Conference For Catholic Facility Management. Track 8 Making Cents of Financing and Building in this Economy

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1 Track 8 Making Cents of Financing and Building in this Economy

2 Course Description In October 2010, the AIA/CES system was updated with the new CES Discovery system, in that time we have transferred more than one million records. This new update has made it necessary to remind us of the AIA/CES policies and procedures, to introduce the new provider ethics, and to reintroduce the AIA/CES audits/quality assurance program. This presentation covers those areas giving providers the opportunity to give feedback and input.

3 Conference for Catholic Facility Management BCDM Architects is a Registered Provider with The American Institute of Architects Continuing Education Systems (AIA/CES). Credit(s) earned on completion of this program will be reported to AIA/CES for AIA members. Certificates of Completion for both AIA members and non-aia members are available upon request. This program is registered with AIA/CES for continuing professional education. As such, it does not include content that may be deemed or construed to be an approval or endorsement by the AIA of any material of construction or any method or manner of handling, using, distributing, or dealing in any material or product. Questions related to specific materials, methods, and services will be addressed at the conclusion of this presentation.

4 Copyright Materials This presentation is protected by US and International Copyright laws. Reproduction, distribution, display and use of the presentation without written permission of the speaker is prohibited. Beringer Ciaccio Dennell Mabrey, Inc. (BCDM) 2011

5 Making Cents of Financing and Building in this Economy Learning Objectives At the end of this program, participants will be able to: Learn a comprehensive plan approach to determine the advantages of expanding existing facilities or building new. Perspectives for evaluating the financial feasibility of borrowing funds to hedge inflation and occupy earlier, thus building a case to gain an exception from Diocese guidelines. Explore the advantages of Construction Management as a construction delivery for optimum value and the benefits of an integrated process. Review the Life Cycle Value analysis of water to water geothermal heat pump system and the opportunities Catholic Church campuses have with diversity and block cooling loads. Learn through an overview of the project, how Built of Living Stones was integral from planning, design, construction to occupancy.

6 Making Cents of Financing and Building in this Economy Master Planning Process

7 Master Planning Process - BCDM Interview Concept

8 Master Planning Process - Existing Site Programming Document

9 Master Planning Process - Existing Site Master Plan

10 Master Planning Process - Green field Master Plan Model

11 Master Planning Process - New Holy Spirit Property Aerial Site

12 Master Planning Process - New Holy Spirit Property Site Plan

13 Making Cents of Financing and Building in this Economy Financing Strategy - New Holy Spirit Background Information Holy Spirit Catholic Church acquired approximately 29 +/- acres for $1,205,932. A loan for $1,190,000 was utilized to assist in the acquisition of the property, which has since been paid in full. The total master plan is referred in phases as Spirit l, Spirit ll and Spirit lll. These phases consist of the following: Spirit l Site development, Parish Hall with kitchen, religious education classrooms, parish offices and library. Spirit ll Church and related facilities. Spirit lll Future including gymnasium, bell tower and other amenities.

14 Financing Strategy - New Holy Spirit Background Information First capital campaign generated approx. $1.2 mil. through 12/31/07. TORCH Committees original projections consisted of completing the Parish Hall by the end of June 2010 and then the Church by June The projections assumed future capital campaigns receiving $833,333 annually through December 31, Plan included two more three-year capital campaigns - $1,000,000 for years 2011 to 2013 and $650,000 annually for years 2014 to Sold existing Assets for $549,175 and $5.25 mil. proceeds used to assist in payment of loan and the $4.75 mil. deposited in interest bearing account. Lease agreement with new owner provided $12,667 per month until June 2010 when relocation occurs.

15 Financing Strategy - New Holy Spirit Decision Approved a Spirit I Building Plan of $5.6 Million. Completed all Spirit II Master Planning by July 30, 2008 Approved the Spirit II Business Plan on March 24, 2008

16 Financing Strategy - New Holy Spirit Initial Plan Spirit I Building Plan of $5.9 Million. Utilize Phase I for worship until 35% of Spirit II costs of $8.7 million are generated through capital campaign. Realization that above plan would not generate 35% of necessary funding until 2013 (2015 completion) based on current giving levels. A loan of $4.8 million would still be required for project completion.

17 Financing Strategy - Spirit II Business Plan Construct Spirit I and Spirit II nearly simultaneously for $12.2 Million. Nearly 42% of the cost ($5.1 million) would come from savings in-hand. Difference in costs associated with approved Business Plan and Initial Plan is primarily due to construction savings. A construction loan of up to $5.5 was required. A conventional loan allowed interest only payments for the first three to five years before converting to a principal/interest schedule for 15 years.

