Project Costs and Schedule

Once the space programs were finalized, cost estimates for the North and South Options were developed.

For the South Option, a cost estimate of $753.0M was developed, including the 17-story, 1.4 million sf, 560-bed hospital, an additional 330,000sf of structured parking and support services under the hospital and 40,000sf of renovation in the existing University Hospital for ambulatory clinics use. It was generally felt that the constrained nature and location of the South Option site would provide an image challenge for the new facility. The South Option has a lower first cost because of a greater re-use of the existing University Hospital. However, occupying the older facility will limit options for clinic design and could impact operational efficiencies, resulting in higher future operating costs.

Regarding the North Option, a cost estimate of $775.0M was developed, including the 16-story, 1.3 million sf, 560-bed hospital, an additional 470,000sf of structured parking and support services and a 300,000sf specialty clinic/office building. It was the general consensus of the participants in the planning process that the North Option presented a better image and allowed future growth for the facility. Despite a higher first cost, the Planning Team was of the opinion that the North Option would prove to provide lower initial and long-term operating costs.

Early on in the planning process, direction was taken from LSU Health Sciences Center to pursue the South Option, and the figure of $750.0M was subsequently presented to the 2005 State Legislature. Therefore, the capital cost estimates used in the financial plans are $753.0 million.

The above cost figures do not include the cost of land acquisition, although MCLNO did initiate a high-level property appraisal by SRSA Commercial Real Estate of the different areas for background information. The above cost figures also do not include the provision of utilities to the site. However, the figures do include escalation of project costs at 5% per year until the baseline projected start of construction in October 2007, based on a draft construction schedule that was prepared in October 2004. The above figures also include a sitework allowance.