New Financing Program to Fund Energy Improvements at 56 Bank Row
MassDevelopment announced that Abercrombie Greenfield, LLC will receive $450,000 in financing for energy improvements to its office building at 56 Bank Row in Greenfield, the first project financed under the agency’s new Property Assessed Clean Energy (PACE) Massachusetts program.
Through PACE Massachusetts, capital provider Greenworks Lending from Nuveen will provide financing for a range of energy upgrades that were installed to the building, including efficient electrification of space heating, energy-recovery ventilation, LED lighting and controls, improvements to windows and insulation, and a solar photovoltaic system on the roof. This financing will be repaid via a betterment assessment on the property.
“PACE Massachusetts stands to be a key financing tool for making commercial properties more energy-efficient,” said Housing and Economic Development Secretary Mike Kennealy, who serves as chair of MassDevelopment’s board of directors. “These efforts will benefit the Commonwealth and its communities by creating jobs, reducing energy consumption, and making progress towards Massachusetts’ clean-energy goals.”
MassDevelopment President and CEO Dan Rivera noted that energy upgrades at 56 Bank Row are the first to be financed under PACE Massachusetts. “We encourage property owners throughout the Commonwealth to consider how this flexible, long-term financing tool can help them tackle an energy-improvement project.”
Launched in July 2020, PACE Massachusetts is a new long-term option for financing energy improvements to commercial and industrial buildings, multi-family properties with five or more units, and buildings owned by nonprofits. The program enables commercial property owners to fund energy-efficiency and renewable-energy projects by agreeing to a betterment assessment on their property, which repays the financing.
“The renovation of the Abercrombie Building rescued a blighted historic property that was structurally failing.”
Offering more flexibility than a direct loan, PACE Massachusetts allows property owners to undertake comprehensive energy upgrades without adding new debt to their balance sheet and through longer financing terms of up to 20 years. MassDevelopment administers PACE Massachusetts in consultation with the Massachusetts Department of Energy Resources (DOER).
“DOER commends PACE’s first approved project for its commitment to comprehensive energy improvements and building electrification using heat pumps,” Department of Energy Resources Commissioner Patrick Woodcock said. “As the number of municipalities opting into PACE grows, we look forward to having more commercial properties take advantage of this program to finance renovations and retrofits to help meet the Commonwealth’s ambitious greenhouse-gas emission-reduction goals.”
Massachusetts cities and towns are required to opt into PACE Massachusetts by a majority vote of the city or town council or the board of selectmen, as appropriate, in order for a property within that municipality to be eligible for the program. Forty-seven cities and towns have opted in; the city of Greenfield was one of the earliest to do so in April 2018.
“This historic PACE financing for the complete energy-efficiency renovation of an underutilized building on Bank Row joins many energy-efficiency ‘first’ accomplishments in our city since we became the first green community in Massachusetts in 2010,” Greenfield Mayor Roxann Wedegartner said. “It’s a legacy we should all take pride in and continue to support.”
Built in 1896, 56 Bank Row is a 12,696-square-foot office building. The energy improvements are projected to save 189,000 kilowatt hours from the grid annually compared to a building built to current Massachusetts energy-efficiency code, which equates to a 28% overall reduction.
“Greenworks Lending from Nuveen is very proud to have worked with MassDevelopment to bring financing for Massachusetts’s first C-PACE project at 56 Bank Row,” said Greenworks Lending from Nuveen CEO and President Jessica Bailey. “We hope that this is the first of many C-PACE projects to come with MassDevelopment as we work together to bring financial and environmental benefits to local businesses and communities in Massachusetts.”
Bradley McCallum, owner of 56 Bank Row, added that “the renovation of the Abercrombie Building rescued a blighted historic property that was structurally failing. The project combines factors including a long-term lease with the Northwestern District Attorney’s Office, state and federal historic tax credits, an innovative design by Tom Douglas Architects, and a committed contractor, Mowery & Schmidt, and their team of subcontractors. Thanks to this team, we were able to transform the bones of this historic structure into a vibrant resource for the city of Greenfield.
“As with projects of this ambition and scale,” he went on, “we faced cost overruns, and one of the positive contributions that PACE Massachusetts provides Abercrombie Greenfield is the ability to retroactively refinance key energy-efficiency investments that we made and consolidate the outstanding bridge financing and private loans into a fixed 20-year repayment structure, providing credit beyond the 80% LTV, which our primary mortgage with Berkshire Bank is capped at. Berkshire Bank, which is our tax-credit investor and lender, has worked in partnership with Abercrombie Greenfield to secure our PACE Massachusetts financing.”