consulting report of pkf of august 2011 on revised ucla hotel project

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Via Email March 26, 2012 Susan Gallick Executive Director, Faculty Association at UCLA EMAIL: [email protected] RE: 2nd Response for PRR 2012‐139 UCLA Luskin Center Dear Ms. Gallick: In response to your follow emails inquiry dated March 22, please find enclosed the following responsive documents:

1) 2012‐139 PKF Revised 08.09.2011.pdf 2) 2012‐139 PKF Assumption 08.09.2011.pdf

Please note: UCLA used the PKF materials as a resource to assist in the creation of the Business Case Analysis but some of the operational projections were modified and the project timeline changed.

The CPRA authorizes UCLA to charge for reproduction costs and/or programming services.1 As a courtesy, these fees have been waived. Any subsequent requests may be subject to copying and/or programming fees. RMIP strives to honor the spirit and legislative intent of the California Public Records Act. We believe the attached responsive records successfully fulfill the purpose of this law and your request. This completes the response to your follow up email requests. Please feel free to contact me if you have any questions or comments. Sincerely,

Aimee M. Felker Director Records Management & Information Practices (310) 794‐8741 | (310) 794‐8961 (fax) | [email protected] | www.finance.ucla.edu AMF:amf Enclosure(s): PRR 2012‐139 Responsive Documents + Request

1 California Government Code §6253(b)

PKF Consulting USA | 865 S. Figueroa Street, Suite 3500 | Los Angeles, CA 90017

TEL: 213-680-0900 | FAX: 213-623-8240| www.pkfc.com

August 9, 2011 The attached projections (8.9.2011 $185 ADR) were derived via the following assumptions and methodology

PKF Consulting USA completed a market study for a proposed hotel and conference center on two different sites in a report dated July 24, 2009. Following this, we ran additional analyses based on specific guidelines provided by UCLA and validated by PKF Financial comparables – we pulled two sets of financial comparables

o 5 university conference centers located outside California o 5 full service hotels with meeting space located in Los Angeles and San

Diego We established room revenue based on a requested subsidized ADR for University related demand. We established other revenue line items based on southern California and University comparables, incorporating the IACC conference center facilities. The analysis excludes parking. For Revenues, we incorporated the following assumptions:

o We expect the property to capture approximately 2/3rds of its demand from group and 1/3 from Transient demand. We estimate a $189 Transient rate and $184 group rate for a weighted rate of $185 in 2011 dollars. This reflects a stabilized year.

o We have utilized a general inflation rate of 3.5% o Year one is assumed start July 2015 and post an ADR of $221. Year two and

three ADR growth are expected to be above 3.5% as the subject ramps up. Years four and beyond are estimated at 3.5% annual ADR growth. This equates to a representative year ADR of $185 in 2011 dollars.

o Occupancy is projected to ramp up from 60% in year one to 65% in year two and 70% in year three. The property is estimated to stabilize at 70% and cater only to university related demand.

o All other line items were projected based on the specific facilities program at the subject versus the comparable operating statements. We utilized the university conference centers to support our food and beverage and conference services revenue projections.

We utilized the southern California comps to establish a baseline expense for operating a 250-room conference hotel in Los Angeles. We reviewed detailed departmental schedules for rooms and food and beverage for the southern California comparables as well as a set of 10 additional California hotels. For expenses, we incorporated the following assumptions:

o Beverage represents approximately 25% of food and beverage revenue. We have adjusted food and beverage expense upwards to adjust for a 5%

2012-139 - 001Follow Up Response



management fee on beverage as it will be operated by a third party. This equates to a 1.25% upward adjustment to food and beverage expense

o We incorporated the higher salaries and benefits package by imputing 16.8% in year one and 18.8 percent in years 2 and on, applied to all salaries and wages. This is presented as a separate line item.

o We applied a sourcing expense of 7.6% to all expenses except FF&E Reserves. This is presented as a separate line item.

o We utilized a 5% annual reserve for replacement amount throughout the projections period.

o We excluded management fees, other than the beverage management fee incorporated in food and beverage expense. We also excluded insurance and real estate taxes.

Other Assumptions o The property is assumed to contain 250 guestrooms, 25,000 square feet of

meeting and conference space, and the associated amenities and facilities as presented in the 2009 market study.

These assumptions are subject to the attached statement of assumptions and limiting conditions.




