Dealmaker: X-Caliber Funding, CastleGreen Finance Complete $122M Refinance for Fairmont Breakers Long Beach Hotel

(Illustration courtesy of X-Caliber Funding)

X-Caliber Funding and CastleGreen Finance, an X-Caliber affiliate that provides capital through Commercial Property Assessed Clean Energy financing, provided $122 million to refinance Long Beach, California’s Fairmont Breakers Hotel & Spa.

To date, the two X-Caliber affiliates have provided $64.4 million in bridge loans, secured by a first mortgage and historic tax credits, and CastleGreen has provided $57.7 million of Commercial Property Assessed Clean Energy financing through the California Statewide Communities Development Authority’s Open PACE Program. With their latest financings, X-Caliber and CastleGreen have provided a total of $122.2 million in financing to the project.

“The tax credits are designed to restore, reuse and preserve iconic landmarks like the Fairmont Breakers Hotel, and they provide the borrower with greater flexibility to support their capital needs,” X-Caliber President and CEO Chris Callahan said.

C-PACE offers low-cost, long-term financing for energy efficiency, water conservation and renewable energy projects, which align well with a historic renovation or adaptive reuse.

“Partnering Historic Tax Credits and C-PACE financing is a double win – it breathes new life into aging structures while promoting energy savings and environmental responsibility,” said Sal Tarsia, managing partner with CastleGreen Finance. “The structure is a smart choice for borrowers looking for effective financing for renovations that reduce energy consumption and increase property value, while also preserving history.”

This is the second such combination executed by X-Caliber and CastleGreen that combines a first mortgage loan, C-PACE and historic tax credits to fund a renovation project. The team completed a $54.9 million mortgage loan and C-PACE joint transaction in April 2022 for the same sponsorship for 110 Ocean Center, also in Long Beach, Calif., and worked with a third party to execute the historic tax credits.

The project is designed to be energy efficient, is estimated to reduce water consumption by 6,241,339 gallons of water a year, and to produce cost savings of $2,517,043 over the lifetime of the financing.

The renovated Breakers Hotel, which has been rebranded under the Fairmont brand, features 185 guest rooms, a rooftop pool, several restaurants, and a renovation of the iconic Sky Room. The 15-story hotel, which is among the oldest buildings in Long Beach, dates to 1926 and has hosted guests including John Wayne, Clark Gable, Cary Grant and Elizabeth Taylor. It is within walking distance of many of Long Beach’s notable features, including the Convention and Entertainment Center, the restaurant district, the Aquarium and the Long Beach Cruise Terminal. The hotel closed in 1988 and most recently operated as an assisted living facility.

The Fairmont Breakers Hotel & Spa Long Beach is projected to open this spring.