Vision Market Analysis Operations Review Facility Assessment and Plan

University of Louisville Residence Hall Renewal Master Plan September 14, 2005
Vision Market Analysis Operations Review Facility Assessment and Plan Implementation Plan

Residence Hall Renewal Master Plan Assumptions
University wants the residence halls to be a recruitment advantage University wants the residential experience to increase student campus engagement and academic success University wants to enrich campus life through increased on campus student housing capacity Living on campus at U of L improves student retention as shown in other national and institutional research

Visioning the Future H&RL is integral to the campus community for student retention and satisfaction, leadership development and civic engagement and most importantly, support students’ academic success All residential housing on Belknap and Health Science campuses are seamlessly by our University HRL Team

Visioning the Future Students are living and learning on campuses 2900 in single, double, suite, and apartment style housing A major facility renovation project funding and beginning with a completion goal of 2014 Utilizing a combination of full-time/part-time university staff and outsourced vendor staff to provide the services necessary to maintain the halls

Visioning the Future Providing contemporary, progressive technological services for residents and prospective students

Visioning the Future Provide focused living learning communities for first year students, honors students and students interested in leadership development Sustaining active partnerships with the College of Arts and Sciences, The Speed School, and the Southern Police Institute resulting in new living learning centers for these schools’ students

Visioning the Future Our facilities will be updated to provide an amenity-driven, consumer-oriented residential experience while remaining affordable Our facility environments will provide space that encourages engagement and academic success Students living on campus will gain a stronger connection to the overall university community

Capacity Growth RETURNING DEDICATED FIRST YEAR 1998 2182 ON-CAMPUS
1582 600 2182 TOTAL CAPACITY 2005 2239 919 2605 ON-CAMPUS 3158 TOTAL CAPACITY 2011 2475 981 2956 ON-CAMPUS 3456 TOTAL CAPACITY

University of Louisville
Market Analysis Benchmarking Student Survey Demand Projections

Market Analysis Benchmarking
Profile of Off-Campus Properties Sample Size: 22 properties located within 15 miles of campus Property Size: 42 to 689 units; median 208 units Leases: All offer 12-month leases; majority offer 6- or 9-month leases (most for an additional charge) Security deposits: $0 to $450 Occupancy: 77% to 100%; median 92%

Off-Campus Rents by Unit Type

Peer Institutions SUNY at Buffalo University of Cincinnati University of Illinois – Chicago University of Kentucky – Lexington University of Memphis University of Missouri – Columbia University of Nevada – Reno University of Pittsburgh University of South Florida Wayne State University

Peers: Beds/Units as a % of Enrollment Median: 12% 65% 25% 23% 12% 10% 9% 7% SUNY at Buffalo University of Pittsburgh University of Kentucky-Lexington University of Missouri-Columbia University of Memphis University of Illinois-Chicago University of Louisville University of Nevada-Reno University of Cincinnati University of South Florida Wayne State University 18% Proposed

Peers: Fall 2004 Occupancy Median: 98.5% 100% 99% 98% 97% 93% 82% University of Cincinnati SUNY at Buffalo University of Illinois-Chicago University of Pittsburgh University of Louisville University of Missouri-Columbia University of Nevada-Reno University of Memphis

Peers: Room Rate Suite Double Median: $4,636 $5,290 $5,210 $5,138 $4,790 $4,750 $4,636 $4,280 $4,250 $3,777 $3,108 $2,912 University of Nevada-Reno University of Illinois-Chicago University of Cincinnati University of Pittsburgh University of Missouri-Columbia SUNY at Buffalo Wayne State University University of Kentucky-Lexington University of Louisville University of South Florida University of Memphis $5,140 Proposed

Peers: Room Rate Suite Double Median: $4,636 $5,290 $5,210 $5,138 $4,790 $4,750 $4,636 $4,280 $4,250 $3,777 $3,108 $2,912 University of Nevada-Reno University of Illinois-Chicago University of Cincinnati University of Pittsburgh University of Missouri-Columbia SUNY at Buffalo Wayne State University University of Kentucky-Lexington University of Louisville University of South Florida University of Memphis

