Requirements to Eliminate #6 Oil and Reduce Air Pollution

In 2011, New York City, as part of Mayor Bloomberg’s campaign to make the city healthier, adopted new heating oil requirements to reduce the dangerous air particles that contribute to respiratory and other illnesses, says Ira Meister, president and founder, Matthew Adam Properties.  While not as well publicized as the mayor’s campaign to eliminate super-sized sodas, the impact of the oil regulations is being felt significantly more by New York City co-ops and condos.

The law calls for the elimination of #6 oil – the dirtiest and most pollution causing oil – by 2015.  By then, buildings must convert to lighter #4 or #2 oil or natural gas.  Newly installed boilers would have to use the lighter #2 oil or natural gas or their equivalent and by 2030, #4 oil will be phased out.

“In recent years, even before the new city regulations, buildings were converting to natural gas, which is cleaner, requires less maintenance and in recent years has been significantly less costly then oil,” Meister says. Some buildings, depending on their configuration, have switched to dual-fuel options where either oil or gas can be used, depending on the price.


Many buildings have yet to switch to #4 or #2 oil and gas

“We have noticed, as we talk to boards of buildings we do not manage, that many properties have not started the process of complying with the new regulations,” Meister says.  Since July 1, 2012, buildings have had to convert to a cleaner fuel before their three-year certificate of operations expires.  All properties must be in compliance by January 1, 2015.

“Some buildings have been lax in rushing to the deadline,” Meister says.

The least expensive short-term solution is to convert to #4 oil, which will probably require a tank cleaning and some minor boiler changes.  Converting to natural gas can be much more costly and depends on whether the boiler is compatible with gas and the need, very often, to line the chimney as the thinner carbon monoxide produced by natural gas can seep through cracks in the lining. Another concern is whether the building is in a zone where Con Ed supplies natural gas.


The City has streamlined the permit process, allowing permits to be obtained in days instead of weeks

To encourage early compliance, the city streamlined the approval process by reducing the number of documents requires to be filed. Licensed boiler installers can submit one unified form to city agencies and certify that the fuel grade conversions were documented and the necessary work was properly performed without the need of more complex design submissions. This will reduce the estimated upgrading cost per boiler to $7,000 from $10,000. “Additionally,” Meister says, “the city streamlined the permitting process, allowing permits to be obtained in days instead of weeks.”

Complying Early with Local Law 87 Has Benefits

Buildings that comply with Local Law 87 prior to their assigned date can benefit from various incentives before funding runs out or regulations change.

The legislation requires large buildings to conduct an energy audit and a retro-commissioning study every 10 years.  The energy audit identifies areas where energy and cost savings could be implemented, though not mandated. The retro-commissioning requires “base building systems” to be at performance capabilities. If not, corrective measures are required.

Incentives for Completing both Retro-Commissioning and Audit

The heating requirements of the retro-commissioning require analysis be conducted during the heating season, which ends in March, negating the possibility of compliance this year. The law provides an incentive for buildings that complete both the retro-commissioning and the audit by the end of 2013.  If accomplished, the date for the next round of compliance is 10 years past the assigned date.

Reports are required based on the last digit of the tax block number.  For example, buildings with the last digit of 3 are required to file in 2013, with 6, in 2016.  The later a building is required to file, the more advantageous it is to comply in 2013.  Those buildings whose tax block number is 2, would be required to file in 2022.  But, if they comply in 2013, the next mandated compliance period would not be until 2032.

Buildings covered by the law are larger than 50,000 gross square feet or two or more buildings on the same tax lot that comprise more than 100,000 gross square feet as we’ll as two or more condominiums governed by the same board that together exceed 100,000 gross square feet.

But, there are significant benefits for buildings complying before the required timeframe, says Brian King, president and CEO, Ecological LLC, an environmental sustainability company.

Incentives are offered by NYSERDA (New York State Energy Research and Development Authority) and others to improve the energy use in buildings.  Changes to the incentives or a lack of funds may make them unavailable in future years.

Energy Auditing Can Save You Money Long Term

While changes are not mandated in the energy auditing component of Local law 87, buildings can save money long term by implementing some or all of the recommendations.  One incentive available involves financing upgrades to heating and cooling systems through the payment of utility bills.  For example, if NYSERDA lends a building $1 million for upgrading, which saves approximately $200,000 annually in energy costs, the building can pay this off in five years through an agreement with Con Ed on its utility bill.  The building will be charged the same amount as if it hadn’t upgraded (which would be an additional $200,000 annually over the actual expense) and in five years that would total the $1 million loan from NYSERDA.  After five years, the building is saving at least $200,000 in energy costs annually.  An option being considered is Pace Bonds, which would be similar to the NYSERDA loans and could be paid back through incentives in real estate taxes.

Several cities, including Philadelphia, Seattle, San Francisco and Washington, DC, have passed legislation similar to Local law 87, and about a dozen states are looking into various aspects of it.

Matthew Adam Properties is working with Ecological LLC to conduct the audits and retro-commissioning in buildings we manage and developing plans for compliance.  A key part of the audit is a cost benefit analysis.

