Pre-War Co-op Adapts to New Gas Inspection Laws with Innovative Heating System

The fallout from a failed gas inspection can be momentous. Not only do all lines have to be inspected and perhaps changed, but stoves and a building’s boiler face a prolonged shutdown. And then there’s the cost of the fix, which can total into the hundreds of thousands. While that scenario is playing out across the city, one 45-unit pre-war co-op got ahead of the curve, albeit not by choice.

Aging Out Of The Building Code

 “It’s not a traditional kind of building,” says Margaret McAdams, director of management at Buchbinder & Warren. “Each apartment has its own gas boiler that provides it with heat and hot water.” When Local Law 152, the gas inspection regulation, went into effect, this co-op brought in their plumber to test the lines. “Regretfully,” McAdams recalls the plumber saying, “‘I can’t pass you. It’s not that your little gas boilers are necessarily failing or causing a problem, it’s just that these don’t meet city regulations anymore.’”

Full Stop

The building's board faced a stark reality: They couldn't comply with the heating system they had. If there was a gas shutdown, Con Ed wouldn’t turn the gas back on because the building’s structure was non-compliant, leaving them with no viable heating solution. The board had to consider its alternatives, and the first one considered was a traditional solution.

“We had some boiler companies look at the option of installing one boiler,” says McAdams. “We also looked at ways to electrify a building system without having to invade or create major disruption in each apartment.” Unfortunately, none of these options were inexpensive choices. “It’s a very forward-thinking board,” McAdams says, “and they decided to look at the concept of putting individual heat pumps into each apartment, which would get them ahead of the climate mobilization curve.”

Implementing this plan involved taking advantage of ongoing facade work. The board had already contracted with a company for exterior repairs and the sidewalk shed was in place. If the co-op used the same contractor, it would be able to combine exterior facade work with the additional heat pump prep work, which involved opening up each apartment’s exterior walls for a future install. “I don't think your typical pre-war building is going to say, "Let's spend $2 million on putting in heat pumps," McAdams says. “But this building was backed into a corner.”

Moving Forward

The moving parts needed to be coordinated. Money needed to be raised, consultants needed to be engaged, and the shareholders needed to be onboard for the process.

Money. The co-op had refinanced its underlying mortgage about two years ago, taking on extra debt because the board knew it would need to perform façade work. Dealing with the gas problem added about $1.5 million, and the co-op had to assess for that. The board spread this out over 18 months.

Consultants. The co-op was already working with a FISP architect, and they brought in a structural engineer to design the heat pump installation. Prior to installing heat pumps, the exterior walls had to be cut open and louvers put in place until the install time. The co-op also hired a project manager to coordinate and oversee all the players. “When you have this many players, and whenever you have a project that requires workers going into every single apartment, you have to have someone at the helm of all this, managing the different professionals and making sure everything is working in concert,” advises McAdams.

The board knew that there were incentives and rebates available, but finding the right ones and applying for them was a tall task. They engaged STRATCO Property Solutions, a third-party specialist, to navigate the incentive programs and submit all applications.

Shareholder buy-in. The co-op wanted to test out the heat pumps and make sure they were supplying enough heating and cooling before making a full purchase. The board put out an appeal to all 45 shareholders asking for two pilot apartments to test out an installation, and two volunteered to be the “crash test dummies,” says McAdams. “You can have all the best drawings in the world, but until you physically get some hands-on experience you can’t find out what refinements are needed.” There were some hiccups along the way, but the outcome from the two test cases was that shareholders had comfortable heat during last winter and the air conditioning was cooling nicely.

Physical disruption. Installing heat pumps in each apartment is a physically disruptive process. Depending on the apartment’s size, the process can be one or several days. Recognizing that the general contractor has a huge role to play, the co-op bid out the job, looking for someone who had a track record managing something as complicated as this and came with good sub-contractors. “It is highly invasive and requires advance notice to each shareholder,” says McAdams. “The GC will go into each apartment, move all the furniture out of the way, lay down protection, cover everything, pop the heat pump in, connect it and clean up. And there’s always the one-off where a resident has a family emergency or someone’s ill and calls the GC saying ‘You can’t come in today.’ This has a whole domino effect, and the GC has to be able to handle it,” she advises.

Bottom Line

“The upside for a pre-war building is that now you’ve got apartments that can control their heating and cooling,” McAdams says. “And understanding the import of Local Law 97, this building will be in a terrific spot in the years ahead.“ But, she adds, this solution also comes with a lot of pain, both financial and coordination. You’re basically re-doing the heating structures that these buildings were built around, and that is no small task.

—Carol Ott