Building owners face deadline for relief from emission caps
July 1 deadline is looming, but guidance from city is sparse
Building owners can apply for a reprieve from the city’s stringent emission caps, but time is running out.
Under Local Law 97, buildings considered the city’s biggest global warming contributors — those larger than 25,000 square feet — must meet new greenhouse-gas emission caps starting in 2024. But the law also allows owners of certain properties to apply for an adjustment to those limits that runs through 2029.
The catch: Owners only have until July 1 to apply. Complicating matters, the Department of Buildings has yet to release an application form or further guidance on the law’s parameters.
“Nearly two years after Local Law 97 was passed, it is still unclear how the law will be applied and how building owners are supposed to comply — endangering environmental efforts while setting building owners up for unnecessary fines,” Real Estate Board of New York President James Whelan said in a statement.
The law says the adjustment is available but not limited to buildings with 24-hour operations, facilities critical to human health and safety, those with high-density occupancy and properties dedicated to energy-intensive industrial use or communications technologies.
Owners must show that meeting 2024 caps is impossible because their building’s emissions in 2018 exceeded the caps set for 2024 by more than 40 percent. If approved, the building’s emission limits will temporarily be adjusted to 70 percent of its 2018 level.
Some attorneys are concerned that not enough owners know this option is on the table.
“Owners are not paying attention, but neither is the city,” said YuhTyng Patka, a partner with Duval & Stachenfeld. “The sense of urgency is not there.”
The Department of Buildings plans to open the application process in the next few weeks and will provide additional guidance once that window opens, according to an agency spokesperson.
Real estate professionals have been fighting for a different reprieve, which Gov. Andrew Cuomo included in his budget proposal. It would give building owners the option to offset their carbon emissions by buying renewable energy credits generated outside the city. The city’s law counts only credits from renewable energy generated within the city — which makes the credits a non-option, given the lack of wind and solar farms and hydroelectric plants in the city.
Environmental groups, along with Mayor Bill de Blasio, oppose Cuomo’s proposal, saying it circumvents the city’s law. The proposal doesn’t seem to have the support of the Assembly or Senate majorities, which excluded it from their budget resolutions.
Owners argue that the city hasn’t provided enough clarity on how they can meet the law’s requirements, while supporters of the measure say landlords have known since the law’s passage in 2019 that they would need to limit their emissions. Those who don’t face millions of dollars in annual fines.
New York Communities for Change, one of the groups fighting the Cuomo proposal, released a report this week targeting the Durst Organization and Rudin Management as some of the city’s “biggest polluters,” noting those companies would owe $581.5 million between 2024 and 2050 based on their buildings’ current emissions. (Those figures don’t factor in any retrofitting or upgrades across their portfolios or greening of the grid.) The group says the fines could pay for thousands of green jobs annually.
The Durst Organization’s Jordan Barowitz said the analysis highlights the “critical flaw” in the law — that energy-efficient buildings have only two choices, and both do nothing for climate change:
“Disperse people to work in less energy-efficient buildings or pay millions of dollars in fines that will go into City Hall’s pocket, not investments in renewable energy or carbon reduction,” he said in a statement.
A spokesperson for Rudin said the law focuses on “source power, not energy efficiency.”
Even if a building doesn’t explicitly qualify for a temporary adjustment, attorneys are encouraging building owners to apply. Alexis Saba, an environmental and land use attorney with Sive Paget & Riesel, said the application process could lay the foundation for seeking other adjustments or reduction of penalties from the Department of Buildings.
“The spirit of that adjustment is that you have tenants that are high-energy users,” she said. “Now is a good time to apply and make your case to DOB.”