REPORT TO THE BOARD OF GOVERNORS SUBJECT PHARMACEUTICAL …bog2.sites.olt.ubc.ca/files/2014/11/3.20_2014_11_B4-CDRD-Building.… · The Faculty of Pharmaceutical Sciences/Centre for

REPORT TO THE BOARD OF GOVERNORS

SUBJECT PHARMACEUTICAL SCIENCES CENTRE FOR DRUG RESEARCH & DEVELOPMENT BUILDING

MEETING DATE DECEMBER 2, 2014

APPROVED FOR SUBMISSION

Forwarded to the Board of Governors on the Recommendation of the President

Arvind Gupta, President and Vice-Chancellor

Presented By David H. Farrar, Provost & Vice-President Academic Michael Coughtrie, Dean, Faculty of Pharmaceutical Sciences Lisa Castle, Vice-President Human Resources

(Acting Vice-President Resources & Operations) John Hepburn, Vice-President Research and International John Metras, Managing Director, Infrastructure Development Al Poettcker, President & CEO, UBC Properties Trust

Report Date November 12, 2014

DECISION REQUESTED For Information

EXECUTIVE SUMMARY

The Faculty of Pharmaceutical Sciences/Centre for Drug Research & Development (CDRD) building, completed in September 2012, has allowed the Faculty to expand its entry class by almost 50% while doubling graduate training. These increases will significantly address BC Ministry of Health projections of severe and worsening provincial pharmacist shortages for the foreseeable future.

The partnership with the CDRD provides opportunities for enhanced recruiting and retention of faculty, researchers and students; greater success in translation of discoveries into practice and products; and education and training to address the critical need for highly qualified personnel in the drug development business.

The distinctive 281,000 ft2 building, which was recognized with a Governor General’s Award in Architecture and Lieutenant Governor’s Medal Award in Architecture (merit), provides space for both independent and collaborative study, research and social interaction.

Funding for the building included a $86.4m contribution from the Provincial government. Two separately funded components, the Modified Barrier Facility and a Data Centre, are located in the basement and provide critical support for UBC research activities. The overall project was delivered to a LEED Gold standard under the approved $155.23 million budget for a cost of $150.903 million.

Agenda Item #3.20

Template revised: July 1, 2014

Title/Subject of Report

Place and Promise COMMITMENT(s)

Research Excellence: The University creates and advances knowledge and understanding, and improves the quality of life through the discovery, dissemination, and application of research within and across disciplines.

Place and Promise ACTION(s)

Foster UBC’s globally influential areas of research excellence.

Develop new global centres of excellence at UBC with international partners.

Enhance infrastructure to support leading edge research.

Description & Rationale

Winner of the Governor General’s Award in Architecture, the Lieutenant Governor’s Medal Award in Architecture (merit), the new 281,000 SF Faculty of Pharmaceutical Sciences/Centre for Drug Research and Development1 (CDRD) building has allowed the Faculty to expand the entry class while doubling graduate training. These increases will significantly address BC Ministry of Health projections of severe and worsening provincial pharmacist shortages for the foreseeable future. Two separately funded components, the Modified Barrier Facility and a Data Centre, are located in the basement and provide critical support for UBC research activities. The building is located on Agronomy Road and Wesbrook Mall across from the Life Sciences building. The design is unconventional and its layout offers opportunities for both independent and collaborative study, research and social interaction. This LEED Gold building was delivered under the approved budget $155.23 million for a cost of $150.903 million.

The continuing need for pharmacists in British Columbia and sustained growth in the fields of pharmaceutical sciences and drug research has presented UBC with an important opportunity to solidify its role as a leader in these fields and upgrade existing obsolete facilities. The new building will allow the Faculty to expand the current entry class of 152 places by 72 for a total of 224 entry positions (adding 72 first year seats increases the overall student body by 288 additional students at steady state), while doubling graduate training. A further round of expansion by 16 spaces could subsequently be undertaken.

The partnership with the CDRD provides opportunities for significant operating cost savings, enhanced recruiting and retention of faculty, researchers and students, greater success in translation of discoveries into practice and products; and education and training to address the critical need for highly qualified personnel in the drug development business.

Project Management: UBC Properties Trust

Consultant: Hughes Condon Marler and Saucier + Perrotte in joint venture

Contractor: LEDCOR

COSTS Capital &

Lifecycle Operating

This LEED Gold targeted building was delivered under the approved budget $155.23 million for a cost of $150.903 million.

1 CDRD is a unique BC initiative to provide the resources, infrastructure and expertise to address a “commercialization gap.” CDRD advances promising drug compounds discovered in academia to a stage where proof-of-principle data is available to make a compelling case for subsequent commercial and clinical development.

