Governor Hochul Announces $20 Million Awarded to Advance Climate-friendly High-rise Building Retrofits in New York State
Unprecedented Emissions Reduction Retrofit Projects Will Serve as Models for Urban Sustainability in Cold Climates
January 12, 2022
Governor Kathy Hochul today announced that $20 million has been awarded to pioneer climate friendly retrofit solutions for existing high-rise buildings. Pending contract finalization, Empire State Realty Trust, Hines, L+M Development Partners and Omni New York are now eligible to receive up to $5 million each to advance tall building retrofit projects that reduce harmful emissions and serve as models of urban sustainability for cold climates. First announced as part of the 2022 State of the State, these awards will accelerate New York's progress toward the Climate Leadership and Community Protection Act goal of reducing greenhouse gas emissions 85 percent by 2050.
"As we pursue our nation-leading climate goals, it's imperative we explore innovative ways to transform our buildings into models for a sustainable urban future," Governor Hochul said. "The Empire Building Challenge brings the combined ingenuity of New York's public and private sectors to bear in the existential fight against climate change. As we move forward, my administration will continue pursuing sustained efforts to tackle this challenge and set the pace for the nation-wide clean-energy transition that is required."
These awards showcase the first four retrofit projects that have emerged from the Empire Building Challenge (Challenge), which is administered by the New York State Energy Research and Development Authority (NYSERDA). Through a competitive solicitation in which Empire Building Challenge partners worked with engineering and innovation experts, the four real estate partners were selected to implement a replicable low-carbon retrofit proposal for addressing one or more barriers to decarbonizing their building(s). Collectively, these partners own more than 37 million square feet of New York real estate. The projects, which include nearly 600 units of affordable housing, are expected to lead to solutions for increased comfort, sustainability, and energy performance of the state's existing high-rise buildings with the goal of carbon neutrality, which means deeply reducing carbon dioxide emissions and balancing any remaining carbon dioxide emissions released into the atmosphere with an equivalent amount being removed.
The Challenge supports the State's newly adopted goal to achieve two million climate friendly homes by 2030, including one million electric and efficient, and up to one million electrification ready households. The $20 million invested in these projects will also unlock over $100 million in private investment by attracting the global market of solution providers to bring innovation and business investment to New York State. Private investment will stimulate demand for the climate friendly retrofits these real estate leaders are pioneering and kick-start a sector that will foster tens of thousands of good paying jobs and local economic development.
NYSERDA President and CEO Doreen M. Harris said, "NYSERDA is excited to support the transformative work of the first round of Empire Building Challenge projects, which will advance the State's overall goal of achieving carbon-neutrality by mid-century. These partnerships between technology innovators and the state's real estate leaders will advance scalable decarbonization solutions that reduce emissions from high-rise buildings while growing the clean energy economy."
The four projects include:
Empire State Realty Trust - Empire State Building:
Empire State Realty Trust (ESRT) is a publicly traded real estate investment trust, with over 10 million square feet of office and retail space in the metro New York area. ESRT has committed to achieving carbon neutrality across their 14-commercial office building portfolio by 2035, leading with net-zero carbon emissions for the Empire State Building by 2030. ESRT will focus on energy recovery, steam reduction, strategic pilots with water and air source heat pumps, and converting to air source domestic hot water. NYSERDA's investment in this project will provide "proof of concept" to implement pilots for several key projects that are planned for replication throughout the remainder of the Empire State Building, as well as the rest of the Empire State Realty Trust portfolio.
Hudson Square Partnership, a joint venture with Hines, Trinity Church Wall Street and Norges Bank Investment Management - 345 Hudson Street:
Empire Building Challenge partner Hines brought together a consortium of solution providers and engineering experts that tackled the challenge of achieving carbon neutrality by applying a holistic approach to complete decarbonization of a high-rise commercial office building through floor-by-floor retrofits. The floor-by-floor and building level approach entails replacement of the fossil-fuel heating system with water source heat pump system, heat recovery, a highly efficient ventilation system, and thermal storage. The comprehensive retrofit of 345 Hudson Street takes advantage of tenant turnover now through 2032 as an opportunity to upgrade building infrastructure to new, carbon-free, energy cost-saving technology to completely decarbonize the 978,277 square-foot building.
