Plan for UCLA Hotel-Conference Center of Feb. 9, 2012 Sent to UCLA Faculty Assn. on Mar. 20, 2012

Via Email

March 20, 2012

Susan Gallick EMAIL: susangallick@earthlink.net

Faculty Association at UCLA EMAIL: ucfa@earthlink.net

RE: RESPONSE for PRR 2012‐139 Business Plan for proposed UCLA Luskin Center

Dear Ms. Gallick:

This is a response to your request for public records under the California Public Records Act (CPRA) dated February 21, 2012. Please find enclosed the following responsive document:

1) Business Case Analysis Luskin Conference and Guest Center, January 2012

The CPRA authorizes UCLA to charge for reproduction costs and/or programming services.1 As a courtesy, these fees have been waived. Any subsequent requests may be subject to copying and/or programming fees.

RMIP strives to honor the spirit and legislative intent of the California Public Records Act. We believe the attached responsive records successfully fulfill the purpose of this law and your request.

This completes the response to your request. Please feel free to contact me if you have any questions or comments.

Sincerely,

Aimee M. Felker Director Records Management & Information Practices (310) 794‐8741 | (310) 794‐8961 (fax) | uclapublicrecords@finance.ucla.edu | www.finance.ucla.edu

AMF:amf

Enclosure(s): PRR 2012‐243 Responsive Documents + Request

1

California Government Code §6253(b) Page 1 of 1

BUSINESS CASE ANALYSIS LUSKIN CONFERENCE AND GUEST CENTER Account 946375 January 2012

Approved for campus:

A.

Steven A. Olsen Vice Chancellor and Chief Financial Officer University of California, Los Angeles

University of California, Los Angeles 2011-2012 Major Capital Improvement Program

Date

Business Case Analysis Luskin Conference and Guest Center

TABLE OF CONTENTS ' EXECUTIVE SUMMARY INTRODUCTION PROJECT DRIVERS SUMMARY OF PROJECT GOALS/DRIVERS

()

PROJECT OBJECTIVES/EVALUATION CRITERIA 6 9

DEVELOPMENT PROCESS EVALUATION OF ALTERNATIVES RECOMMENDATION

10

ATTACHMENTS

11

1, Alternatives Matrix 2. Business Case Analysis — Financial Summary 3. Fiscal Analysis of Recommended Alternative 4. Site Map

2

Business Case Analysis Luskin Conference and Guest Center

EXECUTIVE SUMMARY

State-of-the-art academic conference facilities are needed at UCLA to foster the exchange of ideas, enhance the image of the campus as one of the world's great research universities, and allow UCLA to compete with other top tier institutions for major academic conferences.

Existing campus meeting facilities are in limited supply, and there is demand from faculty for modern conference and guest facilities that can support major academic conferences.

A $50 million gift from Meyer and Renee Luskin to help construct and endow an academic conference center on the campus — as part of a their total $100 million gift to enhance the overall academic quality and reputation of the UCLA campus — will allow faculty, researchers, and students to exchange ideas and elevate debate on society's greatest challenges with international scholars, civic leaders and the general public.

Criteria were developed to evaluate the potential for conference and guest facilities on four campus sites. The evaluation criteria included centrality of location, impacts to adjacent uses, site acquisition costs, room affordability, and support from faculty and response from the community. The most viable site was found to be the site of Parking Structure 6 (PS 6) adjacent to the main entrance to the campus. Situated at the terminus of Westwood Plaza, it is easy to locate for first time visitors, and is close to popular campus venues such as Ackerman Union and Pauley Pavilion, and Westwood shops and restaurants. The selected site has strong support from faculty and community, and provides an opportunity to improve the adjacent Gateway Plaza as a welcoming point to UCLA. Studies have confirmed that redevelopment of the PS 6 site would provide the campus community with reasonably priced conference facilities and guest rooms in a central campus location. An efficient building footprint with parking can be developed at this location. While use of the site requires the demolition of PS 6, lost parking capacity can be accommodated in adjacent parking structures. A financial analysis has concluded that the proposed Luskin Conference and Guest Center at this location — to be operated as a self-funded auxiliary in partnership with other existing campus lodging auxiliaries - would be financially self-sustaining and effectively serve as a venue for expanded local and global collaboration.