STATEMENT OF ASSUMPTIONS AND LIMITING CONDITIONS

This report is made with the following assumptions and limiting conditions: Economic and Social Trends - The consultant assumes no responsibility for economic, physical or demographic factors which may affect or alter the opinions in this report if said economic, physical or demographic factors were not present as of the date of the letter of transmittal accompanying this report. The consultant is not obligated to predict future political, economic or social trends. Information Furnished by Others - In preparing this report, the consultant was required to rely on information furnished by other individuals or found in previously existing records and/or documents. Unless otherwise indicated, such information is presumed to be reliable. However, no warranty, either express or implied, is given by the consultant for the accuracy of such information and the consultant assumes no responsibility for information relied upon later found to have been inaccurate. The consultant reserves the right to make such adjustments to the analyses, opinions and conclusions set forth in this report as may be required by consideration of additional data or more reliable data that may become available.

Hidden Conditions - The consultant assumes no responsibility for hidden or unapparent conditions of the property, subsoil, ground water or structures that render the subject property more or less valuable. No responsibility is assumed for arranging for engineering, geologic or environmental studies that may be required to discover such hidden or unapparent conditions. Hazardous Materials - The consultant has not been provided any information regarding the presence of any material or substance on or in any portion of the subject property or improvements thereon, which material or substance possesses or may possess toxic, hazardous and/or other harmful and/or dangerous characteristics. Unless otherwise stated in the report, the consultant did not become aware of the presence of any such material or substance during the consultant’s inspection of the subject property. However, the consultant is not qualified to investigate or test for the presence of such materials or substances. The presence of such materials or substances may adversely affect the value of the subject property. The value estimated in this report is predicated on the assumption that no such material or substance is present on or in the subject property or in such proximity thereto that it would cause a loss in value. The consultant assumes no responsibility for the presence of any such substance or material on or in the subject property, nor for any expertise or engineering knowledge required to discover the presence of such substance or material. Unless otherwise stated, this report assumes the subject property is in compliance with all federal, state and local environmental laws, regulations and rules. Zoning and Land Use - Unless otherwise stated, the projections were formulated assuming the hotel to be in full compliance with all applicable zoning and land use regulations and restrictions. Licenses and Permits - Unless otherwise stated, the property is assumed to have all required licenses, permits, certificates, consents or other legislative and/or administrative authority from any local, state or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based. Engineering Survey - No engineering survey has been made by the consultant. Except as specifically stated, data relative to size and area of the subject property was taken from sources considered reliable and no encroachment of the subject property is considered to exist. Subsurface Rights - No opinion is expressed as to the value of subsurface oil, gas or mineral rights or whether the property is subject to surface entry for the exploration or removal of such materials, except as is expressly stated. Maps, Plats and Exhibits - Maps, plats and exhibits included in this report are for illustration only to serve as an aid in visualizing matters discussed within the report. They should not be considered as surveys or relied upon for any other purpose, nor should they be removed from, reproduced or used apart from the report.




STATEMENT OF ASSUMPTIONS AND LIMITING CONDITIONS (continued)

Legal Matters - No opinion is intended to be expressed for matters which require legal expertise or specialized investigation or knowledge beyond that customarily employed by real estate consultants. Right of Publication - Possession of this report, or a copy of it, does not carry with it the right of publication. Without the written consent of the consultant, this report may not be used for any purpose by any person other than the party to whom it is addressed. In any event, this report may be used only with proper written qualification and only in its entirety for its stated purpose. Testimony in Court - Testimony or attendance in court or at any other hearing is not required by reason of rendering this appraisal, unless such arrangements are made a reasonable time in advance of said hearing. Further, unless otherwise indicated, separate arrangements shall be made concerning compensation for the consultant's time to prepare for and attend any such hearing. Archeological Significance - No investigation has been made by the consultant and no information has been provided to the consultant regarding potential archeological significance of the subject property or any portion thereof. This report assumes no portion of the subject property has archeological significance. Compliance with the American Disabilities Act - The Americans with Disabilities Act ("ADA") became effective January 26, 1992. We assumed that the property will be in direct compliance with the various detailed requirements of the ADA. Definitions and Assumptions - The definitions and assumptions upon which our analyses, opinions and conclusions are based are set forth in appropriate sections of this report and are to be part of these general assumptions as if included here in their entirety. Dissemination of Material - Neither all nor any part of the contents of this report shall be disseminated to the general public through advertising or sales media, public relations media, news media or other public means of communication without the prior written consent and approval of the consultant(s). Distribution and Liability to Third Parties - The party for whom this report was prepared may distribute copies of this appraisal report only in its entirety to such third parties as may be selected by the party for whom this report was prepared; however, portions of this report shall not be given to third parties without our written consent. Liability to third parties will not be accepted. Use in Offering Materials - This report, including all cash flow forecasts, market surveys and related data, conclusions, exhibits and supporting documentation, may not be reproduced or references made to the report or to PKF Consulting in any sale offering, prospectus, public or private placement memorandum, proxy statement or other document ("Offering Material") in connection with a merger, liquidation or other corporate transaction unless PKF Consulting has approved in writing the text of any such reference or reproduction prior to the distribution and filing thereof. Limits to Liability - PKF Consulting cannot be held liable in any cause of action resulting in litigation for any dollar amount which exceeds the total fees collected from this individual engagement. Legal Expenses - Any legal expenses incurred in defending or representing ourselves concerning this assignment will be the responsibility of the client.


