Mayors Say Natural Gas Moratorium Not Having Much Impact on New Development Projects

John Jordan | September 19, 2019

From left, Yonkers Mayor Mike Spano, White Plains Mayor Tom Roach, New Rochelle Mayor Noam Bramson and panel moderator Deborah Doern of Houlihan Lawrence.

RYE BROOK—The mayors of New Rochelle, White Plains and Yonkers recently told an audience of real estate professionals that the natural gas moratorium imposed by utility Con Edison earlier this year is not putting a dent in investor interest or development activity in their respective Westchester County cities.

New Rochelle Mayor Noam Bramson, White Plains Mayor Tom Roach and Yonkers Mayor Mike Spano participated in a Sept. 16th program entitled “Meet the Mayors” staged by Houlihan Lawrence at 800 Westchester Ave. in Rye Brook. The moderator of the program was Deborah Doern, regional vice president of the brokerage firm.

White Plains Mayor Roach said the impact of the natural gas moratorium, which went into effect in March of this year, has been limited on the city’s development pipeline.

If projects were not approved by Con Edison prior to the moratorium, the developer is prohibited from utilizing natural gas until the ban is lifted.

“These big projects, they work around it,” Mayor Roach said. “They can either have a burner that also uses oil or they can sign on to a contract with interruptibles” whereby the development could switch from gas to another source of power during the winter.

He added that the city is pushing very aggressively on new projects to use geothermal energy.

The natural gas moratorium is impacting new restaurants, the mayor noted. Mayor Roach cited the case of a proposal for a restaurant that was to occupy vacant space that was formerly a bank branch in City Center. The plan did not move forward because of the natural gas moratorium.

The natural gas ban will impact small businesses and restaurants,” he added. “You won’t be able to open a restaurant in something that wasn’t a restaurant before,” Mayor Roach said.

New Rochelle Mayor Bramson said the situation is similar in the Queen City.

“When the moratorium was first announced, I think all of us sort of gasped because there was a real fear that it would bring development to a complete halt, but since then most of the large developers have managed to find alternatives that work for them,” Mayor Bramson told the gathering.

The mayor noted that like White Plains, the City of New Rochelle encourages renewable energy and geothermal energy in new projects.

“In the end, for the long-term it may prove to be a blessing in disguise because it will have encouraged a shift to clean energy, which should have occurred anyhow, but I still believe it happened way too abruptly,” Mayor Bramson stressed.

The little lead time that was given prior to the natural gas moratorium’s effective date of March 15 could have put the billions of dollars in new development projects in Westchester County at risk. However, he said thankfully that does not appear to be the case.

Yonkers Mayor Mike Spano said he is still quite concerned about the future impacts of the moratorium. He said that one rental apartment developer in Yonkers has stated that he plans to switch from natural gas to electric heat, which the mayor noted is more expensive than natural gas.

While the developer has stated that rental costs at this project will likely remain relatively the same, the heating costs for tenants at the project will be higher.

He said that so far developers proposing projects in Yonkers have been looking to adapt to the moratorium. If they did not secure approvals for natural gas connection prior to the imposition of the moratorium, developers have been seeking alternative energy solutions, including geothermal as an alternative so that their projects can break ground.

“At the end of the day it is still a capacity issue that has to be addressed,” Mayor Spano said. “It really has to be worked out between the governor and those on the state level.”

John Jordan
Editor, Real Estate In-Depth