FY 2017 Capital Development Plan. Arizona State University. Revised November 2016

Transcription

1 FY 2017 Capital Development Plan Arizona State University Revised November 2016

2 EXECUTIVE SUMMARY Page 1 of 17 Item Name: Revised FY 2017 Capital Development Plan (ASU) Action Item Committee Recommendation to Full Board First Read of Proposed Policy Change Information or Discussion Item Issue: Arizona State University asks the committee to review and recommend forwarding to the full board for approval ASU s Revised FY 2017 Capital Development Plan, which includes one new project and one previously approved project. The plan totals 45.5 million. Enterprise or University Strategic Plan (Check the element(s) of the strategic plan that this item supports or advances) Empower Student Success and Learning Advance Educational Attainment within Arizona Create New Knowledge Impact Arizona Compliance Real property purchase/sale/lease Other: Statutory/Policy Requirements Pursuant to Arizona Board of Regents Policy Chapter 7107, Capital Committee review and Board approval of the annual Capital Development Plan (CDP). Project Justification/Description/Scope The Arizona State University FY 2017 Revised CDP totals 45.5 million and proposes one new major capital project for approval, along with the combination of two previouslyapproved projects. Armstrong Hall Renovation Previously Approved RossBlakley Library Renovation Previously Approved Conference Center For this Revised CDP, ASU has set as its priorities the combined renovation of Armstrong Hall and the RossBlakley Library and the construction of a Conference Center on the Tempe campus. Contact Information: Morgan R. Olsen, Executive Vice President, Treasurer and CFO (480) Morgan.R.Olsen@asu.edu

3 EXECUTIVE SUMMARY Page 2 of 17 The projects in this Revised CDP respond to the need to provide students, faculty and staff with highquality facilities that will enable their success and support the key elements of ASU s Strategic Enterprise Framework, including: Achieving a fiftyseven percent increase in degree production Establishing national standing in academic quality and the impact of colleges and schools in every field Enhancing local impact and social embeddedness Expanding research performance to 815 million in annual research expenditures by 2025 Fiscal Impact and Financing Plan: The ASU FY 2017 Revised CDP, if fully implemented, reflects a total cost of 45.5 million, including the two previouslyapproved projects. Of the total amount, 26.0 million will be financed using debt. Debt Ratio Impact: the projected incremental debt ratio impact on system revenue bond debt service for the proposed revised CDP projects is 0.08 percent. The tables in Exhibits 1 and 2 provide details on project financing, funding sources and debt ratio impact. The following table reflects charitable gift funding anticipated in each project plan of finance: Project Name Approval Date Occupancy Date Project Cost Gift Target Current Gifts (Cash/ Pledges) Sun Devil Stadium Renovation Gammage Auditorium Rehabilitation PA Ph1 11/2014 Ph2 9/2015 Ph3 6/2016 PA 6/2016 8/ m 56.0m TBD 9.1m 5.6m 5.3m

4 EXECUTIVE SUMMARY Page 3 of 17 Requested Action Arizona State University requests that the committee forward to the full board for approval of the ASU Revised FY 2017 Capital Development Plan, as described and presented in this Executive Summary.

5 EXECUTIVE SUMMARY Page 4 of 17 Exhibit 1 ARIZONA STATE UNIVERSITY FY 2017 REVISED CAPITAL DEVELOPMENT PLAN Project Board Approval Status Gross Square Footage Project Cost Amount Financed Funding Method Annual Debt Service Debt Ratio New Academic/Support Project ASUTConference Center 30,000 19,500,000 Other Local Funds New Project Total 30,000 19,500,000 Previously Approved Academic/Support Project ASUTArmstrong Hall/ RossBlakley Library Renovation Previously Approved Project Total CDP June ,581 26,000,000 26,000,000 System Revenue Bonds 2,086, % 166,581 26,000,000 26,000,000 2,086, % Total 196,581 45,500,000 26,000,000 2,086, %

