GREENFIELD — The former Wilson Department Store redevelopment project was selected as one of 10 affordable housing projects to receive grant funding from the first pool of state dollars aimed at lowering energy costs and improving air quality and comfort.

The $1.56 million Affordable Housing Deep Energy Retrofit Grant will allow The Community Builders (TCB) to replace all of the Main Street building’s aging oil and gas-powered systems, according to Development Project Manager Julia Scannell. Funding can also be applied to insulation and any other sustainability upgrades, she said.

“We’re changing every aspect of the building, and because of that, the [heating, ventilation and air conditioning] system won’t support the new structure and layout and uses of the building,” Scannell explained. “TCB also has strong sustainability goals that we associate with all of our projects.”

Wilson’s Department Store, one of the last independent, family-owned department stores in the country, closed in January 2020. Mark Abramson, a real estate agent with Coldwell Banker Commercial Upton-Massamont Realtors, previously said the property, which includes the parking lot behind the building and two lots on Chapman Street, was priced at $3.95 million when it went on the market. Mayor Roxann Wedegartner announced in November 2022 that the city worked in partnership with The Community Builders, MassDevelopment and the Franklin Community Co-op — which operates Green Fields Market — on MassDevelopment’s acquisition of the property.

The redevelopment project, which involves relocating and expanding Green Fields Market into the Main Street building’s first floor and turning the upper floors into 65 mixed-income rental apartments, has already been given the green light by both the Planning Board and Historical Commission. In June, the project received a special permit from the Zoning Board of Appeals.

“The project is on track with our anticipated schedule, which is a lengthy schedule,” she said. “Last week, we submitted our first pre-application to the state for the big allocation of competitive financing, including the low-income housing tax credits we envision using to finance the project.”

In addition to the $1.56 million from the state, the applicants have also secured $100,000 in Community Preservation Act funding from the city. The anticipated cost is still “in process,” Scannell said.

“This work is important and needed, and also costly,” she said.

The Affordable Housing Deep Energy Retrofit Grant Program, which the Healey-Driscoll administration created earlier this year, awarded a total of $27.35 million to seven organizations for 10 different affordable housing projects.

“Every day, I hear from residents who are struggling with the high costs of energy and housing,” Gov. Maura Healey said in a statement. “This grant program will lower monthly energy bills and maintain affordable housing for families across Massachusetts. Electrifying our buildings presents an important opportunity to drive down energy costs for our residents. We will continue to pursue smart, cost-effective strategies that make our state more affordable, while keeping us on the cutting edge of climate innovation.”

Scannell said that, given the length of the competitive financing process, it likely won’t be until mid-2025 that construction on the housing portion of the project begins. Now two years into the process, Scannell said the state funding demonstrates a “positive step forward.”

“We’re really appreciative of all the support the project has been receiving from the local to the state level,” Scannell said. “It’s a keystone project from Greenfield and Franklin County.”

Reporter Mary Byrne can be reached at mbyrne@recorder.com or 413-930-4429. Twitter: @MaryEByrne.