Big projects, careful planning. I manage a building on Central Park West that implemented a large number of improvements, all centered around sustainability. The entire program was in the $2 to $3 million range, and we raised the funds using two methods. First, we refinanced the co-op’s underlying mortgage and borrowed additional funding. Second, the co-op imposed a five-year assessment and had shareholders pay one month’s extra maintenance each year. In another building, a condo, we’re spending around $1.75 million to install new boilers, a cogen system and relining the chimney. Here, the funding is coming from a five-year assessment and Con Ed financing.
Project evangelists. I think the apartment owners in both cases have been very, very interested in reducing their carbon footprint and in making their buildings more sustainable. And clearly in avoiding fines, which go into effect in 2024. I think it’s important to realize that technology continually changes. If you look at cogen systems that were put in 25 years ago, there are very few still operating. There are people who believe that cogen units will only work for 10 years, but many will last for 15 to 20 years. And the payback on those units are usually eight to 10 years. So you’re getting additional money down the road that comes back to the building in savings.
Investing for sustainability. It’s interesting to me that everyone I talk to realizes that the climate mobilization fines exist, and they’re worried about them. But there are some who believe that the city will kick the can down the road, as it has so often done in the past. If you look at the city budget, though, these fines are already accounted for. There’s a high likelihood that the city will not change the dates, and the fines will not disappear. And those buildings that don’t take immediate action are going to be caught with fines and penalties, which is a waste of money.