Smaller business and property owners anxious over costs of new clean-energy requirements
With strict and fast-approaching clean-energy deadlines, some business and property owners find themselves caught between their progressive environmental views and what they see as realistic financially.
A Building Energy Use Disclosure Ordinance was passed in 2014 as a way to track Cambridge’s greenhouse gas emissions. The law referred to as Beudo, targets large commercial, institutional and multifamily buildings responsible for half of emissions in the city. Specifically, the legislation requires buildings of more than 25,000 square feet and residential properties with more than 50 units – an estimated 1,100 buildings citywide – to report annual energy and water use.
The city’s Net Zero Action Plan recently moved up its timeline to 2035 from 2050, adding urgency to environmental efforts, and Beudo changes such as performance requirements were introduced last fall after reports showed no decrease in emissions since 2018. Beudo is considered part of a “Green New Deal” package for Cambridge.
Property owners can make alternative compliance payments to the city if they’re not able to achieve the required emissions reductions: The ordinance establishes the average cost of removing a ton of emissions from a building at $234, based on an analysis done by the city of Boston, said Cambridge city councillor Quinton Zondervan, the leader of local Beudo efforts. The Cambridge council is also debating whether to allow businesses to use carbon credits as a means of offsetting carbon emissions.
In interviews over the course of July, property owners said they wanted to prioritize eco-friendly energy use, but many cannot see how to meet the city’s standards so quickly without hurting their business or penalizing tenants.
Mark Harrington, manager of a small chain of gyms called Healthworks that has a location in Porter Square, said he was one of many business owners who support the proposal but is concerned with its implications. The difficulty of maintaining the climate in a space such as an indoor gym, paired with demands such as filtering and more aggressive air circulation that came with the pandemic, has tagged his building with one of the largest carbon footprints in the city, he said.
He invested recently in green heating equipment and pumps designed to last 30 years, but with stricter standards expected in Beudo updates, he said, he fears that will jeopardize his investment.
The law should account for the damage to smaller businesses when factoring in rules that limits greenhouse gases from bigger ones such as Harvard, the Massachusetts Institute of Technology and the city’s many life-sciences labs, which business owners call the largest contributors to greenhouse gas emissions – and the only ones with pockets deep enough to shrug off Beudo requirements. “I want to make sure they’re thinking of everyone when putting this together, not just someone who owns a 15-story lab in Kendall Square,” Harrington said. “We just need to have an honest conversation in the community about what it’s going to cost.”
Another voice calling for the city to do more to fine-tune the ordinance: Patrick Barrett, a Central Square lawyer and property owner.
The city often cites laws similar to Beudo passed recently in Ithaca, New York, as a model of how it could work for Cambridge but, Barrett said, that city offered property owners low- or no-interest loans out of a $100 million fund backed by private equity to support the work needed to switch to new electrical systems. Ithaca’s model also includes hiring consultants to evaluate the costs, Barrett said.
The 2035 goal is “a fun headline,” Barrett said, but the state is on a 2050 timeline, along with most other places in the country. “Why is the tiny, little place of Cambridge on a faster track? What resources make that possible?”
Barrett said he’s done a lot of research where he feels the city has failed, even sending a letter to 4,000 homes and the 2,387 businesses he estimates to be affected by the law to say what the legislation could mean for them. Institutions such as Harvard and MIT have entire sustainability teams that can help them meet the city’s goals, but most property owners don’t: “I am the sustainability team,” Barrett said, “If the city is serious about going carbon neutral net-zero, you have to help people get there.”
Charlie Marquardt, owner of Mid Cambridge Cleaners, opposes Beudo in its current form. “I’m galled by the inequalities in how it works,” he said, referring to the law leaving out large Brattle Street homes that he said create “exponentially more emissions” than an apartment building such as his, which gets included in Beudo compliance requirements as a commercial property. Just compare 169 apartment units and 169 single-family homes, he said.
