Out with the Old and In with the New: Not so Fast!

out with old in with newIn a time of aging buildings and increasing backlogs, facilities at institutions across the country are currently in need of drastic change.  As project backlogs near $100/GSF at many segments of campuses, deferral levels will dictate action. As the economy improves, we hope that capital becomes more readily available at many institutions.  To manage capital investments effectively, facilities leaders will be faced with an important question: should we build new, renovate/modernize, or remove?

For many campuses, this question causes constant debate and discussion among constituents during annual financial and facilities investment reviews.  For institutions with new or evolving programs, new space might be inevitable as specialized labs, classrooms, or offices might be required. These decisions are often easier as new programs have the ability to increase enrollment and generate revenue.

For instances where conditions are driving the project decision rather than program, there is not a “one size fits all” answer for any major renovation.  As a facilities management best practice, one must do the simple calculus of comparing the renovation costs to what new construction costs would be for a similar facility. However, several concepts are often excluded from this discussion. Below are a few things to keep in mind as campus leaders make these critical decisions.

Density and Utilization.  Density is a measure of how many people are using your campus on a regular basis.  Utilization refers to the amount of time a space is occupied and how full a space is.  Both are often used to justify the addition of a new building from a programmatic perspective. But is it always appropriate? A simple analysis done in advance might show that a campus does not in fact need a new building.  Rather, they may feel overcrowded because they simply have the wrong kind of space.  Separating fact from fiction is key to building campus consensus on these issues.  Millions in capital dollars can be saved or lost by this decision.   Maintaining the campus footprint, increasing density, and lowering facility overhead as a percentage of the institutional budget must be evaluated in the decision process.

What about the old building?  In cases where a new building is constructed to replace one with high levels of deferral, a clear decision should be made as to the fate of the existing structure. We often see institutions fail to make these decisions early on, causing confusion as a replacement project gets underway.  Can swing space be afforded?  Is adaptive reuse an option?   Absent the proper process and policies, what begins as an initiative to remove a backlog laden structure actually becomes a campus expansion as the old building is not torn down. Be sure to set clear expectations for the existing space as new buildings come online.

What does the project do to rate of deferral? Anytime a new building is constructed, the campus should be mindful of what the long-term implications are to operations and capital at the institution. As the pressure mounts to maintain new space at a high standard, resources are inadvertently redirected from buildings with high levels of need. The result is an effective decrease in Annual Stewardship across the remaining campus, resulting in increased deferral rate. Be mindful of the effect of new buildings and be sure to appropriately budget for operation and maintenance going forward.

What does all this mean?  Basically, we have seen that a directed campus process is key to managing facility investment resources effectively.  In these difficult economic times, challenging enrollments and rapid change in learning pedagogy, campuses need a multi-year plan that is broadly understood and supported institutionally.  Finding that unique balance between new construction, renovation, and repair will be a key institutional challenge in the decade ahead.

 

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