18 Financing Strategy - Spirit II Projected Cost Reductions from Simultaneous Build-Out

19 Financing Strategy - Capitalization Plan Comparison Capitalization Plan Comparison Total Projected Cost Current Spirit II Bus Plan Spirit l $5,891,178 $5,591,178 Spirit ll $8,705,342 $6,650,660 Total Costs $14,596,520 $12,241,838 ($2,354,682) Capital Campaign Collections Years 12/31/ to to to 2016 Total Original $1,200,000 $2,500,000 $3,000,000 $1,950,000 $8,650,000 Current & Alternative $1,200,000 $1,700,000 $1,700,000 $1,700,000 $6,300,000 Anticipated Loans Current Alternative Spirit I Principal Loan Amount $0 $0 Spirit II Principal Loan Amount $4,801,000 $5,516,000 ($715,000) Repayment 8.00% 6.00% Interest Cost 2 Years Interest Only $768,160 $661,920 Principal & Interest 15 Years 8.00% 7.00% Principal Portion $4,800,000 $5,516,000 Interest Portion $3,457,555 $3,408,286 Total Payment over 15 Years $8,258,554 $8,924,286 Total Principal and Interest $9,026,714 $9,586,206 Occupancy of Spirit II (5 Years) Interest Savings using Current Plan $559,492 Total Net Savings $ 1,795,190

20 Making Cents of Financing and Building in this Economy Construction Delivery Risk. Objective Pre select the Management of Construction Involve the Constructor in the design process Strategize Phasing and Schedule Cost Control Lean Process

21 Making Cents of Financing and Building in this Economy Construction Delivery Risk. Selection Process Request for Proposals Part I CM Qualifications Organizational Chart of Management Part II Preconstruction Services Lump Sum CM Fee as a % of Cost to a GMP Interviews Selection Qualifications Ranking Experience Capability Organization Historic Performance on Similar Projects Sealed Bids open after ranking Negotiations

22 Making Cents of Financing and Building in this Economy Construction Delivery Risk. Advantages: Builds Ownership and Knowledge with the constructor Integrates Value Decisions Transparency of Cost Life Cycle Analysis True Cost Flexibility in Bidding / Contracting / Purchasing Reduction of Redundant management Costs Design to a Budget vs. Budgeting to a Design Verification of Bids for cost / scope Optimum Documentation of Bid Packages Management of owners costs

23 Making Cents of Financing and Building in this Economy Life Cycle Cost Analysis - Motivated by Sustainable Design Initial Cost vs Operational Costs Holy Spirit Phase I is pursuing LEED Silver Certification Holy Spirit Phase II is pursuing LEED Certification

24 Life Cycle Cost Analysis - HVAC Case Study

25 Life Cycle Cost Analysis - Analysis Overview Considerations First Time Cost Diversity Total Energy Cost Operational Cost - Systems Considered Water to Air Heat Pumps Water to Water Heat Pumps Traditional Boiler/Chiller

26 Life Cycle Cost Analysis - Water to Water Geothermal Heat Pump

27 Life Cycle Cost Analysis - Water to Water Geothermal Heat Pump Block Cooling Advantage Spirit I Spirit II Total = 84 T = 59 T = 143 T Diversity Load = 80 T Savings (First time Cost) 63 T = 56% Less Spirit I HVAC Cost = $916,413 Spirit II HVAC Cost = $438,872 Difference = $477, Zones 30 Tons 457MBH 8 Zones 43 Tons 457MBH 12 Zones 45 Tons 745MBH 11 Zones 11.5 Tons 203MBH 8 Zones 14 Tons 258MBH

28 Life Cycle Cost Analysis - Water to Water Geothermal Heat Pump System Components Water to Water Heat Pumps Energy Recovery Make Up Air Fan Coil Units

29 Life Cycle Cost Analysis - Water to Water Geothermal Heat Pump Load Requirements

30 Life Cycle Cost Analysis - Water to Water Geothermal Heat Pump 4-Pipe Distribution System

31 Life Cycle Cost Analysis - Water to Water Geothermal Heat Pump Fan Coil Unit

32 Life Cycle Cost Analysis - Water to Water Geothermal Heat Pump Geothermal Loop -Source 80 Tons/48 Wells 20 o.c./400 deep 2 6 wells 4 9 wells

33 Life Cycle Cost Analysis - Water to Water Geothermal Heat Pump Energy Recovery Unit

34 Life Cycle Cost Analysis - Water to Water Geothermal Heat Pump How it Works Heat and Cool Water Water is distributed to fan coil units Cooling Mode Load side produces 42 deg. Water Load water distributes to fan coils Rejected 100 deg. source water is pumped to reheat coils for dehumidification or heating Source water pipes to geothermal ground loops for rejection Heating Mode Load side produces 100 deg. Water Load water distributes to fan coils Rejected 45 deg. source water is pumped to reheat coils for cooling during heating Source water pipes to geothermal ground loops for rejection

35 Built of Living Stones One of the most significant and formative experiences in the life of a parish community is the process of building a church.

36 Built of Living Stones Artists bridge the worlds of the visible and the mysterious invisible. They choose materials with integrity because they will endure from generation to generation.

37 Built of Living Stones By bringing together these personal and ecclesial elements in faith and charity, parishioners help to build a new structure and to renew their parish community.

38 Built of Living Stones The Five Liturgical Principals for Building Churches: 1. The Church building is designed in harmony with Church laws and serves the needs of the liturgy.

39 Built of Living Stones 2. The Church building fosters participation in the liturgy.

40 Built of Living Stones 3. The design of the Church reflects the various roles of the participants.

41 Built of Living Stones 4. The Church building respects the culture of every time and place.

42 Built of Living Stones 5. The Church building should be beautiful.

43 Built of Living Stones The decisions made considered the theology of the Eucharistic Assembly, understanding this was to be the house of God on earth. This was to be A temple of God built of living stones.

44 This concludes The American Institute of Architects Continuing Education Systems Course BCDM Architects Jim Dennell, AIA (402)

45 Conference For Catholic Facility Management BCDM Architects Jim Dennell, AIA (402)