Revised: March 2015 REPORT TO THE BOARD OF GOVERNORS Agenda Item #1.13 SUBJECT TALL WOOD STUDENT RESIDENCE (BROCK COMMONS PHASE 1) MEETING DATE JUNE 9, 2015 APPROVED FOR SUBMISSION Forwarded to the Board of Governors on the Recommendation of the President Arvind Gupta, President and Vice-Chancellor DECISION REQUESTED IT IS HEREBY REQUESTED that the UBC Board of Governors grant BOARD 2 approval for the Tall Wood Student Residence project, with authorization to issue the development permit and a funding release of $1,500,000 to complete working drawings and tender documents. Capital Budget $47,750,000 Operating Budget see report Revised Schedule Program Authorization to issue development permit Proceed to working drawings and tender Funding Release $1,500,000 Information Expenses to date $550,000 Funding released to date $750,000 Report Date May 12, 2015 Presented By Louise Cowin, Vice-President Students Lisa Castle, Vice-President Human Resources (Acting VP Resources & Operations) John Hepburn, Vice-President Research & International Andrew Parr, Managing Director, Student Housing & Hospitality Services John Metras, Managing Director, Infrastructure Development Brent Sauder, Director, Strategic Partnerships Office Peter Smailes, Treasurer Michael White, Associate Vice-President, Campus + Community Planning Al Poettcker, President & CEO, UBC Properties Trust EXECUTIVE SUMMARY The Tall Wood Student Residence (Brock Commons Phase 1) project is intended to address two objectives: 1) To deliver approximately 400 student residence beds as part of the Student Housing & Hospitality Services (SHHS) strategy to address the growing wait list for on-campus housing, which reached a peak of 5,200 students in August 2014. 2) To design, build, evaluate and monitor an 18-storey building utilizing advanced wood-based building systems, physically demonstrating the applicability of wood in the tall-building market.
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Revised: March 2015
REPORT TO THE BOARD OF GOVERNORS Agenda Item #1.13
Forwarded to the Board of Governors on the Recommendation of the President
Arvind Gupta, President and Vice-Chancellor
DECISION REQUESTED
IT IS HEREBY REQUESTED that the UBC Board of Governors grant BOARD 2
approval for the Tall Wood Student Residence project, with authorization
to issue the development permit and a funding release of $1,500,000 to
complete working drawings and tender documents.
Capital Budget $47,750,000 Operating Budget see report Revised Schedule Program Authorization to issue development permit Proceed to working drawings and tender Funding Release $1,500,000
Information Expenses to date $550,000 Funding released to date $750,000
Report Date May 12, 2015
Presented By Louise Cowin, Vice-President Students Lisa Castle, Vice-President Human Resources (Acting VP Resources & Operations) John Hepburn, Vice-President Research & International Andrew Parr, Managing Director, Student Housing & Hospitality Services John Metras, Managing Director, Infrastructure Development Brent Sauder, Director, Strategic Partnerships Office Peter Smailes, Treasurer Michael White, Associate Vice-President, Campus + Community Planning Al Poettcker, President & CEO, UBC Properties Trust
EXECUTIVE SUMMARY The Tall Wood Student Residence (Brock Commons Phase 1) project is intended to address two objectives:
1) To deliver approximately 400 student residence beds as part of the Student Housing & HospitalityServices (SHHS) strategy to address the growing wait list for on-campus housing, which reached apeak of 5,200 students in August 2014.
2) To design, build, evaluate and monitor an 18-storey building utilizing advanced wood-basedbuilding systems, physically demonstrating the applicability of wood in the tall-building market.
There is world-wide interest in bringing engineered wood/hybrid mass timber building systems and the inherent positive attributes of wood (renewability, flexibility, carbon sequestration), to the high-rise building market. Lessons learned from mass timber construction, in the form of solid wood columns and beams utilized for over 100 years, plus recent advances in engineered wood products and connectors, now make it feasible to utilize hybrid mass timber systems for structural elements of buildings beyond the current 4-6 storey code height limitation set for wood-frame construction.
The UBC Tall Wood Student Residence will have a height of 53 metres (the maximum permitted on the academic campus) and a gross floor area of approximately 162,750 ft2 (15,120 m2). It will accommodate student housing for upper year and graduate students with a planned capacity of 404 beds (up from 383 beds estimated at Board 1) in single-bed studio and 4-bed quad units, each with integrated kitchen and bathroom facilities. Additionally, a collegium is programmed for the ground floor.
