Office of the President TO MEMBERS OF THE FINANCE AND

Office of the President

TO MEMBERS OF THE FINANCE AND CAPITAL STRATEGIES COMMITTEE:

ACTION ITEM

For Meeting of July 17, 2024

SEGUNDO INFILL STUDENT HOUSING, DAVIS CAMPUS: BUDGET, SCOPE,

EXTERNAL FINANCING, AND DESIGN FOLLOWING CONSIDERATION OF AN

ADDENDUM TO THE 2018 LONG RANGE DEVELOPMENT PLAN

ENVIRONMENTAL IMPACT REPORT PURSUANT TO THE CALIFORNIA

ENVIRONMENTAL QUALITY ACT

EXECUTIVE SUMMARY

The Segundo Infill Student Housing project is approximately 116,000 gross square feet in size

and provides 206 new residence hall units targeted for first-year students. The project helps UC

Davis meet the demand for on-campus housing and make progress toward the 2018 Long Range

Development Plan goals and Memorandum of Understanding commitments with the City of

Davis. The project will utilize existing dining and community facilities, given its adjacency to

other residential complexes and available capacity for those amenities, making it a cost-efficient

project. Students who have the benefit of living on campus are immersed in the campus

community with easy access to the variety of academic, research, clinical, recreational, and retail

facilities UC Davis offers, which promotes student success. Providing on-campus housing is

especially beneficial in supporting UC Davis’s underrepresented student groups.

Consistent with the campus’s commitment to responsible stewardship of resources and

demonstrating leadership in sustainable business practices, the project targets a Leadership in

Energy and Environmental Design™ (LEED™) minimum building certification level of Gold

with a goal to achieve Platinum.

In May 2023, the Regents approved $4.1 million of preliminary plans funding for the project

from housing reserves.

The Regents are being asked to: (1) approve the project budget of $100,047,000; (2) approve the

project scope; (3) approve external financing in the amount of $98,297,000; (4) adopt the

California Environmental Quality Act Findings; and (5) approve the project design.

FINANCE AND CAPITAL STRATEGIES -2- F3

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July 17, 2024

RECOMMENDATION

The President of the University recommends that the Finance and Capital Strategies Committee

recommend to the Regents that:

A. The 2024-25 Budget for Capital Improvements and the Capital Improvement Program be

amended as follows:

From: Davis: Segundo Infill Student Housing – preliminary plans – $4.1 million to be

funded from housing reserves.

To: Davis: Segundo Infill Student Housing – preliminary plans, working drawings,

construction, and equipment – $100,047,000 to be funded from external financing

($98,297,000) and housing reserves ($1.75 million).

B. The scope of the Segundo Infill Student Housing project be approved. The project shall

provide a five-story building of approximately 116,000 gross square feet. The building

will house approximately 494 student residents in 206 rooms and will include community

and support spaces with outdoor amenities.

C. The President be authorized to obtain external financing in an amount not to exceed

$98,297,000 plus additional related financing costs to finance the Segundo Infill Student

Housing project and declare that external financing may be used to reimburse prior

expenditures. The President shall require that:

(1) Interest only, based on the amount drawn, shall be paid on the outstanding

balance during the construction period.

(2) As long as the debt is outstanding, the general revenues of the Davis campus shall

be maintained in amounts sufficient to pay the debt service and to meet the related

requirements of the authorized financing.

(3) The general credit of the Regents shall not be pledged.

(4) Any reimbursements will meet all requirements set forth in Treasury Regulations

Section 1.150-2.

D. Following review and consideration of the environmental consequences of the Segundo

Infill Student Housing project, as required by the California Environmental Quality Act

(CEQA), including any written information addressing this item received by the Office of

the Secretary and Chief of Staff to the Regents no less than 48 hours in advance of the

beginning of the Regents meeting, testimony or written materials presented to the

Regents during the scheduled public comment period, and the item presentation, the

Regents:

FINANCE AND CAPITAL STRATEGIES -3- F3

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(1) Adopt the CEQA Findings for the Segundo Infill Student Housing project, having

considered both the 2018 Long Range Development Plan (LRDP) Environmental

Impact Report (EIR) for the Davis campus and June 2024 Addendum to the 2018

LRDP EIR.

