Case Study

The Heritage

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Fully occupied mixed-income property pursues facade retrofit

The Heritage, preserved by L+M, showcases a multifamily retrofit project that eliminates fossil fuel usage, improves resident comfort, and minimizes occupant disruption through the use of innovative retrofit methods, materials, and technology. The 34-story, three-building complex , which was built in 1974 next to Central Park in New York City, contains 600 housing units, of which 402 are affordable, with 134 set aside for the formerly unhoused. 

The Heritage is an affordable housing development with poor insulation and high utility costs due to outdated heating and water heating systems. This project dramatically cuts heating and cooling needs thanks to major building envelope improvements. Packaged terminal heat pumps for heating and cooling will reduce energy use and costs from the current electric resistance heating system. The retrofit project also pilot-tests state of the art heat pump water heaters and electric laundry dryers.

L+M is a pioneer in mixed-income, market-rate, and mixed-use developments that revive and transform neighborhoods. The company has acquired, built, or preserved nearly 46,000 residential units and more than 1.2 million square feet of retail and community facility space, representing approximately $16.5 billion in development and investment.

Towers of the Heritage property

Project Status

Planning

Under Construction

Monitoring & Evaluation

Investment

19 million

to accomplish Strategic Decarbonization retrofits. 

Testimonial

“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.” 

Joseph Weishaar

Senior Vice President

L+M Fund Management

Scale

The package of measures offers a pathway to decarbonization for LMI properties across New York State.

The Heritage rendering
workers at hertiage
Testimonial

“We integrated a newer prefabricated system with EIFS to significantly upgrade the performance and aesthetics of The Heritage, while minimizing project costs.”

David Ash

Director of Construction

L+M Development Partners

A baseline assessment is key to understanding current systems and performance, then identifying conditions, requirements or events that will trigger a decarbonization effort. The assessment looks across technical systems, asset strategy and sectoral factors.

Building System Conditions
  • Equipment nearing end-of-life
  • Comfort improvements
  • Indoor air quality improvefments
  • Facade maintenance
  • Efficiency improvements
Asset Conditions
  • Repositioning
  • Recapitalization
  • Capital event cycles
  • Carbon emissions limits
  • Owner sustainability goals
Market Conditions
  • Technology improves
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L+M takes advantage of the recapitalization cycle of The Heritage to upgrade its infrastructure and include decarbonization measures to meet its climate goals while improving tenant comfort. The property’s age and outdated design made it an ideal candidate for a deep carbon reduction project, focused on envelope improvements, high efficiency heat pumps, and an integrated design approach to minimize tenant disruption. One element of this project is improving views through larger windows. 

Effective engineering integrates measures for reducing energy load, recovering wasted heat, and moving towards partial or full electrification. This increases operational efficiencies, optimizes energy peaks, and avoids oversized heating systems, thus alleviating space constraints and minimizing the cost of retrofits to decarbonize the building over time.

Existing Conditions

This diagram illustrates the building prior to the initiation of Strategic Decarbonization planning by the owners and their teams.

Click through the measures under “Building After” to understand the components of the building’s energy transition.

Sequence of Measures

2022

2023

2024

Building System Affected

  • heating
  • cooling
  • ventilation
The Heritage Before Illustration
The Heritage After Illustration
Install VRF Heat Pump Unit for Lobby and Common Area
EIFS overclad from Sto Corporation
EIFS overclad from Sto Corporation
Unitized prefabricated exterior wall (Dextall), windows, roof
Decentralized IceAir PTHP (no backup resistance heat), integrated with Dextall wall panels (electrical upgrades + condensate drainage)
Adding ERV to rooftop fresh air unit
CO2 ASHP for DHW
CO2 ASHP for DHW
CO2 ASHP for DHW
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Reduce Energy Load 

Re-cladding of the 3 buildings is estimated to avoid $10 million of LL11 compliance costs between now and 2046. One portion of the project is using prefabricated external wall panels from Dextall to minimize installation time and therefore tenant disruption.

