Bernhard Instrumental in First C-PACE Project in New York City

By: Ryan Hoff, PE, CEM, Project Manager at Bernhard

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When we think of improvements, we often think of “bigger, better, faster, stronger.” Instead, perhaps we should be determining when less actually becomes more. Bernhard and Petros Partners recently demonstrated that less is more when it comes to carbon emissions and less traditional loan financing.

Commercial Property Assessed Clean Energy (C-PACE) financing is at the core of this new philosophy. C-PACE is a program created to give building owners a path to finance projects that increase building efficiency (and therefore reduce energy use and carbon emissions and create more sustainable buildings). This program is unique because the financing can fund up to 100% of all project costs that contribute to energy use improvement and it’s now available in a majority of states.

Although paramount to the process, financing is just one part of the deal. C-PACE needs an energy model of the project’s baseline, design building and an evaluation of the project budget in order to move forward. That’s where Bernhard’s team of experts come into the picture. Bernhard has been providing these crucial energy audits for C-PACE financing since 2017 and we work hard to fully understand the differences of each state’s C-PACE program to help determine the maximum amount of financing for which a project is eligible.

To date, 38 states and the District of Columbia have passed legislation to allow the use of C-PACE financing. For most states, the savings over the term of the loan must exceed the total loan principal. The recent, historic project in New York will do just that. This project at 111 Wall Street will retrofit the 900,000-sqare-foot tower for efficiency, resiliency, and local law compliance. Not only is this the first C-PACE project in New York City, but it is also the largest C-PACE loan in United States history. It is estimated to save $3.0 million in annual energy costs and avoid $850,000 in annual Local Law 97 fines starting in 2030.

According to Real Estate Weekly, by 2030 the program will create 689 green jobs and reduce 447,600 metric tons of CO2e from our atmosphere, an equivalent of taking 97,344 passenger cars off the road for a year.

For this groundbreaking project, Petros Partners is the financial group providing the loan and Bernhard provided the energy audit. The building was flooded during Hurricane Sandy in 2012 and ownership has struggled to operate at anything exceeding 50% occupancy. The building required a major renovation and a final decision was made to creatively combine C-PACE financing with standard loans to complete the work.

Energy improvements included:

Replacing all existing lighting with LED lighting
Redesigning and replacing a majority of the existing HVAC system with modern energy efficient systems
Replacing all existing plumbing fixtures with new low-flow fixtures
Replacing all existing elevators with new high-efficient elevator system
Abatement and removal of hazardous asbestos containing material

Along with the estimated energy and operation costs, the project is estimated to decrease carbon emissions by 42%. The energy conservation project is being paired with an architectural renovation that anticipates enabling the building to reach full occupancy again. The aging infrastructure, high energy utility rates, and Local Law 97 all make New York City a prime market for additional C-PACE projects, and the 111 Wall Street project is a clear example of how successful they can be.

This is just one example demonstrating how Bernhard can help building owners pursue C-PACE. Our team of experts have completed C-PACE energy audits in 13 different states and have identified more than $830 million of C-PACE financing for our clients. Our projects have ranged from $1 million to $89 million and have included new construction or renovations in buildings such as:

Offices
Apartments
Hotels
Sports complexes
Warehouses
Hospitals

If a project is ongoing, our experts are able to partner with a financial group and identify the amount of C-PACE for which the project is eligible. If determining energy savings opportunities or the replacement of aging infrastructure is the goal, Bernhard has a full mechanical, electrical and plumbing (MEP) design team with an emphasis on sustainability, which works to:

Identify the energy conservation measures
Make a business case for energy efficiency
Design the project
Provide PACE energy audit
Provide commissioning
Provide measurement and verification

We have specialized expertise in energy audits for C-PACE financed projects and we know how to help you maximize your budget, leverage savings and be part of creating a more sustainable future. Learn more about our commercial energy audit services here.

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