L+M Development Partners - The Heritage Buildings:
L&M is a pioneer in mixed-income, market-rate and mixed-use developments that revive and transform neighborhoods. Since its inception, L+M has acquired, built or preserved nearly 35,000 residential units and over 1.2 million square feet of retail and community facility space, representing approximately $10 billion in development and investment. The company has committed to carbon neutrality by 2030 at The Heritage, including a 54 percent reduction in site energy use intensity. They will achieve this through façade upgrades of three low-to-moderate income multifamily buildings with 600 units located in an East Harlem disadvantaged community (including two high-rise 34-story buildings). At the 11-story 1660 Madison site, L+M is planning to achieve carbon neutrality through packaged terminal heat pumps, domestic hot water electrification, ventilation upgrades, and dryer electrification.
Omni New York - Whitney Young Manor:
Omni is a privately held, vertically integrated company comprised of six operating businesses that has developed a reputation as one of New York's most trusted affordable housing developers. Founded in 2004, Omni has acquired, rehabilitated or built more than 17,000 apartments nationwide and currently owns more than 10,000 units in New York State. The company has committed to retrofitting Whitney Young Manor - an affordable multifamily property located in Yonkers comprised of 195 apartments across two buildings located in a disadvantaged community - to be carbon neutral by 2035. The comprehensive retrofit includes major building envelope over-cladding that will dramatically improve the buildings' insulation and reduce heating and cooling loads, along with two new centralized heat pump systems to serve all heating, cooling and domestic hot water needs. As part of a major recapitalization, the property will undergo a $22 million renovation, with almost $12 million allocated to building energy consumption and decarbonization. These upgrades will reduce the property's site energy intensity by nearly 50 percent, and should deliver full carbon neutrality by 2035.
Assemblymember Michael Cusick said, "Reducing buildings emissions is crucial for achieving the emissions reduction goals of the CLCPA. Climate friendly high-rise buildings are the way of the future. Retrofitting existing high-rise buildings to be more environmentally friendly and to reduce emissions is a necessary step to meeting our emissions reduction goals, especially in our major cities. The awards announced today will serve as an example for making our buildings cleaner and greener as we go forward."
State Senator Kevin Parker said, "As the Chairman of the Senate Committee on Energy and Telecommunications, I commend Governor Hochul for creating this incentive to ensure developers have the resources they need to build climate friendly living throughout our state. I applaud the companies who are participating for taking the necessary steps to ensure that we meet our state's energy goals."
Chairman, President, and CEO at Empire State Realty Trust Anthony E. Malkin said, "The Empire State Building is as innovative today as it was the day it was built and serves as the international beacon of the possibilities within the built environment to prove the business case to reduce carbon emissions. This important partnership between New York State and commercial real estate leaders creates local jobs, drives technological innovation, improves our communities, and stands as an example for climate-friendly retrofits."
Vice President of L+M Workforce Housing Fund Joseph Weishaar said, "The funding from NYSERDA's Empire Building Challenge program will help L+M pilot and scale new retrofit technologies that will drastically reduce or eliminate carbon emissions in our affordable housing portfolio. Large-scale investment in such technology is crucial to addressing the challenge of climate change."
Managing Director of Omni New York LLC Eugene Schneur said, "We are thrilled to partner with NYSERDA on this innovative energy retrofit program at Whitney Young Manor. The Empire Building Challenge will enable Omni to continue to pioneer decarbonization strategies that are crucial for reducing emissions and combatting climate change. We look forward to working with NYSERDA to make Whitney Young Manor a model demonstration project that can be replicated throughout New York and beyond."
Managing Director of Asset Management at Trinity Church Wall Street Sujohn Sarkar said, "The carbon reduction and energy efficiency strategy at 345 Hudson, one of our flagship properties, exemplifies Hudson Square Properties' stewardship and commitment to the long-term strength of our neighborhood. 345 Hudson will provide a roadmap for sustainable practices throughout our portfolio and beyond. Stemming from the partnership between Trinity, Norges Investment Management and Hines, with support at the city and state levels, we endeavor to leverage our leadership in sustainability to strengthen our communities."