Page 2


FINANCIAL Funding Sources,

Impact on Debt Ratios

Funding Sources ($000’s)Pharmaceutical Sciences/CDRD Board 3 Board 4 Province of BC 86,400 86,400 CFI 4,963 3309 Internal Loans - UBC loan funded by CDRD lease revenues 14,150 14,150 Faculty Fundraising (potential bridging loan) 27,737 25,064

Total PharmSci/CDRD Funding 133,250 128,923Modified Barrier Facility Discretionary Endowment 11,220 11,220 Faculty of Medicine 2,089 2,089 Faculty of Science 493 493 Other User Faculties 598 598 CFI (Imaging Lab) 1,080 1,080

Total MBF Funding 15,480 15,480Data Centre Discretionary Endowment 6,500 6,500

Total Funding 155,230 150,903

SCHEDULE Implementation

Timeline

The project finished on schedule as predicted at Board 2 and 3. Occupancy was phased from September through November 2012.

Schedule Board 3 Board 4Board of Governors (Board 1) Jun-09 Jun-09Board of Governors (Board 2) Apr-10 Apr-10Commence Site Preparation, Servicing and Excavation May-10 May-10Board of Governors (Board 3 -Partial: Foundation & Structure Jun-10 Jun-10Board of Governors (Board 3 ) Jun-10 Jun-10Board of Governors (Board 3 - Fast Track) Jun-10 Jun-10Substantial Completion Aug-12 Aug-12Occupancy Sep-12 Sep-12Board of Governors (Board 4) Sep-13 Sep-14

BENEFITS Learning, Research,

Financial, Sustainability &

Reputational

Reputational:

This new building has won the following awards: • 2013 Best Lab Award, Wallpaper Magazine • 2011 Canadian Architect Award of Excellence. • 2013 Lieutenant Governor of British Columbia Award in Architecture – Merit Level • 2014 Governor General’s Medal in Architecture

Economic Development: UBC programs and research activity act as catalysts for increased economic output. Provision of a new facility for the Faculty of Pharmaceutical Sciences and the Centre for Drug Research and Development (FOPS/CDRD) can only ensure an increase of the continued contribution of UBC to the provincial and national economy. UBC’s economic impact on the surrounding community is over $12.5 billion. The provincial operating grant for the year ending March 2013 was $900 million offering the people of BC a good return on their investment. Alignment with Provincial commitments to support economic and social development, establish better linkages with industry and business, and improve commercialization of research through:

Page 3


• Ongoing professional relationships with UBC investigators • Employment opportunities for skilled professionals • Net inflow of extra-provincial investment dollars • Creation of wealth in local community • Multiplier effect on local job creation

Partnership between Pharmaceutical Sciences and the Centre for Drug Research and Development provides:

• Operating cost savings, • Enhanced recruiting and retention of faculty, researchers and students • Greater success in translation of discoveries into practice and products • Education and training to address the critical need for highly qualified

personnel in the drug development business Technology:

The inclusion of the new data centre has allowed ITS to consolidate the 78 identified IT sites spread across the campus. The data centre contributes to increased IT sustainability and efficiency as it provides opportunities for heat capture, increased power efficiency through a single purpose-designed site and the capacity to house high performance computing research equipment. Sustainability:

LEED Gold certification Is targeted (version 1.0)

Project showcases environmental, economic and social sustainability through design features that minimize footprint and resource consumption and provide a healthy and integrated learning environment.

• High performance glazing • Central high efficiency heat recovery chillers plant • High efficiency HVAC system (Displacement Ventilation, radiant slab heating,

occupancy and CO2 sensors, lab makeup and transfer air) • Occupancy and daylighting sensors • Central variable flow manifolded laboratory exhaust system (unoccupied mode

turndown) • Heat recovery from lab fumehoods, data centres and general exhaust • Solar Chimney and automatic operable windows (common atrium) • Employing low flow plumbing fixtures • Heat capture via double skin system on south elevation • Operable windows • Abundant natural light reducing use of electrical lighting;

Compliance with Wood First Act:

• Wood is used in a highly visible capacity in the UBC Faculty of Pharmaceutical Sciences. Throughout the interior public spaces of the building, wood is showcased as a wall and ceiling cladding, as exposed wall guard protection and on guardrails, as trim.

Page 4


• The extent of wood used on the ceilings was beyond the 10% allowable by the BC Building Code. An Alternate Solution, in combination with independent third-party testing, was necessary to permit the full proposed extent.

