Dear Unit Owners:

At our January 10 meeting, the Trustees made some important decisions relative to our pending roofing, trim, painting and roadways projects. While the approved motions will be detailed in the meeting’s minutes, we wanted you to be aware of them as soon as possible.

Use of the Current Reserve Fund: We voted not to take any money out of the current Reserve Fund. There are 4 main drivers behind this decision.

First, our complex has a history of "surprises". While we are confident that our work to date has identified our major needs, we can never be 100% sure. We want to have funds available as a precaution. Secondly, there appears to be a perception among the realtor community that the scope of the work in front of us indicates that we have not had a good handle on things. We want to do whatever we can to dispel and alter that perception. To have a depleted reserve fund would not be conducive to that goal. Rather, we prefer to send the message that we have identified our problems, are addressing our major needs and are funding, on an ongoing basis, the inevitable future expenditures. Directly related to the foregoing is our expectation that a reasonable and growing reserve fund is a positive to potential buyers and their advisors. Thirdly, our projected capital expenditures over the next decade and beyond clearly indicate the necessity to fund them on an uninterrupted basis. Finally, we have some pending FY 2002 projects (including replacing the remaining timber retaining walls) that will deplete the current fund.

Timetable of the work: We concluded that we want to get this work completed in one season, probably April-October. We have vetted contractors capable of doing this and will give them priority in the selection process. Not only will this save us money but also it will minimize the time that our property will be "torn up". That is an issue for both current residents and potential buyers of units that come on to the market.

Financing: Subject to negotiations with lenders, we voted to take the following approach to financing this project:

Phase I - Project Work Period: During this time, we plan to take out what amounts to a "construction loan". Similar to a home equity line of credit, we will draw on it as needed as the work progresses and pay interest only. Our thinking is to pay the interest out of the current reserve fund and then reimburse that fund once we move to Phase II. That approach will save interest costs as we will reimburse our current reserve fund at an interest rate equal to that which those funds would have earned had we not temporarily depleted them.

Phase II - Post Work Period: At the end of the work period, we will "convert’ the above to a maximum of a three year term loan. At that point in time, we will know the actual costs that need to be included in the final assessment (the work itself; costs attributable to the "construction loan period"; project oversight and all attendant legal and/or administrative costs, etc).

Unit owners will have at least the following options as to how to meet their individual obligations (which, as you know, will be based upon beneficial ownership percentages):

• Pay the assessment amount in one lump sum
• Finance the total assessment over the amortization period

We are going to explore a third option, which would be a combination of the above (an up front lump sum of less than the total assessment with the balance financed). In the event we are able to offer this, the carrying costs will be a function of the amount financed.

This approach will enable those who want to pay in one lump sum the opportunity to do so (thus saving the amortizing loan’s interest and loan related costs). Those preferring to finance will have whatever the final amortization period (again, we are aiming at 3 years) over which to spread their payments. Those choosing this alternative will bear all of the term loan’s attendant costs (interest, application and any other fees, legal review etc.)

We are negotiating with two banks (both of which specialize in condominium lending) whose terms, while not identical, are similar. The interest rate is expected to be in the 7-7_ % range. We intend to secure a fixed rate for many reasons. First, current rates are relatively low (and even if they increase, they should remain attractive). Secondly, we want to avoid a variable environment from both an interest rate risk and an administration point of view. The collateral will be our monthly fees which will have to be assigned to whichever institution we choose. No unit owner will be on the note.

Unit owners who choose to finance a portion or all of the assessment should be aware that the interest costs will not be tax deductible.

We believe that the above plan is fair to everyone. Our intention has been to come up with an approach providing sufficient flexibility to accommodate the vast majority, if not all, of our unit owners.

While we are requiring bidders to continually "sharpen their pencils", we suggest that you plan on an assessment in the neighborhood of ~$20,000 and on having to make a financing decision not later than September of this year.

Related Matters: We are ready to have our final specifications reviewed by an outside professional, as will be all contracts prior to our executing them. We expect to make vendor decisions late next month.

Dick Bonz, who, along with Lou DiNapoli, has spent incredible energy and countless hours on this project, is going to be reducing his involvement going forward because of business travel obligations. Joe Dini and Tim Gartland, both of whom have experience related to pieces of this work, are up to speed on this project as well as our other long-term plans. They will be assuming a more active role on both fronts. That is beneficial to all of us especially since, as our newest Trustees, they have the longest terms remaining and their familiarity with the underlying detail of all of our plans is critical from a continuity perspective.

We hope that this update will be helpful to you. Please call one of us if you have questions.

Sincerely yours,

James H. Vineburgh

For the Trustees