NYSERDA evaluated proposals based on a project's scalability and feasibility in addressing the major challenges of decarbonizing high-rise buildings, as well as the building owner's willingness and ability to implement solutions across their portfolio of buildings. The remainder of the Empire Building Challenge funding will be made available in 2022 and 2023 for future solution development and implementation to decarbonize high-rise buildings, which could, for example, include replacement of fossil-fuel heating and cooling systems with electric and energy efficient technologies.
To inform the market and stimulate dialogue between real estate, engineering, and technology providers, NYSERDA plans to launch an event series on February 3, "The High Rise, Low Carbon Series" with the Building Energy Exchange (BE-EX), to highlight the four projects awarded today, and explore the decarbonization solutions identified with their solution providers to provide important insights to the broader market. To register for the first webinar, please visit the event link.
High-rise buildings, particularly in New York City, face unique challenges when it comes to implementing carbon emissions reduction measures. These challenges can range from tenant disruption, upfront costs for renovations, and the sheer size and scale of high-rise buildings. The Empire Building Challenge seeks to address these and other market barriers by addressing crucial clean energy innovation gaps, through collaboration with the private sector, to decarbonize high-rise buildings and provide a blueprint so successful strategies can be implemented across many more buildings. As part of the Empire Building Challenge, NYSERDA launched the Empire Technology Prize in November last year, which will support innovation and product development in the high-rise building decarbonization space to address market gaps.
Buildings are one of the largest sources of greenhouse gas emissions in New York State and integrating energy efficiency and electrification measures in existing buildings will reduce carbon pollution and help achieve more sustainable, healthy, and comfortable buildings. Through NYSERDA and utility programs, over $6.8 billion is being invested to decarbonize buildings across the State. In addition to the carbon benefits, these projects will also help the State achieve its energy efficiency target to reduce on-site energy consumption by 185 TBtu by 2025, the equivalent of powering 1.8 million homes.
The Empire Building Challenge, announced in September 2020, created a public-private partnership with 10 leading real estate developers who collectively control over 130 million square feet of real estate in New York State, including more than 250 buildings that contain affordable housing. These 10 partners have pledged to achieve carbon neutrality in one or more of their buildings and in more than 700 units of affordable housing collectively with the potential to scale across their portfolios to more than 25,000 units of affordable housing. A full list of the Empire Building Challenge Partners and more information about the real estate in which they have committed to achieving carbon neutrality can be found at http://nyserda.ny.gov/EBC-Partners.
Building owners, solution providers, manufacturers and other interested stakeholders are encouraged to visit http://nyserda.ny.gov/EBC for additional details on the Empire Building Challenge and to learn how to partner with NYSERDA, reduce carbon emissions, and get involved in the clean energy economy.
This program is funded through NYSERDA's $6 billion Clean Energy Fund.
New York State's Nation-Leading Climate Act
New York State's nation-leading climate agenda is the most aggressive climate and clean energy initiative in the nation, calling for an orderly and just transition to clean energy that creates jobs and continues fostering a green economy as New York State recovers from the COVID-19 pandemic. Enshrined into law through the Climate Leadership and Community Protection Act, New York is on a path to achieve its mandated goal of a zero-emission electricity sector by 2040, including 70 percent renewable energy generation by 2030, and to reach economy wide carbon neutrality. It builds on New York's unprecedented investments to ramp-up clean energy including over $33 billion in 102 large-scale renewable and transmission projects across the state, $6.8 billion to reduce buildings emissions, $1.8 billion to scale up solar, more than $1 billion for clean transportation initiatives, and over $1.6 billion in NY Green Bank commitments. Combined, these investments are supporting nearly 158,000 jobs in New York's clean energy sector in 2020, a 2,100 percent growth in the distributed solar sector since 2011 and a commitment to develop 9,000 megawatts of offshore wind by 2035. Under the Climate Act, New York will build on this progress and reduce greenhouse gas emissions by 85 percent from 1990 levels by 2050, while ensuring that at least 35 percent with a goal of 40 percent of the benefits of clean energy investments are directed to disadvantaged communities, and advance progress towards the state's 2025 energy efficiency target of reducing on-site energy consumption by 185 trillion BTUs of end-use energy savings.
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