On Monday, March 14 Mayor Alex Morse was joined by city and state officials to mark the official start of the demolition and cleanup of the former Parson’s Paper in preparation for the expansion of Holyoke manufacturer Aegis Energy Services. The announcement capped a multi-year effort to remediate the site and make it ready for development. The expansion of Aegis Energy Services will entail a private investment of approximately $7 million, the retention of 65 jobs and the creation of at least 30 new jobs, as well as the creation of up to 4 megawatts of renewable energy, making it the City’s largest manufacturing expansion in years.
“This is a significant milestone in our City’s revitalization that should be celebrated and praised. Redevelopment of the Parsons site has been an extremely difficult challenge, bringing with it significant legal, environmental, and financial constraints that have impeded progress for years,” said Mayor Alex Morse. “The staff in the Office of Planning and Economic Development and the Law Department should be applauded for their efforts as they’ve worked diligently with the Redevelopment Authority and a cross-collaboration of public and private partners to make this project a reality. I’d be remiss if I did not offer my sincere appreciation to Lee Vardakas of Aegis Energy for his commitment to Holyoke; we are fortunate to have this innovative company stay and grow in our city, and I thank him for his investments and contributions.”
Located at 84 Sargeant Street between the first and second level canals, the 4.7 acre Parsons Paper site sits right next to South Holyoke, comprising one of the ten areas designated within the City’s Urban Renewal Plan (URP). The property has been unused and vacant since 2004. In 2008, a fire significantly destroyed a majority of the structures, and the City officially foreclosed on the property and took ownership in 2012 for failure to pay taxes. In 2014 the Redevelopment Authority engaged Tighe & Bond to undertake environmental assessments, specifications for demolition and cleanup, and project permitting to prepare the site for reuse.
Many sources of funds are being used to make the demolition and cleanup phase of the project possible and have been amassed through the HRA, including:
- $250,000 in funds from an agreement with Eversource Energy (formerly Northeast Utilities) as part of a mitigation payment associated with cleanup of contaminants in the Connecticut River.
- $2 million from the state Brownfield Fund through MassDevelopment
- $1 Million capital investment by the Holyoke Gas & Electric, which secures an easement on the site for potentially 2.5 MW of hydroelectric generation
- $400,000 capital loan from the Holyoke Economic Development and Industrial Corporation, to be paid from the sale proceeds of the land to AEGIS Energy Services.
- The City also provided its most aggressive tax incentive schedule in its history: 100% property tax exemption for 10 years.
“This is an incredibly challenging site and a costly endeavor, one that would have been very difficult for the City to do by itself; consequently the financing framework for this project is probably the most complex that Holyoke has seen in decades. The implications a year from now will be significant: blight reduction, building reuse, job creation, expansion of manufacturing, more renewable energy and improved property values in the neighborhood,” said Marcos Marrero, Director of Planning & Economic Development for the City, as well as Executive Director for the Holyoke Redevelopment Authority.
“Cleaning up and redeveloping this highly visible site in downtown Holyoke will positively impact surrounding businesses, residences, and the City’s innovation district,” said MassDevelopment President and CEO Marty Jones. “This project illustrates the vital role the Brownfields Redevelopment Fund plays in transforming parcels around the Commonwealth, and I applaud Holyoke for its commitment to this property.”
The contractor for the work is McConnell Enterprises, Inc, which will begin work on the site immediately in order to take advantage of the regularly scheduled canal draw-down during March 22 through 24. Demolition and cleanup is projected to be completed by August of this year, after which the site will be taken over for redevelopment by Aegis Energy Services, rehabilitating one 40,000 square foot building – a 200% expansion of the company’s square footage – and adding at least 30 new jobs, an approximate 50% growth in the company’s employment.
“Aegis has been proud to be a part of the Holyoke community for over 10 years, and we look forward to continuing to grow our business here,” said Lee Vardakas, President of Aegis Energy Services. “ As a company we see the value of growing our business in Holyoke and it was important for us to make every effort to stay here and contribute to that progress. We see the the exciting progress being made in Holyoke and appreciate all the City has done to help this project move forward. We are eager to see the site cleaned and to begin work on our expansion.”
Aegis Energy Services, Inc. is a manufacturer, engineer, installer, and service provider of Combined Heat & Power (CHP) systems throughout the Northeast and Mid Atlantic States. CHP, also known as cogeneration, is the simultaneous production of heat and electricity from a single fuel source. The company first began in 1985 and moved to 55 Jackson Street in 2005, and has since outgrown its 20,000 square foot facility that abuts the Parson’s Paper site, prompting owner Lee Vardakis to begin discussions with the Office of Planning and Economic Development about expansion or potential relocation in late 2014.
For his part, Jim Lavelle, General Manager of the Holyoke Gas & Electric added that, “the Parsons Paper site has great potential for renewable energy and the Holyoke Gas and Electric is happy to have played a role in its redevelopment. We look forward to further exploring this option and collaborating with Aegis Energy to make Holyoke a greener place to do business.”Share