The Real Deal New York

City partners with banks to offer $100M in financing for mandatory heating conversion

June 13, 2012 03:30PM

Mayor Michael Bloomberg announced today that more than $100 million in financing will be made available to property owners who perform clean heat conversions. Last year, the city banned the heaviest heating oils, which are still used in about 10,000 structures, and urged owners to switch to cleaner heating solutions by 2015. Bloomberg said the conversions would generate $300 million in construction activity.

Speaking at the 1,400-unit Eastchester Heights Apartments, a Bronx housing development owned by Taconic Investment Partners that was formerly one of the city’s top users of heavy oils before recently converting to natural gas, Bloomberg said financial institutions — including Chase, Deutsche Bank, Hudson Valley Bank and Citigroup — have committed $90 million in private lending for cleaner oils, while the city’s Housing Development Corp. and Department of Housing Preservation and Development are making an additional $18 million available for mixed-income residential buildings. He was joined by representatives from those organizations and others that contributed to the program.

“Summer is the perfect time for buildings to convert from polluting to cleaner heating systems, and the new resources announced today will help them do just that,” Bloomberg said. “By phasing out heavy heating oils, we are closer to achieving our PlaNYC goal for the cleanest air of any major U.S. city.”

The city is creating a $5 million loan loss reserve fund to encourage private lending to lower income buildings. Con Edison and National Grid, the city’s largest utility providers, are also upgrading infrastructure to make heat conversions less costly for property owners. — Adam Fusfeld