6 EXECUTIVE SUMMARY Page 5 of 17 Exhibit 2 REVISED CAPITAL DEVELOPMENT PLAN ANNUAL DEBT SERVICE BY FUNDING SOURCE Project Amount Financed 301 TUI AUX ICR OLF SLP FGT DFG OTH TOTAL ANNUAL DEBT SERVICE Previously Approved Academic/Support Project ASUTArmstrong Hall/ RossBlakley Library 26,000,000 2,086,300 2,086,300 Renovation Previously Approved Academic/Support 26,000,000 2,086,300 2,086,300 Project Total Total 26,000,000 2,086,300 2,086,300 REVISED CAPITAL DEVELOPMENT PLAN OPERATION AND MAINTENANCE BY FUNDING SOURCE Project TOTAL ANNUAL O&M 301 TUI AUX ICR OLF GFA FGT DFG OTH TOTAL ANNUAL 0&M New Academic Support Project ASUTConference Center New Academic/Support Project Total Previously Approved Academic/Support Project ASUTArmstrong Hall/ RossBlakley Library Renovation Previously Approved Academic/Support Project Total 0 Total Debt Service Funding Source Codes: (301) 301 Fund/Other (ICR) Indirect Cost Recovery (GFA) General Fund Appropriation (TUI) Tuition (OLF) Other Local Funds (FGT) Federal Grant (AUX) Auxiliary (SLP) State Lottery Allocation Proceeds (DFG) Debt Financed by Gifts (OTH) Other

7 EXECUTIVE SUMMARY Business and Finance Committee Meeting Page 6 of 17 EXHIBIT A FY 2017 REVISED CDP LOCATION AND SITE MAP

8 EXECUTIVE SUMMARY Page 7 of 17 Arizona Board of Regents Arizona State University Revised Capital Development Plan Project Justification Report Armstrong Hall/RossBlakley Library Renovation Previous Board Action: FY 2017 Capital Development Plan June 2016 Statutory/Policy Requirements Pursuant to Arizona Board of Regents Policy, Chapter 7102, all renovation projects of 5 million or more shall be brought to the Business and Finance Committee for approval, regardless of funding source or financing. Project Justification/Description/Scope Armstrong Hall and the RossBlakley Library, which previously housed the Sandra Day O Connor College of Law, will be repurposed to serve as the consolidated home for the College of Liberal Arts and Sciences (CLAS) on the Tempe campus, as depicted on the map attached hereto as Exhibit B. The Armstrong Hall and RossBlakley Library renovation projects were included in the FY 2017 Capital Development Plan as separate projects. In the interim, the same Design Professional (DP) and Construction Manager at Risk (CMAR) were selected for both of these projects. The results of this selection process have provided ASU with an opportunity to combine these projects and thereby capture efficiencies for the project design and construction process. The renovation of Armstrong Hall, a twostory, approximately 98,829 grosssquarefoot facility with a basement, and the approximately 67,752 grosssquarefoot Ross Blakley Library will further two campus master plan goals. This project will advance the goal of attainment of national standing for CLAS by providing the college with a consolidated home that enhances instructional and research effectiveness. The project also will strengthen the heart of the Tempe campus by repurposing existing academic space to enable the success of CLAS students, faculty, staff and administration. Armstrong Hall will house the Office of the Dean, provide a central location for CLAS student success and advising functions, and create a hub for CLAS student instruction and collaboration. Additionally, the Great Hall will be updated for use as a large classroom and to host lectures and special events.

9 EXECUTIVE SUMMARY Page 8 of 17 The RossBlakley Library will provide classrooms, writing centers, offices and humanities research and student collaboration space for use by the English Department. The project also will include infrastructure upgrades to create more energyefficient mechanical systems and address the major operational and code compliance issues that were identified in the engineering evaluation. The project also will allow for some updating of campus hardscape and landscape in the immediate area of Armstrong Hall and RossBlakley Library. Project Delivery Method and Process This project will be delivered through the CMAR delivery method. This approach was selected to provide contractor design input and coordination throughout the project, alleviate potentially adversarial project environments and allow for the selection of the most qualified contractor team. With the use of two independent cost estimates at each phase and prequalified, lowbid subcontractor work for the actual construction, CMAR project delivery also provides a high level of cost and quality control. ASU has selected both the DP and CMAR for this project. The initial cost and scope for this project w determined through the use of a consulting engineering firm that performed an indepth evaluation of the buildings to identify required upgrades. The proposed budget is based upon reasonable assumptions on cost per square foot for the changes needed to accommodate the new building occupants. Project Status and Schedule This project is in the planning phase. The design phase is scheduled to be initiated in November 2016, with construction scheduled to start in February Project Cost The budget for the combined 166,581 grosssquarefoot project is 26.0 million. The budget represents an estimated construction cost of 108 per gross square foot and an estimated total project cost of 156 per gross square foot. For this Capital Development Plan phase, an engineering consultant was hired to determine the scope and provide external cost estimates from independent programming efforts. Additional independent cost estimates will be provided by the DP and CMAR, as the project progresses through the design process.