(2) Make a condition of approval the implementation of applicable mitigation

measures within the responsibility and jurisdiction of the Davis campus as

identified in the Mitigation Monitoring and Reporting Program adopted in

connection with the 2018 LRDP EIR.

(3) Approve the design of the Segundo Infill Student Housing project, Davis

campus.

BACKGROUND

Past Regents Items

• Preliminary Plans, May 2023, $4.1 million (housing reserves).

The project scope remains consistent with that presented to the Regents in May 2023.

Project Background and Context

The UC Davis Student Housing and Dining Services program delivers an excellent on-campus

living experience by providing a safe and comfortable environment that fosters community

interaction and educational development.

As of fall 2023, on-campus housing is available for 15,479 undergraduate and graduate students

in a combination of Regents-owned complexes (6,391 beds) and third party-developed

apartments (9,088 beds). UC Davis currently offers a one-year housing guarantee to incoming

first-year students and a two-year guarantee for incoming transfer students. The campus’s

longstanding goal is to house first-year students in residence hall complexes with programs and

services geared toward supporting students’ academic success and individual development as

they transition to campus life. Although the campus consistently expanded its residence hall

portfolio over the last decade, most recently with the replacement and expansion of Shasta Hall

in 2021 (formerly Emerson Hall), additional residence hall beds are projected to be necessary to

keep pace with anticipated freshmen enrollment growth.

Housing on the Davis campus is organized in several neighborhoods. Traditional residence halls

are located in the Tercero, Segundo, and Cuarto neighborhoods and primarily serve first- and

some second-year students. On-campus apartment-style housing in the Orchard Park and West

Village neighborhoods provides housing primarily to upper-division undergraduates, graduate

students, and student families.

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The Segundo neighborhood consists of 14 residence hall buildings, the Segundo Services Center,

and the Segundo Dining Commons, and is located on the northwest corner of the central campus.

The neighborhood’s westside has a park-like setting defined by a north-south axis that connects

community support buildings with open spaces and residence halls. This infill project will

advance the coherence and interconnectedness of the neighborhood.

In addition to increasing residence hall bed inventory in support of enrollment growth, the

additional space will also allow for surge space as the campus anticipates redeveloping old

housing. The project will also continue to move UC Davis towards the goal of housing 48

percent of the Davis campus-based enrollment. As of the 2022-23 academic year, UC Davis

housed 37 percent of Davis-based students on campus.

PROJECT DESCRIPTION

The proposed approximately 116,000-gross-square-foot (gsf) project will provide 206 rooms.

The units primarily support double occupancy but are designed to support tripling to

accommodate fluctuations in enrollment, student demand, and surge space and to provide a lower

cost housing option. The planned configuration upon opening of the project is 60 percent double-

occupancy (124 rooms) and 40 percent triple-occupancy (82 rooms). The units and their design

are generally consistent with those of other well-liked first-year residential neighborhoods at UC

Davis, Cuarto and Tercero. The Segundo Dining Commons will serve the project and will

leverage the full capacity of the dining hall. Other student-serving amenities are available in the

neighborhood; the proximate Segundo Services Center provides administrative and recreational

residential area services, including a service desk, academic advising, computer center,

convenience store, recreation room, and meeting and study rooms. The project is anticipated to

be completed prior to the start of the fall quarter in 2027.

Program and Scope

The building program includes approximately 494 student beds in 206 rooms, communal

bathrooms, two Resident Director Apartments, residential amenities, building amenities, and

building support spaces. Table 1 shows the breakdown of the unit mix, which is designed to

accommodate future shifts in occupancy between double- and triple-bedded rooms based on

future demand factors.