  • Envelope Improvement: Install exterior wall and roof insulation (EIFS overclad and panelized wall system with integrated high performance windows, dependent on location, and commercial window replacement)
  • Submetering 

Recover Wasted Heat

  • Energy Recovery Ventilator (ERV): install ERV unit into exhaust risers to recapture exhaust heat and preheat fresh air

Partial Electrification

Replacing apartment electric resistance heating baseboards and sleeve air conditioning units with modular Packaged Terminal Heat Pumps (PTHP), and installing CO2-based heat pumps for Domestic Hot Water (DHW) production will significantly increase system efficiency and reduce energy use

and costs. The PTHP installation work is coordinated with the panelized exterior wall system to integrate necessary electrical upgrades and condensate lines and minimize installation time as a result.

  • Heat Pumps: Replace electric baseboard heating with Package Terminal Heat Pumps (PTHPs) for apartments and install VRF system for common areas
  • Domestic Hot Water: CO 2 Air Source Heat Pump (ASHP) for DHW production
  • Laundry appliance

Making a business case for strategic decarbonization requires thinking beyond a traditional energy audit approach or simple payback analysis. It assesses business-as-usual costs and risks against the costs and added value of phased decarbonization investments in the long-term.

Retrofit Costs

Decarbonization Costs

$18M

Capital costs of decarbonization measures.

Avoided Risks

Business-as-Usual Costs

$11M + $535k / YR

BAU cost of system replacement/upgrades and LL11 compliance cost for facades + yearly energy cost, repairs, and maintenance savings.

Avoided Risks

Business-as-Usual Risks

$34k / YR

Avoided LL97 fines starting in 2030.

Added Value

Decarbonization Value

$6M

Incentives from Empire Building Challenge and Clean Heat from ConEd.

Net Present Value

TBD

Net difference between the present value of cash inflows and outflows over a period of time.

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Built in 1974, the buildings have little-to-no remaining insulation, costly and inefficient baseboard electric resistance heat systems, and central natural gas-fired domestic hot water (DHW) plants. The outdated design and building age make the Heritage an ideal candidate for a carbon-neutral deep retrofit. 

At the time of its acquisition in late 2019, L+M planned to open up the façade at 1660 Madison to increase the size of some of the bedroom windows and replace the roof. Previous ownership had already completed this scope of work on the two high-rise towers. Since 1660 Madison was already targeted for these more intrusive upgrades, the building presented the greatest opportunity for a deep retrofit scope of work. This 11-story building’s scale and layout is representative of L+M’s portfolio and LMI (low and moderate housing) buildings in New York State.

The package cost exceeds that of standard business-as-usual practice at the property. Every element of the buildings’ envelope, HVAC systems, DHW systems, and controls are proposed for upgrades to modernize the building to meet necessary resiliency and low-carbon needs. 

Standard operating practice at the building would entail maintenance and replacement of mechanical systems in-kind at end of useful life (e.g., baseboard heaters, central DHW, and exhaust equipment), and code-minimum glazing replacement at end of useful life. 

The building’s heating system consists of mainly baseboard electric resistance heaters in apartments and some common areas. It is estimated that roughly 50% of the heaters date to the building’s construction and as such are past the end of useful life and in need of replacement. Cooling in apartments is provided by sleeve ACs provided by residents. PTHP installation will provide controllable, efficient heating, as well as cooling to all residents within the 1660 Madison building. The higher cost for this upgrade provides a better functioning system and benefit to residents. 

The three gas-fired water heaters are near the end of their useful life, making for an ideal time to invest in a new approach to DHW. The electrification of the load at 1660 will inform the approach used at the towers later in the decarbonization period. 

Facade maintenance requires continual investment. In particular, recladding of the three properties is estimated to avoid $10 million of LL11 compliance costs between now and 2046.The new façade approach will nearly eliminate these costs throughout the life of the product as it will not require the same upkeep as the existing materials.