10 EXECUTIVE SUMMARY Page 9 of 17 The CMAR will be at risk to provide the completed project within the agreedupon Guaranteed Maximum Price (GMP). A final report on project control procedures, including change orders and contingency use, will be provided at project completion. Fiscal Impact and Financing Plan: The 26.0 million project budget will be funded with system revenue bonds. Debt service will be paid from tuition. There are no expected increases in operation and maintenance costs for this project. Debt Ratio Impact: The projected incremental debt ratio impact for this project is 0.08 percent. Occupancy Plan Armstrong Hall will become the home of the College of Liberal Arts and Sciences on the Tempe Campus, bringing together physically separated offices, classrooms, and student support space. The RossBlakley Library will become home to the CLAS English Department. The relocation of CLAS academic functions to Armstrong Hall will open up space in the Fulton Center and other buildings across campus, providing needed Tempe campus growth space for the University. This project will be scheduled to minimize the impact on CLAS programs and services.

11 EXECUTIVE SUMMARY Page 10 of 17 Capital Project Information Summary University: Arizona State University Project Name: Armstrong Hall/RossBlakley Library Renovation Project Description and Location: The renovation of Armstrong Hall and the RossBlakley Library will prepare the buildings for the CLAS user group by creating classrooms; writing centers; research, office and student collaboration space; and updating the Great Hall. The project also will include infrastructure upgrades to create more energyefficient mechanical systems and address the major operational and code compliance issues that were identified in the engineering evaluation. Finally, the project will allow for some updating of campus hardscape and landscape in the immediate area of Armstrong Hall and RossBlakley Library. Project Schedule: Planning August 2016 Design October 2016 Construction February 2017 Armstrong Construction Completion December 2017 RossBlakley Construction Completion August 2017 Project Budget: Total Project Cost 26,000,000 Total Construction Project Cost 18,000,000 Total Project Cost per GSF 156 Construction Cost per GSF 108 Change in Annual O and M Cost: Utilities 0 Personnel 0 All Other Operating 0 Subtotal 0 Funding Sources: Capital A. Gifts B. System Revenue Bonds 26,000,000 Debt Service Funding Sources: Tuition Operation/Maintenance 0 Funding Sources:

12 EXECUTIVE SUMMARY Page 11 of 17 Capital Project Budget Summary University: ASU at the Tempe Campus Project: Armstrong Hall/RossBlakley Library Renovation Capital Development Plan Capital Costs 1. Land Acquisition 2. Construction Cost A. New Construction B. Renovation 18,000,000 Project Approval C. Special Fixed Equipment D. Site Development (excl. 2.E.) E. Parking and Landscaping F. Utilities Extensions G. Other* (Demolition) Subtotal Construction Cost 18,000, Fees A. CMAR PreConstruction 335,854 B. Architect/Engineer 1,281,260 C. Other Subtotal Consultant Fees 1,617, FF&E Movable 2,432, Contingency, Design Phase 150, Contingency, Constr. Phase 1,760, Parking Reserve 8. Telecommunications Equipment 420,000 Subtotal Items 48 4,762, Additional University Costs A. Surveys, Tests, Haz. Mat. Abatement 550,000 B. Movein Costs 150,000 C. Printing Advertisement 643 D. Keying, signage, facilities support 140,000 E. Project Management Cost (2%) 691,600 F. State Risk Mgt. Ins. (.0034 **) 88,400 Subtotal Addl. Univ. Costs 1,620,643 Total Capital Cost 26,000,000 * Universities shall identify items included in this category ** State Risk Management Insurance factor is calculated on construction costs and consultant fees.

13 EXECUTIVE SUMMARY Business and Finance Committee Meeting Page 12 of 17 EXHIBIT B ARMSTRONG HALL AND ROSSBLAKLEY LIBRARY RENOVATION LOCATION AND SITE MAP Arizona Board of Regents Arizona State University

14 EXECUTIVE SUMMARY Page 13 of 17 Revised Capital Development Plan Project Justification Report Conference Center Previous Board Action No previous Board action. Statutory/Policy Requirements ABOR Policy 7102(B) requires Committee review and Board approval of projects with a total project cost over 10 million. Project Justification/Description/Scope ASU owns five acres of land located on the southeast corner of Mill Avenue and University Drive, adjacent to and connecting the Tempe campus with downtown Tempe. The redevelopment of approximately 1.6 acres of this site (the Parcel ) for a hotel and conference center, which would be embedded within and serve the ASU and Tempe communities, has been a longstanding plan of the University. The proposed conference center will be fully integrated within the hotel on the project site, as depicted on the map attached hereto as Exhibit C. The conference center will include approximately 30,000 square feet of space and be capable of accommodating at least 1,000 people at a seated event. Other amenities will be determined during the design phase with input from ASU and the City of Tempe. The presence on campus of a highquality conference center will be highly beneficial to the University, supporting its mission as a leading global educational and research institution by facilitating the hosting of Universityrelated meetings and public functions. It also will be an asset to downtown Tempe, as a larger conference center has long been an important City objective. The hotel and conference center will provide a badlyneeded location for large University and community events, capable of hosting national and international academic conferences, community events, and similar meetings that are not currently possible, due to congestion at the Tempe campus Memorial Union and the lack of venues of the necessary size in the immediate vicinity.