Table 1

Segundo Infill Student Housing Mix of Unit Types

Unit Type

Number

of Units

Number

of Beds

Single Occupancy

Double Occupancy

124

248

Triple Occupancy

246

Total

206

494

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Indoor community amenities include floor lounges, study nooks, and convenient laundry

facilities. The ground floor includes a welcoming entry lobby connected to a vibrant main lounge

and a bustling social kitchen. The residential floors maintain a variety of views of the exterior

from nooks, corridors, and lounges, supplementing the connection to the exterior from individual

rooms. Table 2 provides a breakdown of the planned building program.

Table 2

Segundo Infill Student Housing Summary of Proposed Square Footages

Category

ASF

GSF

Residential Space (excluding restrooms)

47,362

63%

Community Amenities

12,857

17%

Restrooms

11,276

15%

Support Spaces

3,843

Total Enclosed Assignable Square Feet (ASF)

75,338

100%

Mechanical Electrical Plumbing

3,852

Covered Unenclosed Area (50%)

4,300

Structure

32,632

Total Project Gross Square Feet (GSF)

116,122

Outdoor Community Amenities

The project creates distinct outdoor social spaces. Pathways are strategically designed to

integrate with the existing multimodal passageways in the neighborhood. The East Entry Plaza

creates an open space to support the extension of indoor programs. The Bicycle Courtyard

includes 600 total bike parking spaces; over 50 percent will be covered by the second-story

podium above, and 25 percent will be enclosed and secured. The landscape, including the Pocket

Park and West Lawn, supports and weaves together open spaces and activities.

Off-Campus Housing Demand

The project will deliver a product that is inherently different from the apartment-style and single-

family homes available in the City of Davis. As a traditional residence hall, the project will

provide additional programming and a board (cafeteria-style meal) program unavailable in the

off-campus market. Increasing the number of residence hall beds on campus assures the campus

that it can uphold its first-year housing guarantee while alleviating some of the challenges the

City of Davis is experiencing with the availability of affordable off-campus housing.

On-Campus Housing Rates and Off-Campus Rent Comparison

The on-campus residential rental rates for singles, doubles, and triples are the same across all on-

campus residential neighborhoods. The socialization of the housing rates ensures those students

living in newer housing units are not burdened with higher rates. The campus’s rates for the

2023-24 academic year are $12,498 per person for a double occupancy room. Although it is too

FINANCE AND CAPITAL STRATEGIES -6- F3

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early to establish rents for FY 2027-28, UC Davis has a long-standing practice of offering below-

market rents and plans to continue this commitment when Segundo Infill is added to the

campus’s housing portfolio.

The following chart notes that rental rates for on-campus housing were nearly 30 percent below

the off-campus Davis market for 2023-24.

Location

2023-24 Monthly Rent

% Under Market

UC Davis Residence Hall Rate,

double occupancy room

$1,180 per person

28%

Davis Community Market Rate,

double occupancy room

$1,650 per person

Notes:

(1) The 2023-24 cost of a double occupancy residence hall was $12,498 per person for the 9.5-month

term, or $1,315 per month. The following on-campus services and amenities have been removed

from the monthly rate in the chart above since these are not provided in off-campus rentals: residence

hall program ($80/month/bed) and utilities ($55/month/bed).

(2) UC Davis residence halls include furnished dorm rooms and housekeeping of common areas. Costs

for these have not been removed from the rate comparison.

(3) Off-campus rates are for unfurnished apartments without Wi-Fi and housekeeping of common areas.

(4) Double occupancy rates are used for both on-and off-campus bedrooms.

(5) Comparison uses two-bedroom, bed lease average data for new construction comparable apartments

in Davis.

Funding Plan and Financial Feasibility

The total project budget of $100,047,000 will be funded with $1.75 million of housing reserves

and $98,297,000 of external financing. At the tax-exempt planning rate of 4.25 percent and

assuming a 30-year term with two years of interest only, the average annual debt service for

years one and two is anticipated to be $4.2 million, and for years three through 30 is anticipated

to be $6.1 million.