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Business Case Analysis Luskin Conference and Guest Center

INTRODUCTION UCLA is recognized as a world class research and teaching university with an enrollment of over 40,000 students. Served by a talented and committed group of over 30,000 faculty and staff, the campus serves Los Angeles, the region, and the nation through a variety of institutional, academic and research enterprises. A record high of 91,512 students have applied for fall 2012 admission — more applications received than any other UC campus and the highest number of applicants to any four year university in the nation. Freshman applications from out or state and international students rose by 57.8 percent, from 12,920 in 2011 to 20395 this year.

-

-

-

The UCLA campus is also home to the Ronald Reagan UCLA Medical Center, which is ranked among the most comprehensive and advanced healthcare systems in the world. With a staff exceeding 2,000 physicians, patients utilize UCLA's clinics more than one million times annually and the hospitals more than 80,000 times a year.

In addition, UCLA is a key academic, social, and cultural contributor to the Los Angeles area and an economic catalyst for the State of California, generating in fiscal year 2009-10, $5.6 billion in annual economic activity for California and contributing $3.78 billion toward the state economy through direct spending from the general campus alone.'

UC Office of the President "UC, UCLA generate billions in annual economic activity for California"; September 2011; http://www.newsroorn.ucla.edu/portal/ucla/uc-ucla-generate-billions-in-annual-2 I 5394.aspx 4

Business Case Analysis Luskin Conference and Guest Center

PROJECT DRIVERS

State-of-the-art conference facilities are needed at UCLA to foster the exchange of ideas, enhance the image of the campus as one of the world's great research universities, and allow UCLA to complete with other top tier institutions for major academic conferences. Existing campus meeting facilities are in limited supply, and there is demand from faculty for modern facilities that can support major academic conferences.

In December 2010, the campus received a major gift from alumni Meyer and Renee Luskin to help construct and endow an academic conference center on the UCLA campus, to be named the Meyer and Renee Luskin Conference and Guest Center. The donors are interested in establishing a facility that will allow faculty, researchers and students to exchange ideas and elevate debate on society's greatest challenges from international scholars, civic leaders and the general public. The Luskins have pledged a total gift of $100 million, including $40 million applied to the capital cost of the conference center and $10 million of endowment to support academic departments in hosting conferences. An additional $50 million will support programs, faculty and students in the School of Public Affairs. The total gift of $100 million is intended to work together as a comprehensive initiative to enhance the overall academic quality and reputation of the UCLA campus.

A Conference and Guest Center would help establish the campus as a global leader in education and research as envisioned in UCLA's Academic Strategic Plan. The Plan identifies four principles in support of the academic enterprise — academic excellence, civic engagement, diversity of academic inquiry and financial security — that are commensurate with the needs of a leading public research university in the 21st century. By providing the campus with a venue for hosting conferences and sponsoring events at the local, national and international levels, a Conference and Guest Center would enrich the intellectual life of the campus consistent with the principles of the Plan.

A Conference and Guest Center would also help the campus build a stronger base with its alumni, students and their parents, and medical center/hospital guests who want to stay on campus when they visit. The inclusion of guest rooms would provide conferees with a more productive meeting environment by minimizing travel time between the campus and off-campus hotels, allow more time for informal contact between conference participants throughout the duration of their stay, and provide conferees with more exposure to academic resources and cultural and recreational activities on the UCLA campus. All guests would need to demonstrate an affiliation with the University in order to book a reservation.

The campus currently operates two on-campus guest houses, a residential conference center in Lake Arrowhead, and a robust summer conference program in the campus residence halls. The two on-campus facilities — the UCLA Patient Family Guest House (Tiverton House) and the UCLA Guest House — are operating near capacity in their combined 161 rooms. Meeting space in Covel Commons and the Faculty Center is also in limited supply. A Conference and Guest Center is needed to increase the supply of modern meeting facilities and on-campus guest rooms.

