Salem Opens New Financing Program for Commercial Property Upgrades

Salem commercial property owners now have a new financing option for costly building upgrades, with applications opening Wednesday for the city’s new Commercial Property Assessed Clean Energy program.

Known as CPACE, the program allows owners of eligible commercial, industrial, agricultural, nonprofit and multifamily properties to obtain long-term private financing for improvements involving energy efficiency, renewable energy, water conservation and seismic safety.

For Salem businesses and developers, the biggest difference is how those projects can be financed. CPACE can cover up to 100% of eligible direct and indirect project costs, reducing the amount of cash a property owner may need upfront for improvements that can otherwise carry significant initial costs.

The financing does not come from the City of Salem. Property owners work with private capital providers, while the city’s Urban Development Office reviews applications and handles the documents needed to place the CPACE assessment on the property.

That assessment becomes attached to the property and can remain with it if the building is sold, allowing the repayment obligation to transfer to a future owner. Existing lienholders, including mortgage holders, must consent before CPACE financing can move forward.

Eligible improvements can range from HVAC systems, insulation and building-envelope work to renewable energy installations, water-saving equipment and seismic retrofits. The city also lists energy storage and electric vehicle charging infrastructure among examples of improvements that can qualify when program requirements are met.

The structure is intended to make projects with long useful lives easier to finance over longer periods. For property owners, that could make the program particularly relevant when the cost of a major retrofit would otherwise make a project difficult to complete through conventional financing alone.

Salem’s City Council approved Ordinance 10-26 on Aug. 10, formally establishing the program after the city began exploring CPACE implementation in 2025. Applications became available Sept. 9.

Property owners do not automatically receive financing through the program. They must first identify a participating capital provider and apply with the lender. Salem’s Urban Development staff can then approve, conditionally approve or deny the application.

Approved projects are also subject to a city administrative fee equal to 1% of the total CPACE financing, with a minimum fee of $2,500. The fee is due after approval and before the city executes the transaction documents.

For Salem’s commercial property market, the new program adds another financing tool at a time when major renovations, energy improvements and seismic upgrades can require substantial capital. Its impact will ultimately depend on how many local owners and developers decide the financing structure makes sense for their projects.

Salem Opens New Financing Program for Commercial Property Upgrades

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