Over a ten-year period, the campus is projected to have a minimum modified cash flow margin

of 7.3 percent and a debt service coverage of 1.5x as required by the University’s Debt Policy

(Policy). UC Davis’s days’ cash on hand in the Short Term Investment Pool (STIP)/Total Return

Investment Pool (TRIP) is 62 days as of April 30, 2024, which does not meet the requirements of

the Policy.

The Segundo Infill Student Housing project meets the minimum 1.0x auxiliary project debt

service coverage ratio; however, the campus falls short of the minimum 1.1x auxiliary system

debt service coverage as required by the Policy in the current fiscal year (2024-25). The UC

Davis housing system is projected to meet this requirement in fiscal year 2024-25 and for the

remaining ten-year forecast. An exception to the University’s Debt Policy has been granted by

the Executive Vice President – Chief Financial Officer for days’ cash on hand and auxiliary

FINANCE AND CAPITAL STRATEGIES -7- F3

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system debt service coverage. Additional information regarding funding and financial feasibility

is included in Attachment 2.

Project Delivery and Schedule

The proposed project is intended to be constructed using the design-build delivery method, with

a Maximum Acceptance Cost, a method successfully employed by UC Davis on a number of

recent housing projects. In this process, the University contracts with a single party for both

design and construction. The design-build process is efficient and allows the contractor’s

technical expertise and creativity to be incorporated into the design process from the beginning.

The design-build process has proven so successful in controlling costs, managing schedules, and

maximizing value for housing projects that the campus now prefers to deliver all-new residence

hall housing projects using this method.

The estimated construction completion date for the project is April 2027.

PROJECT DESIGN

Site Conditions and Location

The proposed project will be located on the existing surface Parking Lots 22 and 16, as shown in

Attachment 4. The location provides convenient access to Russell Boulevard, a main Unitrans

Bus route that connects to the City of Davis; California Avenue, a central street that connects to

the heart of the campus; and Russell Field, which supports campus recreation and events.

The site currently provides parking for the Segundo neighborhood. Much of the construction will

occur on Parking Lot 22, while Parking Lot 16 serves as the laydown site for construction trailers

and temporary facilities. Upon project completion, Parking Lot 16 will continue to serve as a

small surface parking lot for the Segundo neighborhood, with several improvements and

modifications, including relocating the entrance, adding a drop-off and turnaround area,

improving the loading zone, and installing electric vehicle smart chargers. Parking in the

neighborhood is currently undersubscribed, and the first-year residents of the new Segundo Infill

Housing project will not have vehicles, resulting in the ability to continue to meet neighborhood

parking demands even with less parking in the neighborhood. A large parking structure with

capacity to support the displaced parking is located proximate to the neighborhood.

Project Design and Physical Design Framework

The scale of the Project’s five-story structure integrates with the existing two- and three-story

residence hall buildings in the neighborhood and establishes context for future higher-density

development/redevelopment in the neighborhood. The student housing program fosters

community and connection to the main campus, within the Segundo neighborhood, and

throughout the new complex itself.

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The main entrance consists of a lobby adjacent to the main corridor on the ground floor of the

building. The west entrance will be adjacent to the Segundo Quad, Segundo Dining Commons,

and the Student Services building to give students traveling from the west side of campus easy

access to the building.

From the Segundo Quad to the west, the project site is organized into four distinct yet

complementary outdoor use zones: the Pocket Park, West Lawn, Bicycle Courtyard, and the East

Entry Plaza. All spaces are interconnected through a permeable ground floor design, which

connects interior and exterior community spaces, providing flexibility and access for students.

• The Pocket Park serves as the hub for outdoor space and pedestrian connectivity to the

campus while providing flexible outdoor gathering and studying space.

• The West Lawn provides an outdoor amenity for neighborhood residents and

complements a larger open space to the west of the project site.

