Tens of millions of dollars?

In the most recent Chronicle article, Doug is quoted as saying that the schools have lost “tens of millions” of dollars due to the mismanagement of the Grammar School Trust by the Feoffees.  Here is the background for that assertion.

At the links below you can find a PDF chart as well as the actual Excel spreadsheet used to calculate the difference between what the Feoffees have provided to the schools and what they could have provided with prudent management for every year since 1968.

Other – 120212 – Feoffee Deficit (PDF)

Other – 120212 – Feoffee Deficit (Excel file)

The value of Little Neck as a rental property in 2010 is taken as an average of the four appraisals.  The value for previous years is calculated using the Boston Case/Schiller Home Price Index from 1987 forward:


…and National Association of Realtors national median values before that:


For the estimated distribution, we start with the average cap rate from all four appraisals and then reduce it by the average expenses from the appraisals.  In our case, we reduce it still further in order to account for the effects of keeping the property seasonal and hiring a professional manager, both of which we feel are critical to achieving the highest net return for the beneficiaries.  We also give the Feoffees “credit” for payments toward the wastewater system, since this is necessary to retaining the value of the property and would not be captured in the “normal” operating expenses.

Lastly, all numbers are brought into 2010 dollars using the CPI numbers from here.


Please send any comments on ways you feel this analysis is faulty using the contact link.

In summary, it is not necessary to come to the conclusion that the Feoffees are “bad people” in order to come to the conclusion that they are ill suited to the task of being Trustees of this Trust.  All we are asking is to let professionals have a chance to manage this asset properly before liquidating it and cheating the schools out of yet still more tens of millions of dollars.