UCLA Hotel & Conference CenterRepresentative Year of Operation

Stated in 2011 DollarsNumber of Units: 250Number of Annual Rooms Available: 91,250Number of Rooms Occupied: 63,875Annual Occupancy: 70%Average Daily Rate: $185.00Revenue Per Available Room: $129.50

Amount Ratio Per Room P.O.R.Revenues Rooms $11,817,000 53.5% $47,268 $185.00 Food & Beverage 6,388,000 28.9% 25,552 100.01 Conference Services 3,385,000 15.3% 13,540 52.99 Other Operated Departments 319,000 1.4% 1,276 4.99 Rentals and Other Income 160,000 0.7% 640 2.50 Total Revenues 22,069,000 100.0% 88,276 345.50

Departmental Expenses Rooms 2,938,000 24.9% 11,752 46.00 Food & Beverage 4,791,000 75.0% 19,164 75.01 Conference Services 1,490,000 44.0% 5,960 23.33 Other Operated Departments 153,000 48.0% 612 2.40 Total Departmental Expenses 9,372,000 42.5% 37,488 146.72

Departmental Profit 12,697,000 57.5% 50,788 198.78

Undistributed Expenses Administrative & General 1,741,000 7.9% 6,964 27.26 Marketing 1,100,000 5.0% 4,400 17.22 Property Operation and Maintenance 1,019,000 4.6% 4,076 15.95 Utility Costs 753,000 3.4% 3,012 11.79 Total Undistributed Operating Expenses 4,613,000 20.9% 18,452 72.22

Gross Operating Profit 8,084,000 36.6% 32,336 126.56

Additional Expense Retirement Contribution 978,000 4.4% 3,912 15.31 Sourcing Cost 1,137,000 5.2% 4,548 17.80 Total Fixed Expenses 2,115,000 9.6% 8,460 33.11

Net Operating Income 5,969,000 27.0% 23,876 93.45

FF&E Reserve 1,103,000 5.0% 4,412 17.27

Net Operating Income After Reserve $4,866,000 22.0% $19,464 $76.18

Source: PKF Consulting

PKF Revised 08.09.2011.xlsx : 10yr 2012-139 - 005Follow Up Response

UCLA Hotel & Conference CenterProjected Operating Results

2015/16 2016/17 2017/18 2018/19 2019/20Number of Units: 250 250 250 250 250Number of Annual Rooms Available: 91,250 91,250 91,250 91,250 91,250Number of Rooms Occupied: 54,750 59,310 63,880 63,880 63,880Annual Occupancy: 60.0% 65.0% 70.0% 70.0% 70.0%Average Daily Rate: $221.00 $231.00 $239.00 $248.00 $256.00Revenue Per Available Room: $132.60 $150.15 $167.30 $173.60 $179.20

Amount Ratio Amount Ratio Amount Ratio Amount Ratio Amount RatioRevenues Rooms $12,100,000 51.2% $13,701,000 52.8% $15,267,000 53.9% $15,842,000 54.0% $16,353,000 53.9% Food & Beverage 7,586,000 32.1% 7,852,000 30.2% 8,127,000 28.7% 8,411,000 28.7% 8,706,000 28.7% Conference Services 3,446,000 14.6% 3,864,000 14.9% 4,307,000 15.2% 4,458,000 15.2% 4,614,000 15.2% Other Operated Departments 325,000 1.4% 365,000 1.4% 406,000 1.4% 421,000 1.4% 435,000 1.4% Rentals and Other Income 163,000 0.7% 182,000 0.7% 203,000 0.7% 210,000 0.7% 218,000 0.7% Total Revenues 23,620,000 100.0% 25,964,000 100.0% 28,310,000 100.0% 29,342,000 100.0% 30,326,000 100.0%

Departmental Expenses Rooms 3,240,000 26.8% 3,483,000 25.4% 3,738,000 24.5% 3,869,000 24.4% 4,005,000 24.5% Food & Beverage 5,690,000 75.0% 5,889,000 75.0% 6,095,000 75.0% 6,308,000 75.0% 6,529,000 75.0% Conference Services 1,516,000 44.0% 1,700,000 44.0% 1,895,000 44.0% 1,962,000 44.0% 2,030,000 44.0% Other Operated Departments 156,000 48.0% 175,000 47.9% 195,000 48.0% 202,000 48.0% 209,000 48.0% Total Departmental Expenses 10,602,000 44.9% 11,247,000 43.3% 11,923,000 42.1% 12,341,000 42.1% 12,773,000 42.1%

