Brooklyn Co-op Closes on First Multifamily Express Green Loan

The four-unit co-op at 90 Sterling Pl. in Park Slope, Brooklyn is not big enough to fall under Local Law 97, which, beginning next year, sets carbon emission caps for buildings larger than 25,000 square feet. Even so, this co-op board is the first in the city to close on a Multifamily Express Green (MEG) Loan from the nonprofit lender New York City Energy Efficiency Corp. (NYCEEC).

The $120,000 loan carries an interest rate of 7%. It, along with a $12,000 incentive from Con Edison, will pay for most of the $150,350 project, which entails decommissioning and removing the gas boiler, upgrading the electrical system, and installing all-electric heat pumps for space and water heating.

“These measures should significantly reduce the building’s greenhouse gas emissions over the life of the project,” NYCEEC says in a statement. Such reductions will come about when boards abandon fossil fuels and install electric infrastructure in their buildings as the grid gets increasingly fed by energy from such renewable sources as wind, solar and hydroelectric. This process, known as “electrification,” is central to the city’s and state’s goals of sharply reducing carbon emissions.

Andrew Haser, an associate on NYCEEC’s business development team who shepherded the loan through the approval process, adds: “MEG loans are a good fit for smaller co-ops and condos. It’s a streamlined and more efficient loan process. We’re shooting for a six-week process between initial contact from the borrower and closing the loan.”

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The self-managed Park Slope co-op is a four-story, century-old brownstone with an aging gas boiler that overheated some apartments and under-heated others. The co-op board, which consists of all four shareholders, was disinclined to throw good money after bad. “Our boiler is very old,” says Toby Johnson, a college math professor who serves as board treasurer. “We didn’t want to sink stupid money into this archaic technology. Eventually the world is going to switch to electric heat pumps, so we decided to go ahead and do it.”

To pay for the fully-amortizing, 10-year loan, the board dipped into its reserve fund and raised maintenance from $1,000 to $1,600 a month. There was no assessment. The board was delighted to get the NYCEEC loan because of today’s skewed lending market.

“It’s very difficult for a co-op of our size to get a loan,” Johnson says. “It’s not about our creditworthiness, it’s that it doesn’t make economic sense for banks to make such small loans. So it was very important for us to get this loan from NYCEEC.”

Haser notes: “NYCEEC has been doing green loans for over a decade, so we’re pretty well versed in financing energy-efficiency projects, projects that are focused on environmental measures.” Among those are Property Assessed Clean Energy, or PACE, loans, which allow co-ops to install energy-saving retrofits at no upfront cost, then repay the loan through a lien on their property taxes. Haser adds that NYCEEC now has several more MEG loans in the pipeline. “We were extremely happy with how the project worked at Sterling Place, and we’re very optimistic about these loans.”

Johnson, for his part, would like to see his pioneering co-op serve as an example for other small co-ops and condos. “I do hope this encourages other buildings to do this,” he says. “It makes a lot of sense, and as more and more people do it, it’ll get easier to do.”

PRINCIPAL PLAYERS — HEAT PUMP CONTRACTOR: Ice Age Mechanical Corp. ELECTRICIAN: Riviera Electric. PLUMBER: HBNY Plumbing & Heating. LENDER: New York City Energy Efficiency Corp.