Matthew Adam Properties is on the leading-edge of management firms in promoting energy conservation and “Green” technology.  We are one of the few, if only, management company in New York with a division headed by a LEED certified professional dedicated to sustainability and promoting “Green” initiatives. The goal is not only to reduce costs and gas emissions, but to create a safer and healthier environment for residents of properties we manage.

Local Law 87 is part of a package of four laws called the “Greener, Greater Buildings Plan,” enacted in 2009 to improve the energy and water efficiency of the city’s largest buildings.

Another of the laws, Local Law 84, requires annual benchmarking of energy and water systems with the city publishing the results. Local Law 85 requires that plans for renovations or upgrades demonstrate how the project complies with the Energy Code.  Local Law 88 requires upgrading to lighting systems and installations of electrical submetering in apartments. Buildings covered by this law have until January 1, 2025, to comply.

The goal of the package is to reduce greenhouse gas emissions by 30 percent by 2030.

Reducing Renovation Costs

             While multi-family buildings are looking to keep costs down as much as possible in this economic environment, there are certain items that need to be addressed.  One of these is the physical upkeep of the property, says Ira Meister, president and CEO of Matthew Adam Properties.  An important area is the public spaces, which immediately give a visitor insight into the attention to detail in the management of the property and how the residents view their homes.

Appearance of public areas can affect property value

“In fact,” Meister says, “the appearance of the public areas has an impact on the value of the building and the price of units.  Spaces that show their age might give the prospective buyer an indication that the mechanical systems may lack proper maintenance, which could lead to higher maintenance/common charges or a special assessment.

“The hallways at 1175 York Avenue needed to be refurbished and we wanted to add ‘Green’ elements to reduce costs and make the environment healthier for residents and staff,” Meister says.

He notes that in today’s economy with construction and renovation projects less plentiful contractors are more competitive and buildings can obtain lower bids than prior to the recession of 2008.

“While this helps to reduce costs, there are other ways to do so, and we diligently pursue these,” Meister says.  “One way is through the purchase of materials.”

For 1175 York Avenue, the asset manager at Matthew Adam researched the cost of materials such as carpeting, wall coverings and lighting fixtures and then aggressively bargained with the vendors to get a better price.

“We reduced the designer’s budgeted cost of materials by $150,000,” Meister says.  “The diligence of Martin Traub, the asset manager, paid off for the co-op.”

“Green” initiatives have long-term savings

In addition to installing new carpeting and wall covering, Matthew Adam had energy-saving, compact florescent lighting installed.  While the initial cost is higher for the lighting, long-term there is savings in the cost of the bulbs and energy.  Other “Green” initiatives are found in the adhesives and surface coatings.

“At Matthew Adam Properties we are in the forefront of bringing “Green” materials to the properties we manage,” Meister said.  “In every project we are involved with we see how we can bring our “Green” initiative to bear.”

A Geothermal Well in Manhattan

Matthew Adam Properties is committed to promoting and implementing “Green” systems wherever possible in properties it manages. In fact, points out President and CEO Ira Meister, the firm has its own Sustainability Department headed by a LED certified professional.

One of the more unusual projects for the firm was the installation of a geothermal well in a small, multi-family co-op it manages on East 93rd Street.

“Many are surprised to hear that we were working with engineers to install a geothermal well in Manhattan, and while it is unusual, it is not the first,” Meister says.  “It is estimated there are about 100 geothermal projects in the five boroughs, mainly in institutional buildings, such as the Times Square TKTS Booth, the Brooklyn Children’s Museum and the Queens Botanical Garden.”

In Manhattan, Meister points out, most building sites tend to be small, so the wells are vertical.  The building on East 93rd Street is in the Carnegie Hill section of Manhattan, which is higher than other areas, which facilitated the drilling.  The wells usually go to a depth of 1,500 feet. 

Use the Natural Energy of the Earth to Heat Your Buildings

Geothermal energy systems use the earth’s constant temperature to heat and cool buildings.  They are dug to the level where the earth maintains the water temperature at a constant level.  Actually, the systems are not wells, but a series of pipes.  Here is how it works.  In winter, the warm water is drawn from the earth through a series of pipes using the natural warmth of the water to deliver it to a heat pump inside the property, which transfers it to the air circulated though interior ductwork to heat the interior.

In summer, Meister says, the process is reversed and heat is extracted from the air inside the building and transferred into the earth.  The system also uses some of the heat generated to provide hot water.

Geothermal Systems are More Efficient Then Conventional Heating

The Environmental Protection Agency estimates that geothermal systems are 75 percent more efficient than oil furnaces, 48 percent more efficient that gas furnaces and 40 percent better than air source heat pumps.

The expense varies depending on the size of the property and the extent of the drilling, but it is estimated that costs are recovered in from two to eight years.  In addition to the energy savings, tax credits may be available as well as financial assistance from NYSERDA (the New York State Energy Research and Development Authority), which promotes the use of alternative energy technologies.

Other positive factors, Meister points out, are lower maintenance costs since the systems do not burn fossil fuels, which require cleaning and upkeep of the fuel and gas systems.  In addition, the pipes in the system are warranted for 50 years and the above ground equipment of 25 to 30 years, about twice the life expectancy of a furnace or other conventional systems.