15 EXECUTIVE SUMMARY Page 14 of 17 This development, along with the planned adjacent Lifelong Learning Community, will create publicprivate partnerships to positively affect and increase community and economic development with strategic value to the University. Project Delivery Method and Process The conference center will be constructed through a reimbursement agreement with the hotel developer. Project Status and Schedule ASU anticipates entering into an agreement to provide the conference center in concert with a planned hotel to be delivered by a private developer, with an approximate twelvemonth time period to complete due diligence, finalize design, obtain approval from the ASU/City of Tempe Joint Review Committee, and reach agreement on the various transaction documents. Project Cost The project budget for construction of the conference center is 19.5 million. Fiscal Impact and Management Plan The 19.5 million project budget will be funded with Other Local Funds. ASU will enter into a management agreement with the hotel operator for operation of the conference center to ensure seamless, coordinated management and operation of the hotel and conference center. Under the terms of the management agreement, ASU will have a presence in and a right to use the conference center, while the hotel/conference center operator will pay all operating and capital maintenance costs and be entitled to revenues therefrom. Parking for the conference center will be provided in an ASUowned parking area. ASU will provide the hotel conference center with space for 275 vehicles and the hotel conference center will improve, configure and manage the space at its cost. The hotel conference center will pay all ongoing operating and maintenance costs associated with its parking area. Occupancy Plan This project will not affect occupancy or programs, as the site is currently unoccupied. Parking will be replaced in the area through the construction of structured parking.

16 EXECUTIVE SUMMARY Page 15 of 17 Capital Project Information Summary University: Arizona State University Project Name: Conference Center Project Description and Location: The proposed conference center will be fully integrated with the hotel on property that ASU owns at the southeast corner of Mill Avenue and University Drive on the Tempe campus. The conference center will include approximately 30,000 square feet of space to accommodate at least 1,000 people at University and communityrelated meetings and public functions. Project Schedule: Per Lease Agreement (TBD) Planning Design Construction Start Construction Completion Project Budget: Total Project Cost 19,500,000 Total Project Construction Cost 13,650,000 Total Project Cost per GSF 650 Construction Cost per GSF 455 Change in Annual O & M Cost: Utilities 0 Personnel 0 All Other Operating Subtotal 0 Funding Sources: Capital A. Other Local Funds 19,500,000 Operation/Maintenance 0 Funding Sources:

17 EXECUTIVE SUMMARY Page 16 of 17 Capital Project Budget Summary University: Arizona State University Project: Conference Center Capital Development Plan Capital Costs 1. Land Acquisition 2. Construction Cost A. New Construction 13,525,000 B. Tenant Improvements C. Special Fixed Equipment D. Site Development (excl. 2.E.) 75,000 E. Parking and Landscaping F. Utilities Extensions 50,000 Project Approval G. Other* (Commisioning) Subtotal Construction Cost 13,650, Fees A. CMAR PreConstruction 205,000 B. Architect/Engineer 1,360,000 C. Other Subtotal Consultant Fees 1,565, FF&E Movable 1,000, Contingency, Design Phase 700, Contingency, Constr. Phase 950, Parking Reserve 8. Telecommunications Equipment 1,000,000 Subtotal Items 48 3,650, Additional University Costs A. Surveys, Tests, Haz. Mat. Abatement 50,000 B. Movein Costs C. Printing Advertisement D. Keying, signage, facilities support E. Project Management Cost 518,700 F. State Risk Mgt. Ins. (.0034 **) 66,300 Subtotal Addl. Univ. Costs 635,000 Total Capital Cost 19,500,000 * Universities shall identify items included in this category ** State Risk Management Insurance factor is calculated on construction costs and consultant fees.

18 EXECUTIVE SUMMARY Business and Finance Committee Meeting Page 17 of 17 EXHIBIT "C" HOTEL CONFERENCE CENTER LOCATION AND SITE MAP