This Co-op Board Is Set to Comply with the Climate Mobilization Act

This co-op board was ahead of the curve before the curve even existed. Years ago, the seven-member board at the 13-story, 172-unit, prewar building at 111 Fourth Ave. near Union Square started talking about ways to improve the building’s long-term energy efficiency.

“A lot of co-op boards are reactive,” says Eric Einstein, the co-op board’s president. “I think long-term. So we started looking at all the building’s systems – facades, elevators, boilers, roof, windows – and how long they would last. It was a slow process to get momentum.”

The apartments also had chronic heat imbalances, thanks to an aging system that underwent two seasonal switchovers every year and was in either heating or cooling mode, never both. So twice a year, the residents were at war over whether the building should be in heating or cooling mode. With the two combined boilers and absorption chillers nearing the end of their lives, the board started talking about alternatives, including geothermal and solar energy. In 2017, the board turned to Ecosystem Energy Services, an engineering and construction company, to explore these and other options. Ecosystem’s engineers quickly ruled out geothermal as too costly and solar as impractical because of roof size and rooftop shadows.

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“We went on a fact-finding mission to find out what their needs and goals were,” says Jaime Pereira, Ecosystem’s senior business development manager. “We developed a roadmap – a preliminary assessment – that gave them three options. We brainstormed, and the client guided us to the project that was the most attractive.”

That project entails removing the massive cooling tower from the roof and installing nine air-source heat pumps that are powered by electricity – until the outdoor temperature dips below 40 degrees, when a natural-gas boiler will provide supplemental power. The ideal solution is to have all building systems run on electricity as the electric grid gets greener and fossil fuels are phased out. But this “hybrid” system reduced the number of heat pumps by two-thirds while making maximum use of limited roof space. Rather than send the proposed system out for bids, the board decided to have Ecosystem install it.

“We’re pretty sure our guarantees were a deciding factor,” Pereira says. “Our projects have a fixed cost, so our model removes the risk of paying for change orders. We also can guarantee a project’s sum energy savings, incentives, return on investment and construction schedule. If surprises come up, we eat that cost. To avoid that, we do a lot of due diligence up front.”

While this project was in the works, the city passed the sweeping Climate Mobilization Act, which will begin imposing fines in 2024 on buildings that fail to bring their carbon emissions under established caps. The Fourth Avenue co-op was already way ahead of this curve. Even though the hybrid heating and cooling system will rely on a new natural gas-fired boiler on the coldest days, the cumulative reductions of carbon emissions will make the building immune to fines until at least 2050. And residents will be able to control the temperature inside their apartments.

As the multi-million-dollar project begins, shareholders are relieved to know that the cost will be covered by the co-op’s mortgage refinancing early this year plus the $3.5 million reserve fund, which has been fed by incremental yearly maintenance increases that led to annual budget surpluses. The project will not require an assessment or a sharp maintenance increase.

“It’s going to be more expensive than a 10-year fix,” Einstein says, “but based on the possible fines, this made sense. It also becomes a selling point for people buying into the building. It goes back to our philosophy of doing preventive maintenance and thinking ahead. This way, we’re setting ourselves up for a cheaper, more energy-efficient future. A better future.

PRINCIPAL PLAYERS – ENGINEER/CONTRACTOR: Ecosystem Energy Services. PROPERTY MANAGER: Akam.