Market Analysis Student Survey
Off-Campus Housing Costs Per Person Single Students

Off-Campus Housing Costs Per Unit Married/Family Students

Median Price Per Unit Comparison With Market Rents Students are generally renting at or below the median price in the market Married/family students generally seek lower cost housing than single student who share the rent

Unit Types and Rents Tested in the Survey

Most Important Factors Respondents Considered in their Housing Decision 500 1000 1500 2000 2500 Availability of parking Ability to meet other students/social atmosphere Physical condition of the housing Freedom from rules and regulations Security Have own bedroom Have personal space/privacy Adequate living space Proximity to campus facilities and services Affordable cost Weighted Scale Overall On Campus Off Campus Others were tested: these are the top ten responses

Interest in Proposed Housing

Reasons for Lack of Interest in Proposed Housing 100 200 300 400 500 600 Prefer University Tower or Medical/Dental Apartments Prefer Louisville Hall Prefer existing traditional campus housing I already own a home Prefer Bettie Johnson Hall I live with my spouse and/or children I do not want to move Concerned about the level of rules & regulations I live with my parents/relatives Prefer to rent off campus The housing is too expensive Number of Respondents Off Campus On Campus

Market Analysis Demand Projections
Off-Campus Student Demand – Fall 2004 Overall, 7.5% of current off-campus residents “would” or “might” be interested in the proposed housing Significant percentage of off-campus freshmen interested Class Capture Rate 50% Closure 25% Freshmen 2,167 8% 82 30% 164 245 Sophomores 1,884 2% 22 17% 79 101 Juniors 2,120 5% 48 21% 114 161 Seniors 2,285 3% 36 98 134 8,456 187 454 641 Full-time Off-Campus Enrollment Projected Demand Definitely Interested Might Be Interested

On-Campus Student Demand – Fall 2004 Overall, 32% of current on-campus residents “would” or “might” be interested in the proposed housing Lower-division students most interested Class Capture Rate 50% Closure 25% Freshmen 1,550 389 35% 135 524 Sophomores 604 45% 53 187 Juniors 164 30% 24 53% 22 46 Seniors 68 33% 11 6 17 2,386 560 215 775 Full-time On-Campus Enrollment Projected Demand Definitely Interested Might Be Interested

Total Demand by Unit Preference – Fall 2004 Demand at higher rents for renovated traditional halls and new semi-suites still exceeds the proposed supply of 1,033 beds Renovated Traditional Double $3,920 18% 117 20% 158 274 Improved Traditional Double $4,600 30% 194 42% 323 517 New Semi-Suite Double $5,140 127 19% 149 276 New Semi-Suite Single $5,860 32% 204 144 348 Total 100% 641 775 1,416 Preference Demand Projected 2004 Rent Per Student Per AY Unit Type Off-Campus Students On-Campus Students

Operations Analysis Progress Report Challenges and Opportunities Visioning the Future

Operations Review Overview
Four Aggressive Years of Growth and Improvements Challenges and Opportunities Remaining Major issues and recommendations for University Leadership Major Issues and recommendations for Housing and Residence Life Visioning the Future

Operations Review Progress Report
Four Years of Growth and Improvement General fund subsidy has been eliminated from the housing budget Student housing capacity has grown in four years from 9% to over 12% of fulltime undergraduate students Space renovated in Threlkeld for the Etscorn Honors Center – significant endorsement of the learning value of living on campus

Operations Review Progress Report
…More Improvements Housing cancellation policies and penalties have improved spring occupancy by 2-3 % annually. Enhanced security and fire safety program with access control and sprinkler systems Began house calls and facility assistant visits Enhanced the First Year Experience for residential students with various initiatives

Operations Review Challenges and Opportunities
University Leadership Do you want the residential experience to help recruit tomorrow’s best students? What level of commitment is sustainable from academic affairs for world-class residential learning communities? Can retention be increased through the nexus of a distinctive residential experience? Is the time right to establish a single source campus housing management approach?