The building site is adjacent to the North Parkade (see Attachment 1) within the Brock Commons student housing “hub” site designated in the UBC Vancouver Campus Plan. The project represents the first phase of Brock Commons and will provide student housing only, with a future phase providing other community amenities and academic spaces as well as additional student housing.
Despite the recent growth in student housing stock on the Vancouver campus, demand continues to exceed supply by a significant amount. UBC is addressing this with a proposed Student Housing Growth Strategy that would add up to 2,250 beds to the inventory between 2017 and 2019, in addition to the currently approved Ponderosa Phase 2 and Orchard Commons projects. The Tall Wood Student Residence is an important component of this strategy.
The capital cost for the project is now estimated at $47.75m ($43.3m standard construction, plus $4.45m wood premium). The $43.3m base building cost will be funded by SHHS through an internal loan repaid from housing rental revenue. The $4.45m estimated premium for advanced wood design and construction is to be funded from external sources including $3.45m secured to date from the Canada Wood Council (CWC) and Forest Innovation Investment (FII). An additional $1.0m is committed and scheduled to be announced in June 2015. Further fundraising activities will be pursued throughout the project. Any incremental funds realized will be used to enhance the design, or contribute towards post construction evaluation and monitoring of the facility.
The project will provide an opportunity to demonstrate use of a sustainable, locally relevant construction material in a high-rise building application, presenting a unique and compelling Campus as a Living Laboratory (CLL) opportunity for the Faculty of Applied Science, Faculty of Forestry and local forestry and wood products industries. It will also provide a necessary visible reference and knowledge generation site for influencing the 2020 Canadian National Building Code.
The project is being managed by UBC Properties Trust. The design consultant is Acton Ostry in partnership with Architekten Hermann Kaufmann. Board 1 approval was received in September 2014. Schematic design has been completed and work is underway with the Provincial Building & Safety Standards Branch on a Site Specific Regulation which will allow mass timber construction in this case beyond current building code limits. Board 2 approval is sought at this time to complete the design.
Development review procedures for the project have been completed including reviews by the Advisory Urban Design Panel (Apr 9, 2015) and Development Review Committee (Apr 23, 2015) and a Public Open House (Apr 29, 2015). Information sessions were also held with students (April 1, 2015) and with Chancellor Place residents (Apr 23, 2015). Campus and Community Planning confirm that the development review process for the project has been completed. The project is ready for issuance of the Development Permit following Board 2 approval. Project completion is targeted for August 2017.
Learning Research Innovation Engagement (Internal / External)
☐ International
or ☐ Operational
DESCRIPTION & RATIONALE
Background & Concept The Tall Wood Student Residence (Brock Commons Phase 1) project provides a unique opportunity to both address a core University need for expanded on-campus student housing and provide a compelling Campus as a Living Lab opportunity for UBC researchers, students and local industry.
The use of engineered wood materials as a primary structural component in buildings of all types, and high-rise buildings in particular, is currently a strong focus of design and research communities, forest industries and governments seeking to promote sustainability, innovation and economic development. Wood is a renewable resource, offers flexibility in use and is a more sustainable building material than concrete or steel in that it sequesters carbon, while the production of concrete and steel releases significant amounts of carbon.
The emergence of engineered wood products and advances in connectors has made it feasible to utilize wood-based products and systems as structural elements for wood buildings higher than the traditional 4-6 storey heights allowed by building code and the wood-frame building system. Innovative designs using engineered wood products such as a cross-laminated timber (CLT), structural composite lumber (SCL) and glued laminated timber (glulam) have been developed around the world with notable projects ranging from 6-14 storeys in Austria, Australia, Norway, England and British Columbia.
The Forte tower in Melbourne is currently the world’s tallest wood residential building at 10-storeys (32m). A 51 meter, 14 floor apartment building is currently under construction in Bergen, Norway. In North America, the Wood Innovation & Design Centre in Prince George is the tallest wood building at 29.25m. Proposed designs have been put forward for wood towers ranging from 20 to 40 storeys. In March 2014, the US Department of Agriculture announced a funding program for a tall wood building competition to accelerate technology transfer and implementation of expanded uses of wood products for building construction in the United States.
UBC’s current portfolio of wood structure buildings includes the Centre for Interactive Research on Sustainability (CIRS), the Bioenergy Research & Demonstration Facility (North America’s tallest industrial building using CLT), the Earth Sciences Building and others.
The Tall Wood Student Residence project will design, build, evaluate and monitor an 18-storey building utilizing mass-timber hybrid building systems, physically demonstrating the applicability of wood in the tall-building market and providing
Planned student residence bed count has increased from 383 to 404. Projected
gross building area has increased from 157,000 ft2 to 162,750 ft
2. Total capital
cost has increased from $44m to $47.75m. Internal financing requirement has
a range of research opportunities for UBC faculty and students in the Faculty of Applied Sciences and Faculty of Forestry.
