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Brcidford Schools, Inc. <br />February 8, 1989 <br />Mr. Craig Waldron <br />Director of Community Development <br />City of Roseville <br />2660 Civic Center Drive <br />Roseville, Minnesota 55113 <br />Dear Craig: <br />As per our phone discussion February 7, 1989, and a subsequent <br />discussion I had with Sid Inman, this letter is intended to answer <br />following questions that you need clarified. <br />1. On the operating expense statement, what is the <br />AMORTIZATION LHI item? <br />The AMORTIZATION LHI (LHI=leasehold improvements) represents the <br />yearly amortization of a capital expenditure for special <br />improvements that the school must make to accommodate its <br />operation and/or special use. Examples would be: built in <br />cabinetry; directional and classroom signage; built in reception <br />desks; exterior signage for parking areas and building signage; <br />telephone and intercom systems; etc.; none of which are normally <br />provided by the landlord. <br />2. Is depreciation ingluIed in the operating <br />expenses? �g7' � �k 7 A/ <br />No. Building and/or facility depreciation is not included in the <br />material we have supplied to the city. <br />3. What is the meaning of the Total Rent for the <br />school building? <br />It is important to note that the rent per student month figure <br />does not represent an industry standard figure. What it does <br />represent is a rent per student month specific to Bradford. In <br />other words, this number represents a weighted, adjusted average <br />for rent and related expenses for a "Bradford School" based on our <br />actual occupancy expenses company wide. It also represents the rent <br />that the corporation (or a related entity holding the real estate) <br />can and will charge the school and the rent the school can pay. The <br />$81.26 rent per student month number represents the rent per <br />student month which I have adjusted forward to the expected year of <br />occupancy. I believe the rent per square foot derived by this <br />4method ($14.65 gross rent per s.f. based on 16,146 s.f.) is valid <br />when compared to the current market rents for the Roseville area. <br />355 FIFTH AVENUE SUITE 410 PITTSBURGH, PENNSYLVANIA 15222 <br />(412) 227-6900 <br />