• All millwork outside of laboratories extensively uses wood as its basis. In the framed partitions, all blocking associated with millwork is wood.

• Hardscape elements in the landscape architectural design such as seating and table surfaces feature wood.

• The presence of wood as a secondary construction material is emphasized by the use of rough sawn formwork as a visible expression on the cast-in-place concrete.

CONSULTATION Relevant Units,

Internal & External Constituencies

A meeting with all stakeholders was held 29 August 2014 to review process and lessons learned:

General consensus: Building occupants and campus stakeholders find this to be enjoyable, livable and sustainable space for research, learning and exchange of ideas. Its architectural expression gives the building a striking presence and it is considered to be a signature building at UBC.

Planning process and design should be flexible to accommodate evolving pedagogy and future capacity. This project was at least 11 years from planning to delivery. During that period the programme changed significantly through the addition of a modified barrier facility, a data center and a CFI related lab adding mechanical and electrical requirements. Many faculty & staff joined the Faculty after design or during construction and teaching needs changed during construction.

Important to the success of the project to have the right involvement of campus stakeholders at the right time. Like other projects, consensus was that Building Operations and IT and AV should be involved early or throughout planning and construction.

Due to government requirements, this project went through a Public Private Partnership feasibility assessment. Taken through indicative design, the project capital cost for the base Pharmaceutical Sciences/CDRD facility was estimated at $200M, excluding Modified Barrier Facility and Data Centre. Costs of $1.5M were incurred for P3 assessment and the indicative design process. A value for money case was not made. UBCPT estimated (and ultimately delivered on) a base capital cost of $133M including risk management fees. The project had a hard deadline of August 2012 to accommodate a significant planned expansion in enrolment. As there was insufficient time for regular process of design bid build, a fast track process was employed. Fast tracking compresses the project schedule by running the design and construction phases simultaneously. This is not sequential and therefore riskier. With careful governance and support from all stakeholders, this project met the deadlines and came in under budget.

Deficiencies being resolved – problem elevators, thermal comfort, interior door design.

Sustainability: As the building is 85% occupied and the data centre is only 30% occupied, analysis is required as to why energy use in building is greater than modelled.

Utilization: Enrolment Services noted that the building is locked at 6pm daily and 6pm on Friday for the weekend. Any use after that requires hiring of security personnel to monitor use. This is prohibitive for classroom use and it is felt that because of this the building is under-utilized. To be resolved through operations and policy.

Page 5


UBCPT COMMENTS Complete for all

reports that include a property component

Date of Review: Signed Off by:

Previous Report Date September 27, 2011

Decision Fast Track Update Report

Action / Follow Up The Board 3 “Fast Track” approval for the Pharmaceutical Sciences / CDRD project, received in June 2010, requires that information update reports on the progress of the fast track process be brought to the Board until 80% of construction tenders are complete. That milestone was achieved in July 2011 and now 97% of tenders are complete. This will therefore be the last Fast Track Update Report, covering the period up to August 31, 2011.

The current $94.6 million forecast for construction completion cost, which factors in previous value engineering savings and allows for future unforeseen scope adjustments and costs, can be managed within the original $93.0 million construction budget with the use of $1.6 million of project contingency. A total of $3.45 million of contingency is still in place for use, if required, during the balance of construction.

Previous Report Date June 8, 2011


Action / Follow Up While total construction tenders to date (now 54% complete) have been under budget there have been a number of post tender scope adjustments not previously budgeted. The added cost for these adjustments, along with recent tender results and the scope left to tender which is highly dependent on architectural details, have led the construction manager to forecast a budget overage of up to $4.0M. The project team has developed a list of value engineering items with a total possible savings of $5.4M. It is expected that the required $4.0M in savings can be realized from this list. The full project contingency ($5.49M) is still in place for use as required during the balance of construction.

Site Work

The level 5 slab is complete. The level 6 slab is 50% complete and the roof slab is 15% complete. Overall the construction is 18% complete. Curtain wall installation commences on the east elevation on May 12, 2011.

Tenders

Twenty-seven construction tender packages have been completed to date. Two packages were tendered in April. The total value of awarded work is $46.3 million or 54% of overall construction budget.

Page 6


Previous Report Date April 5, 2011


Action / Follow Up The fast track process is proceeding well. Total construction tenders to date are under budget, and while tendering is behind original schedule, this is not expected to impact the final budget amount or the final completion date of the project. Site Work The ground floor and level 2 slabs are complete. The level 3 slab is 50% complete, the level 4 slab is 25% complete and the level 5 slab is 10% complete. Overall the construction is 12% complete. Tenders Eighteen construction tender packages have been completed to date. The total value of awarded work is $29.8 million or 35% of overall construction budget. Total construction tenders to date are under budget. The Atrium Skylight tender is the only tender to so far have come in over budget. All other tenders have come in at or under budget.