With a height of 53m (the maximum permitted on the academic campus) and a gross floor space of approximately 162,750 ft2 (15,120 m2), the building will provide 404 student residence beds for upper year and graduate students, in single-bed studio and 4-bed quad units, each with integrated kitchen and bathroom facilities. Amenity spaces, such as social gathering and study spaces for the use of students, will be located on the ground floor along with administration, laundry facilities, storage spaces and service rooms. Additionally, a collegium for commuter students is programmed for the ground floor.
The building will comprise of 17 storeys of mass-timber hybrid construction above a one-storey base of concrete construction. There will be two 18-storey concrete cores containing exit stairs and elevators.
Access to student housing is a key strategic initiative for UBC that creates an improved student experience and long lasting connections to UBC, adds vibrancy to the campus and supports the international student recruitment plan. The Tall Wood Student Residence project has been identified as a key component of the UBC Student Housing Growth Strategy to add up to 2,250 additional beds by 2019 and thereby help address the growing wait list for on-campus housing which reached a peak of 5,200 students in August 2014 (an increase of 1,500 from the same point in 2013).
Location
The building site is on the existing open area located to the north of the North Parkade and fronting onto Walter Gage Road (see Attachment 1). This is within the Brock Commons student housing “hub” site designated in the UBC Vancouver Campus Plan. This first phase of Brock Commons will provide student housing only with a future phase providing other campus amenities and academic spaces as well as additional student housing. The project team has done significant due diligence in testing alternative sites for this project and the proposed location for the Tall Wood Student Residence is well suited in terms of functional requirements and urban fit.
Benefits The Tall Wood Student Residence project will provide a range of benefits for UBC and the wider community. These include:
Addition of 404 student residence beds to help address the growing studenthousing wait list, which reached a peak of 5,200 in August 2014.
Creates an effective collegium site to support commuter students.
Demonstration of a sustainable, locally relevant construction material in aninnovative high-rise building application, providing a compelling argumentfor the use of wood-based building systems in the tall building market.
Creation of a Campus as a Living Laboratory (CLL) opportunity for AppliedScience, Forest Science and local forestry and wood products industries,offering research and learning opportunities for UBC students, researchersand faculty in the design, construction, evaluation and monitoring ofadvanced mass timber structural systems.
Provision of a necessary visible reference and knowledge generation site forinfluencing the 2020 Canadian National Building Code.
Development of UBC, BC and Canada as a global tall-wood hub that willsupport expansion in the areas of education/training, certification, globalconsulting and software development.
Will bring interested visitors to campus (as has the CIRS project), buildingUBC’s reputation for innovation and sustainable building design and exposingthe institution and its academic offerings and research findings to a broaderbase.
Will foster strengthened communication and relationships for further multi-disciplinary initiative between UBC, CWC, FII and local forestry and woodproducts industries who will be project collaborators here and hopefullyagain in the future.
Provide the knowledge and know how required to replicate this type ofbuilding in a cost effective and timely fashion to address the current studenthousing bed deficit.
Sustainability
The building will be designed to achieve LEED Gold certification as a minimum. The use of wood as the primary building material will substantially reduce the carbon footprint of the building over a conventional building. Wood is a more sustainable building material than concrete or steel in that it sequesters carbon while the production of concrete and steel releases significant amounts of carbon. Wood is also renewable, versatile, non-toxic and provides aesthetic benefits.
RISKS Financial, Operational
& Reputational
Risks
Risks to be addressed include:
Financial and technical risks associated with Tall Wood construction,including ability to obtain building permit approval and cost of constructioninsurance. The BC Building Code currently allows for wood structures up to 6storeys in height. Development of an 18-storey tall wood building willrequire a Site Specific Regulation from the Provincial Building & SafetyStandards Branch (BBSB). The design team has developed a technically andeconomically feasible design solution for the project and work is underwaywith the BSSB on the Site Specific Regulation (SSR). Discussions have also
been initiated with the insurance industry to demonstrate that mass timber construction poses much less risk than wood frame construction.
Schedule risks due to use of advanced wood-based building systems whichmay entail longer design, permit review and construction processes. Theproject team has developed an initial plan for efficient construction of themass-timber structure during the spring and summer (dry months) of 2016.This assumes favourable review of the design by the BSSB and completion ofthe Site Specific Regulation by the BSSB/Provincial Government bySeptember 2015 in order to commence construction of the concretestairwell and elevator cores by October 2015. As noted, work is underwaywith the BSSB to develop the SSR.
