+---------------------+------------------------------------------------+
| ***Title:***        | **Los Alamos National Laboratory\              |
|                     | Los Alamos Science Complex:**                  |
|                     |                                                |
|                     | **Alternative Financing Proposal**             |
|                     |                                                |
|                     | **Executive Summary**                          |
+---------------------+------------------------------------------------+
| ***Author:***       | **Christopher L. Webster**                     |
|                     |                                                |
|                     | **Program Manager**                            |
|                     |                                                |
|                     | **Strategic Research Directorate**             |
+---------------------+------------------------------------------------+
| ***Submitted to:*** | **Everet H. Beckner**                          |
|                     |                                                |
|                     | **Deputy Administrator for Defense Programs,   |
|                     | NNSA, NA-10**                                  |
|                     |                                                |
|                     | **David E. Beck,**                             |
|                     |                                                |
|                     | **Technical Director, NA-12**                  |
|                     |                                                |
|                     | **Antonio F. Tavares**                         |
|                     |                                                |
|                     | **Technical Systems Engineering Manager,       |
|                     | NA-12**                                        |
+---------------------+------------------------------------------------+
| ![](media/ima       |                                                |
| ge1.jpeg){width="2. |                                                |
| 4305555555555554in" |                                                |
| height="0.9         |                                                |
| 013888888888889in"} |                                                |
+---------------------+------------------------------------------------+

**The Los Alamos Science Complex:**

**Alternative Financing Proposal**

**Executive Summary**

**Background**

**, Salvage/Storage; built in 1940's, asbestos siding and roof, floor
drains clogged -- Due to be replaced during one of LANL's Consolidation
Projects.**

**TA-16, Building 7, Salvage/Storage; built in 1940's, asbestos siding
and roof, floor drains clogged -- Due to be replaced during one of
LANL's Consolidation Projects.**

![](media/image2.png){width="3.375in" height="1.7458333333333333in"}Los
Alamos National Laboratory is faced with a serious problem of aging
infrastructure that threatens our ability to carry out the Laboratory's
mission and impacts our ability to attract and retain top talent.
One-half of the Laboratory's facilities are in poor or fair condition
and two-thirds are greater than thirty years old. In the past,
preventive

facility maintenance was deferred for technical programmatic priorities.
The Department of Energy's (DOE) current budgeting process allows 5% -
8% less for infrastructure maintenance and repair than the industry
average. Over time, this practice has resulted in a backlog of needed
repairs that threatens to overtake the Laboratory's ability to address
these problems. The facilities planned for replacement in the Los Alamos
Science Complex are reaching the end of their useful life and would
require major upgrades to continue operations that meet future mission
needs. These facilities are proposed for eventual decontamination and
decommissioning.

![](media/image3.png){width="5.75in" height="2.097916666666667in"}

**Vision**

The Los Alamos Science Complex (the Science Complex) and the
twenty-first-century laboratory and research space it will provide will
rejuvenate and enable the Los Alamos National Laboratory mission of
"Science for the Nation". By providing state-of-the-art facilities in a
multi-disciplinary environment, the Science Complex will enable
mission-related scientific research in a unique and powerful
collaborative setting that is designed to be environmentally sound and
highly cost effective.

**Proposal**

In addition to traditional construction funding mechanisms such as
congressional line- item or General Plant Project (GPP) funding, the
University of California (the University) wishes to pursue third party
financing as a means to revitalize the aging infrastructure. Third party
financing clearly shows that construction can be completed much faster,
and the costs can be kept much lower, because of the elimination of the
government's year-to-year uncertainty in the availability of funds.

**Development Approach**

The University is developing alternative methods for financing
(third-party financing) for the construction of the Science Complex.
Over the next ten years, the University intends to use a three-phase
approach to construct "build-to-suit" facilities for lease by the DOE,
which accelerates the schedule for occupation and lowers the cost of
construction.

By providing modern, competitive, high-quality space and amenities, the
DOE will be able to attract and retain world-class talent and resources.

During this past year, Oak Ridge National Laboratory (ORNL) has
successfully built three buildings for a total of \$71 million dollars
using third-party financing. Los Alamos' development approach is to
build upon the success of ORNL's model for third party financing.

![](media/image4.wmf){width="5.75in" height="2.1215277777777777in"}

A pristine development site known, as Two Mile Mesa North is located in
Technical Area (TA) 58, within walking distance to TA-3, the
Laboratory's main technical area, where frequent interactions occur. The
Two Mile Mesa site has minimal environmental constraints for
development.

**Phase I**

Los Alamos and the University's Office of the President, will build upon
the success of Oak Ridge National Laboratory's model for third-party
financing. Phase I of the Science Complex will include new
infrastructure, a new access road, and design and development to support
construction of five buildings for a total estimated cost (TEC) of \$140
million dollars. Approximately 1,200 persons will be relocated from
within the 43 square miles that the Laboratory encompasses. 402,000
gross square feet (GSF) of new space will be constructed and Los Alamos
will vacate 279,000 net square feet of space.

Conceptual design, planning and project prioritization have been
completed for Phase I. However, project priorities may change due to
guidance from DOE. Until then, the five buildings selected for Phase I
are:

Number of

[Building Owner]{.underline} [TEC (Millions)]{.underline} [Size
(GSF)]{.underline} [Occupants]{.underline}

1\. Biosciences \$62 138K 226

2\. Earth & Environmental Sciences \$14 70K 302

3\. Science Centers \$5 24K 56

4\. Theoretical R&D \$23 85K 400

5\. Computer/Computational Sciences \$27 85K 200

![](media/image6.png){width="3.375in" height="2.41875in"}

![](media/image7.png){width="1.75in" height="0.8645833333333334in"}

Estimated financial impact to Los Alamos are based on a total mortgage
payment of \$254 million dollars with tax exempt bonds finance 0r \$302
million dollars with corporate finance (assumes a \$140 million dollar
project with a 25 year mortgage). Therefore, annual mortgage payments
will be \$10 million with tax exempt bond finance and \$12 million with
corporate finance. Los Alamos estimates that \$8.5 million annual
efficiencies could be realized pending analysis. These estimates will
change as Phase I is formalized and as interest rates fluctuate.

**Conclusion**

![](media/image8.png){width="0.5493055555555556in"
height="0.16597222222222222in"}