Departmental Profit 13,018,000 55.1% 14,717,000 56.7% 16,387,000 57.9% 17,001,000 57.9% 17,553,000 57.9%

Undistributed Expenses Administrative & General 2,016,000 8.5% 2,117,000 8.2% 2,220,000 7.8% 2,299,000 7.8% 2,378,000 7.8% Marketing 1,437,000 6.1% 1,352,000 5.2% 1,400,000 4.9% 1,448,000 4.9% 1,499,000 4.9% Property Operation and Maintenance 1,186,000 5.0% 1,240,000 4.8% 1,283,000 4.5% 1,328,000 4.5% 1,374,000 4.5% Utility Costs 872,000 3.7% 914,000 3.5% 958,000 3.4% 991,000 3.4% 1,026,000 3.4% Total Undistributed Operating Expenses 5,511,000 23.3% 5,623,000 21.7% 5,861,000 20.7% 6,066,000 20.7% 6,277,000 20.7%

Gross Operating Profit 7,507,000 31.8% 9,094,000 35.0% 10,526,000 37.2% 10,935,000 37.3% 11,276,000 37.2%

Additional Expense Retirement Contribution 1,011,000 4.3% 1,183,000 4.6% 1,244,000 4.4% 1,287,000 4.4% 1,332,000 4.4% Sourcing Cost 1,301,000 5.5% 1,372,000 5.3% 1,446,000 5.1% 1,497,000 5.1% 1,549,000 5.1% Total Fixed Expenses 2,312,000 9.8% 2,555,000 9.8% 2,690,000 9.5% 2,784,000 9.5% 2,881,000 9.5%

Net Operating Income 5,195,000 22.0% 6,539,000 25.2% 7,836,000 27.7% 8,151,000 27.8% 8,395,000 27.7%

FF&E Reserve 1,181,000 5.0% 1,298,000 5.0% 1,416,000 5.0% 1,467,000 5.0% 1,516,000 5.0%

Net Operating Income After Reserve $4,014,000 17.0% $5,241,000 20.2% $6,420,000 22.7% $6,684,000 22.8% $6,879,000 22.7%



UCLA Hotel & Conference CenterProjected Operating Results

2020/21 2021/22 2022/23 2023/24 2024/25Number of Units: 250 250 250 250 250Number of Annual Rooms Available: 91,250 91,250 91,250 91,250 91,250Number of Rooms Occupied: 63,880 63,880 63,880 63,880 63,880Annual Occupancy: 70.0% 70.0% 70.0% 70.0% 70.0%Average Daily Rate: $265.00 $274.00 $284.00 $294.00 $304.00Revenue Per Available Room: $185.50 $191.80 $198.80 $205.80 $212.80

Amount Ratio Amount Ratio Amount Ratio Amount Ratio Amount RatioRevenues Rooms $16,928,000 53.9% $17,503,000 53.9% $18,142,000 53.9% $18,781,000 53.9% $19,420,000 53.9% Food & Beverage 9,010,000 28.7% 9,326,000 28.7% 9,652,000 28.7% 9,990,000 28.7% 10,339,000 28.7% Conference Services 4,776,000 15.2% 4,943,000 15.2% 5,116,000 15.2% 5,295,000 15.2% 5,480,000 15.2% Other Operated Departments 451,000 1.4% 466,000 1.4% 483,000 1.4% 500,000 1.4% 517,000 1.4% Rentals and Other Income 225,000 0.7% 233,000 0.7% 241,000 0.7% 250,000 0.7% 259,000 0.7% Total Revenues 31,390,000 100.0% 32,471,000 100.0% 33,634,000 100.0% 34,816,000 100.0% 36,015,000 100.0%

Departmental Expenses Rooms 4,145,000 24.5% 4,290,000 24.5% 4,440,000 24.5% 4,595,000 24.5% 4,756,000 24.5% Food & Beverage 6,758,000 75.0% 6,994,000 75.0% 7,239,000 75.0% 7,492,000 75.0% 7,755,000 75.0% Conference Services 2,101,000 44.0% 2,175,000 44.0% 2,251,000 44.0% 2,330,000 44.0% 2,411,000 44.0% Other Operated Departments 216,000 47.9% 224,000 48.1% 232,000 48.0% 240,000 48.0% 248,000 48.0% Total Departmental Expenses 13,220,000 42.1% 13,683,000 42.1% 14,162,000 42.1% 14,657,000 42.1% 15,170,000 42.1%