5

Business Case Analysis

Luskin Conference and Guest Center

SUMMARY OF PROJECT GOALS/DRIVERS

The project goals/drivers can be summarized as follows: •

Realize t he donor's vision to foster the exchange of ideas and enhance the overall academic quality and reputation of the UCLA campus.

•

Provide the campus with state-of-the-art meeting and guest facilities for hosting conferences and events at the local, national and international level.

•

Allow UCLA to compete with other top tier institutions for major academic conferences.

I' ROJ ECT 0l3.J E( "I' l YES/EVALUATION CRITERIA Based on these goals, this analysis evaluates alternative solutions in terms of the following objectives/criteria. The alternatives are shown on a comparison matrix included in the Appendix.

Function: Does this alternative provide an operationally efficient plan for its intended use?

Adjacency: Does this alternative provide conference and related guest facilities in a central campus location?

Building Site and Massing: Does this alternative provide an efficient footprint that enhances campus lire and minimizes impacts to the surrounding community?

Site Acquisition: How does this alternative compare with others in terms of costs to acquire the site, and/or the opportunity cost of future site development?

Room Affordability: I low does this alternative compare with others in terms of providing reasonably priced rooms and conference facilities to campus clients?

Community Response: Does this alternative have support from the adjacent community?

Faculty Support: Does this alternative have support from the faculty?

MEASURES OF SUCCESS •

Increased number of academic conferences at UCLA.

•

Increased number of academic scholars, accommodated on campus.

•

Ability to achieve and maintain financial self-sufficiency while offering competitive room rates for an academic market.

6

prospective students and parents that can be

Business Case Analysis Luskin Conference and Guest Center

DEVELOPMENT PROCESS

In 2008, the campus convened an administrative group to work with the Deans of Law, Medicine, Engineering and Management, and relevant campus staff, to assess the feasibility of a conference center on campus. Research conducted by internal staff included a review of International Association of Conference Centers (IACC) market data 2 ; review of relevant occupancy data in the local hotel market; review of demand for on-campus facilities for group con ferencing and day meetings; review of the occupancy levels of existing Patient Family Guest House (Tiverton House) and the UCLA Guest House; and a review of thirteen universityaffiliated conference centers and an on-site visit to five o• those facilities. In addition, campus staff reviewed alternative sites and prepared preliminary pro forma data. Primary demand was anticipated to be from the Anderson School of Management, the School of Law, the Henry Samueli School of Engineering and Applied Science, and the David Geffen School of Medicine.

A variety of alternatives were explored to provide the facilities needed to host national and international conferences, consistent with the campus aspiration to become a global leader in education and research. Continuing to host conferences in Covel Commons and student residence hall facilities during the summer months would not allow for the development for a year round program. Surveys determined that the area lacks nearby hotels that can provide the necessary meeting space. The campus also studied the potential for expanding the existing UCLA Guest House and determined that the site was insufficient to accommodate the number of guest rooms, meeting space and parking that are necessary for a Conference and Guest Center.

Potential campus locations for construction of a new conference facility were also studied. A site in Lot 36 adjacent to Wilshire Boulevard would not provide conferees coming to UCLA with a campus experience. Sites that were investigated in detail included two in the north campus near the Anderson School of Management. While the two sites were determined to be physically viable, one of these sites would have required the relocation of the Chancellor's residence to an off-campus location. The campus decided not to pursue either of these sites since they were found to be too costly to acquire and too distant from campus facilities and amenities.

While these studies were underway, the campus retained an experienced hotel and conference center consultant in 2009, Pannell Kerr Forster (PKF), to review and augment UCLA's occupancy and operating projections. The findings in their report were informed by an assessment of the local and regional conference and lodging markets, and assessed demand for academic meetings and events with representatives of the College and professional schools by

The International Association of Conference Centers (IACC) is a not-for-profit, facilities-based organization whose mission is to assist members in providing the most productive meeting facilities around the world. These facilities represent the highest-quality venues available to meeting professionals. Exacting standards and stringent guidelines ensure the highest quality conference facilities and services. Meeting planners rely on and trust the IACC universal and world-renown criteria.

