AGAWAM – Agawam commercial and industrial buildings, along with multi-family residential buildings with five or more units, are now eligible to finance major energy upgrades through the Commonwealth’s Property Assessed Clean Energy Program (PACE).

Per Mayor William Sapelli’s proposal, the Agawam City Council voted to adopt the state program. PACE for commercial buildings is a new mechanism that allows property owners to finance gas line extensions, renewable energy and energy efficiency upgrades through an extra payment to their property tax bills known as a “betterment assessment.” To finance improvements, property owners can agree to do the betterment assessment on their property – which repays the financing.

“The PACE program becomes yet another economic development tool that we can offer to property owners and investors currently doing business in Agawam and those considering relocation into Agawam,” Sapelli said in a statement. “We would like to thank the Agawam City Council for seeing the value in programs like PACE as we continue to collaborate to establish Agawam as a premier destination for commercial investment in the Pioneer Valley.”

According to Planning and Development Director Marc A. Strange, this approach enables the owners to undertake more comprehensive energy upgrades with longer payback periods of up to 20 years. At property sale, the lien stays with the property and is transferred to subsequent property owners.

“From what we understand, it’s a brand new program and we’re one of first communities in Western Massachusetts to adopt that,” said Strange.

The benefits of PACE were broken down by MassDevelopment– the state’s economic development and finance agency – as follows:

• Property owners: Advantageous, non-recourse, upfront, long term, potentially off balance sheet financing that remains with the property if sold. Capital improvements could reduce operating costs and increase property values.

• Municipalities: Job creation, business growth, and environmental benefits associated with reducing energy consumption.

• Lenders/Mortgage holders: Improved cash flow and reduced credit risk from lower operating costs via financing that cannot be accelerated. Capital improvements could also increase collateral property value.

Improvements eligible for financing through PACE must be permanent affixed to the property and include energy-efficiency upgrades, renewable energy, and the extensions of existing natural gas distribution to a property.

PACE was passed as part of the energy legislation signed by Governor Baker in August 2016. MassDevelopment and the Massachusetts Department of Energy Resources (DOER) will administer the program.

“It really appears to me that the Baker administration has been doing so much in a lot of areas, but specifically economic development and business. They’ve done a great job,” Sapelli told Reminder Publishing.

Strange echoed Sapelli’s sentiments, saying he also believes the administration is “pro-development.”

“They’ve allocated money on a state level to support ventures and programs – the PACE program is just another tool, as the mayor said, that we can use to offer property owners and entities that want to invest in Agawam,” he said. “They can finance energy improvements over time and that helps out everybody.”

For more information about the program, contact Strange at (413) 786-0400 x8245 or mstrange@agawam.ma.us