The cancellation of Beudo hearings this summer because councillors couldn’t get a quorum was disrespectful to community members advocating for changes to the law, Marquardt said. His fear is that the city will push the ordinance forward and deal with its consequences later, he said, but “it’s their responsibility to reach out to those affected by the laws they put in place.”
Zondervan cites wide public support for this issue, grounded in a decadelong push to combat climate change in Cambridge. While there has been pushback from building owners since the timeless was accelerated, most landlords are just asking for more flexibility in the ordinance so they can comply. “Ultimately, we have to move forward in some way and reduce emissions,” Zondervan said.
Fines hurting businesses and externality costs being passed onto customers and commercial building tenants may be an inevitable drawback of protecting the planet, Zondervan said – but it is not accurate to portray this only as a cost, as it’s also a reduction approach that includes potential cost savings. And it’s large bio labs, not small businesses, that use lots of energy and face the largest offset costs, he said.
The business concerns exist regardless of the ordinance, as climate change will push buildings to update their fuel needs even without Beudo, Zondervan said. Owners can also find help on improving energy systems through partners such as the Community Development Department’s Energy Alliance, and some funding is available through the Mass Save program as well.
This article was written in partnership with Cambridge Local First. It was updated Aug. 27, 2022, at the request of councillor Quinton Zondervan’s legislative aide to clarify the meaning of a paraphrase.
The community development department spent four years copying Boston’s ordinance and essentially told no one but MIT, Harvard, and the major owners in Kendall Sq. Zondervan then sidelined them with amendments he’s been adding to and tweaking on the fly since last November. The only sticking point was how these major groups were going to pay. This was in March when people like me were made aware that BEUDO exists. CDD told no one about this and when asked to produce a list of owners they reached out to they, after making us wait 10 days for “legal approval” handed over a garbage list of property entities and managers (most of whom no longer work for their respective companies). There are over 2300 BEUDO properties in the city not 1100, something we discovered when a small group of citizens took it upon ourselves to make a real list to let people know this was happening. Zondervan has been playing fast and loose with this promising exemptions for some and changing the ordinance hours before a hearing in an attempt get that support he claims to have. So far his biggest supporters are MIT/Harvard student most of whom appear to think this only affects their institutions and a group called Mothers Out Front whom I can only imagine feel duped at this point. The only thing we all agree on is that climate change is real and we should work to reduce emissions. However the real world practical challenges of this proposal will force really bad decisions. Full electrification without waiting for the grid to be able to supply green energy leaves us burning more coal and gas up stream. Without massive infrastructure improvements from Eversource makes electrification next to impossible. For existing buildings this plan is especially damaging. Poor insulation and no place to put switch gear or transformers will be a logistical nightmare for some. We will also be creating new energy
peaks in the Winter that will activate more coal/gas burning. This plan is a half baked headline seeking mess devised by a broken and leaderless Community Development Department and people who seem to know nothing about how buildings work, spearheaded by an ideologue whose real aim has very little to do with climate change or efficient buildings.
When we added solar to our roof 4 years ago, we expected a manageable financial penalty–similar to Harrington and Barrett imply is reasonable.
But we were shocked to find out that our solar system was expected to have an annual financial return of 18% (twice the stock market with half the risk!), and our actual savings have been even better than that. I expect when small businesses do the math, they will conclude that going green is a great investment.
Peter it’s not as simple as adding solar to my building (which in Central Sq isn’t possible). Try amortizing $1.5M in improvements along with the effect of cancelling commercial leases, and removing ground floor elements of your building, and then pushing the overall costs onto your tenants. We can make our buildings more efficient but not without support from the utility, funding from the city, and vast improvements to our infrastructure which includes the Grid actually delivering clean energy 80% of which comes from gas and coal.
Keep crying real tears, Mr. Barrett
As usual, Councillor Zondervan is quick to insist that there is broad public support for something the city is trying to push through with inadequate background given to residents. See: Bike lanes for riders who consistently ride through red lights.