We are excited to be part of this sustainable project. To read the full article pick up this month’s addition of the San Fernando Business Journal or click here.