For the first time in Texas, a PACE project is being funded through a multi-tranche process, unlocking millions in potential savings with $53.2 million in PACE financing for a landmark development in Fredericksburg.

On August 15, 2025, the Texas PACE Authority facilitated the closing of the first of three funding tranches for the Kimpton hotel at The Meuse. The remaining two tranches are anticipated over the next 18 months, in step with the construction timeline. Petros PACE Finance played a pivotal role in structuring Texas’s first-ever multi-tranche deal, serving as the lender and providing financing for energy- and water-efficient upgrades.

“The sponsor, DC Partners, was very focused on putting an efficient capital structure together for the project,” said Lawton Johnson who led the deal for Petros.  “After a detailed review of the business plan and discussion with the sponsor, Petros proposed a multi-tranche funding structure to minimize the carrying costs that come from a full funding at closing.  The result is millions of dollars in savings for the sponsor and its investors.”  

“We are excited to be working alongside Texas PACE Authority and Petros PACE Finance on such an innovative structure for The Meuse,” said Acho Azuike, COO of DC Partners. “In today’s financing climate, it’s essential to be more creative and strategic in how we structure our capital stacks. This multi-tranche PACE financing not only aligns with our commitment to sustainability, but it also allows us to maximize efficiency and long-term value for our investors while bringing a landmark development to life in Fredericksburg.”

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Why This Project Is a Texas First

The Meuse marks several milestones:

• First multi-tranche TX-PACE financing facilitated by Texas PACE Authority
• First project under the City of Fredericksburg TX-PACE Program, part of the regional AACOG PACE Program.
• One of the largest TX-PACE transactions in the program’s history

This innovative funding structure allows the developer to draw only the funds needed at each stage of construction, dramatically reducing interest costs over the life of the financing. For large-scale developments like The Meuse, this approach can mean millions in savings, making PACE financing even more attractive and sustainable for developers and investors.

Garrett Bonn, Assistant City Manager shared, “The Meuse project is the first in Fredericksburg to use the TX-PACE program, and it’s a great example of how the City supports smart, sustainable development. Importantly, while the City sponsors the program, it does not provide any funding or assume financial liability. Our hope for the program is that it will continue to encourage sustainability and conservation throughout the community.”

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About The Meuse

Developed by DC Partners, a Houston-based luxury mixed-use real estate firm, The Meuse is a 22-acre destination resort and retail district on the west side of Historic Fredericksburg.

Named in honor of the city’s founder, John O. Meusebach, the development will blend Fredericksburg’s rich heritage with modern luxury and provide much needed meeting space to the city.

When complete, The Meuse will feature:

• A 212-room Kimpton boutique hotel
• Full-service restaurants and bars
• A resort-style pool deck
• Indoor and outdoor event and meeting spaces
• A 73,200-square-foot shopping district with destination retail, tasting rooms, and dining

The retail district development will also preserve and incorporate the historic Sunday House, paying homage to Fredericksburg’s deep cultural roots while introducing world-class hospitality to the Texas Hill Country.

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Sustainable Design with Long-Term Impact

By using TX-PACE financing for energy- and water-efficient improvements, The Meuse is elevating Fredericksburg’s hospitality and tourism profile while demonstrating that large-scale developments can embrace sustainable building practices without sacrificing financial efficiency.

The Texas PACE Authority is proud to support this innovative project, alongside Petros PACE Finance, and to introduce a funding structure that will serve as a model for future PACE transactions across the state.

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About DC Partners
Established in 2011, DC Partners has garnered acclaim for its luxury high-rise residential, mixed-use, and hospitality projects. The firm's portfolio, exceeding $1B, includes award-winning high-rise developments in Houston: Astoria, Arabella, Marlowe, and Chateau Ten; as well as iconic mixed-use developments: The Arts Residences and Thompson San Antonio hotel, 4411 San Felipe, and The Allen, which includes Residences at The Allen, The Pavilion, and Thompson Houston hotel, and The Meuse, a luxury mixed-use development under construction in Fredericksburg, Texas.

Since its formation, DC Partners has delivered projects nationwide including 22 transformative projects totaling over four million square feet. Visit us at https://dcpartnersusa.com/

About Texas PACE Authority
Texas PACE Authority (TPA) is the nonprofit administrator of more than 100 local TX-PACE programs. TPA empowers commercial, industrial, and multifamily property owners across Texas to make energy and water-saving upgrades that reduce costs, benefit the environment, and support local communities. Working with local governments, lenders, and service providers, TPA has facilitated over half a billion dollars in new investment statewide. Learn more at www.TexasPACEAuthority.org.

About Petros PACE Finance

Petros PACE Finance, LLC is a national leader in the C-PACE marketplace, dedicated solely to providing long-term C-PACE financing to commercial property owners seeking to lower energy costs, reduce their carbon footprint and increase property values and meet sustainability goals. The company is a platform portfolio investment of Apollo Global Management. Its leadership team has decades of executive-level experience in private credit and structured finance, with direct long-term institutional investor relationships. With billions in committed capital, Petros is able to close transactions in eligible C-PACE markets nationwide. To learn more about Petros PACE Finance visit our website at www.petros-pace.com.