A symphony of energy upgrades creates harmony for this midcentury co-op

Over the past three years, Amalia Cuadra, the senior director of engi­neering at EN-POWER GROUP, has been putting together an orchestra of sorts. Rather than violins and cellos and flutes, her instru­ments are heat pumps, effi­cient boilers and HVAC equip­ment. She’s used them all to build a harmony of energy effi­ciency at the Victoria, a 1960s white brick co-op building with about 500 units in the heart of Union Square in lower Manhattan.

“I’ve seen the chillers operate, I’ve seen the boilers operate, and now every­thing is going to be working together as an orchestra,” she said.

Cuadra’s symphony is now almost perfor­mance-ready. Largely hidden from view in the building’s mechan­ical room on the first floor are new modular water-source heat pumps. They stand stacked and ready to func­tion as chillers, providing cooling for the building as temper­a­tures start to rise in the coming summer months. They’re also connected to another system across the room — hot water tanks store domestic hot water for resi­dent use. They will be warmed using heat sucked out of hot apart­ments in the summer by the cooling system. The heat pumps will still see a bit of action during the fall shoulder season, when they switch to heating mode to warm the building. And then as winter takes hold, new, effi­cient gas-fired hot water boilers will take over to heat homes and domestic hot water.

With a mix of elec­tricity and natural gas-powered compo­nents, the hybrid elec­tri­fi­ca­tion solu­tion was the Victoria’s answer to compli­ance with New York City’s Local Law 97 (LL97), which mandates cutting carbon emis­sions over time. When the board found out in 2019 that it was subject to regu­la­tion, it had already been plan­ning ahead — plumbing infra­struc­ture badly needed to be replaced along with a host of other capital improve­ments, so members were prepared to fund the upgrades when they refi­nanced the building’s mort­gage in 2021. 

“We intend to make smart deci­sions for our share­holders,” said Corinne Arnold, pres­i­dent of the Victoria’s board. ​“It’s not all about moving to elec­tric, it’s about making a deci­sion based on a cost benefit analysis with all the local laws and plan­e­tary goals.”

Arnold, who became board pres­i­dent in 2019 and is currently running for the New York State Assembly, views these improve­ments as neces­sary to keep the building in both good finan­cial and infra­struc­tural health for decades to come. The board’s proac­tivity, along with a commu­nica­tive manage­ment team and knowl­edge­able engi­neers, has contributed to the decar­boniza­tion efforts that reduce their annual energy costs. And more impor­tantly, it will save on LL97 penal­ties to the tune of $300,000 per year after 2030 fines would have kicked in.

Hybrid harmony

With penal­ties on the horizon, common sense could point a blanket solu­tion of fully elec­tri­fying a building’s HVAC systems. But, Cuadra points out, full elec­tri­fi­ca­tion isn’t neces­sarily feasible for the Victoria, as with the majority of build­ings EN-POWER works with. For such build­ings with a central air system that delivers heating and cooling via fan coil units in each apart­ment, going fully elec­tric doesn’t typi­cally make economic sense. It can be wiser to decen­tralize these systems where possible, installing tech­nology like package terminal heat pumps in apart­ments to both heat and cool the space.

After meeting with different engi­neering firms, The Victoria board decided EN-POWER GROUP would fit their needs best. Cuadra and the board ran through options and decided hybrid elec­tri­fi­ca­tion would be the way to go. They decided as a group to remove the steam absorp­tion chillers, which previ­ously provided cooling, and replaced them with the modular heat pumps. The new pumps are neatly stacked in the mechan­ical room so the cooling system now runs completely on elec­tricity. The heat pumps will also be able to provide heat in milder chilly temper­a­tures, reducing the load on the natural gas-fired boilers. 

Even though the building is still using gas, the new boilers are lightyears ahead of the previous iter­a­tion in terms of energy effi­ciency. The building previ­ously used steam for heating and domestic hot water, as well as for cooling, making all the systems inef­fi­cient and expen­sive. Now, the boilers make hot water, which heats the coils in each fan coil unit; those in turn heat the air as the fan warms apart­ments in the winter — a delivery system more effi­cient than using steam.

The new boilers also make hot water to use for domestic hot water — but not all the time. It’s a process shared with the heat pumps during part of the year, thanks to a heat recovery system Cuadra imple­mented into the cooling system while the heat pumps operate in chilling mode. As chilled condenser water condi­tions the air in a fan coil unit and extracts the heat, that now-heated water is circu­lated to warm up the domestic hot water before being sent to the cooling tower — which won’t have to work as hard — to repeat the cycle. As long as systems work how they should, the Victoria shouldn’t have to use the boilers for hot water at all during the summer months when the chilling and heat recovery systems are active.