Funding risks associated with the proposed external funding sources to payfor the estimated $4.45m tall wood premium. CWC and FII have committed$3.45m to date and, as noted above, an additional $1.0 million contributionis expected to be announced in June 2015. Therefore, overall funding riskremains small.
Liquidity constraints which may delay our ability to provide the internalfinancing to SHHS required for the project. The Executive has confirmed thatthis project has been prioritized to receive the necessary liquidity for internalfinancing.
Financial / cash flow risks associated with achieving 12-month residenceoccupancy. This risk is mitigated through Summer Use of Campus initiativesand increasing demand for 12-month housing.
Liveability risks associated with a new construction method could result insound transfer and other comfort issues for residents. This has beenmitigated through a thoughtful design process which has been sensitive tooccupant requirements and satisfaction. Research has shown that woodbuildings can actually provide an improved occupant experience.
Capital Budget The capital cost for the project is now estimated at $47.75 million including a premium of $4.45 million for utilizing a mass-timber hybrid building system. This estimate was prepared by UBC Properties Trust (UBCPT) based on detailed analysis undertaken with input from the design team and construction manager as part of the schematic design process.
Project Capital Cost Breakdown Cost $
Board 1 Cost $
Board 2 $/GSF $/Bed
Construction Costs
Construction $29,516,000 $31,300,000 $192 $77,475
Construction Contingency $1,177,500 $1,300,000
Cash Allowances
Public Realm $290,450 $300,000
Site Servicing $730,050 $850,000
Escalation1 $0
FF+E $1,334,500 $1,500,000
UBC IT and Secure Access $785,000 $1,000,000
Audio Visual $149,150 $150,000
Soft Costs
Consultant Budget $1,884,000 $2,000,000
Project Management $942,000 $1,000,000
Moving, Commissioning, Inspections
$236,975 $250,000
IIC, Permits, PO Charges, Insurance and Legal
$942,000 $1,300,000
Building Subtotal $37,987,625 $40,950,000 $252 $101,361
GST $619,000 $667,000
Building Total $38,606,625 $41,617,000 $256 $103,012
Retained Risk $294,375 $325,000
Construction Period Financing $1,099,000 $1,108,000
Base Project Sub-Total $40,000,000 $43,300,000 $266 $107,178
Tall Wood Premium (Externally Funded)
$4,000,000 $4,450,000
Tall Wood Project Total $44,000,000 $47,750,000 $293 $118,193
Gross Building Area (gsf) 156,840 162,750
Number of Residence Beds 383 404
Cost per bed for the project, not including the collegium and the separately funded wood premium, is $106,559 which is in line with the cost per bed for the Ponderosa Commons Phase 2 project ($105,342) factoring in construction cost escalation between the tender dates for the two projects (2013 versus 2015). Note that risks associated with mass timber construction are covered within the tall wood premium component of the budget and not within the base construction contingency, which is based on standard concrete construction.
Preliminary Operating Budget Operating and maintenance costs for the building will be covered by SHHS through student housing rental revenue. The SHHS preliminary operating budget for Tall Wood Residence, including debt servicing, is provided in Attachment 3 and shows positive cash flow starting in Year 2 of operation (2018/19).
FINANCIAL Funding Sources,
Impact on Liquidity
Funding + Financing The $43.3 million base building cost (total cost less wood premium) will be funded by Student Housing & Hospitality Services through an internal loan at 5.75% annual interest paid back over 30 years from housing rental revenue. The $4.45 million wood premium is to be funded from external sources. $2.8 million of this amount has been secured from the Canada Wood Council (CWC) and $650,000 from Forest Innovation Investment (FII). An additional $1 million has been committed and is expected to be announced in June 2015. CWC and the Council of Forest Industries (COFI) will assist UBC is closing any funding gap associated with the wood premium remaining, after more detailed engineering and design of the structure (opportunities include reduced fees and donation of building materials). Given that fundraising activities are targeted at the innovation aspects of the project, additional funds generated through fundraising over and above current budget requirements will be used to enhance the design, and post construction evaluation and monitoring of the facility.
For clarity, no portion of the wood premium will be funded by Student Housing and Hospitality Services.
Source Board 1 Board 2 Status
Canadian Wood Council
(CWC) contribution for Tall
Wood premium
$2,800,000 $2,800,000
Letter of Intent
received. Execution of
funding agreement
expected before Board 3.
Forest Innovation
Investment (FII) contribution
for Tall Wood Premium
$650,000 $650,000 Received.
Student Housing &
Hospitality Services
(financing required)1
$40,000,000 $43,300,000 Committed.