2

7

Business Case Analysis Luskin Conference and Guest Center

utilizing surveys and focus groups. PKF was also asked to update their findings in 2011. Based on additional focus groups with UCLA faculty regarding academic conference needs, UCLA concluded that it could support a full-service conference center with approximately 250 rooms and 25,000 square feet of meeting space for academic travelers, visiting faculty, and other university affiliated business.

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Business Case Analysis Luskin Conference and Guest Center

EVALUATION OF ALTERNATIVES

Four campus locations were evaluated with respect to the previously discussed project objectives. The locations include 1) the site of the current faculty center; 2) a site on the portion of the existing CHS South Parking Structure along Le Conte Avenue; 3) a site currently occupied by the West Alumni Center at the terminus of Westwood Plaza; and 4) a site currently occupied

by Parking Structure 6 (PS 6) also at the terminus of Westwood Plaza. A no-build alternative would not provide an academic venue for the exchange of ideas in a central campus location, would continue to make academic conferences dependent upon local market availability and prevailing rates, and would cause the campus to forgo the $50 million Luskin gift. Attachment 1 provides a comparison matrix of objectives achieved for each of the alternatives that were evaluated, and Attachment 4 shows their locations on a campus map.

Faculty Center Site In early 2011, the campus proposed a Residential Conference Center and Faculty Club project on the site of the current Faculty Center in the core campus. The site was chosen due to its central location and proximity to a wide range of academic programs. It also would have allowed the campus to incorporate a renewed Faculty Club into a state-of-the-art conference facility, and realize synergies between the meeting room and food service facilities of the two programs. In April 2011, this proposal was put on hold following concerns expressed by the faculty, many of whom have a strong personal connection to the existing facility.

Le Conte Site The Le Conte site is located adjacent to Westwood Village and the medical enterprise in the Center for the Health Sciences along the southern edge of the campus. Planning studies showed that the site could accommodate the mass of the proposed project on a commercial street with good vehicular access. However, redevelopment of the site was found to block access to the north half of the CHS South Parking Structure, would require replacement of existing parking inventory in that area of the campus, and would likely encounter opposition from adjacent neighbors and hotel operators. The option was considered too remote from the core campus and would restrict potential future expansion of academic and research programs in the Health Sciences zone.

West Alumni Site The West Alumni site is located at the terminus of Westwood Plaza, a major entrance to campus, with direct access to public transportation and major campus venues such as Pauley Pavilion and Ackerman Union. While the site would be easy to find and access, planning studies determined that a redeveloped site would be too crowded with respect to its proximity to Pauley Pavilion, and too costly to acquire due to the necessity of replacing the alumni center and re-routing of major campus utility infrastructure.

9

Business Case Analysis Luskin Conference and Guest Center

RECOMM EN DATION

The PS 6 site was found to be the most viable location for the proposed facility. Located at the terminus of Westwood Plaza, the site provides easy access to popular campus venues such as Ackerman Student Union and Pauley Pavilion, as well as to Westwood shops and restaurants. It is also easy to locate for first-time visitors, near the main entrance to UCLA. The site is surrounded by the West Alumni Center and Pauley Pavilion to the north, the campus Gateway Plaza with traffic turnabout and Engineering VI to the east, Strathmore Drive to the south, and Spaulding Athletic Field to the west. Attachment 4 shows the recommended location on campus.

The campus has determined that the adjacent parking inventory can absorb the loss of 754 spaces currently in Parking Structure 6 and also accommodate parking for non-resident conference guests in nearby parking structures with nearly 7,500 spaces. There is available capacity in the parking system due to an extensive commuter vanpool program - and a significant increase in the resident student population - that have decreased the number of average daily trips on campus by more than 11 percent during the past four years alone. Currently, UCLA is experiencing its lowest traffic level since record-keeping began over twenty years ago.