Recommendations for University Leadership Effect the coordinated marketing and management of UofL Housing with ULP to have a single source of authority for the University’s student residential experience Recruitment - Marketing Retention Asset management Occupancy designations Policy development Academic and educational focus

Recommendations for University Leadership For a specified period of years consistent the housing master plan, re-direct general fund overhead charges, interest on housing revenues/reserves and housing budget surpluses directly to the residential capital projects

Recommendations for University Leadership Delegate to the Housing and Residence Life management team the decisions of where students should be assigned based on market forces and educational needs. Develop a plan to eliminate the requirement that upper class students living on campus must purchase a meal plan

Recommendations for University Leadership Appoint a task force of faculty and student affairs and housing staff to develop a strategic plan for an expanded focus on residential learning Provide appropriate educational funds to support the residential learning initiatives needed to support recruitment and retention of students

Housing and Residence Life How can the residential facilities and the on campus experience support recruitment and retention of students? Can we guarantee housing to all first year students? What is the primary focus of the educational experience in residence life? Can you develop business practices that enable full tracking of all fiscal issues while allowing reduction in operating costs Should you adopt practices where appropriate from the Allen & O’Hara management and marketing model

Recommendations for Housing Leadership Develop a plan, in collaboration with enrollment management, to guarantee all first year students who apply by May 1st each year (and thereafter as well) Identify market niches and marketing strategies to increase overall fall occupancy by 2-3% within three years

Recommendations for Housing Leadership Establish first year residence halls so that front-loaded student support can efficiently enhance their retention to the sophomore year Centralize housing’s residence life and student services around simplified and focused residential learning objectives to enhance the success of first year and other residential students

Recommendations for Housing Leadership Reduce operating expenses through re-organization, more clearly focused student academic success activities, and re-engineered business practices Develop a business model scenario applying the ULP operations structure to UofL Housing to clearly identify the added operating expenses of the current H&RL budget Analyze the differences to determine if the added expenses are justified by student outcomes in terms of recruitment or retention

Operations Review Visioning the Future
The educational experience gained by living on campus is recognized and valued by all stakeholders Aggressively funded capital investments transform the traditional residence halls into engaged learning environments with comfortable and secure accommodations The recruitment of your next generation of students is enhanced by the quality of the residential experience at the University of Louisville

Facility Assessment and Plan Assessment Options Implementation

Part One - Analysis Facility Existing Condition Assessment Site
Structure Exterior Enclosure Roof Finishes Conveying Mechanical, electrical, Plumbing, Fire Protection Systems Building Code ADA Accessibility Program Assessment Unit types / mixes Amenities Living – learning Communities

Floor 1 Miller Hall – Recommended Option Threlkeld Similar
System Renewals New Mechanical System New Electrical System New Windows New Roof New Interior Finishes Elevator Computer WC Recreation Laundry Seminar WC Vending Kit. Lounge (2500 sf new) Front Desk Shared Spaces Residence Hall Office Elev. 2B 2B 2B 2B Bath Lounge Floor 1 RD Apt. 2B 2B 2B 2B 2B 2B 2B 2B 2B

Floor 2-4 Miller Hall – Recommended Option Threlkeld Similar 2B 2B Lng
Bath Bath Elev. 2B 2B 2B 2B 2B 2B 2B 2B Lng 2B 2B Floor 2-4 2B 2B 2B 2B 2B 2B 2B 2B 2B 2B 2B 2B

Three existing dormitories, three stories each.
49 Complex – Recommended Option Three existing dormitories, three stories each. First floor elevations are unequal Underutilized first floor plan

Two new 250 bed Residence Halls at 65,000 GSF each. 4 levels.
49 Complex – New Construction Service Two new 250 bed Residence Halls at 65,000 GSF each. 4 levels. Food Service at 9,500 GSF. 1 level. 2 Fraternity Chapter Rooms at 4,000 GSF

