BUILD NYC RESOURCE CORPORATION PROJECT COST/BENEFIT ANALYSIS January 7, 2016
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1 BUILD NYC RESOURCE CORPORATION PROJECT COST/BENEFIT ANALYSIS January 7, 2016 APPLICANT The Chapin School, Ltd. 100 East End Avenue New York, New York PROJECT LOCATION 100 East End Avenue New York, New York A. Project Description: The Chapin School, Ltd. (the School ) is a not-for profit educational corporation which operates an independent all girls day school for approximately 770 students from kindergarten through 12th grade. The School is seeking approval for the issuance of approximately $75,000,000 in tax-exempt bonds to: (1) finance and/or refinance the improvements to, renovation, equipping and/or furnishing of the School s existing eight-story facility (the Facility ) located at 100 East End Avenue, New York, New York 10028, including: (a) a three-story vertical addition to accommodate a new gymnasium and an expanded space for performing arts programs (the Facility Addition ) and (b) the reconfiguration of existing space within the Facility to provide more classrooms, gathering space, an additional cafeteria, a maker/design studio for the robotics program and other S.T.E.M. curriculum, and a new nursing facility and (2) pay for certain costs related to issuance of the bonds. The School currently employs 207 full-time equivalent employees at the project locations and expects to hire 15.5 additional employees within the next three years. B. Costs to City (New York City taxes to be exempted): Mortgage Recording Tax Benefit: $ 1,218,750 Estimated NYC Forgone Income Tax on Bond Interest (estimated NPV %)*: 713,162 Total Cost to NYC $ 1,931,912 *The exact amount of personal income tax revenue that will be lost as a result of this transaction depends on factors including (but not limited to) the percentage of bond bought by entities subject to New York City personal income taxes, the interest income generated from the bonds and the tax rate applied to bond purchasers. C. Benefit to City (Estimated NYC direct and indirect taxes to be generated by Company) (estimated NPV %): $ 26,576,512
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10 Background The Chapin School, LTD. (the School ) is a not-for-profit educational corporation that operates a non-denominational, independent all girls day school for grades Kindergarten through Class 12. Approximately 770 students are currently enrolled at the school, which employs 130 teachers and 85 staff members. Founded as a primary school in 1901, Chapin was incorporated in 1925 and received its charter from the Board of Regents of the New York State Education Department in Chapin s 13 grades are housed in an eight-story building on Manhattan s East End Avenue, its location since The building includes a front space devoted to Upper School (grades 8 through 12) and Middle School (grades 4 through 7) classrooms, a back wing devoted to the Lower School (grades K through 3) and offices, and a connecting interior section that houses gymnasiums, theater facilities and common gathering spaces, such as the Assembly Room, dining room and library. The School is committed to its mission of preparing a diverse and talented community of young women to thrive and lead in a global society through its dedication to academic excellence, personal integrity and community responsibility. To meet these goals, the School offers a comprehensive, well-balanced and rigorous academic program that also includes vibrant arts programs, interscholastic athletics and opportunities for leadership, teamwork and engagement through service learning, sports and other extracurricular activities.] The School is a member of the New York State Association of Independent Schools (NYSAIS), a voluntary association of 194 independent nursery, elementary and secondary schools with combined enrollments of approximately 79,000 students statewide. NYSAIS serves as an advocate for these educational institutions, acts as an accrediting body chartered by the New York State Board of Regents and administers interscholastic sports for member schools. Additionally, NYSAIS periodically sends a visiting committee to evaluate and make recommendations for improvements to the programs and facilities of its member schools. Chapin made improvements to its existing building in 1996 and 2006 based on the results of NYSAIS evaluations. The plans for the current building enlargement are also in response to recommendations made in a 2013 NYSAIS evaluation. Project Overview The School has obtained from the Board of Standards and Appeals (BSA) of the City of New York the necessary variances for the construction of a three-story vertical addition to its eight-story building. The enlargement will house a regulation-sized gymnasium, which will double as a gathering space for the entire school, and a new space for its music and dance programs. In addition, the enlargement will allow Chapin to repurpose existing space within the school to provide much-needed flexible classroom space, an Upper School Commons area, a maker space/design studio, and improved nursing facilities. The School has also renovated its dining space and is currently creating an additional dining space beneath it to accommodate the current student population. The project will provide critical space for the school s programmatic needs. Two areas directly benefitting are athletics and performing arts: Page 1 of 4
11 Physical Education and Athletics Facilities The school s existing gymnasiums are inadequate in that they do not accommodate the needs of the current students at the School and limit the School s ability to host league games. Existing gymnasium space does not comply with the requirements imposed by the Athletic Association of Independent Schools of New York City ( AAIS ), which administers league play. The AAIS currently prohibits Chapin from hosting league tournament games and allows home games only by exception. Because of concerns for players safety, the AAIS intends to prohibit those home games as well. The project will provide the school with a regulation-sized gym on the 11 th floor, a critical programmatic need. Ancillary facilities (e.g., locker room, training room, storage space, bathroom, office and bleachers), which are currently lacking, will be provided and will be adjacent to or below the new gym. A suspended running track will be located on a mezzanine level