• A Bicycle Courtyard celebrates the campus’s vibrant bicycle culture by centralizing the

bike parking facilities. The Bicycle Courtyard includes 600 total bike parking spaces;

over 50 percent will be covered by the second-story podium above and 25 percent will

be enclosed and secured.

• The East Entry Plaza provides a point of entry for the facility adjacent to the main

vehicular drop-off zone.

The design of the building and the materials selected are consistent with the campus’s Physical

Design Framework. The public outdoor spaces have been carefully designed to promote the

connection between buildings and landscaping. The design and materials selected promote a

cohesive environment in the Segundo Neighborhood through consistency of scale, color, and

textures while ensuring longevity and maintainability. Exterior finishes will include brick,

exterior insulation and finishing system panels, aluminum windows, and concrete site surfaces.

A materials sample is included with the design materials in Attachment 5.

Sustainable Practices

The building will achieve a minimum Leadership in Energy and Environmental Design™

(LEED™) Gold certification, with the goal of Platinum. The entire project will incorporate

electrification and will not utilize natural gas for building heat or hot water generation.

Additionally, the building will have:

• Operable windows

• High-performance exterior envelope design

• Low-emitting materials

• Daylighting

• High-quality views

• Lighting controls

• Durable materials

• Reduction of indoor water use to exemplary levels

• Outdoor bicycle parking

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Long Range Development Plan (LRDP)

The project is consistent with the 2018 LRDP. The 2018 LRDP land use designations for the site

are Student Housing and Streetscapes and Roadways. The Student Housing designation allows

for a variety of campus and privately operated student housing types and densities and includes

ancillary services to support housing (i.e., landscape, path, on-site utility services, and parking).

Beckett Hall Circle will be widened from a multimodal path to provide full emergency vehicular

access around the new building, which is consistent with its current use. The project will develop

student housing at the site and increase the on-campus residential population; therefore, the

Segundo Student Infill Housing project is consistent with the 2018 LRDP.

CONSISTENCY WITH SELECT UC POLICIES AND PRACTICE

The project complies with the UC Policies for Seismic Safety, Sustainability, and Small/Disabled

Veteran Business Enterprises (see Attachment 7).

CEQA COMPLIANCE

Pursuant to the California Environmental Quality Act (CEQA), a June 2024 Addendum to the

2018 LRDP EIR (SCH# 2017012008) has been prepared for the Segundo Infill Student Housing

Project (Attachment 9). The Project is within the scope of impacts identified and analyzed in the

2018 LRDP EIR, and none of the circumstances that will trigger subsequent or supplemental

environmental review under Public Resources Code Section 21166 and CEQA Guidelines

Sections 15162 or 15163 have occurred or are present. With the implementation of relevant

certified 2018 LRDP EIR mitigation measures, no new significant environmental impacts have

been identified in connection with the revised Project that were not considered in the 2018 LRDP

EIR. The 2018 LRDP EIR Mitigation Monitoring program is applicable to the project, and

applicable mitigation measures for the Project can be found in Section 5 of the June 2024

Addendum. Findings have been prepared to support the University’s determination that the

proposed project will not require major revisions to the 2018 LRDP EIR (Attachment 11).

Key to Acronyms

CEQA

California Environmental Quality Act

EIR

Environmental Impact Report

gsf

Gross Square Feet

LEED™

Leadership in Energy and Environmental Design™

LRDP

Long Range Development Plan

Policy

University’s Debt Policy

STIP

Short Term Investment Pool

TRIP

Total Return Investment Pool

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ATTACHMENTS:

Attachment 1:

Project Sources and Uses

Attachment 2:

Summary of Financial Feasibility

Attachment 3:

Comparable Project Information – Scatterplot and Table

Attachment 4:

Project Location Map/Site Map

Attachment 5:

Design Graphics

Attachment 6:

Alternatives Considered

Attachment 7:

Statement of UC Policy Compliance

Attachment 8:

2018 LRDP:

https://ucdavis.app.box.com/s/3b7029z14i9j8n2nr2vfcnejl8kbs71h

Attachment 9:

