HOW TO RUN YOUR BUILDING!

Emily Myers: Welcome to How to Run Your Building, a conversation with New York's leading property managers. I'm Emily Myers with Habitat Magazine, and my guest today is Evangelos Fantakos, chief executive officer at High Rise Property Management. Many co-ops and condos are taking a comprehensive look at how they can reduce carbon emissions in order to comply with local law 97 and achieve energy savings. Evangelos, the Imperial Sanford Building in Flushing, Queens, is one of the co-ops in your portfolio that's taken on major retrofits to reduce their carbon footprint and comply with local regulations. What can you share about their journey? 

Evangelos Fantakos: So it's been an interesting one.

We have not been managing this property in particular for too long. However, since towards the end of last year, we were requested to help in coordinating benchmarking, conversions of their oil from number four to number two. And then their biggest project, which is a window installation, replacing all their windows which is a project that's gonna estimate around seven to $800,000.

We've been basically trying to put together a plan to see how we can in the most cost effective way, of course help insulate the building and make sure that they're retaining their heating and cooling. Make sure that they're not wasting excessive amounts of oil as number four, oil is being replaced entirely and not really being used anymore.

Those found still using number four oil are facing penalties and it's all part of this Local Law 97 Act to try to get all these buildings to reduce their carbon footprint. So the window insulation project is of course to ensure that they're retaining the heating and cooling. The boiler oil conversion is gonna help reduce energy usage. They're gonna reduce overall costs on the bills. And number two oil burns a lot slower allowing it to be a better use for fuel and it's definitely gonna save on the amount that they're spending on a monthly basis.

And then, in addition to that, we are trying to weather strip wherever we can. We're trying to find any kind of openings within the common areas, whether it's stairwell doors a front entrance, back entrance, side entrances. We're just trying to see how we can put together this overall plan, both short term and long term to help reduce energy costs and usage.

Emily Myers: So you've got the number four fuel oil replacement making that a number to fuel oil, and you've got all that work on the building envelope. Of course, that includes improvements to walls, roofs, foundations, windows, and it might include insulation, as you said, weather stripping, moisture control, air sealing.

The window replacement: what prompted that? Were the frames deteriorating or was it established that a lot of heat was being lost by the windows? 

Evangelos Fantakos: So we did a few surveys. There definitely was a lot of energy loss. But the undertaking was started prior to us really taking over.

 We've worked with this company before. They're called Hanock Group and it's a company based out of Queens, New York, and they help with projects such as this. They have these incentivized programs that allow buildings to get rebates on doing window replacements, benchmarking, energy audits.

They will come in and survey the property and see where there's energy loss. We've had a huge helping hand from this company. And we've used other companies. The New York Accelerator, Redox, I know has some incentivized programs. Ener Go-- there's a ton out there as all part of the Climate Mobilization Act, but, in particular, Hanock was able to find that because the windows were, x amount of time old, they have not been replaced. They said if you replace them, if you do an entire replacement and not just phase this out, we can offer X amount in rebates. So we're still not finalized with how much in rebates we're gonna receive.

We have found that the project, again, is somewhere between seven and 800,000. We can expect that the rebates may be somewhere around 20 to 30% in funds coming back to the building, which is excellent. But of course it's very labor intensive. There are lots of surveys, lots of inspections being done, and a lot of data that we're having to give to the company.

Utility bills, any kind of ESCO companies. All that gets compiled in their research and when they do the analytics they come up with, okay, so the building lost X amount of fuel because it had number four oil. We can tell that temperatures dropped within a certain range because of the lack of installation due to the windows and all this compiled in their research and allowed them to, come back to us with this great incentive. 

Emily Myers: Can you talk a little bit about the energy savings being generated by this work? 

Evangelos Fantakos: So we feel that once the windows are replaced and, we complete the weather stripping and we're done with the conversion which is rather simple. The number four to number two conversion is not gonna be a huge undertaking, but once it's all said and done, we're estimating that they're gonna be saving somewhere between 65 and 70% on energy, fuel usage and consumption. We were looking at bills. After looking at the oil delivery invoices, they were coming in around like 14,000 every two weeks, which is a lot of money. We now figure that after the conversion and with the savings on replacing the windows so that there's insulation, we're looking at possibly spending somewhere around four to 6,000 a month, which is a huge reduction in cost, amongst other savings. 

Emily Myers: You mentioned the Hanock group and they are helping with incentives. What do you look for in the partners that you work with on these types of projects? 

Evangelos Fantakos: With some partners we develop an organic relationship by just longevity, working together over time. It may be that they were already on a project, and we inherited the building and inherited the project. And then with some vendors we outsource and look for certain vendors that can help with certain projects and if all goes well, then those are the type of vendors we'd like to keep.

And those are the ones that we end up calling. With Hanock Group, I actually worked with them once in the past. I inherited a building that was already signed to an agreement to have them help with windows. And then in this property when we took over, again, they had already been in communication with Hanock.

However, once we've got briefed on all the different things they wanted to work on we were already going to consider working with the New York Accelerator and Hanock in this case. But again, some of the undertakings had already been underway. In this case, they had already been assigned to the Hanock group.

Emily Myers: And is the building currently projected to face Local Law 97 penalties for emissions, and how is this work going to mitigate those fines? 