The 1660 Madison building is an 11-story Concrete Superstructure with a masonry cavity wall façade with no insulation. The master bedrooms have one full height window and one narrow ribbon window at the top of the wall. All other bedrooms have a narrow ribbon window at the top of the wall. All the windows were replaced over 20 years ago and are in poor condition. Only the living rooms and master bedrooms are cooled, with conventional AC Units installed in through-wall sleeves. 

The initial approach to updating the façade was to enlarge ribbon windows, install AC units/through-wall sleeves in all rooms without cooling, replace all residential windows, and then clad masonry with an EIFS system. 

After review, it was determined that masonry columns around windows and modified openings would require a significant amount of reinforcement and likely not survive demolition and need to be removed and replaced. Construction time frames would take roughly 8 weeks per apartment with a temporary interior wall shrinking apartment spaces. 

Instead L+M identified a solution that would address both the engineering and tenant challenges and found that a window-wall or panelized system would solve both. This solution eliminates the need for added masonry reinforcing and/or the rebuilding of masonry which significantly reduces installation time from (8) to (2) weeks. This allows residents to remain in their units during construction and substantially reduces the impact on their daily lives.

This approach would also give added access to upgrade the existing baseboard heating and through-wall AC cooling to combined BMS-controlled PTHPs. The façade work also permits running the necessary electrical conduit and drainage for the PTHPs. L+M identified the Dextall Dwall product which combines UPVC components resulting in superior thermal values. This prefabricated product addresses insulation and air-sealing requirements, while also including window replacements in one package. L+M verified with the manufacturer that it can be customized to include necessary sleeve penetrations for PTHPs. 

Financial feasibility for decarbonization projects depends on numerous factors including the availability of project financing, incentive funding, and allocation of low-income housing tax credits (LIHTC). Exterior over-cladding projects that enhance curb appeal and improvements to resident comfort may also increase market rents and/or Section 8 rents. L+M evaluates potential reductions to long-term capital spending in addition to operating expense savings in determining which projects to pursue. In addition to financial feasibility, L+M may elect to pursue decarbonization measures in order to evaluate new materials and technologies, meet internal ESG goals, or comply with mandated or anticipated regulatory changes.

An emissions decarbonization roadmap helps building owners visualize their future emissions reductions by outlining the CO2 reductions from selected energy conservation measures. This roadmap is designed with a phased approach, considering a 20- or 30-year timeline, and incorporates the evolving benefits of grid decarbonization, ensuring a comprehensive view of long-term environmental impact.

Strategic decarbonization roadmap for The Heritage
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In 2020, L+M envisioned a deep retrofit plan for the Heritage and formed its consulting team including Inglese and Cosentini. L+M and SWA discussed the possibility of applying to the Empire Building Challenge initial round to further study possibilities for the building and to support the retrofit plan. In 2021 the L+M was awarded the next round of funding to execute the vision. The process encouraged the team to think holistically about the project and identify as many opportunities as possible to eliminate fossil fuel usage, reuse waste heat, and reduce loads on the building. 

Throughout 2022 to the present, the team has met regularly to review each aspect of the design, review submittals and recommend improvements, and review construction schedules and decision-making deadlines to ensure all elements of the project are completed as needed. 

As a socially responsible developer, sustainability is central to L+M’s mission to create green, high-quality affordable housing. Since many of our projects are income-restricted, L+M is focused on reducing operating costs to allow for greater affordability. 

Partnering with NYSERDA on developing a roadmap to carbon neutrality will benefit our investors, residents, our communities, and our environment, both now and in the future

L+M hopes to use the Empire Building Challenge as a chance to pilot new technologies and create a scalable approach to reducing emissions throughout its portfolio.

Furthermore, L+M is committed to transparency and sharing retrofit project economics and case studies with the broader industry. L+M’s pre-construction, engineering, and development teams actively share best practices with industry peers through the New York State Association for Affordable Housing (NYSAFAH), The Urban Land Institute (ULI) and other industry organizations. 

L+M is also an active participant in conferences and stakeholder sessions with NYSERDA and is committed to working with state and local governments, equipment suppliers, contractors, and the broader real estate industry to decarbonize the built environment.

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