June 2024 Addendum to the 2018 LRDP EIR:

https://ucdavis.app.box.com/v/SegundoInfillHousing-Addendum

Attachment 10:

2018 LRDP EIR and Mitigation Monitoring and Reporting Program:

https://ucdavis.app.box.com/s/yqhq0ni1f7ce1mhpqux61g9oqfs326ow

Attachment 11: CEQA Findings

Attachment 12:

UC Operational Carbon and Energy Assessment for New Construction

(OCEAN) Tool

ATTACHMENT 1

PROJECT SOURCES AND USES

SEGUNDO INFILL STUDENT HOUSING

PROJECT SOURCES

Source

Total

Percent of

Total

Housing Reserves

$1,750,000

1.7%

External Financing

$98,297,000

98.3%

Total Sources

$100,047,000

100%

PROJECT USES

Use

Total

Percent of

Total

Site Clearance

$3,751,000

4.0%

Building

$62,292,000

66.9%

Exterior Utilities

$3,977,000

4.3%

Site Development

$3,790,000

4.1%

A/E Fees

$2,173,000

2.3%

Campus Administration

$5,990,000

6.4%

Surveys, Test, Plans

$602,000

0.6%

Special Items

$6,996,000

7.5%

Contingency

$3,581,000

3.8%

P-W-C Cost

$93,152,000

100%

Group 2 & 3 Equipment

$1,750,000

Project Total

$94,902,000

Interest During Construction

$5,145,000

Grand Total

$100,047,000

A/E fees include the executive architect/engineer’s basic services contract fee.

Campus Administration includes project management and inspection.

Special Items include: detailed project program and other pre-design study consultants, environmental services consultants, plan check fees,

major local jurisdiction fees, special design consultants, independent structural /seismic and MEP review, hazardous materials

abatement/remediation design services, and commissioning agent.

4 Cost of preliminary plans (P), working drawings (W), and construction (C).

PROJECT STATISTICS

Gross-Square-Foot (GSF)

116,122

Assignable-Square-Foot (ASF)

75,338

Efficiency Ratio ASF/GSF

64.9%

Building Cost/ASF

$827

Building Cost/GSF

$536

P-W-C Cost/ASF

$1,236

P-W-C Cost/GSF

$802

Building Cost/Unit

$302,388

Building Cost/Bed

$126,097

P-W-C Cost/Unit

$452,194

P-W-C Cost/Bed

$188,567

Cost Drivers

The Design Build delivery method maximizes value in a few distinct ways:

• The Design Build process locks in a Maximum Allowable Cost (MAC) early in the

design phase, providing cost certainty and eliminating the risks related to rising inflation

and / or long lead times for procurement.

• In addition, having the contractor as part of the design team ensures that costs are

considered at every stage of the design process. This approach provides maximum

alignment of campus priorities and design outcomes, resulting in maximum value to the

campus.

• By having a single contract with both the Architect and Contractor, the design-build

partner assumes the risks associated with errors and omissions from the design team. In a

Design-Bid-Build model, the University would be responsible for architectural errors and

omissions. The Design Build method provides a substantial benefit to the University in

this regard.

• By reducing redundancy in the design process, the Design Build method often speeds up

project durations by up to 12 percent, resulting in cost savings for both the design-build

partner and the University.

ATTACHMENT 2

SUMMARY OF FINANCIAL FEASIBILITY

DAVIS CAMPUS

Project Name

Segundo Infill Student Housing

Project ID

953200

Total Estimated Project Cost

$100,047,000

Anticipated Interest During Construction

(included in total estimated project cost)

$5,145,000

PROPOSED SOURCES OF FUNDING

Housing Reserves

$1,750,000

External Financing

$98,297,000

Total

$100,047,000

Below are results of the financial feasibility analysis for the proposed project using the campus’s Debt

Affordability Model. The model includes projections of the campus’s operations and planned financings.

