How a Queens multifamily rental building turned roof repairs into energy gains

Eric Bluestone prides himself on his strong head start over other New York City prop­erty owners when it comes to decar­bonizing their building port­fo­lios: The Bluestone Organization, a Queens-based real estate devel­op­ment, construc­tion, and prop­erty manage­ment company where he acts as pres­i­dent and partner, has been investing in energy effi­ciency for over 30 years. It’s a mentality that Bluestone says is rather uncommon among his industry peers. 

“Not every­body’s on board with it,” he said. ​“I can’t say that every­body is drinking the Kool-Aid.”

Yet incor­po­rating clean energy strate­gies into newly constructed build­ings, while also improving effi­cien­cies among an existing port­folio, is central to the busi­ness model of his family’s company, now in its third generation. 

“We believe that we all should be doing our part to reduce our carbon foot­print, to mini­mize the use of fossil fuels, to not waste water and energy,” Bluestone said.

That’s why in 2023, when the group’s apart­ment building at 75 – 23 113th St. in Forest Hills, Queens was due for a new roof, Bluestone took the oppor­tu­nity to also fit a solar array onto the building.

The Challenge

When Local Law 97 (LL97) passed in 2019, requiring New York City building owners to either comply with carbon reduc­tion targets or face fines, Bluestone wasn’t as intim­i­dated as other prop­erty owners in his field. ​“For most of our build­ings, we’re ahead of the curve,” he said.

There’s also another factor moti­vating his sustain­able mission: A vital cost benefit. Decarbonized build­ings are gener­ally cheaper to run, saving money on energy bills, and likely making prop­er­ties more valu­able in the long run. 

“I don’t want to mini­mize one [driver] in lieu of the other, because they’re both impor­tant,” Bluestone said.

This cost-benefit usually takes many years to play out, and financing energy projects like solar panel instal­la­tions usually requires upfront costs in the hundreds of thou­sands of dollars. So when consid­ering projects, building owners care­fully weigh the initial costs against long-term finan­cial bene­fits. Those analyses, Bluestone says, have always been ​“the main driving criteria” in deciding whether to move ahead.

There has been a strategy to Bluestone’s 12 previous solar deploy­ments: By pairing the solar instal­la­tion process with roof replace­ments, and adding insu­la­tion, Bluestone is able to ensure a long life for the solar array, and avoids having to remove the array in the future to fit a new roof. 

“We have a contractor who does both and gives us good pricing on the roof replace­ment,” Bluestone said, ​“so it’s worth our while to do that.”

That contractor, Best Energy Power (BEP), does a cost-benefit analysis that weighs up ​“the upfront cost and the antic­i­pated payback,” according to Bluestone. The analysis takes into account factors including a building’s orien­ta­tion, amount of shading, and the maximum capacity of panels that a roof could hold.

Bluestone’s Forest Hills prop­erty was a prime candi­date for a roof upgrade. The Oakcrest, a 54-unit rental building, would soon need to upgrade its aging roof, which hadn’t been updated since it was built in the 1970s; and while the roofing team was at it, Bluestone was bent on installing solar to cut energy costs down the line.

The Roadmap

The first ques­tion BEP faced was how big of an array to build, based on phys­ical and tech­nical constraints.

They aimed to fit a 32.4‑kilowatt solar array, which would provide enough energy to power the complex’s common areas, including the laundry, boiler, and elevator, though not the apart­ments them­selves. They opted not to power the indi­vidual apart­ments with solar, as they soon real­ized the array size wouldn’t support all the units, and fire code prevented them from installing batteries for energy storage. 

“We would not get the return for the addi­tional kilo­watts that we’re creating,” Bluestone said. 

Compared to other ​“low-hanging fruit” improve­ments like lighting or water for faucets and toilets, solar is one of the most capital-inten­sive projects Bluestone has done in its older buildings. 

It’s espe­cially expen­sive because of the ​“top-of-the-line equip­ment” that BEP chooses to use, according to contractor Ronnie Mandler, founder of BEP, who handled the Oakcrest’s solar instal­la­tion. The company uses American-made solar panels with 25-year warranties, which are partic­u­larly costly in compar­ison to imported panels. Still, Mandler said, these initial invest­ments are worth it: ​“It’s much cheaper to do it right on day one.”

The next hurdle was paying for it all, since the finan­cial outlay for this project was more than the Bluestone Organization wanted to pay out of pocket. Usually, Bluestone would go to banks for more tradi­tional loans. This lending option can be conve­nient at the end of a mort­gage cycle, when borrowers can include energy project work in refi­nancing plans. But the Oakcrest, like most build­ings, would be mid-cycle at the time the project needed to happen, which elim­i­nated that option.

