Clean Energy, Collaboration, Government & Industry, Manufacturing & Assembly, Power Management, Safety Standards
SCIenergy, a pioneer in optimizing buildings for energy performance and value, is finalizing a project for Time Equities, a full service real estate firm actively involved in the acquisition and management of commercial and residential properties, that will cut energy consumption at 125 Maiden Lane in New York by 29.5% as well as better protect the building and its occupants from outages and storm surges like those experienced during Hurricane Sandy.
The project will be entirely paid for through energy savings with no upfront cost to the building owner, thanks to SCIenergy’s innovative Managed Energy Services Contract (MESA) for delivering infrastructure upgrades as a service. Construction will be completed later this year. Mitsui & Co. (U.S.A.), Inc. (“Mitsui USA”) and the New York City Energy Efficiency Corporation (“NYCEEC”) actively participated in the project.
“Hurricane Sandy was a wake-up call for everybody that lives and works in cities,” said Steve Gossett Jr., CEO of SCIenergy. “Buildings need to be more energy efficient, but they also have to become more resilient. By leveraging energy savings to fund upgrades through MESA, we can modernize buildings in a way that works for building owners and occupants.”
Built in 1958, 125 Maiden Lane is a 320,000 square foot mixed-use building near Wall Street containing commercial office condominiums. The core systems had not been upgraded since it was built. The pneumatic building control system did not function in many areas: air handlers and dampers had to be adjusted manually by maintenance staff.
In 2011, Time Equities enlisted SCIenergy’s predecessor, Transcend Equity, and its partner Mitsui USA to upgrade the building and improve its overall performance through MESA and EnergyScapeTM, SCIenergy’s cloud-based platform for reducing energy consumption, lowering costs, conducting preventative maintenance and other tasks. NYCEEC also participated in this first phase by providing credit enhancement, enabling the financing to close and construction to begin.
When the initial phase of the project was nearly complete, Hurricane Sandy hit. Like many other buildings in New York City, the basement of 125 Maiden Lane became flooded, rendering the 56-year old steam system inoperable and damaging the newly installed equipment. As a result, Time Equities decided to expand the scope with deeper energy efficiency improvements and resiliency measures: new fully condensing gas boilers located in a mechanical room on the upper floors far above potential flood areas are replacing the steam systems. The new system is also about 95% efficient, which will eliminate losses associated with failed steam traps and leaks.
Taking both phases of construction together, SCIenergy anticipates that the upgrades will reduce energy consumption by 29.5 percent and save 7,260 MMBTUs of energy per year, or approximately the same electricity consumption of 650 American households annually.
“We evaluated a variety of retrofit funding options before selecting MESA. It shifts the performance risk and funding responsibility away from the office and condominium unit owners,” said Rick Recny, Director of Asset Management at Time Equities. “MESA is an important tool in Time Equities’ overall strategy for achieving sustainability in the buildings it manages.”
Efficiency as an Asset
The 125 Maiden Lane project—which will increase the equity of the owners, help reduce emissions, and give occupants a better live/work environment—became financially feasible because MESA can turn efficiency into a financial asset. Under MESA, building owners pay a fee equivalent to, or lower than, their historical utility bill for a designated period of time, typically ten years. In turn, SCIenergy and its partners take responsibility for the building’s energy: paying the owner’s actual utility bill, providing upfront costs, implementing upgrades, and continually enhancing operation through EnergyScape.
MESA Green Strategies One, a joint venture of Mitsui USA and SCIenergy, provided the initial equity for the improvements while NYCEEC provided $2.8 million of debt financing. MESA Green Strategies One and NYCEEC will then earn a return through energy savings over the next ten years.
“NYCEEC is committed to helping owners like Time Equities transform their buildings into cleaner, greener and more resilient investments, said Fred Lee, Director of Legal Affairs and Finance for NYCEEC. “Innovative financing structures like MESA can unlock tremendous energy savings potential.“
"We are very pleased to be working with Time Equities and SCIenergy. Building efficiency is a critical issue and one of the more promising segments in energy services,” said Matthew Maher, Director of New Business Development at Mitsui USA. “The techniques being pioneered by SCIenergy and its partners will ultimately be exported to multiple regions around the world.”