Departmental Profit 18,170,000 57.9% 18,788,000 57.9% 19,472,000 57.9% 20,159,000 57.9% 20,845,000 57.9%

Undistributed Expenses Administrative & General 2,462,000 7.8% 2,547,000 7.8% 2,637,000 7.8% 2,729,000 7.8% 2,825,000 7.8% Marketing 1,552,000 4.9% 1,606,000 4.9% 1,662,000 4.9% 1,720,000 4.9% 1,781,000 4.9% Property Operation and Maintenance 1,423,000 4.5% 1,472,000 4.5% 1,524,000 4.5% 1,577,000 4.5% 1,632,000 4.5% Utility Costs 1,062,000 3.4% 1,099,000 3.4% 1,137,000 3.4% 1,177,000 3.4% 1,218,000 3.4% Total Undistributed Operating Expenses 6,499,000 20.7% 6,724,000 20.7% 6,960,000 20.7% 7,203,000 20.7% 7,456,000 20.7%

Gross Operating Profit 11,671,000 37.2% 12,064,000 37.2% 12,512,000 37.2% 12,956,000 37.2% 13,389,000 37.2%

Additional Expense Retirement Contribution 1,379,000 4.4% 1,427,000 4.4% 1,477,000 4.4% 1,529,000 4.4% 1,583,000 4.4% Sourcing Cost 1,603,000 5.1% 1,659,000 5.1% 1,718,000 5.1% 1,778,000 5.1% 1,840,000 5.1% Total Fixed Expenses 2,982,000 9.5% 3,086,000 9.5% 3,195,000 9.5% 3,307,000 9.5% 3,423,000 9.5%

Net Operating Income 8,689,000 27.7% 8,978,000 27.6% 9,317,000 27.7% 9,649,000 27.7% 9,966,000 27.7%

FF&E Reserve 1,570,000 5.0% 1,624,000 5.0% 1,682,000 5.0% 1,741,000 5.0% 1,801,000 5.0%

Net Operating Income After Reserve $7,119,000 22.7% $7,354,000 22.6% $7,635,000 22.7% $7,908,000 22.7% $8,165,000 22.7%



SCENARIO 2 - 250 ROOMS 2011 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26

Departmental Expenses Rooms $2,938,000 $3,240,000 $3,483,000 $3,738,000 $3,869,000 $4,005,000 $4,145,000 $4,290,000 $4,440,000 $4,595,000 $4,756,000 $4,923,000 Food & Beverage 4,791,000 5,690,000 5,889,000 6,095,000 6,308,000 6,529,000 6,758,000 6,994,000 7,239,000 7,492,000 7,755,000 8,026,000 Conference Services 1,490,000 1,516,000 1,700,000 1,895,000 1,962,000 2,030,000 2,101,000 2,175,000 2,251,000 2,330,000 2,411,000 2,496,000 Other Operated Departments 153,000 156,000 175,000 195,000 202,000 209,000 216,000 224,000 232,000 240,000 248,000 257,000 Total Departmental Expenses 9,372,000 10,602,000 11,247,000 11,923,000 12,341,000 12,773,000 13,220,000 13,683,000 14,162,000 14,657,000 15,170,000 15,702,000

Undistributed Expenses Administrative & General 1,741,000 2,016,000 2,117,000 2,220,000 2,299,000 2,378,000 2,462,000 2,547,000 2,637,000 2,729,000 2,825,000 2,924,000 Marketing 1,100,000 1,437,000 1,352,000 1,400,000 1,448,000 1,499,000 1,552,000 1,606,000 1,662,000 1,720,000 1,781,000 1,843,000 Property Operation and Maintenance 1,019,000 1,186,000 1,240,000 1,283,000 1,328,000 1,374,000 1,423,000 1,472,000 1,524,000 1,577,000 1,632,000 1,690,000 Utility Costs 753,000 872,000 914,000 958,000 991,000 1,026,000 1,062,000 1,099,000 1,137,000 1,177,000 1,218,000 1,261,000 Total Undistributed Operating Expenses 4,613,000 5,511,000 5,623,000 5,861,000 6,066,000 6,277,000 6,499,000 6,724,000 6,960,000 7,203,000 7,456,000 7,718,000

FF&E Reserve 1,103,000 1,181,000 1,298,000 1,416,000 1,467,000 1,516,000 1,570,000 1,624,000 1,682,000 1,741,000 1,801,000 1,865,000

Total Expense $15,088,000 $17,294,000 $18,168,000 $19,200,000 $19,874,000 $20,566,000 $21,289,000 $22,031,000 $22,804,000 $23,601,000 $24,427,000 $25,285,000

