Exhibit C

MEMORANDUM

DATE: November 8, 2007

TO: Members of the Ohio Cultural Facilities Commission

FROM: Tony Capaci

SUBJECT: Financial Analysis of NURFC Pro forma

I appreciate the opportunity to assist the Commission Members in evaluating the financial
position of the National Underground Railroad Freedom Center. My analysis is based on year
to date (YTD) actual 2007 numbers, forecasted 2007 year end (YE) numbers, and projected
2008 and 2009YE numbers. My remarks will focus on the submitted Pro forma plan, concluding
with an opinion on the overall sustainability of the Freedom Center.

Base Operations Earned Revenue

This portion of the Pro forma deals with revenue generated from day-to-day operations of the
facility comprised of admissions, membership, facility rental, and retail.

• Total earned revenue forecasted for 2007 is $1.81M as compared to 2006 actual earned
revenue of $1.83M. Forecasted earned revenue for 2008 and 2009YE is $1.87M.
Actual earned revenue as of 8/31/07 is $1.2M or 67% achieved with four months
remaining.

• The Freedom Center engaged Proctor and Gamble, GFK Custom Research North
America, and Northern Kentucky University to perform marketing research. The results
of the Northern Kentucky University Study rated the Freedom Center #1 in overall
satisfaction and #1 in value of the top ten entertainment attractions in the Greater
Cincinnati Area. This finding indicates that in order to sustain projected revenues,
sweeping changes to programming are not needed. However, initiatives focused on
increasing repeat visitors include adding space dedicated to changing exhibits and
adding audio tours for children and adults.

In summary, earned revenue is fairly forecasted in the Pro forma for 2007YE for the following
reasons; the total forecasted earned revenue for 2007 is lower than the 2006 actuals, the
Freedom Center is on target for achieving the revenue forecast for 2007. Additionally, the
projections for 2008 and 2009YE are reasonable 2006 actual results, 2007 YTD and only
modest revenue increases for 2008 and 2009.

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Government Funding

This portion of the Pro forma deals with Management’s projection of funds to be received from
Government Agencies.

• The Federal Department of Education (FDOE) grant is forecasted at $1.4M for 2007 in
comparison to $1.16M for 2006. The funds have been authorized in total and are drawn
upon when the Freedom Center achieves eligible expenses. Eligible expenses are on
target and accordingly, the Freedom Center draws about $120,000 per month. The
FDOE recently notified the Freedom Center that the grants will be limited to a maximum
of $1M for 2008. Consequently, I adjusted the forecast for 2008 and 2009 down to $1M
resulting in a break even scenario (a zero surplus).

• The City grant of $800K has been received for 2007. Management feels confident the
City will match the grant in 2008. Management conservatively estimates a reduction to
$350K in 2009.

• Government ‘Other’ is comprised of the State of Ohio Department of Education (SDOE)

program which has paid the Freedom Center $1.5M for the 5th and 8th grade free
admission program. $1M is allocated in 2007 and $.5M for 2008. 2009 SDOE funds
are conservatively estimated at $350,000.

In summary, as of August 31, 2007 the Freedom Center has collected 85% of total Government
funds forecasted with 33% of the period remaining. Consequently, total government funding for
2007 is fairly forecasted. However, the 2008 and 2009 forecasts for government funding
should be adjusted down by $.5M each year, bringing the projected surplus down to
zero. This adjustment is due to the FDOE grant reduction in 2008 and 2009. A break-even
position does not necessarily jeopardize sustainability; however, implications regarding banking
covenants will be addressed later in this report.

Private Support

This portion of the Pro forma deals with funds raised through the Annual Fund Drive and Major
Gifts received from individuals, corporations, and foundations.

• Total private support forecasted for 2007 is $3.9M, down from $8.8M reported in 2006,
as a result of the successful Bridge to the Future Campaign. Actual YTD private support
at 8/31/07 is $3.6M or 92% of the annual projection with four months remaining. NURFC
will need to raise $300,000 over the four remaining months in 2007.

• The 2008 and 2009 forecast of $2.8M is $1.1M less than the 2007 forecast and $6M less
than 2006 actuals. However, it is noteworthy that the Freedom Center has sought funds
from the same pool of individuals and entities throughout their fundraising history and
will seek additional funds for the soon to be announced Operating Endowment
Campaign, again from the same entities and individuals. It will serve the Freedom
Center well to identify fresh donors for future fundraising initiatives.

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Total private support forecasted for 2007YE is fairly forecasted because the Freedom Center
has collected 92% of the annual projection with four months remaining. The 2008 and 2009YE
projections have been reduced significantly from the 2006 actual and 2007 forecast. The
Freedom Center should be able to meet these lower projections even if they must rely on
fundraising activities aimed at the same pool of donors.

Operating Expenses

Operating expenses include wages and other expenses necessary for the facility to function.

• Operating expenses are forecasted at $7.89M for 2007 as compared to $7.52M actual
2006 operating expenses.

• YTD operating expenses at 8/31/07 are $5.81M or 74% of total forecasted while 75% of
the year has expired.

