• EdR Financial requirements:
0 EdR shall not mortgage, pledge, or encumber the facilities or property
0 Allocate $260 per bed per year for Replacement Reserve, allocation to increase over time
by an amount sufficient to ensure the facilities are maintained in a first class manner
0 Provide the University $639 per bed per year for Resident Life, rate may increase
annually by the greater of:
¤ 3% or
¤ University’s salary increase pool
However, annual rate increase may not exceed the percentage increase in rental rates
• Financial return:
0 Education Realty Trust
¤ 4% management fee based on gross revenues, reduced to 2% upon execution of
contract to construct 2,500 beds (including 60l beds for this proj ect) or manage
university-owned housing
¤ Minimum 9% intemal rate of retum (IRR)
0 University of Kentucky
¤ l0% of gross revenues, increased by 2 points to l2% upon execution of contract
for EdR to construct at least 2,500 beds (including 60l beds for this project) or
manage university-owned housing
¤ 25% of net income in each year in which EdR achieves 9% IRR
• Rights, Risk and Other Requirements:
0 EdR assumes construction and operating risks
0 EdR must comply with University’s existing vendor contracts
0 University may audit EdR’s financial records
0 EdR shall pay prevailing hourly rates for the construction
0 Dispute resolution shall proceed as follows:
¤ Good faith negotiation
¤ Private mediation
¤ Legal action
0 University retains all naming rights
• Responsibilities:
0 EdR responsible for maintenance, operation, and taxes related to the facilities, except
lawn care and snow removal
0 EdR responsible for insuring premises at replacement value
0 University responsible for Residence Life Programming including the hiring of residence
advisors and resident hall director