Wage Expense % Wages 2011 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 Rooms 45% $1,322,100 $1,458,000 $1,567,350 $1,682,100 $1,741,050 $1,802,250 $1,865,250 $1,930,500 $1,998,000 $2,067,750 $2,140,200 $2,215,350 Food & Beverage 46% $2,203,860 $2,617,400 $2,708,940 $2,803,700 $2,901,680 $3,003,340 $3,108,680 $3,217,240 $3,329,940 $3,446,320 $3,567,300 $3,691,960 Conference Services 20% $298,000 $303,200 $340,000 $379,000 $392,400 $406,000 $420,200 $435,000 $450,200 $466,000 $482,200 $499,200 Other Operated Departments 30% $45,900 $46,800 $52,500 $58,500 $60,600 $62,700 $64,800 $67,200 $69,600 $72,000 $74,400 $77,100 Administrative & General 40% $696,400 $806,400 $846,800 $888,000 $919,600 $951,200 $984,800 $1,018,800 $1,054,800 $1,091,600 $1,130,000 $1,169,600 Marketing 30% $330,000 $431,100 $405,600 $420,000 $434,400 $449,700 $465,600 $481,800 $498,600 $516,000 $534,300 $552,900 Property Operation and Maintenance 30% $305,700 $355,800 $372,000 $384,900 $398,400 $412,200 $426,900 $441,600 $457,200 $473,100 $489,600 $507,000 Utility Costs 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Reserves 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Wage Expense $5,201,960 $6,018,700 $6,293,190 $6,616,200 $6,848,130 $7,087,390 $7,336,230 $7,592,140 $7,858,340 $8,132,770 $8,418,000 $8,713,110Retirement Contribution 16.8%/18.8% $977,968 $1,011,142 $1,183,120 $1,243,846 $1,287,448 $1,332,429 $1,379,211 $1,427,322 $1,477,368 $1,528,961 $1,582,584 $1,638,065% of Total Revenue 4.4% 4.3% 4.6% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4%

Sourcing Expense (applied total expense-r 7.6% $1,137,186 $1,301,435 $1,372,037 $1,446,116 $1,496,778 $1,549,065 $1,603,464 $1,659,408 $1,717,552 $1,777,561 $1,839,852 $1,904,413% of Total Revenue 5.2% 5.5% 5.3% 5.1% 5.1% 5.1% 5.1% 5.1% 5.1% 5.1% 5.1% 5.1%

Expenses

PKF Revised 08.09.2011.xlsx : Backup2012-139 - 008Follow Up Response

UNIVERSITY COMPSUCLA Hotel & Conference CenterOperating Results of Comparable Conference Centers

Ratio Per Room P.O.R. Ratio Per Room P.O.R. Ratio Per Room P.O.R.

Revenues

Rooms 48.10% $39,701 $149.68 52.70% $28,586 $131.18 43.20% $29,399 $162.64

Food & Beverage 30.20% 24,892 93.85 26.60% 14,435 66.24 32.90% 22,393 123.87

Conference Services 15.90% 13,087 49.34 16.40% 8,914 40.9 19.10% 13,000 71.92

Other Operated Departments 5.90% 4,850 18.29 3.00% 1,645 7.55 4.80% 3,264 18.05

Rentals and Other Income 0.00% 0 0 1.20% 659 3.03 0.00% 0 0

Total Revenues 100.00% 82,530 311.16 100.00% 54,239 248.91 100.00% 68,056 376.48

Departmental Expenses

Rooms 16.60% 6,606 24.9 31.80% 9,099 41.76 19.20% 5,653 31.27

Food & Beverage 62.90% 15,662 59.05 85.50% 12,340 56.63 71.60% 16,043 88.75


Other Operated Departments 48.10% 2,332 8.79 63.90% 1,052 4.83 8.70% 284 1.57

Total Departmental Expenses 40.00% 33,018 124.48 49.90% 27,070 124.23 36.70% 24,974 138.15

Departmental Profit 60.00% 49,512 186.67 50.10% 27,169 124.68 63.30% 43,082 238.32

Undistributed Expenses

Administrative & General 7.40% 6,084 22.94 11.40% 6,189 28.4 7.60% 5,202 28.78

Marketing 4.00% 3,335 12.58 6.80% 3,687 16.92 7.20% 4,882 27.01

Property Operation and Maintenance 3.60% 2,960 11.16 5.20% 2,795 12.83 5.30% 3,578 19.79

Utility Costs 3.40% 2,815 10.61 5.40% 2,920 13.4 3.50% 2,390 13.22

Other Undistributed Expenses 0.00% 0 0 0.00% 0 0 0.00% 0 0

Total Undistributed Operating Expenses 18.40% 15,194 57.28 28.70% 15,591 71.55 23.60% 16,052 88.8

