Renovate or Replace?

Over a decade ago, one of our constituent institutions here in Maryland was faced with a difficult decision that, on its surface, seemed rather straightforward: Renovate (and possibly expand) a poorly configured building with significant structural and mechanical problems, or replace it with a new one.

Cost aside, the seeming obvious answer was “replace,” but the State wasn’t so sure. They asked us to justify the replacement decision. Fortunately, all benefits aside, the cost to renovate was so high that, when you weighed the qualitative, functional value of the product you had when you were done, replacement stood out as the best response. The project has now been funded and is in design. 

In searching for a “best practices” model that might be applicable to higher education, I came across an interesting article related to health care facilities.  Granted, some institutions may have hospitals allied with them and the lessons are immediately applicable. But for most of us, adapting lessons from the health care field will require a bit of translation. Here’s what I came up with.

The article begins by stating that a thoughtful (health care) campus planning process must include the following:

• Accurately quantify the real clinical [let’s say “programmatic and space”] needs;
• Identify a diversity of sustainable planning options;
• Accurately price the hard, soft and hidden costs of the options;
• Analyze the trade-offs of cost, disruption, image and the value of "new"; and
• Calculate a tangible return on investment.

 Interestingly, with a couple of minor changes, these are identical to the steps we might take in evaluating a general campus facility.  So, when looking at the various options available to facility planners, what are the “elements of success” we should be looking for? The article cites seven, and I’d [adapt] them as follows:

1. Zoning and operations. [What’s your ideal bubble diagram?] The zoning [of various functions within] the [facility] should be clear and intuitively understandable, with adjacencies that support efficient operations. This is the initial planning diagram that determines the relationships of the individual pieces…
2. Orientation and circulation. The movement of people, materials and vehicles should be logical, intuitive and convenient, with an obvious sense of arrival, convenient and adequate parking, a focal center of the campus, and clear and easy wayfinding connecting the pieces together. [I’d add, for a campus facility, that the movement of students within the building, and as they interact with faculty and staff, should be similarly optimized.]
3. Growth and adaptability. There should be a logical method for expanding the campus, allowing for flexible planning and phased, incremental growth. This is often a challenge at older, established medical centers in urban settings and raises the question of whether to relocate to a space with more room to grow. [For our general buildings, the option here is one like that faced with my Maryland example: Is there room to effectively grow the program within the existing facility to meet future demands.]
4. Patient and family focused. The integration of family is an important component in the larger picture of patient care. Facilities should accommodate families with learning environments, diversion and delight, spaces for children, and a sense of safety and security. [I like this one for the health care example, but the parallels are obvious for a general higher ed building: Are the various needs of all potential users—students, faculty, staff, visitors—met within the facility and, if not, how must the existing facility be modified? Can it be modified?]
5. Sustainability. To preserve our natural resources, our buildings should conserve energy, responsibly reuse materials and be built only on sustainable sites. A more careful selection of sites will preserve existing natural sites. A more sophisticated look at building envelopes and the integration of HVAC systems will require less energy to heat and cool, a cost that has exponential importance over the life of the building. And a more careful look at materials reuse will reduce initial capital costs while conserving our natural resources.
6. Market share. What improvements or programs can expand reach, attract the best medical talent and grow patient volumes? How can these programs be enhanced either through new or renovated construction? Will new technologies demand new space or can they be accommodated in existing structures and their respective infrastructures?
7. Cost. Finally, all costs should be considered, including initial construction, phasing, financing, fees and, most importantly, the long-term operational costs of maintaining the space. Institutions too frequently look at the first costs of construction without analyzing the long-term implications of these decisions. This often is a case of capital and operating budgets not being integrally linked in a causal way. Those responsible for planning and building health care facilities should be integrated fully with those responsible for operations.

It’s interesting that the cost aspect, while significant, is just one of seven considered.  In an environment where we are able to look more closely at qualitative or technical aspects of proposals from consultants, for instance, and then consider cost; it makes sense that we do the same for our facilities decisions.

THE DECISION

In looking at these conditions, then, what kinds of outcomes might support replacement, vs renovation?  The article proposes a list and then goes into some detail about each. I’ll provide the list alone here, though I’d refer the reader to the original article for that detail.

The case for replacement would include the following elements:

• Aging facility and infrastructure [that cannot be adequately improved in the long term]
• No space for expansion
• Adjacencies and zoning are failing
• Opportunity to sell the campus [not typically something we’d find on a college campus, but worth including in this list]
• Great site available [sometimes there’s a better place to go]
• Beneficial financing [particularly for auxiliary facilities—a public/private opportunity, for instance, is worth considering for a replacement]
• Supportive donor

 The case for renovation, on the other hand, might include the following: 

• Good campus condition [if the building can be easily adapted, it may make sense to consider it]
• Space to grow and adapt
• Great existing location
• Limited alternative sites
• Urgent needs and timeline
• Limited capital

 This last point is spot-on. Like the article says, 

“Money is the real driver for most renovation or replacement decisions. It takes significant capital to build a new [facility], replacing everything in a new location. In addition to the bricks and mortar, the hidden elements of utilities infrastructure, roadways, equipment, furnishings and fees significantly add to the replacement cost. 

"Without significant capital, it is nearly impossible to consider replacement.”