within the gym, which will further accommodate the needs of the athletic program and provide space for additional occupants at assemblies and interscholastic athletic events. Performing Arts The existing facilities for the school s music and dance programs are inadequate to support the school s commitment to the performing arts. The NYSAIS report recommended that the school (i) evaluate the benefit of adding an arts requirement for students in Class 10, 11 and 12 and (ii) evaluate the existing arts facilities to ensure they reflect the aspirations of the program. There is a clear need for music classroom and practice space and for dance instruction and practice. Middle and Upper School dance requires a minimum cross dimension of 52 feet, so smaller rooms are inadequate. Chapin currently uses the Assembly Room as its primary space for dance instruction. The Assembly Room is a shared space that is often used for gatherings, Lower, Middle and Upper School division weekly assemblies, and parent meetings. These events require set-up and tear-down, negatively impacting the dance program, which is left with insufficient instruction time. Additionally, the school lacks adequate music classrooms, storage space for instruments and practice rooms. By way of comparison, The Spence School (Spence) on East 91 st Street has five music classrooms, including instrumental classrooms, which Chapin currently has only two. The Brearley School (Brearley) on East 83 rd Street currently offers a more robust instrumental program than Chapin, maintaining a full orchestra and offering lessons in strings, brass, theory, piano and percussion. Similarly, Spence offers a full orchestra for both its middle and upper schools. Chapin does not maintain a full orchestra and its instrumental program offers instruction only in violin and cello and on a limited schedule. Chapin s music program falls short of the programs offered at comparable schools. These comparable school offerings, together with the NYSAIS report and the importance of arts programming at Chapin, establishes a clear programmatic need for larger performing arts facilities. With the additional space, Chapin will be able to provide continuity in its music instruction by offering music literacy, skills and process courses continuously throughout the year. The space afforded by the addition of the 9 th floor will allow new classrooms for dance, music instruction, music practice rooms and a music storage room. Page 2 of 4
12 Re-Purposed Space: Classroom, Upper School Commons, Dining Hall, Maker Space/Design Studio and Improved Nursing Facilities The additional classroom space will alleviate scheduling difficulties, as Chapin currently operates with a very high classroom usage rate of approximately 92-95%. The Upper School commons area will provide a dedicated region for the Upper School students, offering essential flexible classroom space, gathering space and publication offices. Because all students currently share one dining hall, they must eat lunch in multiple shifts beginning as early as 10:40 a.m. and ending as late as 1:45 p.m., with long wait times. The additional dining space, which will be used for grades K-5, will greatly alleviate long lines and lunch scheduling issues. The maker space/design studio will provide much-needed space for the popular robotics program, which is currently utilizing hallways for space and completely lacking in storage space. Chapin s robotics program is a key part of its commitment to S.T.E.M., which is a central educational agenda item for the United States and New York State Education Department, particularly for girls and young women. This tinkering space will also allow faculty to create and introduce additional S.T.E.M curricula and units of study. The new nursing facilities will provide sufficient space to accommodate the student population and will offer space for private exams and discussions, and an area to separate ill students from healthy students. The current nurse s office is undersized to support the existing student body and falls short of modern professional standards. Impact of Proposed Project on Current Operations The enlargement of and improvements to the existing building will provide the school with a needed regulation size gym and new space for the performing arts studio, better nursing and medical facilities and a dedicated Upper Schools commons area with additional, flexible classrooms. The school anticipates that the expansion will create approximately 15 permanent full-time jobs once the new and renovated spaces are complete and in use. Timeline for the Project It is anticipated that the 42 -month construction period which began in May 2015 with work on the renovation of the existing dining room and the additional dining room space being created on the below-ground level will be completed by late Construction will occur in three phases: Phase 1: Spring 2015 June 2016 o Excavation work below cafeteria on the first floor o Renovation of current cafeteria and servery o Sidewalk vault and structural support o Work on lower level cafeteria and servery o Interior work and mechanical support Phase 2: Summer 2016 Fall 2017 o Erect vertical steel structure/support o Structural steel erection o Interior build-out Page 3 of 4
13 Phase 3: Fall 2017-Winter 2018 o Complete build-out and conversion of interior spaces o Extension of existing elevators The school will finance the project in several ways, including a combination of: 1. Bridge Loan 2. A four to six year capital campaign proceeds 3. Endowment funds [or match to application] 4. Tax exempt bond financing The anticipated cost of the project is approximately $120 million. Page 4 of 4
14 Wage and Benefits Information 8. All other forms of compensation and benefits Medical insurance coverage Life Insurance Short term diability Long term disability Contributions to retirement after 1 year of service and 26 years of age or older -10% of eligible earnings Cafeteria plan after 1 year of service Free breakfast and lunch Pre-tax transit benefits Vacation, sick and personal time, as well as, all school holidays Professional development funding 9. Affordable Care Act coverage All our employees have access to healthcare under provisions of the Affordable Care Act 10. Earned Sick Time Act compliance All our employees are eligible for paid sick leave of up to 6 weeks per year.
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