RenovationPROJECT_FINAL

FINANCIAL CONSIDERATIONS

• This is a sizeable investment, nomatter which project is chosen. It is an important choice - it sets the course for our future. • The projected capital investment for the New Clubhouse is about $56 million. The projected upfront renovation cost is about $40 million. • Current interest rates make it extremely attractive to finance projects. Under the financing package negotiated, there is only a $175/month incremental difference between the two projects. That equates to little more than $2,000 per year over 15 years. • However, these numbers clearly overstate the cost difference because they do not account for the following critical factors: • Substantial operating efficiencies of a new building • Higher maintenance costs for the larger, older renovated building. • Some funds need to be set aside for space not being renovated. • While it is difficult to supply a specific number, based on the work of Management, through a combination of operational, utility and maintenance cost reductions, savings for the New Clubhouse could be substantial. • For Context: The $2,000 per year difference between a New Clubhouse and a renovation, reduced by operating efficiencies and maintenance costs, is less than 2% of the yearly cost of maintaining a home at Frenchman’s Creek. • For Context: The maximum total cost differential of $30,000 per Member, over the entire 15 year assessment period, is only about 2% of the average home value at Frenchman’s Creek.

By any measure, the $2,000/year incremental cost for a New Clubhouse is a modest investment for such a substantial difference in the quality of the facility.

The most important payback on the investment in a New Clubhouse will be the substantive health, aesthetic, and lifestyle advantages that it offers our Members.

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