TenSquare: Supporting Stride Academy's Growth and Facility Expansion

Stride Academy Board Meeting Facility Planning Discussion Karl Jentoft Partner TenSquare Sean Elder Director of Real Estate Development TenSquare April 2023

Summary: TenSquare can help Stride Academy with its next phase of growth and facility expansion/improvements Strategic Planning to support growth and evaluation of facility needs Management of approval process: Bond investors, authorizer, MDE, financials goals, etc. Development Management of financing facility additions/improvements Construction Management of Design and Construction Ongoing coordination and support to execute plan through occupancy

Stride Academy has made amazing progress in the past few years that position it well for growth and expansion Financial improvement and stabilization School Model improvement School Positioning/Recruitment Community building and engagement Emerged from default/workout

TenSquare provides more than just facility development services to meet the needs of school partners TenSquare Overview: Provides Services to Charter Schools Facilities Development Strategic Planning & Growth Creative Financing Solutions School Improvement Facilities Project Team Karl Jentoft Project Lead Sean Elder Project Manager 60+ Charter School Facility Projects 15 Minnesota School Facility Projects Charter School Experience/Expertise Comprehensive Development Services Consistent delivery of projects on time and on budget

TenSquare provides more than just facility development services to meet the needs of school partners Examples of TenSquare s Work: Facilities Development KIPP Nashville Prodeo Academy Partnership Academy Strategic Planning Hiawatha Academies (Mpls, MN) New Schools for Baton Rouge (LA) Creative Financing St. Paul City School (NMTCs) Hiawatha Collegiate HS (NMTCs) Global Academy (Seller Take-Back) Monarch School (Seller Take-Back)

The execution of facilities development is complicated and challenging Phase 1 Development and Design: Design, Permits, and Bids Financing, Property and Permits Feasibility Analysis Project Strategy Control Property Arrange Financing Program Needs Cost Estimates Timing Financing Legal Rights Community Support Political Opposition Scenario Analysis Land Acquisition Conceptual Design Constructability Program Implications Timing Financing/Budget Entitlements Community Relations Political Support Contingency Planning Risk Assessment Negotiation LOI Draft Purchase and Sale Agreements Manage Due Diligence Coordinate Timing Contingency Planning Risk Assessment Manage Entitlements and Variances Identify and Explore Financing Options Recommend Financing Source and Structure Ensure Team is Assembled Create and Assemble Required Information Negotiate Price Manage Application Process Manage Timing of Process Ensure Timely Closing Contingency Planning Review and Assess Plans Program Needs Reviews Cost/Budget Reviews Timing Community Support Ensure School s Requirements are Met Obtain Timely Approvals From School Security Telecommunications Technology FFE

requiring a lot of work to ensure the facility is successfully delivered Phase 2 Construction New Demolition and Site Prep Construction Management Punch List and Warranty Occupancy Expansion for Stride Cost/Budget Management Timing/Schedule Review Draw Requests Identify and Pursue Rebates Review Change Orders Owner Updates Deal with Any Unforeseen Problems Manage the Draw Process E Rate Cost/Budget Management Timing/Schedule Ensure C of O is in Place Deal with Any Unforeseen Problems Help Develop Punch List Ensure Owner s manual is Created and Transferred Train School in Building Operations Ensure all warranties are in Place Deal with Any Unforeseen Problems Environmental issues identified and managed Coordination with local authorities

TenSquare can help Stride Academy accomplish its growth goals and facility expansion Stride s Stated Goals/Objectives: Grow to 824 students, PK 8 (prelim. Projections) Improve existing building to provide: Additional small group spaces HVAC, paint, and flooring improvements New facility expansion (12,000 sf) to provide: 5 new classrooms New Cafeteria/Kitchen/Commons Area Site improvements to provide: Drop-off/pickup improvements to support growth New field space and play area Refinance bank loan used to acquire land Improve financial gap between annual State Lease Aid/Facility Maintenance Payments and Debt Service Potential Timeline Closing target: September, 2023 Occupancy: August 2024 For DRAFT Purposes Only Subject to further community input and board approval

Preliminary Expansion Concept Design

TenSquare will help Stride find the best solution among multiple facility and financing scenarios Considerations: Engagement of development team (development manager, architect, civil engineer, underwriter, environmental, legal, etc.) Prioritization of current space improvements, future space needs, site needs, and timing of future PreK enrollment Roughly $60,000 in predevelopment expenses are anticipated prior to closing (design, civil, environmental, legal, etc.) Additional indebtedness requires majority bond holder approval (TenSquare, BKDV, and underwriter will lead engagement) Multiple purchase/financing options will be pursued with underwriter to best support STRIDE s needs Programmatic Impacts (i.e. playground) during construction

Strides strategic goals could help improve its financial position Preliminary Feasibility Analysis Est. $7.6MM Total Project Costs, 30 Year Tax Exempt Bond Financing Refinance of Bank Loan, 5 classrooms, caf /kitchen, field and play space Estimated $485,036 additional annual debt service for facility expansion/improvements $85,000 improvement of Lease Aid Gap (State Lease Aid and Facility Maint. Revenue) Affordability Analysis - Expansion Year 6 2028-2029 $ 1,143,125 $ - $ 483,036 $ 1,626,161 $ 1,950.77 Existing Debt Service (2016 Bonds) Existing Debt Service (2022 Land Purchase) - Refinanced w additional Bonds Estimated Additional Debt Service (Expansion) - Interest Only Total Debt Service Debt Service per Pupil Unit (Annual) % of $11,081 Per Pupil Funding (assuming no funding growth) 17.6% Projected Lease Aid Revenues - With Growth Projected Prek Students Projected Lease Aid Eligible Student Population (K-8th) Projected Pupil Units (used for funding calculations) State Lease Aid at $1,314 per pupil unit Lease Aid Maximum Payment ($1,460/Pupil Unit) Estimated Lease Payment (DSC plus associated annaul costs) Facilities Maintenance Revenue 20 800 834 $ 1,095,350 $ 1,217,056 $ 1,666,161 110,035 Surplus/(Deficit) Max Lease Aid & Maint. Revenue Rent vs. Minimum Rent Break-Even Number of Pupil Units ($1,460/pupil) $ (339,070) 1066 For DRAFT Purposes Only Subject to further community input and board approval

Summary TenSquare can help Stride Academy with its next phase of growth Strategic Planning to support growth and evaluation of facility needs Management of approval process: Bond investors, authorizer, MDE, financials goals, etc. Development Management to finance building additions/improvements Construction Management of Design and Construction Ongoing coordination and support to execute plan through occupancy