Green Project Gets Green Financing

When the board at the 244-unit River Arts co-op in Washington Heights set out to convert the building’s boiler from oil to natural gas, it turned for financing to the nonprofit New York City Energy Efficiency Corporation (NYCEEC). But the board also needed help breaking an impasse with Con Ed. 

“The city was putting in gas lines, but we weren’t in one of the designated areas,” says Jack Fogle, the co-op’s building manager and a River Arts resident since 1981. “We wanted to know how we could get in on the deal, which is when we learned about the cluster program and started organizing to get a group together.” 

The next step was getting to the right people at Con Ed – which is where Posie Constable, NYCEEC’s director of business development, stepped in. “I was at a Community Board meeting in Harlem when I learned about the so-called 158th Street cluster efforts,” she recalls. “River Arts and the other buildings had approached Con Ed separately, but I realized they had to band together to hammer out a deal.” With the help of staffers from the NYC Clean Heat program, Constable lobbied Con Ed for two years until the utility finally agreed to install a gas line on their dime. 

NYCEEC needed to move fast to arrange the financing, since River Arts had to have the cash in hand to commit to the cluster – or else the Con Ed deal would fall apart. “We’ve had a green committee for 10 years, so we were aware of NYCEEC and knew they could provide the money,” Fogle says. “But since our underlying mortgage with Berkeley Financial doesn’t allow secondary loans, the lawyers had to make sure there was absolutely nothing that could put us in default.” Because the NYCEEC loan was unsecured, “technically Posie didn’t even have to get approval from Berkeley,” he adds. “But she did, which reassured the board.” And when Constable did the math for them – the five-year, $350,000 loan would cover all project costs, and the savings from the conversion would more than pay off the debt before it came due – the board gave the green light. 

After the agreement with Con Ed was signed in 2014, River Arts immediately set to work upgrading the boilers, installing burners, building a meter room, and installing the infrastructure to connect with the new gas line. Unfortunately, Con Ed was way behind schedule. “They kept delaying when they’d get things up and running, and in the meantime we still had to pay off the loan,” says Fogle. “That’s when we hit the panic button. But NYCEEC was reasonable enough to restructure the loan so that we paid only the interest until Con Ed finally got us connected in 2016.” 

Thanks to the conversion, River Arts is saving $150,000 a year in energy costs. “Which means our debt will be paid off in no time, and then we’ll book all the savings,” Fogle says. “It was an arduous process that required a very engaged and proactive board, but it was worth it in the end, thanks to NYCEEC. I refer a lot of people to them. We’re already looking at a combined heat and power [cogeneration] project, and now we know where we’ll go for financing.” 

Constable welcomes the referrals. “By and large, NYCEEC is still a well-kept secret, and we don’t want to be,” she says. “We’re trying to get the word out to co-ops and condos that there’s a pot of money available to them.”