Bill Morris in Bricks & Bucks on January 12, 2022
Built a century ago, the six-story, 107-unit Kew Gardens Terrace co-op had fallen behind the times. While its brick and timber Tudor flourishes remained a selling point, the building’s infrastructure — most notably an oil-fired boiler — was woefully out of step with today’s emphasis on energy efficiency. To top it off, the roof was a goner.
“Everyone understood that the building was deteriorating,” says Derek Alexander, president of the five-member board, adding that the co-op’s monthly maintenance was among the lowest in the neighborhood. “There was a realization that if we didn’t start investing in the building, we would be screwing ourselves on our resale values.”
The board’s first step was to hire Stone Engineering & Architecture to produce a survey of the building’s systems, which became the basis for a long-term capital plan. It was two-pronged. Since the neighborhood does not have sufficient gas service for heating, the dual-fuel boiler is limited to burning oil, which means the board can control only the amount, not the type, of fuel that gets burned. The best way to do this, it was decided, was to rehab the two-pipe radiator system and install solar panels while replacing the roof. The board brought in nonprofit Solar One to determine if a solar array was feasible. The answer was yes. Now came the big challenge: convincing shareholders to spend $270,000 on the radiators and $380,000 — before incentives — on the solar panels.
“We were not going to ram good stuff down people’s throats,” Alexander says, noting that the board tried to educate shareholders through a flurry of mailings and informational meetings. “There was a lot of sticker shock initially because people don’t want to spend money. But they do understand reasons. Shareholder communication is the main reason we’ve had shareholder buy-in.”
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What the shareholders bought into was transformative. Based on the request for proposals prepared by Solar One, the board hired Best Energy Power to install an array of nearly 400 solar panels.
“We wanted to do two things at once,” Alexander says. “If we were going to replace the roof, we wanted to generate as much revenue as possible. By bolting the solar panels directly into the original oak roof deck, we could install more panels and we wouldn’t need ballast to anchor the panels. This was a once-in-a-lifetime opportunity.”
The board refinanced its underlying mortgage with National Cooperative Bank, but the key funding source was getting shareholders to agree to an approximately 50% maintenance increase — which brought the co-op slightly above the neighborhood average. To soften the sting, Solar One helped arrange for a smorgasbord of local, state and federal tax credits and grants. As a bonus, the two-pronged project will allow the co-op to avoid the Climate Mobilization Act’s first round of fines in 2025.
Now comes the big number: the co-op and all shareholders are enjoying, on average, a 40% reduction in their electricity bills. Some are paying nothing.
“That 40% is a great number,” says Noah Ginsburg, a director at Solar One. “That,” Alexander adds, “is huge.”
The co-op will attack the radiator-rehab project after the current heating season ends. The return-on-investment for that part of the project will be five to seven years, while the solar array will pay for itself in less than three years. Then it will be pure profit.
“I’m happy about the project’s environmental benefits,” Alexander says, “but I see this first as a matter of dollars and cents. In effect, we’ve found the best commercial tenant imaginable for our roof.”
PRINCIPAL PLAYERS — PROPERTY MANAGER: FirstService Residential. ENGINEER: Stone Engineering & Architecture. CONTRACTOR: Best Energy Power. LENDER: National Cooperative Bank. CONSULTANT: Solar One.
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