REBNY, Durst Debut Greener HQ For Climate Week, Not Backing Down From Emissions Law Critiques

Building emissions are top of mind as New York City kicks off Climate Week, with some of the city’s biggest real estate owners on the hook for millions in penalties in a year if they can’t find a way to reduce their buildings’ carbon footprints.

That's why the Real Estate Board of New York, the state's biggest industry lobbying organization, is hoping to set an example. Last week, REBNY gave Bisnow a first look at its renovated headquarters at 570 Lexington Ave., newly minted with LEED Platinum status.

REBNY has spent two years transforming its second-floor office space and the building’s cellar, installing energy-efficient heating and cooling systems, low-flow toilets and replacing all its lighting with LED bulbs.

“If we can commit to doing this, I think it sends a really strong signal that others can as well,” Zach Steinberg, REBNY’s senior vice president of policy, said in an interview at REBNY's revamped HQ.

The Feil Organization-owned art deco tower has been a landmark since 1985. It was first built in the early 1930s and now spans 451K SF across 50 stories, with a tenant roster that includes Cornell University, Sotheby’s Institute of Art and Air India.

Despite the caliber of the building’s tenants, REBNY’s 19K SF spread is still the first office in the building to obtain any form of LEED certification. 

REBNY’s efficiency upgrades come during the first year landlords have to report their buildings’ emissions to the city — and show they have reduced it from 2006 levels or face penalties, as required by Local Law 97. Starting this year, owners have to be on track to reduce carbon emissions by 40% from 2006 levels by 2030.

The reporting period began this year, but the first deadline, an obligation to report building emissions with the NYC Department of Buildings by May 2025, is beginning to stress out REBNY’s members. 

“There's a lot of unanswered questions,” Steinberg said. “There's a big open question in the industry because there's no filing portal yet. People have to file their emissions for this year in May of next year, and there's still no indication on what you file, where you file, how you file.”

Steinberg said REBNY has raised this with the NYC Department of Buildings, which said that the portal will be online around March next year.

“They're cutting it very close,” he said. 

Andrew Rudansky, spokesperson for NYC DOB, told Bisnow that the agency plans to have the filing system available “in early 2025” and said it isn't allowing landlords to report their emissions data today because it wouldn't satisfy the regulation's requirements. 

“Since the LL97 emissions reports must include emissions data from the full calendar year, a report submitted today would be incomplete as it would not account for the final three months of the year,” Rudansky wrote in an email.

Local Law 97 has long been a sore subject for The Durst Organization, whose donation to REBNY facilitated the LEED certification for the lobbying group’s headquarters.

Douglas Durst, chairman of the family firm, said the law discriminates against developers who have been building properties to the highest environmental standards since before 2006.

“We have a higher bar to clear than others because of all the work we've done,” he told Bisnow on Thursday, shortly after the glass LEED plaque was mounted next to the elevators on 570 Lexington’s second floor. “My issue is with the measurements that they used for Local Law 97 and also not taking into consideration what was done previously.”

Still, The Durst Organization has taken strides to bring its portfolio into compliance even with that higher bar, principal and Chief Development Officer Alexander Durst told Bisnow. Durst owns around 16M SF of buildings, including 16 high-rises, but expects to pay a fine next year on just one of the smaller properties it owns, he said.

“That small building is triple net leased,” he said. “We do not have a lot of control over the energy systems or the energy use in the building.”

Even though the majority of its buildings are expected to be in compliance with the 2024 emissions reduction target, like many other NYC landlords, The Durst Organization may have more noncompliant buildings — and accompanying Local Law 97 fines — once 2030 hits and standards become stricter.

Landlords say they have spent a lot of time and money trying to reduce their carbon footprints, but many are concerned by how the energy supply used by New York’s grid affects their buildings’ emissions.

Alexander Durst has been particularly concerned about One Bryant Park, a 2.3M SF skyscraper that has its own water reclamation system and a green roof that uses tenants’ waste as compost.

“It has a cogeneration facility that is penalized because it is combusting natural gas, even though it arguably emits less carbon than if you were drawing the electricity from the grid,” he said.

Under Local Law 97, The Durst Organization was previously set to owe $1.7M in penalties from this year until 2029 at One Bryant Park. In 2030, those fines would have been set to jump up to $3.7M per year.

But the company modified the building's system to draw energy from the grid, the vast majority of which still comes from burning fossil fuels. Durst said the modifications ensured the family business won't have to pay a fine next year at One Bryant Park, but the change to the cogeneration system “probably causes greater carbon emissions than utilizing it to its maximum possible capacity.”

Durst isn’t alone in those concerns, Steinberg said. Many of REBNY’s members are worried about compliance, especially when the state is behind on its own renewable energy generation targets.

In July, New York state announced it was going to miss its target of getting 70% of the state’s energy from renewable sources by 2030 after failing to reach agreements with three offshore wind site developers it had signed tentative agreements with, Politico reported. 

In May next year, when owners have to start paying up, properties have to demonstrate they are on track for a 40% reduction in greenhouse gas emissions from 2006 — a reduction that has to be complete by 2030 to reach the state’s 2050 net-zero commitment. 

The clean energy component is challenging a plethora of property owners across the city that are trying to get their ducks in a row ahead of 2030, CodeGreen Solutions Director Bryan Hadick said. 

Roughly 91% of the city’s buildings were compliant at the start of this year, but the city’s own estimates show that around 80% will no longer be compliant by 2030. 

“There's a push to electrify as our best long-term solution for decarbonizing buildings and getting away from on-site fuel combustion. That said, the grid's not clean yet,” Hadick said. “We're banking on the long-term investment in renewables cleaning the grid. But in the short term, it's not there yet.”

Even the building where REBNY’s LEED-certified HQ sits will face fines unless it can find a way to further reduce its emissions. Feil could be forced to shell out $134,700 every year from 2030 if adjustments aren't made, according to the NYC Accelerator Building Energy Snapshot.

Still, there are actions that commercial real estate owners can take while they wait — even if it’s as small as bringing a single office up to the highest possible environmental standards, U.S. Green Building Council Vice President for LEED for Communities Vatsal Bhatt said.

“Whatever small difference we can make is great. Yes, we want to make a very large difference, but one drop at a time,” he said. “That is what we try to believe.”