Leased Space Policy

Introduction

Purpose

It is the intention of The University of North Carolina at Chapel Hill to ensure that currently owned space is utilized with the greatest efficiency. The University Administration wants to assure that Carolina leases space only when it is appropriate to do so given the nature of the space needed, the location of the programs and the space demands on the campus. When leasing is required, the University Administration also wants to assure the rental rates are cost/beneficial.

Scope of Applicability

This policy applies to all Schools and Units of The University of North Carolina at Chapel Hill.

Policy

Policy Statement

Planning and Oversight

Because the University Administration has primary responsibility for space management, it is critical to assure the proper planning for and adequate review of each leasing decision. Therefore, Vice Chancellors and Deans must include long-range space needs, including leases, as part of the annual planning process. Lease requests included in the annual planning process will be forwarded to the Facilities Planning Committee, for referral to the Space Planning Committee and the University Budget Committee for programmatic and financial review, respectively. Recommendations of the two committees will be jointly forwarded to the Facilities Planning Committee for a final administrative decision.

If approved, the Property Office will initiate the Board of Trustee and State approval processes and monitor the lease through final execution. The Property Office is charged with obtaining the best rental rates in the area where leasing is to occur and to negotiate multiple year renewal options where appropriate. The Property Office will report semi-annually on all leased space to the Facilities Planning Committee, which will exercise oversight on leasing activity. The report should be submitted to the Facilities Planning Committee in June and December, before the semi-annual reports on leased space are presented to the Board of Trustees.

Funding

As stated in the preceding section, the University Budget Committee is responsible for the financial review of lease requests. Decisions regarding the sources of funds to be used in paying rent should be based on the following principles. The Budget Committee can grant exceptions to these principles but should do so under extraordinary circumstances.

• In those cases where the sponsor allows lease payments to be recovered from the project budget and the unit has justified more space, the lease should be directly charged to the project¹. If the Central Facilities and Administrative (Overhead) Pool is currently funding the lease payment for a unit and the sponsor(s) allow lease payments to be recovered from the project, the budget should be adjusted at the earliest opportunity.
• In those cases where a sponsor does not allow lease payments to be recovered from the project budget² and the unit has justified more space, then up to 50% of the cost will come from the Central Overhead Pool overhead and the balance will be borne by the unit.
• If a move is required by the University Administration, 100% of the costs will be borne by the Central Overhead Pool.
• If a temporary move is required by the unit as part of a construction project in the Capital Improvement Program, 100% of the costs will be borne by the 5% reserve on State Bond projects, as funds permit. Non-State Bond projects will be addressed on a case-by-case basis.
• If an administrative unit currently in leased space needs to expand and the unit has justified its need, 100% of the cost will be borne by the Central Overhead Pool.

Use of University Space by Third Parties

Generally, the use of University facilities by third parties is governed by the Facilities Use Policy³. However, the University may, from time to time, permit third parties to use University facilities for research or academic purposes consistent with the University’s mission. All such uses must be approved by the appropriate Dean/Vice Chancellor, the Space Use Committee, and the agreement for the proposed use must be reviewed and approved by an attorney from the Office of University Counsel. A copy of the final use agreement must be filed with the Property Office and the Office of Contracts and Grants. Approval of the financial arrangements must be obtained from the University Budget Committee.

Exceptions

None.

Footnotes

1. Off-campus projects are those conducted in leased facilities not owned by the University where the space rental costs are directly charged to the sponsor, or in facilities not owned or leased by the University. When a project is located in leased space for which the lease costs are not paid by the campus but are directly charged to the project, the off-campus rate is applicable.
2. If a sponsored project is located in a facility leased by the University for which rental costs are paid by the campus and not charged to the sponsored project, the on-campus rate is applicable.
3. The University of North Carolina at Chapel Hill Facilities Use Policy.

Related Requirements

University Policies, Standards, and Procedures

• Facilities Use Policy
• Facilities Use Standard

Contact Information

Policy Contact

Real Estate Operations
300 South Building, CB #1000
Chapel Hill, NC 27599
Phone: 919-962-6172