A new program to promote energy efficiency in New York City buildings has recently launched, giving building owners and tenants something to look forward to.
The program — the New York City Energy Efficiency Corporation (NYCEEC) — was designed by the city’s Office of Long Term Planning and Sustainability in collaboration with the Center for Market Innovation (CMI) and Deutsche Bank’s Community Development Financing group. And Susan Leeds, who has extensive capital markets experience and formerly worked with CMI, has been named its founding chief executive officer.
The corporation, an independent nonprofit, is funded with $37.5 million in seed money from the federal stimulus package. This, along with philanthropic contributions and private sector capital, will be used to provide up-front capital in a variety of forms for energy retrofits in commercial buildings and low-income housing. NYCEEC will be able to provide a range of credit enhancements and innovative capital structures in order to make financing of energy efficiency readily available, and at attractive cost to borrowers. The corporation will also serve as an information center, providing know-how on carrying out retrofits and navigating existing financing and technical programs. And, it will work to increase demand from building owners for retrofits to create a large-scale retrofit industry, and the jobs that come with it.
Although there is a cottage industry in energy efficiency retrofits and some major retrofits have been done on high-profile buildings, like the Empire State Building, efficiency measures have not been taken on the enormous scale required to make the significant reductions they could in energy use and carbon emissions. New York City buildings still use 80 percent of the city’s energy and produce 75 percent of its greenhouse gases.
The retrofit industry has not grown to its potential for many reasons, ranging from the relatively low cost of energy to the unavailability of financing in small sizes. But, an increasing number of stakeholders are convinced that energy efficiency will be one of the determinants of success in the evolving real estate market.
The public/private partnership hopes to use the $37.5 million in stimulus money to obtain as much as ten times that amount from philanthropic and private investors to fund its activities. At that level of funding, it will have the muscle to make a real difference in the New York region, and if it is replicated by other cities, nationwide.