Previous Report Date February 7, 2011


Action / Follow Up Site Work Excavation, footings and underground plumbing work are complete. Columns and walls in the basement are 90% complete. The slab on grade is 80% complete. Ground floor slab is 40% complete and level 2 formwork is underway. Overall the construction is 6.5% complete. Tenders Nine construction tender packages have been completed to date. A summary of the tender results is shown in the table below. The total value of awarded work is $22.1 million or 24% of overall construction budget. All tenders have so far come in at or under budget.

Previous Report Date November 23, 2010


Action / Follow Up The fast track is proceeding well. All construction tenders to date have come in at or under budget and while tendering is behind original schedule this is not expected to impact the final budget amount or the final completion date of the project. Site Work Excavation is 99% complete. Footings are 85% complete and columns and walls in the basement are 45% complete. Underground plumbing work is 25% complete. The slab on grade is 25% complete. Ground floor formwork will commence the week of November 1st.

Page 7


Tenders Eight construction tender packages have been completed to date. The total value of awarded work is $20.82 million or 22.4% of overall construction budget. All tenders have so far come in at or under budget. The next major component to be tendered is Structural Steel which has a value of $2.2 million. This will be followed by Mechanical and Electrical packages with a total value of $38.0 million.



Action / Follow Up The Board 3 “Fast Track” approval for the Pharmaceutical Sciences / CDRD project, received in June 2010, requires that information update reports on the progress of the fast track process be brought to the September 2010 and November 2010 Board meetings. This Fast Track Update Report covered the period to August 20, 2010. Monthly progress reports are also being provided to the Board Chair and Chairs of the Finance and Property & Planning Committees. Reporting will continue until 85% of construction tenders are complete.

Fast tracking compresses project schedule by running design and construction phases simultaneously. A fast-track process is required in this case to meet the August 2012 completion deadline necessary to allow the Faculty of Pharmaceutical Sciences to accommodate a significant planned expansion in enrolment.

The fast track process for the project is proceeding as planned. All construction tenders completed to date have been within budget. Schedule has been caught up after an initial delay with the start of excavation as we awaited final approval of Bill 20 from the Provincial government.

Site Work Before excavation could commence, a land use designation change included in Bill 20 required Provincial approval. Excavation commenced June 25, 2010 and to make up for lost time, the contractor worked 10 hour days and on Saturdays. The premium to expedite the work was $26,000. The result is that the excavation is back on schedule and the east end of the excavation is now ready for footing work.

Tenders Four construction tender packages were completed and awarded to date. The total value of awarded work is $18.92 million or 20% of overall construction budget. All tenders have so far come in at or under budget.


Decision It is recommended that Board 3 approval be granted for this project with authorization to “fast-track” the project and enter into trade contracts as required to maintain the project schedule.

Approval: Capital Budget $155,230,000 Operating Budget $ 2,063,000 Schedule Award of formwork, rebar, below grade M&E Funding Release $150,330,000

Page 8


Information: Expenses to Date: $ 2,709,000 Funding Releases to Date: $ 4,900,000

Approval: An internal loan of up to $62.787 million to be repaid over a period of up to 30 years at a projected rate of 5.75% and debt service will be funded from a variety of sources identified in the Financing Summary section.

Action / Follow Up Board 3 approval is requested on a fast track basis. Approval requested to enter into trade contracts as required to maintain the project schedule.

• Tenders will be reviewed and compared with a line item base budget by the Managing Director, Infrastructure Development prior to award.

• If tenders exceed budget, the Managing Director, Infrastructure Development may require additional value engineering or other such remedies to mitigate risk to UBC.

• A monthly project report is to be sent to the Chairs of Finance and Property and Planning and Executives by the Managing Director, Infrastructure Development, summarizing the project progress until 80% of construction costs have been tendered. This is anticipated for November 2010.

• Information update reports will be brought to the September and November Board meetings (representing 65% and 80% of construction costs tendered).

• Funding releases to be controlled by Managing Director, Infrastructure Development.

