Newly-created state Climate Innovation Finance Authority awards first geothermal loan to The Heights – Twin Cities

The Heights, a future residential and commercial community planned on the former site of Hillcrest Golf Course on St. Paul's East Side, will soon be able to rely on Mother Earth for heating and cooling.

The newly created Minnesota Climate Innovation Finance Authority provided a $4.7 million loan – its first ever loan – to The Heights Community Energy, which plans to build and operate one of the largest geothermal energy systems in the state. Is.

A development agreement requires future multi-family housing and light-industrial buildings in The Heights to be connected to a low-carbon energy system, which would then be funded by private-sector utility payments. It will be the first aquifer-based district geothermal energy system in Minnesota.

“It will be a $12 million project, but this bridge loan will enable us to get that infrastructure in place as housing moves forward this summer,” St. Paul City Council member Nelsey Yang said Wednesday.

The geothermal system will heat and cool buildings in the summer by extracting water from subsurface aquifers. The heat from the buildings will heat the water, which will then be pumped into the aquifer for storage. Hot water can be used to heat the same structures in winter.

The system is designed to help prospective property owners lower their utility bills as well as reduce their carbon emissions. To fund environmental infrastructure, the Minnesota Legislature last year created and funded MNCIFA, which is structured as a publicly accountable financing authority, otherwise known as a “green bank.”

The goal is to use public financing to fill the gap left by traditional financing for clean energy projects.

Heights Community Energy will own and operate the geothermal system under the direction of District Energy St. Paul, the city's longtime nonprofit utility partner and the St. Paul Port Authority, owner and master developer of The Heights.

“This system will go a long way toward achieving our goals of building a carbon neutral community in the Heights,” Port Authority Chairman Todd Hurley said in a written statement.

Chelsea DeArmond, founder of St. Paul 350, called the district system a “catalyst for more community-level climate action for new and existing St. Paul neighborhoods.” The neighborhood-led environmental advocacy group has advocated for clean energy in The Heights over the past five years of planning.

Sherman Associates, JO Companies and Twin Cities Habitat for Humanity plan 1,000 new housing units in The Heights, which is also expected to create 1,000 living wage jobs, according to the St. Paul Port Authority.

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