Gateway Plaza, located at the terminus of Westwood Plaza, consists of landscaped areas, a traffic turnabout, and drop-off and pick-up areas that facilitate the arrival of pedestrians, cars, and buses at the most intensively used entryway to UCLA. Redevelopment of the PS 6 site would provide an opportunity to make improvements to the plaza, since a portion of this area would need to be re-graded to construct the proposed facility. Improvements to the plaza would help to resolve long-term functional issues related to the flow of public transit and drop-off/pick-up activities in the area, and to enhance the plaza as a welcoming point to UCLA. Since the P6 site no longer incorporates the Faculty Center, the size of the current proposed project has been reduced. The footprint of the P6 site is also more compact than the Faculty Center site, provid i lig a configuration that is more conducive to creating the adjacencies and the flow necessary for an efficient meeting facility. Additionally, the size of guest rooms has been slightly reduced and the number of rooms provided has decreased from 282 to 250. These decisions result in a building of less mass and square footage than the facility originally proposed on the Faculty Center site.

A financial analysis has shown the PS6 site to be the most cost-effective of the four alternatives studied. Total up-front one-time expenses to redevelop each site range from $155.2 million for the PS 6 site to $187 million for the Alumni Center site. More detailed analysis has shown that the cost to develop the Faculty Center site —with the reductions in program discussed above would be higher than initial estimates. Attachment 2 provides a Financial Summary of redevelopment costs and operating expenses for each of the alternative sites. Attachment 3 provides additional operating assumptions for the recommended alternative.

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Business Case Analysis Luskin Conkrence and Guest Center

ATTACHM EN'I'S

BCA Attachment 1 Version 1.7 Luskin Conference and Guest Center Alternatives Matrix Alternative 1 PS-6 Site

Alternative 2 Faculty Center

Pauey l ilion .

Alternative 3 Le Conte

-

...

.

— ._

Alternative 4 Alumni Center

,

_

r

it

CHS South Parking Murphy HaII

Eluation va Criteria

Con erence Center iiilg d ar AVe .i

w.

b

,:i -:

tett

4

1

,

1

I

---

I (*(

I

It

.

Conferenc,e Center

• ,- .

Le Conte Avenue

r

1

Ilir-11-11' –

Program goals & objectives – Venue to exchange ideas and provide modern conference space on campus.

Yes

Yes

Yes

Yes

Functional Operations

Efficient building plan for guest rooms. Existing site grades allows for good service access.

Irregular site is not efficient for guest rooms. Requires underground service access.

Efficient building plan for guest rooms. Limited site area for outdoor spaces. Slope of site may solve service access issues.

Efficient building plan for guest rooms. Active outdoor spaces engage with campus. Requires underground service access.

Adjacency

Centrally located on the campus. Provides an arrival point to terminate Westwood Plaza. Pauley and Ackerman provide additional meeting room capacity nearby. Potential noise from bus turnaround.

Adjacent to Murphy Hall. Close to Law School and Sciences. Close to existing Guest House for overflow.

More distant than Alternative 1 for Medical Enterprise and Anderson Management School. .

Adjacent to Medical Enterprise and Westwood Village, Distant from core campus. Far from Anderson Management School and Law School.

Centrally located on the campus. Provides an arrival point to terminate Westwood Plaza. Close to Engineering, CHS, hospital and Anderson Management School. Proposed use encroaches on student areas such as Bruin Plaza and Ackerman. Uses may not be compatible at times.

Building Site and Massing

Efficient building footprint. Footprint allows lower, non-highrise building. Height is compatible with Engineering complex across Westwood Plaza.

Building footprint occupies a large portion of the site and limits campus landscape buffer. Appearance of a long wall against Hilgard. Larger footprint allows for a lower, non-high-rise building. Slightly taller than Murphy Hall.

Would block access to the north half of CHS parking site.

Limits potential future expansion of the Medical Enterprise.

Taller 11-story high-rise building adds cost premiums. Long wall mass along Le Conte.

Building footprint would be very close to Pauley Pavilion.

Taller 11-story high-rise building adds cost premium. Not compatible with lower scale surrounding buildings. Will cast shadows on open space near Bruin Plaza.

Site Acquisition

Requires demolition of Parking Structure 6. Adjacent Parking structures 8, 6, 4 and 7 are able to accommodate lost capacity. Also requires Gateway Plaza improvements.

Requires replacement of the Faculty Center, replacement of parking inventory, and extensive site access requirements for service vehicles.

Requires partial demolition of CHS South Parking Structure and replacement of existing parking inventory.

