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Expiration of tax incentive causes Astoria developer to scrap on-site energy generation plan

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Photo via Durst Organization

A plan to become the only development in New York City to generate its own electricity, hot water, heating and cooling on site was scrapped by the developers of Hallets Point.

The Durst Organization, which originally planned to spend $43 million on three co-generation plants to power their five residential towers in Astoria, said the expiration of the 421-a tax incentive spurred their decision. The incentive would give the developers tax abatement for building affordable housing.

“Without the 421-a tax abatement, we cannot build the remainder of the [cogeneration plant] project,” said Jordan Barowitz, a spokesperson for the Durst Organization. “The rest of the project is up in in the air.”

The first building is being constructed since developers began working on it a day before the tax incentive expired. But now, the entire project is on hold until 421-a or something like it is implemented.

The cogeneration system works only when several power plants are running through multiple buildings, and since there is no guarantee that more buildings will be built, the plants will not be constructed, Barowitz said.

A cogeneration plant turns natural gas into electricity and the waste heat is used for heating and cooling water and heating apartments. Hallets Point would not rely on Con Edison, and this method helps to increase fuel efficiency, reduce energy costs, reduce greenhouse gas emissions, and reduce releases of ozone depleting chlorofluorocarbons (CFCs) from air conditioning units.

Instead, the company is constructing a central cooling plant for the building that will deliver chilled water to each apartment. According to Barowitz, this method is more efficient than having individual cooling units in each apartment.

Originally, the plan called for 2,400 units of which 483 would be affordable. The building currently in construction would only bring 405 units, 81 of which would be affordable, to the stretch of waterfront. It is slated for completion in 2018.

Politico first reported the story.