Further Gov’t-Targeted
Fundraising for Tall Wood
premium
$550,000 $1,000,000 Announcement expected
in June 2015.
Overall Total $44,000,000 $47,750,000
1 - Internal Loan at 5.75% annual interest paid back over 30 years from housing rental revenue.
SCHEDULE Implementation
Timeline
Schedule This schedule assumes favourable review of the building design by the Provincial Building Safety & Standards Branch and completion of the Site Specific Regulation by the BSSB/Provincial Government by September 2015 in order to commence construction of the concrete stairwell and elevator cores by October 2015.
Senate Academic Building Needs Committee Aug 2014 Aug 2014
Architect Selection Jul-Aug 2014 Jul-Sep 2014
Board 1 Sep 2014 Sep 2014
Board 2 Apr 2015 Jun 2015
Board 3 Sep 2015 Sep 2015
Construction Start Oct 2015 Oct 2015
Construction Completion Aug 2017 Aug 2017
Occupancy Sep 2017 Sep 2017
Board 4 Sep 2019 Sep 2019
CONSULTATION Relevant Units, Internal
& External Constituencies
The Tall Wood Student Residence project has been identified as a priority in the UBC Student Housing Growth Strategy and the UBC Capital Plan.
Board 1 approval was received in September 2014. The schematic design has been completed and work is underway with the Provincial Building & Safety Standards Branch on a Site Specific Regulation which will allow mass timber construction higher than current building code limits for this project.
The project is being managed by UBC Properties Trust. The design consultant is Acton Ostry in partnership with Architekten Hermann Kaufmann. The development review procedures for DP 15011 have been completed including reviews by the Advisory Urban Design Panel (Apr 9, 2015) and Development Review Committee (Apr 23, 2015) and a public open house (Apr 29, 2015). Information sessions were also held with students (April 1, 2015) and with Chancellor Place residents (Apr 23, 2015). The online feedback period (Apr 7 to May 8) resulted in the receipt of 15 feedback forms. All comments are posted on the C+CP webpages in keeping with the community engagement commitments of the department.
The feedback from the student community can be summarized as positive with some minor concerns about the timing of the services associated with the other phases of Brock Commons. Neighbouring resident concerns included building height, traffic and circulation, and a potential for increased noise from additional student neighbours. The feedback posted online includes verbatim comment with C+CP commentary.
Campus and Community Planning confirm that the development review process for the project has been completed. The project is ready for issuance of the Development Permit following Board 2 approval.
UBCPT COMMENTS Complete for all reports that include a property
Less Student Housing Operating Costs 4 (1,704) (1,755) (1,808)
Less Public/Other Operating Costs 5 (35) (36) (36)
(1,739) (1,791) (1,844)
Net Operating Income 3,032 3,123 3,217
Less Debt Service 6 (3,032) (3,032) (3,032)
Add Interest Earnings Discount 6 0 0 0
Cash Flow (0) 91 185
Operating Cash Flow NPV: 16,088
IRR: 8.56%
1 - Comparing current rates and current unit sizes, with a Rental Inflation factor applied.
2 - Contemplates vacancy rates of 1% in Winter Academic term and 4% in Summer Academic term.
3 - Lease revenue of $25 per Square Foot per annum. None is contemplated.
4 - Current operating costs are 35% based on Marine Drive Residence operating figures.
5 - Public and other area operating costs are $14 per Square foot per annum, derived from Building Operations.
6 - Assumes financing at a rate of 5.75% amortized over 30 years borrowing through Student Housing Financing Endowment (SHFE) or general working capital as required.
Less Student Housing Operating Costs 4 (1,704) (1,755) (1,808)
Less Public/Other Operating Costs 5 (35) (36) (36)
(1,739) (1,791) (1,844)
Net Operating Income 3,032 3,123 3,217
Less Debt Service 6 (3,032) (3,032) (3,032)
Add Interest Earnings Discount 6 0 0 0
Cash Flow (0) 91 185
Operating Cash Flow NPV: 16,088
IRR: 8.56%
1 - Comparing current rates and current unit sizes, with a Rental Inflation factor applied.
2 - Contemplates vacancy rates of 1% in Winter Academic term and 4% in Summer Academic term.
3 - Lease revenue of $25 per Square Foot per annum. None is contemplated.
4 - Current operating costs are 35% based on Marine Drive Residence operating figures.
5 - Public and other area operating costs are $14 per Square foot per annum, derived from Building Operations.
6 - Assumes financing at a rate of 5.75% amortized over 30 years borrowing through Student Housing Financing Endowment (SHFE) or general working capital as required.