Requires demolition and replacement of alumni center, and re-routing of major campus utility infrastructure. Also requires Gateway Plaza improvements.

Ability to provide reasonably priced rooms and conference facilities to campus clients.

Yes

Yes, but less attractive than Alternative 1 given site acquisition costs.

Yes, but less attractive than Alternative 1 given site acquisition costs.

Yes, but less attractive than Alternative 1 given site acquisition costs.

Response from community

Strong support from neighbors compared to Faculty Center site. Continued opposition from hotel operators.

Strong opposition from neighbors. Concerns about building mass, traffic and noise, and loss of Faculty Center as a community amenity. Risk associated with threatened litigation. Opposition from hotel operators.

Likely to encounter opposition from adjacent neighbors and hotel operators. Some Westwood businesses may support location due to adjacency to Village.

Not presented to a broad constituency. Likely to encounter opposition from hotel operators.

Faculty Stakeholders

Strong support for revised concept.

Strong opposition from emeriti faculty and other advocates of the current Faculty Center

Not presented to a broad constituency. Likely to encounter both advocates and detractors.

Not presented to a broad constituency. Likely to encounter both advocates and detractors.

Attachment 2

Business Case Analysis - Financial Summary Faculty Center

P56 Alternative 1 5 (0oo)

Alternative 2 $ (000)

Alumni Center

Le Conte Alternative 3 5 (coo)

Alternative 4 $ toxl

Up-Front One-Time Expenses (2) 125,000

133,300

132,700

132,900

Equipment

10,000

10,000

10,000

10,000

Parking

10,000

16,600

10,900

5,600

3,200

0

5,000

0

0

o

17,300

Conference and Guest Center

Faculty Center Replacement

0

0 8,700

Alumni Center / Ticket Office Replacement

0

0

Gateway Improvements

Utility Relocation Financing Total

0

945

1,500

6,000

7,000

9,600

8,500

10,200

155,200

179,145

163,600

187,000

0

o

o

0

Up-Front One-Time Funding Sources State funds Gifts Gifts-in-hand Pledges to-date (standby financing)

.

Gifts to be raised (interim financing) Campus funds Long-term External Financing Total

5,000

5,000

5,000

5,000

35,000

35,000

35,000

35,000

0

0

0

0

3,200

0

0

3,200

112,000

139,145

123,600

143,800

155,200

179,145

163,600

187,000

Insert any notes on any restrictions the funds may hove Financing Assumptions Anticpated Repayment Source: General, Auxiliary or Medical Center Revenues Anticpated Fund Source: Cite specific fund source If known Financial Feasability Rate: %

Auxiliary

Auxiliary

Auxiliary

Auxiliary

Proj Net Rev

Proj Net Rev

Proj Net Rev

Proj Net Rev 6%

6%

6%

6%

First Year of Principal (FY 2026-27)

11

11

11

11

Final Maturity (FY2055-56)

40

40

4.0

ao

Proforma analysis conducted using debt affordability model?

p" YES

r

NO

Real Property Annual Operating and Support Expenses Operating Expense Estimated Annual Debt Service

27,905

27,905

27,905

27,905

8,137

10,109

8,979

10,447

36,042

38,014

36,884

38,352

36,042

38,014

36,884

38,352

Other costs Total Annual Funding Sources for Operations & Support Conference & Guest Center Revenue

Notes: a. Excludes catering kitchen scope in Alternative 1. This $7.2M project component will be separately funded.

Business Case Analysis LuskM Conference and Guest Center

ATTACHMENT 3 - Fiscal

Analysis of Recommended Alternative

The proposed Luskin Conference and Guest Center will operate as a sel 1- funded auxiliary, in partnership with the other existing campus lodging auxiliaries (the UCLA Lake Arrowhead Conference Center and the UCLA Guest House).

Room Rates Projected room rates are based on a January 2011 weighted average daily rate of $185. A business mix of two-thirds academic group business and one-third UCLA-affiliated individual traveler is assumed. Additionally, the donor has provided an endowment of $10 million for the Chancellor to subsidize rates for academic groups or campus departments that need additional assistance.