Gross Operating Profit 41.60% 34,318 129.38 21.30% 11,578 53.13 39.70% 27,030 149.53

Management Fee 2.00% 1,651 6.22 3.60% 1,959 8.99 4.30% 2,909 16.09

Fixed Expenses

Property Taxes 3.60% 2,938 11.08 0.00% 0 0 0.10% 74 0.41

Insurance 0.70% 572 2.16 0.00% 0 0 1.30% 900 4.98

Total Fixed Expenses 4.30% 3,510 13.23 0.00% 0 0 1.40% 974 5.39

Net Operating Income 35.30% 29,157 109.93 17.70% 9,619 44.14 34.00% 23,147 128.05

FF&E Reserve 4.00% 3,301 12.45 0.00% 0 0 1.60% 1,122 6.21

Net Operating Income After Reserve 31.30% $25,856 $97.48 17.70% $9,619 $44.14 32.40% $22,025 $121.84


Table 6-1

Conference Center A Conference Center B Conference Center C

PKF Revised 08.09.2011.xlsx : University Conference comps 2012-139 - 009Follow Up Response

UNIVERSITY COMPS

UCLA Hotel & Conference CenterOperating Results of Comparable Conference Centers

1

Ratio Per Room P.O.R. Ratio Per Room P.O.R. Ratio Per Room P.O.R.

Revenues

Rooms 50.10% $35,412 $140.67 47.20% $26,794 $150.95 48.20% $32,736 $144.79

Food & Beverage 33.40% 23,634 93.88 31.00% 17,619 99.26 30.70% 20,869 92.3


Other Operated Departments 4.30% 3,018 11.99 0.70% 412 2.32 4.20% 2,863 12.66

Rentals and Other Income 0.00% 0 0 0.00% 0 0 1.00% 659 2.91

Total Revenues 100.00% 70,693 280.81 100.00% 56,808 320.05 100.00% 67,923 300.41

Departmental Expenses

Rooms 20.60% 7,282 28.93 22.80% 6,113 34.44 21.90% 7,154 31.64

Food & Beverage 63.20% 14,928 59.3 75.60% 13,317 75.03 69.50% 14,506 64.15


Other Operated Departments 43.70% 1,319 5.24 164.70% 678 3.82 42.60% 1,221 5.4

Total Departmental Expenses 37.40% 26,408 104.9 45.70% 25,939 146.14 41.10% 27,687 122.45

Departmental Profit 62.60% 44,285 175.91 54.30% 30,869 173.91 59.20% 40,236 177,96

Undistributed Expenses

Administrative & General 6.00% 4,269 16.96 6.80% 3,856 21.72 7.70% 5,245 23.2

Marketing 3.80% 2,686 10.67 4.30% 2,428 13.68 5.10% 3,436 15.2

Property Operation and Maintenance 3.70% 2,642 10.5 5.60% 3,182 17.93 4.40% 2,972 13.14

Utility Costs 3.10% 2,181 8.66 2.90% 1,638 9.23 3.60% 2,476 10.95

Other Undistributed Expenses 0.00% 0 0 0.00% 0 0 0.00% 0 0

Total Undistributed Operating Expenses 16.70% 11,778 46.78 19.50% 11,104 62.56 20.80% 14,129 62.49


Management Fee 2.30% 1,591 6.32 4.00% 2,272 12.8 2.90% 2,000 8.85

Fixed Expenses

Property Taxes 2.70% 1,923 7.64 0.00% 0 0 2.40% 1,633 7.22

Insurance 0.00% 0 0 0.90% 509 2.87 1.00% 677 2.99

Total Fixed Expenses 2.70% 1,923 7.64 0.90% 509 2.87 3.40% 2,310 10.22

Net Operating Income 41.00% 28,993 115.17 29.90% 16,983 95.68 32.10% 21,797 96.4

FF&E Reserve 0.00% 0 0 4.90% 2,785 15.69 3.50% 2,406 10.64

Net Operating Income After Reserve 41.00% $28,993 $115.17 25.00% $14,199 $79.99 28.50% $19,391 $85,76


Table 6-2

Conference Center D Conference Center E Weighted Average

PKF Revised 08.09.2011.xlsx : University Conference comps 2012-139 - 010Follow Up Response

SOCAL COMPSUCLA Hotel & Conference CenterSoCal Hotels

Ratio Per Room P.O.R. Ratio Per Room P.O.R. Ratio Per Room P.O.R.Revenues Rooms 75.7% $41,477 $151.94 65.2% $49,154 $185.14 66.7% $51,742 $178.47 Food & Beverage 16.3% 8,939 32.75 29.0% 21,841 82.27 28.9% 22,416 77.32 Other Operated Departments 7.6% 4,146 15.19 5.3% 4,016 15.13 0.8% 590 2.03 Rentals and Other Income 0.4% 229 0.84 0.5% 348 1.31 3.6% 2,803 9.67 Total Revenues 100.0% 54,792 200.71 100.0% 75,359 283.85 100.0% 77,552 267.49