CAMPUS FINANCING BENCHMARKS

Measure

Campus Metric

Approval Threshold

Requirement

Modified Cash Flow

Margin

7.32% (minimum),

2026

≥ 0.0%

Must Meet

Debt Service Coverage 1.5x (minimum), 2025 ≥ 1.1x

STIP/TRIP Days Cash on

Hand*

62 days, 04/30/2024 ≥ 90 days

Auxiliary Project Debt

Service Coverage

1.03x (minimum),

2030

≥ 1.0x

Must Meet for

Auxiliary Projects

Auxiliary System Debt

Service Coverage*

0.92x (minimum),

2024

≥ 1.1x

*Metric does not meet the requirements of the University’s Debt Policy. [The Executive Vice President–Chief

Financial Officer has granted an exception to the Policy.]

FINANCING ASSUMPTIONS

External Financing Amount

$98,297,000

Anticipated Repayment Source

General Revenues of the Davis campus

Anticipated Fund Source

Davis Housing Revenues

Financial Feasibility Rate

4.25%

First Year of Principal (e.g. FY 20XX)

2027 (two years interest only 2027-2028)

Term (e.g. 30 years)

30 years

Final Maturity (e.g. FY 20XX)

2056

Estimated Average Annual Debt Service

$4,178,000 (2027-2028)

$6,070,000 (2029-2056)

ATTACHMENT 6

ALTERNATIVES CONSIDERED

As the initial phase of redevelopment of student housing in the Segundo neighborhood, the

housing site for the Segundo Infill Student Housing project and the number of beds necessary to

develop to meet the needs of the Davis Student Housing Master Plan helped determine the scope

of the project. Prior to proceeding with campus-delivered new development, the campus

considered several delivery alternatives to provide this additional housing capacity and to

achieve housing capacity, quality, and program goals in alignment with the objectives outlined

above.

Evaluation Criteria

All project alternatives comply with the campus plans outlined in the Long Range Development

Plan. The primary criteria for selecting the project alternate include meeting the campus’ need

for additional beds in a financially feasible manner. It is also desired that the Segundo Infill

Student Housing development integrate with the existing Segundo neighborhood.

Alternative 1—a renovation project.

This alternative will renovate buildings within either Primero Grove or Regan Hall, which will

address building systems and provide a general renewal of the facilities; however, it will not

provide significant additional capacity beyond the existing beds; therefore, it is not a viable

alternative. If Alternative 1 was pursued, there would be a significant cost; however, the campus

would not gain additional on-campus student beds, and the overall design of the space and

neighborhood would not be improved.

Alternative 2—replacement of an entire residential facility.

This alternative will demolish existing housing in the Segundo Neighborhood and replace it with

new construction. The new construction option allows for the site to be configured to integrate

from a site planning and architectural perspective with the previous phases of development in the

Segundo Neighborhood and for the expansion of the number of beds provided in the resulting

facility to include approximately 400 to 600 additional beds, meeting the campus’ demonstrated

needs for additional beds. This alternative allows for the maximization of energy efficiency,

increased density, and better community integration of single beds. However, this will result in a

loss of beds while the project is underway, displacing students from being able to live on

campus.

Alternative 3—new construction.

This alternative will construct a new residence hall as an infill project to the existing Segundo

Neighborhood. The new construction option provides the same benefits listed above in

Alternative 2 without the displacement of on-campus student residents during the project’s

construction.

Analysis of these alternatives concluded that Alternative 3 is the preferred option. This is the

only option that will allow the campus to meet all identified goals for housing at this site and on

campus. The new residence hall beds, along with ancillary support services to support residents

within the Segundo Infill Student Housing and the larger Segundo Neighborhood, will be

constructed on the parking lot sites between Primero Grove and Regan Hall.

Alternative 4—Public-Private Partnership delivery.

The campus also evaluated a fourth alternative, the construction of a new facility through a

Public-Private Partnership (P3) delivery. P3s at the University of California can be structured in

a variety of transaction forms, including:

• Ground Lease-Leasebacks, in which a Regents-owned site is ground leased to a private

developer who builds the project and leases the facilities back to UC.