The Oakcrest also presented another unique financing chal­lenge: Like most of the prop­er­ties in Bluestone’s port­folio, it’s a market-rate rental building, which makes it inel­i­gible for certain incen­tives and loan programs specific to afford­able housing. 

The key for Bluestone in this case would be to work with a lender special­izing in green projects, so Eric Bluestone contacted New York City Energy Efficiency Corporation (NYCEEC), a nonprofit that provides loans for projects that align with the three prior­i­ties of the EPA’s Greenhouse Gas Reduction Fund: Renewables, building decar­boniza­tion, and elec­tric vehicle charging. In November, the group announced it surpassed $500 million in capital dispensed for green energy projects. Bluestone had previ­ously part­nered with NYCEEC to construct a new energy-effi­cient condo building in Harlem, and then learned about the group’s financing mech­a­nisms for existing buildings.

After an initial screening, the Bluestone Organization began an appli­ca­tion process. As one of the few options for green lending, NYCEEC doesn’t approve loans easily, given strin­gent eligi­bility criteria that rigor­ously ensure the borrowers have the repay­ment where­withal. It wasn’t easy to qualify, but Bluestone became the first indi­vidual rental prop­erty to work with the lender for solar installation. 

NYCEEC is even more strict with rental build­ings than owner-occu­pied prop­er­ties, because income from rentals can be more volatile due to fluc­tu­a­tion in tenant occu­pancy. ​“One owner of a condo sells it to the next owner,” said Jay Merves, NYCEEC’s director of busi­ness devel­op­ment. Costs and income are predictable in these build­ings, Merves explained, whereas rentals are more dynamic. ​“Just because your expenses go up, doesn’t [mean you can] say, ​‘Oh, I’ll just raise my rent.’ It doesn’t work that way.”

Bluestone under­took this project without passing costs on to renters. As a rule, the group doesn’t do this to fund energy projects in any of their buildings. 

“It’s not just a matter of passing the cost down if we’re already maxi­mizing our market rents,” Bluestone said.

According to Bluestone and his partner Ira Lichtiger, they haven’t raised rents to fund any capital projects in their build­ings for at least the last five years, both because of changes to rent stabi­liza­tion laws in New York City, and because the solar-gener­ated elec­tricity doesn’t feed renters’ indi­vidual apartments.

BEP quoted $332,328 for the solar instal­la­tion. Bluestone decided to fund $54,287 out of pocket, and also received a rebate from NYSERDA, the state’s energy authority, which worked out to $41,040 before tax, based on the size of the array.

The project also qual­i­fied for other govern­ment subsi­dies intended to incen­tivize such projects: A federal tax credit equal to 30 percent of the cost after the rebate, and a New York City tax abate­ment of 7.5% of the cost annu­ally for four years. At almost $13,000 a year, this benefit will lessen the load after the project is finished. But these tax incen­tives don’t kick in upfront, so they still needed substan­tial capital at the outset.

That left the NYCEEC loan figure at $237,000. The parties agreed on a ten-year amor­ti­za­tion period to pay back the loan, with a 6.5% interest rate.

The Project

With the financing squared away, it was time to begin instal­la­tion. The array was fitted in September 2023 using a ballasted system — meaning that the panels simply sit on the roof, weighted by cinder blocks, without any roof penetration. 

“It’s like a puzzle,” said super­in­ten­dent Ali Gul, who lives in the building. ​“It’s like you’re building one of those closets from IKEA.”

Installation took just two days, and the bulk of that time was spent wiring a direct feed down to a garage, where they set up inverters that wouldn’t fit in the meter room.

The apart­ments are still connected to the Con Edison grid, and there are no plans to change the energy source in the future.

According to the contract Bluestone shared with Skylight, the company will finan­cially break even from the construc­tion cost in eight years, taking into account the credits and depre­ci­a­tion. Thereafter, they will boast utility bill savings of about $7,500 annually.

As it currently func­tions, the solar array is also producing savings of a different sort: According to the system monitor on Bluestone’s phone app, nearly a year into its oper­a­tion, the array’s total output had equated to almost 66,000 pounds of carbon emis­sion savings.

Among Bluestone’s other build­ings, the bene­fits are clear. 

“Our meters effec­tively run back­wards during summer months, when we get the most effi­cient usage of the solar panels,” Bluestone says.

Given these finan­cial advan­tages and their under­lying mission, Bluestone plans to continue commit­ting to solar instal­la­tions. ​“It’s some­thing we believe in,” Bluestone says. In the near future, they plan to install solar arrays at several other build­ings in their Queens port­folio in Fresh Meadows, Rego Park, Flushing, and Woodside neighborhoods.