• Operating expenses are forecasted at $6.85M in 2008 and $6.95M in 2009. Decreases
are due to scheduled staff and operating reductions.

To align expenses with revenues, management implemented an operating cost reduction

program in 2006. This program continues through 2009. Operating expenses are fairly
forecasted for 2007 and meeting the projections for 2008 and 2009 are dependant upon the
continuation of the planned cuts.

Net Interest Expense

Net interest expense is calculated by netting investment income against interest expense on
bond debt. The table below reflects interest expense exceeding interest income thru 2009.

2006 actual 2007 forecast 2008 projected 2009 projected

Net interest
expense $1,144,786 $960,000 $646,000 $450,000

Cost of their investment is $22,401,291 and market value at 6/30/07 is $21,684,715, creating an
unrealized loss at 6/30/07 of ($716,576). The Freedom Center Investment Committee
continues to monitor the fund and has recommended to the Board no changes be made to the
Freedom Center’s investments at this time.

The one year rate of return is 5.14%, the three year rate of return is 4.0% and the rate of return
since inception is 3.43%. The forecasted rate of return is 5.0% for July 2007 through June
2008.

On a positive note, as bond debt is paid down and interest expense decreases, investment
income, including accrued interest will increase. Accordingly, net interest expense will continue
to decrease. However, based on historical performance, the forecasted 5.0% rate of return may
prove to be overstated.

Other Programs

Other Programs revenue and expenses in the Pro forma are funded by restricted gifts. Other
Programs deficit for 2006 is ($470,000) and a ($30,000) deficit is forecasted for 2007. The

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deficits are due to management reclassifying previously restricted revenue to capital revenue
after requesting permission from the donors to do so. The reported operating expenses
remained in Other Programs thereby creating a deficit. A $250,000 surplus is projected for
2008 and 2009 based on projected restricted revenues of $1M each year and forecasted
expenses are based on estimated direct costs. $775,000 has already been pledged to
restricted gifts in 2008 and 2009. Management is confident the remaining $225,000 each year
will be pledged in 2008 and 2009. Management’s projections are reasonable since 77.5% of
the restricted funds have already been pledged and the expenses are forecasted on a direct
cost basis.

Total Surplus

As of August 31, 2007, the pre-depreciation deficit is ($466,000) and a $1,000,000 gift was
received in September. After they received this donation, management reported to the bank
holding the letter of credit that it expects to reach the covenant required surplus for 2007.
Total surplus is forecasted at $800,000 for 2007 and $500,000 for 2008 and 2009. As
discussed earlier in the report, the 2008 and 2009 surpluses must be reduced to zero due to the
$500,000 decrease in the Federal Department of Education grant, which management was
notified about in early October. In response to this notification management expects to expand
the earlier initiated wage and expense reduction program, so that NURFC can reach their
projected surplus of $500,000 in 2008 and 2009. This expanded wage and expense reduction
program will be discussed in the board’s October Executive Session and will be voted on by the
full board in December. If management is unsuccessful in reducing these expenses, they will be
unable to meet the 2008 surplus covenant.

Bank Covenants

The letter of credit bank group holds three covenants regarding the Freedom Center. Cash and
Investments must maintain a balance of $30,000,000; Borrowing Base cannot fall below
$49,000,000 and a cumulative surplus of $3,500,000 for 2006 and 2007 must be achieved. As
of August 31, 2007 the Cash and Investment balance and Borrowing Base covenants are met
and management expects to meet the cumulative surplus covenant by year end. NURFC has
missed meeting the Covenants on two past occasions and on each occasion the bank forgave
the technical violation and amended the Covenant because the banks did not view these
violations as significant. If NURFC is unable to meet these Covenants and the banks believe the
violation is significant, the banks may opt to call in the letter of credit triggering a demand for
cash which NURFC is unable to pay. Covenants will most likely be renegotiated upon their
expiration in 2008.

Conclusion

The new management has effectively demonstrated its ability to incorporate meaningful
programming, as evidenced by the results of the market research, raise funds, as evidenced by
the results of the Bridge To The Future Campaign, manage operating costs, as evidenced by
cost reductions during declining revenues and grants. Furthermore, management negotiated an
advantageous position, whereby the banks will take a lesser position on the real property
interest until the end of the bond term for the new bonds, allowing the Commission to retain a
lessee’s position (whereby in the case of a default, the Commission has the option to replace
current management and provide culture) for the duration of this appropriation’s bond period.

While the Freedom Center has made some impressive financial strides, potentially overstated
projections regarding investment income and government funding may result in a less than

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projected surplus. Additionally, the inability to set aside funds for replacement of depreciating
assets may be a detrimental one. Ongoing sustainability depends on the successful concurrent
execution of an aggressive cost cutting program and an aggressive endowment fundraising
campaign. The likelihood of NURFC’s success in these efforts is difficult to predict, and is of
concern to Commission staff. Yet, the impact of these risks to the State can be reduced by the
extension of the lease to the end of the bond term for this appropriation.

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