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Campus Outlines Innovative Plan to Double Physical Capacity

March 18, 2015
The ‘2020 Project,’ presented today to the UC Board of Regents, will create more than 10,000 construction jobs in the Valley and allow enrollment to grow to 10,000 students
The University of California, Merced, today will outline for the UC Board of Regents a new development strategy that will more than double the physical capacity of campus facilities by 2020 in an effort to accommodate record numbers of student applicants, increase regional and statewide access to a UC education and support the university’s most critical academic and research priorities.
The newest UC campus, which opened in 2005 with 875 students and now enrolls more than 6,200, will employ a team of private developers and an innovative, fast-track construction model to add nearly 1 million assignable square feet (*see footnote) as rapidly and cost-effectively as possible.
Plans call for the new facilities to be built as a mixed-use, master-planned development on a 219-acre, university-owned site that includes the existing campus. By contracting with a private, multifaceted team to develop the entire project at once, rather than sequentially as individual projects, the university expects to save significant time and money compared with traditional procurement approaches.
The “2020 Project” is expected to create 10,800 new construction jobs in the San Joaquin Valley during the construction period and generate an estimated $1.9 billion in direct and indirect economic impact in the region. Statewide, the totals are 12,600 new construction jobs and $2.4 billion in combined economic impact.
The expansion project will also significantly increase permanent university employment and support enrollment growth to about 10,000 students, the university said. 
Construction could begin in late 2016 or the first half of 2017, with phased delivery of facilities in the 2018-2020 timeframe.
UC Merced will also seek Board of Regents approval today to begin design work on its Downtown Center project, an administrative building complex that would serve as the hub for its growing presence in downtown Merced. At approximately 75,000-100,000 gross square feet, the facility would allow the university to consolidate much of its administrative activity in a central location that will help bring economic vitality to the downtown area and promote a closer relationship between the campus and community.
The Downtown Center would be built on land purchased by the university in June 2014 at the corner of N and 18th streets, directly across from City Hall.      

Student Demand Continues to Grow

The rapid addition of academic, research, housing and recreational facilities is in direct response to growing student demand from the San Joaquin Valley and across the state to attend the most diverse, intimate and environmentally sustainable campus in the UC system. About 97 percent of UC Merced undergraduates hail from California. The campus leads the UC system in the percentage of students who are from under-represented ethnic groups, who are the first in their families to attend a four-year institution, and who come from low-income families that receive federal Pell grants.
Despite a 14 percent increase in undergraduate applications for Fall 2015 — the highest in the UC system — the campus has been forced to slow enrollment growth due to severe capacity constraints. UC Merced received 17,000 applications for Fall 2014 but had seats for fewer than 10 percent of its applicants. 
“UC Merced’s progress in just 10 years is an exciting development for the university, the Merced community and the state of California,” UC Merced Chancellor Dorothy Leland said. “Our development strategy will allow us to resume rapid enrollment growth and advance the regional economy in keeping with our core mission. It will also allow us to build strategically, aligning facility additions with our emerging academic and research priorities and creating a sense of community that encourages faculty, student and staff collaboration.
“This is a winning proposition that could serve as a compelling alternative delivery strategy for future higher-education capital projects for the university and the nation.”

Innovative Approach to Development

The 2020 Project’s approach, a form of public-private partnership known as a Design-Build-Finance-Operate-Maintain (DBFOM) model, is designed to take advantage of private-sector financing and operating efficiencies while making the most prudent use of limited public dollars. While other UC campuses have used simpler variations of the model, this will be the UC system’s first large-scale DBFOM project.
Under the plan, UC Merced will set rigorous performance requirements and design standards that the development team will be contractually obligated to meet. The development team will finance most of the project and deliver the buildings on an expedited schedule, earning “milestone” payments as interim construction deadlines are met and “availability” payments as the buildings are completed and made ready for use. All UC labor contracts will be honored and prevailing wages will be paid.
The proposed plan will also include private operation and maintenance of the new facilities throughout the long-term duration of the contract. The university believes the bundling of these additional services will help drive down overall costs and provide a strong incentive for the development team to provide high-quality, efficient designs that meet or exceed UC Merced requirements, including the campus’s unprecedented commitment to sustainable building design and operation.
All UC Merced buildings to date substantially exceed UC and state requirements for design and operating efficiency. 

Request for Proposals to Come This Year

Following today’s briefing, UC Merced will finalize documents in preparation for the project’s Request for Proposals (RFP) phase. An industry-review process is expected to begin this spring, with the RFP to be released later this year. Three teams have already completed an extensive pre-qualification process, which began last year, and are expected to submit detailed proposals by the end of 2015. The winning team will be announced early in 2016.
The conceptual framework and land-use flexibility necessary to execute the project as an integrated, master-planned development were approved by the UC Board of Regents in May 2013. Additional approvals of the UC Office of the President and the Board of Regents will be sought as contract terms and projected costs are finalized in the coming months.
“As the state economy continues to recover from nearly a decade of recession, it’s important to stretch public funds as far as possible while ensuring a UC-quality education to as many eligible students as we can,” Leland said. “The model we’re pursuing does that by leveraging the financial and operating capabilities of the private sector in ways not previously considered.
“We hope the UC Merced expansion plan will prove to be very informative as state officials consider the optimal way to sustain the world’s preeminent public university system and continue to build on its legacy of access, innovation and excellence.”
*Footnote: Assignable square footage (ASF) is the portion of gross square footage (GSF) that can be directly assigned to specific uses. ASF excludes general-purpose spaces used for mechanical, circulation, building services and other functions that support the overall operation of the building. UC Merced’s current facilities include nearly 900,000 ASF.