• Developer Build-to-Suit, in which a developer builds the project on either private or

Regents-owned land and, upon completion, purchases it from UC.

• The developer builds and operates the facility on Regents-owned land through a ground

lease.

Under the right circumstances, P3s have the potential to offer savings in time, reduce the

expenditure of capital reserves, and preserve the campus’ debt capacity. Consideration of P3s by

UC is based primarily on potential advantages in risk allocation and management efficiencies

offered by experienced private developers who specialize in building types commonly developed

by the private sector. The campus has determined that Segundo Infill Student Housing is not a

suitable candidate for a P3 development because:

Revenue Streams and Financial Feasibility:

• While a P3 could minimize the campus’ initial capital outlay, the campus will forgo a

substantial income stream in the long term.

• The resulting income stream will be used to fund other aspects of the housing program,

such as program enrichment and reserves. A percentage of this funding stream will also

go toward campus programs and infrastructure. The housing rates are socialized to keep

costs as low as possible for students.

A P3 provides no advantage to the campus with regard to “risk” allocation or debt limit.

“Risk” of vacancy and subsequent default is considered low due to the limited amounts of

on-campus housing at UC Davis.

Residential Life:

A significant element of the project is the residential program experience, student services, and

programs to support the successful transition of first-year and transfer students into campus life.

The campus has significant expertise in delivering student life programs that include tutoring,

counseling, recreation, and other support services. For first-year students, the targeted population

for additional housing in the Segundo neighborhood, the campus’ own experience with P3-

developed housing indicates that privatizing student life program delivery to these students is not

as successful as programs managed by the Davis campus professionals. A P3-developed housing

facility in this neighborhood will be challenging to seamlessly integrate with the student

experience throughout the existing first-year housing neighborhood.

Delivery and Operating Efficiencies:

• Campus staff has significant experience in developing student housing. Since 2004, the

campus has successfully managed the construction of nearly 4,000 student beds. The

most recent campus-delivered housing project was the Emerson Hall Replacement

project, which opened in fall 2021. The project demolished a 50-year old building and

built a denser residential building, adding approximately 300 beds to the campus

inventory.

• Segundo Infill Student Housing will have operating synergies with Primero Grove, Regan

Hall, and the Segundo Dining Commons, all of which are operated by UC Davis Student

Housing and Dining Services.

Recommendation

The campus has determined that Alternative 3—a campus-delivered and managed new

construction project providing approximately 400 to 600 beds—is the highest-value project for

the campus. The project addresses the primary evaluation criteria for capacity and leverages the

neighborhood’s existing amenities and support services for operational efficiencies. The project

also enhances the residential community and provides critical flex space for the University to

maintain its overall housing inventory.

ATTACHMENT 7

STATEMENT OF UC POLICY COMPLIANCE

The project is consistent with selected UC Policies and Practices:

Sustainable Practices Policy

This project will comply with the University of California Sustainable Practices Policy. The

Sustainable Practices Policy establishes goals for green building, clean energy, transportation,

climate protection, facilities operations, zero waste, procurement, food service, and water

systems. A full range of sustainability practices for building design and operations is included in

the budgeting, programming, and design effort for the project.

Small Business Enterprises (SBEs) and Disabled Veteran Business Enterprises (DVBEs)

The campus is committed to promoting and increasing participation of Small Business

Enterprises (SBEs) and Disabled Veteran Business Enterprises (DVBEs) in all purchasing and

contract business, subject to any applicable obligations under State and federal law, collective

bargaining agreements, and University policies. The campus regularly communicates with

interested contractors and consultants to provide information about how to find opportunities to

work at the campus and to encourage them to respond to the annual announcement soliciting

interest to perform services. Providing qualified SBEs with the maximum opportunity to

participate will be encouraged with the selected design professionals and contractors with the

goal of meeting 25 percent participation.

Seismic Safety

This project will comply with the University of California Seismic Safety Policy, including

independent seismic peer review.