Departmental Expenses Rooms 30.2% 12,516 45.85 24.1% 11,846 44.62 19.6% 10,135 34.96 Food & Beverage 87.7% 7,843 28.73 86.5% 18,899 71.18 65.4% 14,662 50.57 Other Operated Departments 29.7% 1,231 4.51 89.3% 3,586 13.51 73.8% 435 1.50 Total Departmental Expenses 39.4% 21,590 79.09 45.6% 34,330 129.31 32.5% 25,232 87.03


Undistributed Expenses Administrative & General 11.5% 6,315 23.13 8.8% 6,606 24.88 7.7% 5,969 20.59 Marketing 7.6% 4,149 15.20 7.2% 5,429 20.45 7.0% 5,458 18.83 Property Operation and Maintenance 3.0% 1,625 5.95 5.5% 4,142 15.60 3.6% 2,795 9.64 Utility Costs 2.6% 1,399 5.13 3.9% 2,968 11.18 3.3% 2,527 8.71 Total Undistributed Operating Expenses 24.6% 13,489 49.41 25.4% 19,144 72.11 21.6% 16,748 57.77


FF&E Reserve 4.0% 2,192 8.03 4.0% 3,014 11.35 4.0% 3,102 10.70


PKF Revised 08.09.2011.xlsx : SoCal Hotel Comps 2012-139 - 011Follow Up Response

SOCAL COMPS

UCLA Hotel & Conference CenterHistorical Operating Results of Selected Hotels

Weighted AverageRatio Per Room P.O.R. Ratio Per Room P.O.R. Ratio Per Room P.O.R.

Revenues Rooms 70.1% $49,615 $186.53 57.6% $43,148 $179.21 65.5% $47,132 $177.70 Food & Beverage 24.3% 17,179 64.58 35.5% 26,546 110.26 28.5% 20,465 77.16 Other Operated Departments 5.4% 3,850 14.47 5.6% 4,201 17.45 4.7% 3,395 12.80 Rentals and Other Income 0.2% 158 0.59 1.3% 984 4.09 1.3% 927 3.50 Total Revenues 100.0% 70,802 266.18 100.0% 74,879 311.01 100.0% 71,920 271.16

Departmental Expenses Rooms 22.0% 10,923 41.07 34.4% 14,836 61.62 25.9% 12,199 45.99 Food & Beverage 67.9% 11,663 43.85 94.8% 25,171 104.55 82.2% 16,823 63.43 Other Operated Departments 57.1% 2,200 8.27 57.7% 2,425 10.07 62.5% 2,121 8.00 Total Departmental Expenses 35.0% 24,786 93.18 56.7% 42,432 176.24 43.3% 31,143 117.42


Undistributed Expenses Administrative & General 8.7% 6,187 23.26 9.0% 6,711 27.87 8.9% 6,397 24.12 Marketing 14.8% 10,489 39.43 10.8% 8,056 33.46 9.4% 6,748 25.44 Property Operation and Maintenance 4.0% 2,830 10.64 6.7% 5,006 20.79 4.9% 3,513 13.24 Utility Costs 3.2% 2,235 8.40 3.0% 2,250 9.35 3.3% 2,356 8.88 Total Undistributed Operating Expenses 30.7% 21,741 81.73 29.4% 22,022 91.47 26.4% 19,013 71.68


FF&E Reserve 4.0% 2,832 10.65 4.0% 2,995 12.44 4.0% 2,877 10.85


PKF Revised 08.09.2011.xlsx : SoCal Hotel Comps 2012-139 - 012Follow Up Response

From: UCLAFA [mailto:[email protected]] Sent: Thursday, March 22, 2012 7:48 AM To: Felker, Aimee Cc: Read, Dwight Subject: Re: PRR 2012-139 Business Plan for proposed UCLA Luskin Center Dear Ms Felker Thanks for sending me some documents related to the proposed UCLA Hotel/Conference Center. We already have one of the items on the FA blog. What is missing is the consultant's report that is supposed to be the backup to the revised plan. (Not the old PKF report for the old plan.) The UCLA administration claimed to have such a report. Can you please email me the consultant’s report asap? Also, if there is a user id and password, please include that information as well. Thank you, Susan Susan Gallick Executive Director Faculty Association at UCLA [email protected] 818 341-8664

consulting report of pkf of august 2011 on revised ucla hotel project

Documents

o year

representative year

california o

university comparables

o occupancy

stabilized year

university conference

university related demand