Evangelos Fantakos: So currently the building is looking at somewhere around 14,000 in penalties if they don't comply with getting the fuel changed out, amongst other summons that I'm sure will come for not doing the conversion. But since that's being done that's going to alleviate at least a huge sum of it. There was no estimated amount in penalties for the window insulation project; however, based off of looking at utility bills from the past and what we think the amount in energy waste is, it does seem like they're going to be in a really safe spot come the end of 2030 when the penalties are supposed to be at max. So I would say by doing everything they're doing they're at least saving 14,000 in penalties for now. But one thing to note is that although there is this idea or, projection as to what it's gonna cost for these penalties come 2030, every year as we know, there's different compliance codes that come up. And so they make it more stringent year by year. And the potential for these penalties to increase is just around the corner. There's no telling really what it's gonna be.

You can look at the New York Accelerator website and pull up what you're gauging in penalties. But every year we're seeing new and new compliance codes. Local law 1 52 was not as stringent as it is today. Now they are really breaking down a lot of buildings that have exposed gas piping and they're not well insulated.

They may withstand pressure testing, but they're failing in other ways. And so I'm sure in two years from now, there'll be more and more rules and regulations that make it more challenging and that cause buildings to face more penalty. 

Emily Myers: Clearly there are financial constraints for buildings who perhaps want to do all they can to improve their energy efficiency and reduce emissions, but are restricted by their budget.

How do you support buildings where they're at when it comes to Local Law 97? 

Evangelos Fantakos: So the first thing that we try to do is again, utilize these incentivized programs, by giving them as much building information as possible because they're free. These incentivized programs will, again, without any funds due put together a summary for you. I think working with one of these programs hand in hand is definitely your first plan of action. 

Your second plan of action is to use the summary that they give you with the list of content such as, we see that because you have a cell tower on your roof it's emitting, X amount of energy. Because you have a deterioration on the boiler, you need to change the face plate and return lines.

This is what we summarize you're losing in energy. Once you have that summary, you can choose whether to continue working with these incentivized programs or you can just outsource the work to perhaps other vendors that you know may be more cost effective, some of which also are still in compliance with giving you a rebate.

There's also ways that you can try to submit through ConEd, through National Grid and try to get rebates yourself. Of course this is more of a challenge, but again, I think your first plan is to get a summary, both short term and long term for what you plan to do, and where there are problem areas.

And then address them by, again, working with different vendors to see if you can offer solutions. Maybe certain things can be replaced piece by piece rather than taking on a very large project. And then once you get to the nitty gritty and you have an absolute total figure and that, I have to do A, B, and C and entirety, it's gonna cost x amount. You've already now received all the rebates you can, you know what the building is gonna be able to get back. Once you're left with a final amount, that amount, you'll have to discuss with the board whether or not they have the reserves perhaps to cover some of the cost, half of the cost, and then assess for the rest.

Or, obviously, the best bet would be to try to come up with an assessment and make a reasonable understanding form of communication out to all the shareholders , or the owners, to be aware that due to the rising costs and inflation and the fact that this is the way New York is structured, we do wanna reduce our carbon footprint and these are the things that are costing us to waste energy. You come up with an assessment. That would be, I think, the best plan of action. 

Emily Myers: And is that how the Imperial Sanford building in Flushing is meeting its financial obligations. 

Evangelos Fantakos: Yeah, for the most part we are again, receiving as many incentives as possible. We have been very lucky and fortunate to get a lot of rebates. They did have a line of credit. That's something that you would have to consider: if your property has a line of credit and they can use some of the funds there by all means, that's what it was for, in this case at least.

And I think once it's all said and done, if there are additional funds, which we're projecting, but not to be anything more than maybe 200,000, what we'll do is come up with a plan to perhaps put together an assessment. 

Emily Myers: And obviously the savings that are being generated are a big part of that calculation.

Evangelos Fantakos: Absolutely. 

Emily Myers: So are there any other lessons for boards you can share? 

Evangelos Fantakos: I think that it is very important for the board to be aware of all these new compliance codes and rules and regulations. And a lot of people are hearing a lot of noise per se, on Local Law 97, but there's so much information floating around that it's hard to fully understand what does this mean for me?

And I think it's really important to note that, this is the time, more than ever, where your property manager should be giving you feedback as to, Hey, these are the things that we're doing behind the scenes. Perhaps they're not filling you in on every step of the way. But your property manager or your managing agent should be letting you know, these are the things that we're doing.

If you'd like to be more a part of it, by all means here are the programs. Here's what there is to offer. But as a board, you should definitely be aware that these things are kind of unfolding before our eyes. And every year they're getting more and more challenging, and it is very important to understand, what does it mean for you?

Checking out your building on the New York Accelerator is a huge start. And then seeing if you can maybe be more hands-on, if you feel like your managing agent isn't doing enough. Ask them the right questions. Ask them, what programs have you already spoken with to see if you can get us involved?

Have you done anything to survey our mechanics, and have you done a walkthrough around our building to make sure that we're not losing energy? What do you feel our ratio in energy savings between the last three years and now. These questions I think could help tremendously make you aware.

Emily Myers: You mentioned New York City Accelerator and just wanted to make sure that everyone's aware that's the city sponsored organization, giving free advice about energy retrofits and Local Law 97 compliance. 

You point out as well that boards should be asking their management companies, all those good questions.

And I think another important element is to know exactly what mechanical systems you have in your building so that you can then work out where the improvements can come from. 

Evangelos Fantakos: Absolutely. It's important to know if you're running on just oil or do you have a dual fuel system where you have oil and gas?

In this case, the board had already been aware that at the Imperial there was number four oil. That alone is something that some boards may not even know. So you're absolutely right, Emily. That's a huge factor, knowing what your mechanical systems built of and composed. 

Emily Myers: Great, Evangelos. Thanks so much for joining us. Evangelos Fantakos, chief executive officer at High Rise Property Management. 

Evangelos Fantakos: Thank you very much. It was a pleasure. 

Emily Myers: Great. Thank you.