First Floor Plan 49 Complex - New Construction Floor Plan
Reasons for replacement of 49 Complex New Unit types All new systems, better fit to campus Better use of site New image for complex = higher rents Reasons for removal of Stevenson Hall Existing rooms too small for doubles Raises $ / bed cost to higher than new construction Removed beds accommodated in Complex replacement Residence Life offices remain at Stevenson; upper floors change program use First Floor Plan

49 Complex - New Construction Floor Plan
Typical Floor Plan

Living Learning Suite Semi-suites Options for New Construction 1B 2B
STUDY LOUNGE 2B 1B 1B 2B 2B 1B BATH Living Learning Suite

Implementation Plan Scope Financial Plan Summary Recommendations

Implementation Plan Scope
On-Campus Facilities Operations: All existing halls Capital Improvements: Residential master plan projects; others deferred ULP Beds Bettie Johnson, Kurz, and Campus Commons not in financial model Project surpluses source of revenue only Merger of management systems to be determined

Implementation Plan Scope
ULP Merger/Acquisition Ownership to remain with ULH No financial benefit to University ownership Risk of financial default should remain with ULH Improving net available cash flow to University Additional debt service not advisable in wake of $50 million in new debt for residential master plan Management Short-term: Process re-engineering to approach vision Long-term: Realignment to single point of control within University to achieve vision

Implementation Plan Financial Plan
Challenges and Constraints Rental rates are low High operating costs per bed Ongoing renewal and replacement Existing debt service No reserves Outcome: Minimal existing debt capacity to fund renovations and quality construction

Creating Debt Capacity Increase rents faster than operating costs Charge rental premiums for comprehensive renovations and new construction Trim operating costs and non-operating transfers Minimize capital expenses Outcome: Increased cash flow that can be leveraged to fund capital improvements

Revenue Assumptions 6% annual escalation through FY2009 all beds 45% premium in year following project completion 95% post-completion occupancy Operating Cost Assumptions Current operating results as baseline 3% annual inflation (i.e., 3% less than rents) 10% reduction in year following completion

Capital Improvements Capital Expenses 25% of annual surplus, if available Construction Costs Renovations based on input from planning team $160 per gross square foot for new construction Development Budgets Include FF&E, design fees, development costs, contingency, and financing costs Average markup 33% of construction costs

Financing and Reserves (New/Reno) Bond coupon rate 5.5% 5.0% Term yrs 20 yrs Earnings on reserves 2.5% Reserves Balance of $1.0 million assumed as of 7/1/2005 Operating surpluses are transferred to reserves Operating deficits are funded from reserves Provide backup debt service coverage

Summary

Bed Distribution

Operating Budget

Debt Service Coverage

Reserves

Implementation Plan Summary Recommendations
Establish advisory team to oversee the Plan Collaborate with Academic Affairs to establish living/learning environments Formalize inter-departmental business processes and agreements in support of full auxiliary status Seek operational and programmatic efficiencies to reduce operating costs Implement phased facilities renewal plan Move oversight and control of ULP management to Residence Administration

Floor 1 MEDICAL / DENTAL APTS – Recommended Upgrade 74 Apartments
Program Summary Gross Area/ Floor (first) Gross Area/ Floor (2-4) Gross Area/ Floor (5-7) Total Area First Floor Typ. Office Area 7 Offices per Floor Building Lobby Apts Lobby 10,650 SF 32,331 SF 24,735 SF 67,716 SF 190 SF 1,330 SF 265 SF 403 SF OF OF OF OF OF BATH BATH OF OF BLDG LOBBY 74 Apartments 1B 1B RES LOBBY ST 1 Bedroom (7) Studio (1) 28 Offices total 5,320 SF 1B 1B 1B 1B 1B Floor 1

Floor 2-4 MEDICAL / DENTAL APTS – Recommended Upgrade Program Summary
Second Floor to Fourth Floor 1 Bed room/Studio (10) 2 Bed room (1) Work room (1) OF OF OF OF OF BATH BATH OF OF Work room 2B ST ST 1B ST LOB ST 1B ST 1B 1B 1B Floor 2-4

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