56 Canal St., a former mill building in Holyoke. Photo courtesy of Google Maps.

A new state fund outlined in a bill before the state legislature would help facilitate improvements to underutilized commercial or industrial buildings in economically distressed areas, a measure that supporters say would help spur job creation, business, and maintain historic structures.

The bill (H.285), filed by Reps. Patricia Duffy and Natalie Higgins, would task the MassDevelopment, the state’s development finance agency, with overseeing a redevelopment fund that would dole out money to both nonprofits and for-profit companies. Duffy, a Holyoke Democrat, said the bill is “simple” as it seeks to help developers upgrade, renovate, or repair buildings in older cities and former manufacturing hubs.

“Some of our best assets and challenges are these beautiful, old mill buildings and warehouses,” Duffy told the Community Development and Small Business Committee Tuesday morning. “Our promise also lies in local developers, local businesses that are going to be hiring local folks, taking advantage of our people and our resources here.”

As proposed, the agency would administer funds via grants or loans for renovation projects where tenant rent rates or creditworthiness do not support commercial debt, according to the bill. The money could be used for things like elevator repairs, handicapped access installation, sprinkler system improvements, tenant fit-outs, or other building code requirements.

While the source of revenue for the fund is unclear, a potential sticking point for any new program, Holyoke Planning and Economic Development Director Aaron Vega said the fund could help a city like Holyoke build on other grant programs or local tax incentives to bring buildings back up to code or into a functioning state.

Vega, who previously filed the bill when he served in the Massachusetts House, said there are a number of advantages to repurposing an old building, including getting it back on the city tax rolls, creating jobs or new housing, and allowing companies to be more “green” by not tearing a structure down and building a new one. There’s also a historic preservation aspect to the legislation, he said.

“I’m not just talking about those square buildings, warehouse, sort of mill buildings built 100 years ago, the architecture on many of these buildings, and many of our urban cores, throughout the commonwealth are fantastic, and will never be built again,” Vega told the News Service.

Vega said the proposed fund is similar to another tool Holyoke has used in the past — the Brownfields Redevelopment Fund administered by MassDevelopment and aimed at transforming vacant, abandoned, or underutilized industrial or commercial properties.

Committee co-chair Sen. Nick Collins of South Boston asked Vega how the fund would be financed and receive contributions, saying his district faces similar challenges with older assets and buildings. Vega said the bill’s sponsors leave it “up to you to find the best path forward.”

The bill says the fund “shall be eligible to receive funds as appropriated by the general court, the board, federal grants and programs, and transfers, grants, and donations from state agencies, foundations, and private parties.”

“I wouldn’t obviously support increasing a fee or a tax to support this fund. Perhaps there could be ARPA funds utilized to start, perhaps a percentage of some developer fees across the state could go into to maintain it,” Vega said to Collins. “But you’re exactly right, it needs a funding source.”

Duffy said in depressed real estate markets, developers are “ready to take on these buildings” and support historic redevelopment.

“We support these codes and safety so we want to help these developers be able to come up to code and protect these buildings,” Duffy said. ” … In many ways, it’s the smaller, local developers that we want to help support.”