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SILVERVitw zs12"%1LJ <br /> GENERAL PARTNERSHIP <br /> SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PROJECTION ASSUMPTIONS <br /> FOR THE PERIOD COMMENCING JANUARY 1, 1998 <br /> AND ENDING DECEMBER 31, 2012 <br /> SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS - Continued <br /> 4111 <br /> It is assumed that December 31 will be the year end of the Partnership. <br /> The projection and assumptions are based upon the following, without <br /> limitation: <br /> a. The Partnership will be treated for tax purposes as a <br /> partnership rather than as an association taxable as a <br /> corporation. <br /> b. The Partnership will be approved for tax increment <br /> financing with the City of Mounds View. The Partnership has <br /> projected a 90% increment "pay-as-you-go" reimbursement of <br /> real estate taxes paid each year over the remaining twelve <br /> ( 12 ) year life of the existing TIF district. <br /> Financing <br /> The Partnership projects to secure permanent financing on each project. <br /> Interest rates are projected at 8 .5% with interests and principal <br /> payments payable over thirty (30) years . <br /> Rental Income <br /> The projected rental income assumes that the Partnership will initially <br /> 410 <br /> lease housing units, garages, office building and storage at the <br /> following rents : <br /> Number Square <br /> Rent of Units Feet <br /> 1 Bedroom-Market Rate 620 28 760 <br /> 2 Bedrooms 750 54 1, 037 <br /> Garages - Underground 40 82 <br /> Office Building $12 .00/sq ft 5 , 000 <br /> Office Building $10 .00/sq ft - 25 , 000 <br /> Maintenance Reimburse- <br /> ment $2 . 00/3 . 00 sq ft - <br /> The Partnership projects that annual increases to rental income will be <br /> 3 . 0% a year beginning the first year subsequent to the first year of <br /> operation, through the year 2012 for the senior housing. Rent income <br /> on the office buildings are based on fixed 5 year leases , increased at <br /> $1 . 00 per square foot every five years . Maintenance reimbursement <br /> increase is projected to 5% per year the same projected increase for <br /> expenses . <br /> Interest Income <br /> Interest income on the partnership ' s replacement and debt service cash <br /> reserves , are calculated using an interest rate of 5 . 00% <br /> ( 4 ) <br />