“We can turn off a piece of equip­ment and we’re making the cooling tower more effi­cient,” Cuadra said. ​“It’s really a win-win.”

2026 will be the first year that all these new systems are oper­a­tional at the same time. The final piece of the puzzle is the building manage­ment system (BMS), which is being installed presently, with a plan for it to be final­ized in June. This comput­er­ized control system will keep tabs on the mechan­i­cals throughout the building. It will allow both Cuadra and the manage­ment team to take a closer look at where and how much energy is being used across the HVAC system, producing a trove of data to see how well they’re working.

“That’s really the moth­er­board, it’s the brains behind every­thing,” Cuadra said.

Financial forte and human capital

The Victoria’s mort­gage refi­nance in 2021 coin­cided with a historic drop in interest rates during the pandemic. It secured a $20 million interest-only loan at 2.38 percent with which it has been able to get good returns on invest­ments. About $5 million has gone towards decar­boniza­tion work, with the remainder funding other projects including essen­tial plumbing upgrades and even a new gym. But the board is also thinking ahead to when the mort­gage payment will come due in a few years. To pay it off, the board plans to use the savings accrued from increased energy effi­ciency and only paying interest on their current loan.

“Now that all of these upgrades have reduced our energy and finan­cial liability, we should see more cost savings, and we’re taking them and putting them towards mort­gage repay­ment,” Arnold said. ​“We are just trying [to think] like five steps ahead.”

The work has qual­i­fied for a little over $1 million in incen­tives and rebates, mostly from Con Edison. The Multifamily Energy Efficiency and Building Electrification Program provides incen­tives of up to 70 percent of the cost of energy effi­ciency projects and up to 50 percent of the cost of building elec­tri­fi­ca­tion projects, so a majority of the projects qual­i­fied. However, the amount can seem a bit like a drop in the bucket compared to what the building has spent to do the work. Arnold would like to see the city step up in more ways to help share some of these costs.

“It feels like the city should be partic­i­pating more if they’re going to increase taxes and at the same time create all of these expenses,” she said. ​“Something has to meet in the middle.”

The Victoria is now set up to pay nothing in LL97 fines through at least 2040, according to EN-POWER GROUP’s esti­mates. In addi­tion to this, these measures will help decrease the building’s annual energy costs by about $288,000 annually.

While the finan­cial capital made these projects possible, the human capital within the building has been instru­mental in making them a reality. Arnold works closely with the manage­ment team, which includes a resi­dent manager, building manager and on-site manager Angelina Curanovic, to commu­ni­cate directly with share­holders about what’s going on, why it’s happening and what they can expect. The HVAC improve­ments haven’t dras­ti­cally impacted resi­dents’ day-to-day expe­ri­ences of their apart­ments — they can still adjust temper­a­tures to their comfort as before. But with multiple projects happening behind the curtain, straight­for­ward and consis­tent commu­ni­ca­tion has made it easier for the board and manage­ment to present a united front and avoiding different answers to the same ques­tions from share­holders about all the changes happening in the building.

“The more infor­ma­tion you give them, the better,” said Curanovic, the on-site manager at the Victoria. ​“In my opinion, the resi­dents aren’t how they used to be — they have Google and ChatGPT avail­able to them. They’re becoming more knowl­edge­able about what to ask, and it’s better to give them all the infor­ma­tion up front rather than hold back.”

The depth of knowl­edge among the board and share­holders has also moti­vated people to be more involved throughout the process, according to Arnold. The board’s secre­tary, Robert Von Ancken, has a back­ground in real estate as an expert appraiser, so he knows the value of getting this work done. He’s been part of efforts to educate share­holders about the impact of the upgrades with annual reports. Those reports will soon include hard data — once the BMS is in place — to illus­trate for resi­dents how all the indi­vidual pieces contribute to that symphony of effi­ciency that will continue to play for years to come.

“I want to upgrade the building to the point where it’s certainly going to enhance the overall value of the assets,” Von Ancken said. ​“You may not be able to see it because it’s all in the back room, but it makes a huge differ­ence when you’re selling an apart­ment and you’re talking about the upgrades that you’ve put into the building; they’re not going to have these big expenses going forward.”