Previous Report Date April 8, 2010

Decision Board 2 Approval and Approval for Site Works and Excavation

Approval: Revised Capital Budget Pharmaceutical Sciences/ CDRD $133,250,000 Modified Barrier Facility $ 15,450,000 Data Centre $ 6,500,000 Total Capital Budget $155,230,000 Revised Operating Budget $ 2,063,000 Revised Schedule Authorization to Issue Development Permit Proceed to Working Drawings & Tender Funding Release $ 2,000,000

Information: Expenses to Date: $ 2,164,587 Funding Releases to Date: $ 2,900,000

Action / Follow Up Board 2 approval to proceed with working drawings and tender and to commence site preparation and servicing work as well as bulk excavation for the foundation. A fast track procurement process is required to meet the August 2012 completion deadline. Program area 13,132 NASM, down from 15,385 NASM at previous board.

Page 9



Decision Revised Board 1 Approval

Approval: Project in Principle Location Consultant Selection Preliminary Program Preliminary Capital Budget $153,400,000 Preliminary Operating Budget $ 1,791,299 Preliminary Schedule Proceed to Schematic Design Funding Release $ 1,145,000

Information: Expenses to Date $ 2,000,000 Funding Releases to Date $ 1,755,000

*Preliminary Capital Budget Includes $20,000,000 for Mouse Screening and Innovation Centre to be located in basement level of the new building.

Action / Follow Up Requested that Board accept amended Consultant Selection Policy 126 to delegate approval of architectural shortlist to UBC Executive. As part of a P3 assessment process, an indicative design was completed. UBCPT to publish this document to make best use of fees expended and reduce schedule for future design work. Once provincial approval is received to post Expressions of Interest, UBCPT will proceed with proposal call for Architectural Consultants and full design and engineering team.


Decision Approve: Funding release (Conditional) $92,895,000

Ask to Ministry of Advanced Education and Labor Market Development $96,500,000

A variance to Policy 126 to permit an architect to be selected by the winning consortium in accordance with P3 process.

Internal loan of up to $56.05 million to be repaid over 30 years

Additional loan of up to $25 million to fund building costs in advance of fundraising. The term of this to be no more than 10 years and the loan principal to be reduced as fundraising pledges are fulfilled. Pham Sci responsible for interest costs.

Establishment of a Steering Committee consisting of:

o UBC VPFRO; o UBC Vancouver Provost & Vice President Academic; and o The President of Partnerships BC

Authorization of Steering Committee to take all such action and approve all such agreements and documents as the Steering Committee considers necessary or desirable to proceed with and fully implement the Project substantially as described in the Request for Decision, including agreements providing for expenditures by the University.

Page 10


Authorization of any officer or officers of the university designated by the Steering Committee to execute and deliver, for and on behalf of the University, any agreement or other document approved by the Steering Committee.

Action / Follow Up Changes since previous board submission:

Faculty reduced space requirements by 3000 GSM

Net present value cost at Jan 2009 is $187.4 million including life cycle maintenance costs and equipment.


Decision Board 1 Approval of the project in principle: Funding Release of $1.47M

Action / Follow Up Partnerships BC has recommended the project be implemented as a Private Public Partnership (“P3”). To keep on schedule and enable initial July 2011 occupancy, Request for Qualifications and Request for Proposal must be created. Provincial funding cannot be sought until the outcome of the P3 review by Partnerships BC.

Changes since previous board submission:

2000 GSM graduate student space added ($15M added cost)

Mouse Screening & Innovation Centre (MoSAIC) to address Canada Council on Animal Care requirements. ($20M added cost)


Decision Approval:

Funding Release of $150,000 required to undertake an initial assessment of P3 feasibility. Project has been informally discussed with Partnerships BC and is likely to be implemented as a P3.

Action / Follow Up The BC Capital Standard introduced in June 2006 formalized into provincial policy as part of the Ministry of Finance’s Capital Asset Management Framework. The policy requires that projects with public funding over $20M must be evaluated with a P3 as the base case unless a compelling value for money alternative implementation is approved by Partnerships BC and Treasury Board.

Previous Report Date December 8, 2005

Decision Faculty of Pharmaceutical Sciences New Building.

Board 1 Approval: It is recommended that the Board approve the project in principle and its location.

Funding release $135,000

Action / Follow Up Site approved: corner of Wesbrook and Agronomy, adjacent to Thunderbird Bird Parkade and across from Life Sciences Centre. Project cost estimated at $90.1M. Project to move into schematic design.

Attachment: 1) Photos of Pharmaceutical Sciences/CDRD Building

Page 11


Attachment 1 – Photos of Pharmaceutical Sciences/CDRD Building

Page 12

Documents

REPORT TO THE BOARD OF GOVERNORS SUBJECT PHARMACEUTICAL …bog2.sites.olt.ubc.ca/files/2014/11/3.20_2014_11_B4-CDRD-Building.… · The Faculty of Pharmaceutical Sciences/Centre for