Occupancy Assumption Occupancy for the proposed conference center is projected at 60% in year one, 65% in year two, and 70% in year three. Occupancy is assumed to stabilize at 70%, assuming that the facility caters specifically to university-related demand. This occupancy rate assumption is a conservative approach when compared to the existing occupancies of hotels in the West Los Angeles market.

Operating Assumptions A summary of project operating assumptions for the Luskin Conference and Guest Center is presented in the following table. Data is also provided for a comparable group of selected university-affiliated conference centers and a group of ten comparable southern California hotels.

14

Business Case Analysis I,uskin Conference and Guest Center

Comparison of Projected Operating Expenses (excluding Catering Kitchen operations) Benchmark Groups

Expense as a % of Revenue

Luskin Conference and Guest Center

University-Affiliated Conference Centers

Southern California Hotels

Room

24.9%

21.9%

25.9%

Food and Beverage

76.2%

69.5%

82.2%

Conference

44.0%

44.5%

N/A

Undistributed Expenses

20.9%

20.8%

26.4%

(administrative and general, marketing, operations and maintenance, utility costs) Other Assumptions:

18.8% Premium added to salaries and benefits to cover UC retirement contributions.

3.5% Annual escalation.

1.25% Management fee for a third-party operator added to food and beverage expense for the Luskin Center.

Debt Coverage

As indicated earlier, the Luskin Conference and Guest Center will operate as a self-funded auxiliary, and does not include an operationally-independent Catering Kitchen. The following table demonstrates the financial strength of the Hospitality Services unit. The debt coverage calculation is based on the current planning rate of 6% for new debt issued, a 70% steady-state occupancy rate, and 3.5% of annual escalation.

15

Business Case Analysis Luskin Conference and Guest Center

Projected

Debt Coverage Test

FY 2018-19 Year 3 1st Year at 70% Occupancy

FY 2026-27 Year 11 1st Year of Principal/Interest

($000)

($000)

Hospitality Services Revenue (I)

$44,176

$56,795

Less: Operating Expense

33.082

42,81-1

11,094

13,981

7,734

8,838

Net Revenue after Debt Service

3,360

5,143

Debt Service Ratio

1.43X

1.58X

Net Operating Revenue Less: Annual Debt Service

(I)

Includes Luskin Residential Conference Center, UCLA Guest House and Lake Arrowhead Conference Center. .

16

Business Case Analysis Luskin Conference and Guest Center

ATTACHMENT 4 - Site Map

West Center

Faculty Ce ter

17

PRR 2012-139

From: Sent: To: Cc: Subject:

Susan <susangallick@earthlink.net> Friday, November 11, 2011 5:24 PM Felker, Aimee UCLA Public Records FW: Request for Information from the FA at UCLA

------ Forwarded Message From: Susan <susangallick@earthlink.net> Date: Fri, 11 Nov 2011 10:49:38 -0800 To: <chancellor@conet.ucla.edu> Cc: Dwight Read <dread@anthro.ucla.edu> Conversation: Request for Information from the FA at UCLA Subject: Request for Information from the FA at UCLA Faculty Association at UCLA P.O. Box 33336 Granada Hills, CA 91394-3336 Nov. 11, 2011 Gene Block Chancellor, UCLA 2147 Murphy Hall Campus 140501 chancellor@conet.ucla.edu Dear Chancellor Block, On behalf of Dwight Read, Chair of the Faculty Association at UCLA, and the Executive Board, I am making a request for information as part of the California Public Records Act, Information Practices Act of 1977.

Please send a copy of the business plan for the proposed $152 million conference and guest center to be built at UCLA to the FA as soon as possible.

The FA understands that the business plan has not yet been submitted to the Regents for a vote early next year, but that is even more reason for the faculty to see what the industry experts have said about the proposed conference center before the Regents take a vote.

The address is: Faculty Association at UCLA P.O. Box 33336 Granada Hills, CA 91394-3336 1

Or email the plan to: ucfa@earthlink.net Thank you for your attention to this request.

Sincerely,

Susan Gallick Executive Director Faculty Association at UCLA ucfa@earthlink.net 818 341-8664

------ End of Forwarded Message

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